Mike Ashley

[Happy Face]

I've no real gripe with looking for bargains etc, it should be seen to be a good thing to be able to upgrade or at least replace like for like whilst spending less then you bring in (using the Carroll money on Tiote, Ben Arfa, Cabaye and ultimately Cisse was really good business all round).

 

The problem is that its very difficult to buy to maintain a position. when we bought Cabaye et al I genuinely think we had aspirations to compete (albeit trying to do this through exploiting contracts etc) and could sell that to players who were better than our finishing position of 1th/12th.

 

Now we are trying to buy players to keep us in 8th - 10th and you either (a) overpay for players at that level or (b) take a real gamble on the likes of Perez and Riviere who by rights are at a level lower than 8th - 10th in the premier league (remember Perez came from the Spanish second division and has performed far in excess of expectations) so as a collective will only keep you at your target at best. In reality half + of these will turn out worse than hoped and you then start looking to consolidate 12th - 10th, buy players to do this and end up looking at 14th - 12th etc.

 

Without real ambition its so easy to getting sucked into buying bottom half players and struggling, there's loads of teams in the Premier Leagues history who have slowly but surely dropped 1-2 places a year and then suddenly find themselves in huge trouble. Ashley doesn't see this

 

I think he does, he's just sticking to the plan of slow, sustainable growth so he's not carrying the can for further investment.  Just wrote this over on TT, which is as I see it.....

 

What we had before Ashley and what we have with Ashley is a club that has to pay for itself.  No change.

 

With Ashley the club doesn't have to pay any dividends, board member salaries for 8 people in the same families and exorbitant rates of interest.  The previous owners got away with that level of waste by borrowing more money to spend and keep fans deluded that we were a strong club.  They were always happy that there would be another TV deal around the corner.  The problem came when we had to recalibrate our spending to pay the bills, even with the new TV deals.

 

For example, the 2 biggest net spends in the history of Newcastle United were in succesive years in 01/02 and 02/03.  Bellamy, Robert, Jenas, Viana, Bramble Woodgate and Ambrose were bought at a cost of £45m with literally nothing recouped whatsoever.  This was fine, because a new TV deal started soon (03/04), however because we spent big on borrowing it had to be repaid when that TV deal kicked in, so in 03/04 we bought no-one.  We sold Solano and Cort to turn a small profit, then we had to sell Speed and Woodgate to meet costs.  Every other club was rolling in cash and improving their squad while ours was worsening, so we finished 14th the following year.

 

Ashley is taking the opposite view.  He is not spending a single penny the club does not already have.  Even wages are accounted for up to the end of a contract when a player is bought, so the club are not caught short with expensive wage bills 3 years down the line on a player who wasn't good enough and is rotting in the reserves.  It's an infuriatingly risk averse strategy, but longer term it means ALL the money the club earns can pay for new players, facilities, managers, coaches etc, rather than going on debt (assuming the debt is now "clear").

 

What this has led to is (almost) a year on year increase on gross spending that need not necessarily end at any point....

 

 

I've left out 2014, where we bought no-one.  That was a gamble that paid off, we could have gone down, but without replacing Cabaye we stayed up, which meant we were closer to the break even point where the club can start progressing sooner.

 

None of this is to say we'll soon be challenging for Europe or that other clubs won't continue to outspend us.  We're just much less prone to Summers where we stagnate as we pay off the debts.

[Colos Short and Curlies]

I've no real gripe with looking for bargains etc, it should be seen to be a good thing to be able to upgrade or at least replace like for like whilst spending less then you bring in (using the Carroll money on Tiote, Ben Arfa, Cabaye and ultimately Cisse was really good business all round).

 

The problem is that its very difficult to buy to maintain a position. when we bought Cabaye et al I genuinely think we had aspirations to compete (albeit trying to do this through exploiting contracts etc) and could sell that to players who were better than our finishing position of 1th/12th.

 

Now we are trying to buy players to keep us in 8th - 10th and you either (a) overpay for players at that level or (b) take a real gamble on the likes of Perez and Riviere who by rights are at a level lower than 8th - 10th in the premier league (remember Perez came from the Spanish second division and has performed far in excess of expectations) so as a collective will only keep you at your target at best. In reality half + of these will turn out worse than hoped and you then start looking to consolidate 12th - 10th, buy players to do this and end up looking at 14th - 12th etc.

 

Without real ambition its so easy to getting sucked into buying bottom half players and struggling, there's loads of teams in the Premier Leagues history who have slowly but surely dropped 1-2 places a year and then suddenly find themselves in huge trouble. Ashley doesn't see this

 

I think he does, he's just sticking to the plan of slow, sustainable growth so he's not carrying the can for further investment.  Just wrote this over on TT, which is as I see it.....

 

What we had before Ashley and what we have with Ashley is a club that has to pay for itself.  No change.

 

With Ashley the club doesn't have to pay any dividends, board member salaries for 8 people in the same families and exorbitant rates of interest.  The previous owners got away with that level of waste by borrowing more money to spend and keep fans deluded that we were a strong club.  They were always happy that there would be another TV deal around the corner.  The problem came when we had to recalibrate our spending to pay the bills, even with the new TV deals.

 

For example, the 2 biggest net spends in the history of Newcastle United were in succesive years in 01/02 and 02/03.  Bellamy, Robert, Jenas, Viana, Bramble Woodgate and Ambrose were bought at a cost of £45m with literally nothing recouped whatsoever.  This was fine, because a new TV deal started soon (03/04), however because we spent big on borrowing it had to be repaid when that TV deal kicked in, so in 03/04 we bought no-one.  We sold Solano and Cort to turn a small profit, then we had to sell Speed and Woodgate to meet costs.  Every other club was rolling in cash and improving their squad while ours was worsening, so we finished 14th the following year.

 

Ashley is taking the opposite view.  He is not spending a single penny the club does not already have.  Even wages are accounted for up to the end of a contract when a player is bought, so the club are not caught short with expensive wage bills 3 years down the line on a player who wasn't good enough and is rotting in the reserves.  It's an infuriatingly risk averse strategy, but longer term it means ALL the money the club earns can pay for new players, facilities, managers, coaches etc, rather than going on debt (assuming the debt is now "clear").

 

What this has led to is (almost) a year on year increase on gross spending that need not necessarily end at any point....

 

 

I've left out 2014, where we bought no-one.  That was a gamble that paid off, we could have gone down, but without replacing Cabaye we stayed up, which meant we were closer to the break even point where the club can start progressing sooner.

 

None of this is to say we'll soon be challenging for Europe or that other clubs won't continue to outspend us.  We're just much less prone to Summers where we stagnate as we pay off the debts.

 

I really hope you're right and that the club will be able to reinvest profits rather than sit on cash. Of course it doesn't matter how much we spend if we have Carver in charge.

 

It will be interesting to see what calibre of player we are able to bring in - those that see us a team capable of more (Cabaye) or those that see us as the best they can get (Riviere).

[Interpolic]

It seems a bit misleading to say the gross spend is going up each year while leaving out 2014.  In summer 2014 we had to spend a certain chunk of money just to stand still (or arguably go backwards) due to a refusal to spend for 2 consecutive transfer windows.  If you split that gross spend over 2 years which would make far more logical sense then it equates to £18.7m per year.  Also I'm not sure why you're assuming Ashley will not pay back any of the debt owed to him and all spare cash can be spent from now on, it seems a bit of a leap as far as assumptions go.  In reality I think you're guessing like anyone else.

[Happy Face]

It seems a bit misleading to say the gross spend is going up each year while leaving out 2014.  In summer 2014 we had to spend a certain chunk of money just to stand still (or arguably go backwards) due to a refusal to spend for 2 consecutive transfer windows.  If you split that gross spend over 2 years which would make far more logical sense then it equates to £18.7m per year.  Also I'm not sure why you're assuming Ashley will not pay back any of the debt owed to him and all spare cash can be spent from now on, it seems a bit of a leap as far as assumptions go.  In reality I think you're guessing like anyone else.

 

I think the spending in 11/12 was higher than he'd have liked because we bought an "expensive" striker in Cisse.  £10m was beyond the level of what we were spending on players back then, but needed a striker as Carroll had gone and Ba had the release clause.

 

So in 12/13 we were supposed to cut back (only Anita in a frugal summer), but then we strugglesd in the league and spent in the winter, when we weren't going to.

 

That money was earmarked for summer 13/14, which is why there was no spend then.

 

In 14/15 the spend was at the affordable level the club would like to keep adding to.

 

So it's not right to split 14/15 into 13/14. i think of it more like £17m a season in 11/12, 12/13 and 13/14.

 

It's not an assumption that the club will stop re-paying Ashley debt.  It's as stated in the accounts....

 

http://i60.tinypic.com/2pu0t8o.png

 

£18m was repayable within 1 year, which everyone expects to have been covered off in the 13/14 accounts.  The rest....isn't.

[Unbelievable]

It's not an assumption that the club will stop re-paying Ashley debt.  It's as stated in the accounts....

 

http://i60.tinypic.com/2pu0t8o.png

 

£18m was repayable within 1 year, which everyone expects to have been covered off in the 13/14 accounts.  The rest....isn't.

 

It doesn't really say that though, does it? It says that 18m is repayable, not that the rest of the 129m isn't, unless I'm reading that wrong?

 

Also, from what I've read in the past (might be wrong), the debt is not actually non-interest bearing. Ashley has so far decided not to charge interest he is contractually entitled to, but he could if/when he wanted, even retrospectively. And even if he couldn't, there is nothing stopping him taking the profits out as dividend if he so desired, is there?

 

I want to believe you are right in being optimistic, but there is very little evidence that a change in approach for the better is upcoming, and plenty of evidence pointing to the contrary. Anyway, I'll believe it when I see it.

[Happy Face]

I find plenty to criticise Ashley for, without criticising him for what he might or might not do.

 

I always assume he's going to do what benefits him and sorts direct the most and Newcastle united second.

 

In terms of spending club earnings, Ashley, SD and NUFC all benefit greatest from the club investing all it can in players and coaching.

 

[Unbelievable]

I find plenty to criticise Ashley for, without criticising him for what he might or might not do.

 

I always assume he's going to do what benefits him and sorts direct the most and Newcastle united second.

 

In terms of spending club earnings, Ashley, SD and NUFC all benefit greatest from the club investing all it can in players and coaching.

 

 

I agree. I just don't think that's how he will see it, or he would have started doing it already.

[AyeDubbleYoo]

He could take any profits as dividends, but they're taxable above quite a low threshold. Guess he could also repay some of the remaining debt. It will be interesting to see what be does on that.

[Happy Face]

I find plenty to criticise Ashley for, without criticising him for what he might or might not do.

 

I always assume he's going to do what benefits him and sorts direct the most and Newcastle united second.

 

In terms of spending club earnings, Ashley, SD and NUFC all benefit greatest from the club investing all it can in players and coaching.

 

 

I agree. I just don't think that's how he will see it, or he would have started doing it already.

Paying off his £29m first would back you up.

 

What reason was there for him to repay that beyond a stubborn principle that he had said he wasn't putting any more in after the Keegan affair?

 

I think he'll stick to that though and stop repayments with the £29m satisfied.

[Unbelievable]

I find plenty to criticise Ashley for, without criticising him for what he might or might not do.

 

I always assume he's going to do what benefits him and sorts direct the most and Newcastle united second.

 

In terms of spending club earnings, Ashley, SD and NUFC all benefit greatest from the club investing all it can in players and coaching.

 

 

I agree. I just don't think that's how he will see it, or he would have started doing it already.

Paying off his £29m first would back you up.

 

What reason was there for him to repay that beyond a stubborn principle that he had said he wasn't putting any more in after the Keegan affair?

 

I think he'll stick to that though and stop repayments with the £29m satisfied.

 

I don't know the ins and outs of accounting, but didn't the club once come out to suggest that debt was necessary in the structure or something like that? I can only assume the 29m loan after the relegation season somehow is a different type of loan than the one from when he paid off existing club debts. To be perfectly honest, none of the club's actions with regards to finances make any sense to me, and with regards to football it's even worse

[Interpolic]

I find plenty to criticise Ashley for, without criticising him for what he might or might not do.

 

I always assume he's going to do what benefits him and sorts direct the most and Newcastle united second.

 

In terms of spending club earnings, Ashley, SD and NUFC all benefit greatest from the club investing all it can in players and coaching.

 

 

I agree. I just don't think that's how he will see it, or he would have started doing it already.

Paying off his £29m first would back you up.

 

What reason was there for him to repay that beyond a stubborn principle that he had said he wasn't putting any more in after the Keegan affair?

 

I think he'll stick to that though and stop repayments with the £29m satisfied.

 

Why?

 

It's an assumption as I said. I'm far more likely to believe he'll start pumping excess cash into anything but the playing squad unless we find ourselves in danger again. I firmly believe that they want us to actively avoid cup runs and European qualification in favour of the bare minimum that guarantees a place on the Premier League gravy train. Based on 7 years or so of evidence, and reading their bullshit about 5 year plans to become the next Arsenal or Villa or whoever suited them at the time.

 

I understand that you think you've spotted a trend and am always interested to read an argument that is built on solid analytical grounding, but in this case I don't think your guess is better than mine or anyone else's. Who's to say he won't start using excess cash after the initial loan is paid off to pay off the remainder of his loan or do whatever he likes with it for that matter? Not you, not me, not anyone but the fat, evil, unpredictable cunt that's done whatever he likes since he stepped through the door.

 

Assume the best all you like, but forgive me for assuming the worst.

 

PS you said that this financial trend you'd spotted was the reason you had no doubt we'd appoint the best candidate as manager, so I'll be interested to hear what you have to say if Carver gets the gig full time or we go into next season with Mike fucking Williamson making 30-plus appearances a season.

[AyeDubbleYoo]

Might have been mentioned but Panorama from last week hammering zero hours contracts, mentioning Ashley and Sports Direct by name and showing photos of the fat man etc.

[Interpolic]

Once Sports Direct hit the straight and narrow he'll stick the lot on full time contracts man, pipe down.

 

[Happy Face]

I find plenty to criticise Ashley for, without criticising him for what he might or might not do.

 

I always assume he's going to do what benefits him and sorts direct the most and Newcastle united second.

 

In terms of spending club earnings, Ashley, SD and NUFC all benefit greatest from the club investing all it can in players and coaching.

 

 

I agree. I just don't think that's how he will see it, or he would have started doing it already.

Paying off his £29m first would back you up.

 

What reason was there for him to repay that beyond a stubborn principle that he had said he wasn't putting any more in after the Keegan affair?

 

I think he'll stick to that though and stop repayments with the £29m satisfied.

 

Why?

 

It's an assumption as I said. I'm far more likely to believe he'll start pumping excess cash into anything but the playing squad unless we find ourselves in danger again. I firmly believe that they want us to actively avoid cup runs and European qualification in favour of the bare minimum that guarantees a place on the Premier League gravy train. Based on 7 years or so of evidence, and reading their bullshit about 5 year plans to become the next Arsenal or Villa or whoever suited them at the time.

 

I understand that you think you've spotted a trend and am always interested to read an argument that is built on solid analytical grounding, but in this case I don't think your guess is better than mine or anyone else's. Who's to say he won't start using excess cash after the initial loan is paid off to pay off the remainder of his loan or do whatever he likes with it for that matter? Not you, not me, not anyone but the fat, evil, unpredictable cunt that's done whatever he likes since he stepped through the door.

 

Assume the best all you like, but forgive me for assuming the worst.

 

PS you said that this financial trend you'd spotted was the reason you had no doubt we'd appoint the best candidate as manager, so I'll be interested to hear what you have to say if Carver gets the gig full time or we go into next season with Mike fucking Williamson making 30-plus appearances a season.

 

Yeah, it's just a case of "we'll see" at the moment isn't it.

 

Ashley, Llambias and Charnley have been shambolic in getting across the limitations the club has.  Whether it's because they don't want to draw attention to Ashley's refusal to invest or because they're too conceited to think they need to explain themselves to anyone, or because they are limitations that the owner will increase as time goes by, I don't know.

 

All I know is that up until this season NUFC weren't making enough money to spend it.  That wasn't a concerted effort by a malicious owner to keep the club as low down the league as possible while avoiding relegation.  It was just a financial fact...

 

 

Then with the sale of Cabaye, and the start of a new TV deal in 13/14, the club returned to profitability operationally and over the ownership of Ashley (after player trading).  Guessing the likely figures...

 

 

This is what led to the biggest net spend and the biggest gross spend since Ashley arrived.  And I see no reason to doubt it will be continued.

[Guest Roger Kint]

What biggest net spend? As in last summer? Why are you still peddling that nonsense as though Cabaye was never sold a few months earlier to fund it plus the further sales recently coving it completely? Its a net profit in the real world. We are up over £40m at a fair guess on transfers under MA and the fantasy you keep talking about of us having a big net spend is laughable.

[Happy Face]

What biggest net spend? As in last summer? Why are you still peddling that nonsense as though Cabaye was never sold a few months earlier to fund it plus the further sales recently coving it completely? Its a net profit in the real world. We are up over £40m at a fair guess on transfers under MA and the fantasy you keep talking about of us having a big net spend is laughable.

 

Cabaye was sold in 13/14 an earlier financial year.

 

14/15 then saw the largest net spend and the largest gross spend under Ashley.

 

http://41.media.tumblr.com/2a0beee0e12fb1801fd2a2ac2cb96260/tumblr_nlo1kbruEf1u89ei4o1_400.png

 

Don't know where you get £40m from.  £14.7m up on transfer fees over Ashley's time.

[Andymc1]

What biggest net spend? As in last summer? Why are you still peddling that nonsense as though Cabaye was never sold a few months earlier to fund it plus the further sales recently coving it completely? Its a net profit in the real world. We are up over £40m at a fair guess on transfers under MA and the fantasy you keep talking about of us having a big net spend is laughable.

 

Cabaye was sold in 13/14 an earlier financial year.

 

14/15 then saw the largest net spend and the largest gross spend under Ashley.

 

http://41.media.tumblr.com/2a0beee0e12fb1801fd2a2ac2cb96260/tumblr_nlo1kbruEf1u89ei4o1_400.png

 

Don't know where you get £40m from.  £14.7m up on transfer fees over Ashley's time.

 

Who gives a flying fuck man? I follow football because it's entertaining, I certainly don't follow the game to run the rule over balance sheets. Remember the days when no one took a ha'porth of notice what the accounts looked like.

[Unbelievable]

Going over old ground, but I fail to see why you keep looking at operational profit/loss as some indicator as to what Ashley might do on the transfer market, whilst ignoring what actually happens in terms of transfer fees incoming and outgoing?

[Happy Face]

Going over old ground, but I fail to see why you keep looking at operational profit/loss as some indicator as to what Ashley might do on the transfer market, whilst ignoring what actually happens in terms of transfer fees incoming and outgoing?

 

Operating profit/loss is intrinsic to what the club can afford to do.

 

If the club is hemorrhaging £30m a year before player trading, then players have to be sold to plug that leak.

 

If the club is just about breaking even then players have to be sold before we can buy.

 

If the club is earning £30m, then we can spend that on players before we sell anyone.

 

 

[Wullie]

There's a significant proportion of our support who will be completely mugged this summer when we spend a decent amount (which we will, to survive).

 

Prepare yourself for months of "finally Mike has realised" sentiments, as if buying a few players can put right the decimation of the entire competitive culture of the club since he arrived.

 

Happy Face has fallen for it before we've even spent a penny.

[Happy Face]

There's a significant proportion of our support who will be completely mugged this summer when we spend a decent amount (which we will, to survive).

 

Prepare yourself for months of "finally Mike has realised" sentiments, as if buying a few players can put right the decimation of the entire competitive culture of the club since he arrived.

 

Happy Face has fallen for it before we've even spent a penny.

 

I've fallen for nothing man.  It's exactly what they said was the approach 4 years ago. 

 

Club Finances

Our aim is to make Newcastle United self-financing. We cannot continue to acquire debt year after year and rely on additional financial support from the owner.

 

In 2008/09 we reported an operating loss before player trading of £37.7m. In 2009/10 that loss was £33.5m. Once audited, our accounts for 2010/11 are expected to show an operating loss of just £4.7m and this year we hope we will be close to breaking even.

 

Over the coming year we will continue to build the Club sustainably - on and off the field. We have a realistic view of what we can achieve at Newcastle and the time-frame required to achieve it. We have a strict spending policy and will not take a reckless approach which permits spending beyond our means. It is a sensible long-term plan for success and we have absolute confidence that this is the right model for Newcastle United.

 

I hated it then and I hate it now, but at least it's reaching the point where we can buy without selling.

 

The only people fooled will be the likes of Lovenkrands and Ryder in the chronicle today saying "Ashley needs to spend more", as if Ashley has an epiphany and decides to get more adventurous.  That would be bollocks.  It's been interminably slow growth and will continue at a similarly incremental way.

 

He's not put a penny in for 5 years and nor will he ever again. 

[Andymc1]

It's exactly what they said was the approach 4 years ago. 

 

Surely you're on a wind up?

[Wullie]

They'll spend exactly the amount that they think they need to in order to survive in the division, same as they always do. The amount they spend won't get us a better team, just like it didn't last summer despite the ENORMOUS spending that you bizarrely keep citing.

[Unbelievable]

Going over old ground, but I fail to see why you keep looking at operational profit/loss as some indicator as to what Ashley might do on the transfer market, whilst ignoring what actually happens in terms of transfer fees incoming and outgoing?

 

Operating profit/loss is intrinsic to what the club can afford to do.

 

If the club is hemorrhaging £30m a year before player trading, then players have to be sold to plug that leak.

 

If the club is just about breaking even then players have to be sold before we can buy.

 

If the club is earning £30m, then we can spend that on players before we sell anyone.

 

 

 

I understand that. It's just from 2011 onwards we have seen very manageable operational losses (which shouldn't have even been posted if SD paid a market fee for its advertising btw) and significant profit after player trading. We have not see significant investment in the playing squad in that time, and even worse, we don't even seem willing to pay the going rate for an actual manager who could transform the club's fortunes. I just don't see the significance of going from a very small red to black for operational profit you attribute to it. Do you really think Ashley will start throwing the cash (generated by the club itself mind you) around now, when he could have reinvested profits for the past four years and chose not to?

[Unbelievable]

They'll spend exactly the amount that they think they need to in order to survive in the division, same as they always do. The amount they spend won't get us a better team, just like it didn't last summer despite the ENORMOUS spending that you bizarrely keep citing.

 

Well, there's that too. We have made some absolutely horrendous sales lately. Ben Arfa released for free. Yanga-Mbiwa for 5m was it? Santon sold for 2.8m? We will have to spend big just to not go backwards.