NUFC transfer rumours in the press

[Unbelievable]

What is it with people thinking a company that has paid off its debts is worth LESS to potential buyers than one that hasn't, what with assets being the same and profitability probably higher (otherwise how pay off the loan). I'm no accountant, but when Ashley starts repaying large chunks of our interest free loan, I don't see how that benefits the club or us as supporters at all. It's just profits going out of the company that could have been reinvested, and has no (negative) bearing on any asking price for the club, or am I missing something?

 

Whether you have paid off debts or not is largely irrelevant in valuing thr company. You value the business operations- that is what you are buying. To get to the value of the equity in the business you take the business valuation (usually a multiple of earnings) then subtract long-term debt (ie not day-to-day working capital) and add back cash.

 

There was a great article on this featuring David Wilkinson of Deloitte, who is a very nice man and clearly knows his stuff:

 

http://www.chroniclelive.co.uk/sport/how-much-would-cost-buy-4803989

 

Good read. Some excellent reactions to it as well. Here's a section from somebody who seems to know what he's talking about, which backs up my point, as you do too btw, that Ashley paying off the debt will not automatically lower Ashley's asking price, but will more likely have the opposite effect:

 

The point is that if Ashley takes an optimistic view of the above , then irrespective of his personal feelings .. he could project the club generating profits each year, and paying down his debt ....... irrespective of his personal liking for his role as chairman .. the club would become expensive to buy from a purely commercial view point .. but of course potentially more attractive to a potential acquirer.

[Stuy_O]

We are debt free to Banks unlike all the other clubs, we owe fatty the money.

 

Which other clubs are borrowing from banks to fund transfers? The vast majority of funds into clubs appears to be coming from owners pockets.

 

If I were a credit officer at a bank and was asked to write a loan to a football club to fund transfers, the request would be almost surely get shredded. I can barely imagine a worse use of funds.

 

Not just transfers though is it clubs use money for though is it? Training facilities, stadium expansions are all areas a club would look to a bank to surely?

[Unbelievable]

What is it with people thinking a company that has paid off its debts is worth LESS to potential buyers than one that hasn't, what with assets being the same and profitability probably higher (otherwise how pay off the loan). I'm no accountant, but when Ashley starts repaying large chunks of our interest free loan, I don't see how that benefits the club or us as supporters at all. It's just profits going out of the company that could have been reinvested, and has no (negative) bearing on any asking price for the club, or am I missing something?

 

Whether you have paid off debts or not is largely irrelevant in valuing thr company. You value the business operations- that is what you are buying. To get to the value of the equity in the business you take the business valuation (usually a multiple of earnings) then subtract long-term debt (ie not day-to-day working capital) and add back cash.

 

There was a great article on this featuring David Wilkinson of Deloitte, who is a very nice man and clearly knows his stuff:

 

http://www.chroniclelive.co.uk/sport/how-much-would-cost-buy-4803989

 

“The wages last year were £64m from a revenue of £94m, so that is about 70%, so they are 20% over the top.”

 

Splash another £20m on players would you mike, it'll be 'reet.

 

Do you or do you not accept that in today's top flight football, most if not all (other) clubs do not live within their means, and indeed many receive outside investment from their owners? If so, how do you expect us to compete with them long term? There's a balance to be struck here between financial awareness and controlled ambition, which is not only absolute, but also relative to our competitors, and we're nowhere near getting it right. If I was a shareholder of NUFC I would be delighted by Ashley's management, but I'm not. I'm a football fan, and I want to be entertained for the money and effort I put into the club, not support a balance sheet, but a team sheet. If Ashley does not understand the difference between a SD shop and NUFC he's even thicker than he looks.

[henke]

Have we not gone from a situation where during the first year Ashley was in charge he was pledging iirc £35mil of his own money, year on year. To now where he's skimming the profits to pay back his own interest free loan. That leaves us upwards of £40mil a year worse off, with an owner who has zero ambition beyond getting his money back. We're absolutely fucked until this bloke moves on.

[Ishmael]

Will be interesting to see what happens to all these posts talking about ambition if we land the two strikers we need.

[Wullie]

Will be interesting to see what happens to all these posts talking about ambition if we land the two strikers we need.

 

We need wide players more than we need strikers.

[Ishmael]

What is it with people thinking a company that has paid off its debts is worth LESS to potential buyers than one that hasn't, what with assets being the same and profitability probably higher (otherwise how pay off the loan). I'm no accountant, but when Ashley starts repaying large chunks of our interest free loan, I don't see how that benefits the club or us as supporters at all. It's just profits going out of the company that could have been reinvested, and has no (negative) bearing on any asking price for the club, or am I missing something?

 

Whether you have paid off debts or not is largely irrelevant in valuing thr company. You value the business operations- that is what you are buying. To get to the value of the equity in the business you take the business valuation (usually a multiple of earnings) then subtract long-term debt (ie not day-to-day working capital) and add back cash.

 

There was a great article on this featuring David Wilkinson of Deloitte, who is a very nice man and clearly knows his stuff:

 

http://www.chroniclelive.co.uk/sport/how-much-would-cost-buy-4803989

 

“The wages last year were £64m from a revenue of £94m, so that is about 70%, so they are 20% over the top.”

 

Splash another £20m on players would you mike, it'll be 'reet.

 

Do you or do you not accept that in today's top flight football, most if not all (other) clubs do not live within their means, and indeed many receive outside investment from their owners? If so, how do you expect us to compete with them long term? There's a balance to be struck here between financial awareness and controlled ambition, which is not only absolute, but also relative to our competitors, and we're nowhere near getting it right. If I was a shareholder of NUFC I would be delighted by Ashley's management, but I'm not. I'm a football fan, and I want to be entertained for the money and effort I put into the club, not support a balance sheet, but a team sheet. If Ashley does not understand the difference between a SD shop and NUFC he's even thicker than he looks.

 

Do you thing living outside of your means is a viable long-term option?  No.  Is living within your means?  Probably.  OK, so we win there.  And ofc, I will put the big  assumption that we invest sufficiently and progress in lots of different areas.

 

I'm a football fan too, but I'd rather support a well run club that operates within its means on money the club makes, which doesn't have to rely on some oil rich arab family whose fundamental purpose for ownership is to use the club as an advertising vehicle or on money made illegally from the fall of the Soviet Union.

[Guest bimpy474]

Will be interesting to see what happens to all these posts talking about ambition if we land the two strikers we need.

 

We need wide players more than we need strikers.

 

We need both, especially if it's to be 4-4-2.

[Stuy_O]

Will be interesting to see what happens to all these posts talking about ambition if we land the two strikers we need.

 

They'll still be there. Ashley will have got us a striker on loan and another one who is available. I'll be pleased we have them, but that doesn't mean Mike Ashley has ambition towards Newcastle.

[Ishmael]

Will be interesting to see what happens to all these posts talking about ambition if we land the two strikers we need.

 

We need wide players more than we need strikers.

 

Do we?  Cos I think we need both and if I had to rank the two in terms of importance then I guess I'd put a striker as our #1 priority.  The club seem to agree.  I mean, after Cisse it's the boy wonder and then we wonder...

[AyeDubbleYoo]

We desperately need a backup for Cisse really, at least as much as a winger.

[henke]

Will be interesting to see what happens to all these posts talking about ambition if we land the two strikers we need.

 

It won't change my views on Ashleys / the clubs ambition, it's a carefully planned outlay vs return scenario. The man is prepared to fork out money when, and only when he can see a return on it. The only reason for finishing higher up the table is you net £500,000 per place.

[Wullie]

Will be interesting to see what happens to all these posts talking about ambition if we land the two strikers we need.

 

We need wide players more than we need strikers.

 

Do we?  Cos I think we need both and if I had to rank the two in terms of importance then I guess I'd put a striker as our #1 priority.  The club seem to agree.  I mean, after Cisse it's the boy wonder and then we wonder...

 

Wow Joe Kinnear agrees with you, you must be right.

 

Of course we are absolutely fucking desperate for wide players otherwise it's Jonas and Sammy providing the service to these strikers.

[Mole_Toonfan]

We do need a winger but plenty of clubs in the league play without them and do fine, set the team up the right way and we MIGHT get away with it.

 

We are not going to get away with signing no strikers though.

[Wullie]

We desperately need a backup for Cisse really, at least as much as a winger.

 

A backup is more important than a player for the first team to replace Jonas?

[Ishmael]

Ben Arfa, Marveaux, Sissoko *shudders* and Jonas are probably the "wide players."  You're right though, we need to improve that area.

 

But what do you prefer?  Improve those four or improve the Cisse, Shola strike force?

[Unbelievable]

What is it with people thinking a company that has paid off its debts is worth LESS to potential buyers than one that hasn't, what with assets being the same and profitability probably higher (otherwise how pay off the loan). I'm no accountant, but when Ashley starts repaying large chunks of our interest free loan, I don't see how that benefits the club or us as supporters at all. It's just profits going out of the company that could have been reinvested, and has no (negative) bearing on any asking price for the club, or am I missing something?

 

Whether you have paid off debts or not is largely irrelevant in valuing thr company. You value the business operations- that is what you are buying. To get to the value of the equity in the business you take the business valuation (usually a multiple of earnings) then subtract long-term debt (ie not day-to-day working capital) and add back cash.

 

There was a great article on this featuring David Wilkinson of Deloitte, who is a very nice man and clearly knows his stuff:

 

http://www.chroniclelive.co.uk/sport/how-much-would-cost-buy-4803989

 

“The wages last year were £64m from a revenue of £94m, so that is about 70%, so they are 20% over the top.”

 

Splash another £20m on players would you mike, it'll be 'reet.

 

Do you or do you not accept that in today's top flight football, most if not all (other) clubs do not live within their means, and indeed many receive outside investment from their owners? If so, how do you expect us to compete with them long term? There's a balance to be struck here between financial awareness and controlled ambition, which is not only absolute, but also relative to our competitors, and we're nowhere near getting it right. If I was a shareholder of NUFC I would be delighted by Ashley's management, but I'm not. I'm a football fan, and I want to be entertained for the money and effort I put into the club, not support a balance sheet, but a team sheet. If Ashley does not understand the difference between a SD shop and NUFC he's even thicker than he looks.

 

Do you thing living outside of your means is a viable long-term option?  No.  Is living within your means?  Probably.  OK, so we win there.  And ofc, I will put the big  assumption that we invest sufficiently and progress in lots of different areas.

 

I'm a football fan too, but I'd rather support a well run club that operates within its means on money the club makes, which doesn't have to rely on some oil rich arab family whose fundamental purpose for ownership is to use the club as an advertising vehicle or on money made illegally from the fall of the Soviet Union.

 

We'll be sitting handsomely in the lower leagues a few years down the line if we don't keep up with the competition, but hey ho, at least we'll have paid off our debt! We win indeed.

 

As for that last sentence about not wanting an owner who uses the club as an advertising vehicle: are you for fucking real!?

[AyeDubbleYoo]

Will be interesting to see what happens to all these posts talking about ambition if we land the two strikers we need.

 

It won't change my views on Ashleys / the clubs ambition, it's a carefully planned outlay vs return scenario. The man is prepared to fork out money when, and only when he can see a return on it. The only reason for finishing higher up the table is you net £500,000 per place.

 

The fact is that Ashley has delivered plenty of good signings and will probably still do so, the problem is he won't do it as often or go as high as we would like, and in the meantime he'll throw in a couple of catastrophic errors in other areas of the club.

 

IMO our transfer dealing is the least of our worries.

[Ishmael]

We desperately need a backup for Cisse really, at least as much as a winger.

 

A backup is more important than a player for the first team to replace Jonas?

 

Wont be a back-up if we go 4-4-fucking-2. 

[AyeDubbleYoo]

We desperately need a backup for Cisse really, at least as much as a winger.

 

A backup is more important than a player for the first team to replace Jonas?

 

Well I don't think we need to play Jonas as it is. Obviously both players are needed, but I don't want to think of the consequences of relying on Shola.

[Wullie]

Ben Arfa, Marveaux, Sissoko *shudders* and Jonas are probably the "wide players."  You're right though, we need to improve that area.

 

But what do you prefer?  Improve those four or improve the Cisse, Shola strike force?

 

So our two first team wide player options consist of at least three players playing out of position?

 

As opposed to Papiss Cisse playing in his own position alone or with another striker in Gouffran?

 

Gee tough one.

[Wullie]

We desperately need a backup for Cisse really, at least as much as a winger.

 

A backup is more important than a player for the first team to replace Jonas?

 

Well I don't think we need to play Jonas as it is. Obviously both players are needed, but I don't want to think of the consequences of relying on Shola.

 

Cisse is our first choice striker. Who plays either side if we started tomorrow?

[AyeDubbleYoo]

We desperately need a backup for Cisse really, at least as much as a winger.

 

A backup is more important than a player for the first team to replace Jonas?

 

Well I don't think we need to play Jonas as it is. Obviously both players are needed, but I don't want to think of the consequences of relying on Shola.

 

Cisse is our first choice striker. Who plays either side if we started tomorrow?

 

I would play a 433 with Gouffran and Ben Arfa either side.

[Wullie]

What is it with people thinking a company that has paid off its debts is worth LESS to potential buyers than one that hasn't, what with assets being the same and profitability probably higher (otherwise how pay off the loan). I'm no accountant, but when Ashley starts repaying large chunks of our interest free loan, I don't see how that benefits the club or us as supporters at all. It's just profits going out of the company that could have been reinvested, and has no (negative) bearing on any asking price for the club, or am I missing something?

 

Whether you have paid off debts or not is largely irrelevant in valuing thr company. You value the business operations- that is what you are buying. To get to the value of the equity in the business you take the business valuation (usually a multiple of earnings) then subtract long-term debt (ie not day-to-day working capital) and add back cash.

 

There was a great article on this featuring David Wilkinson of Deloitte, who is a very nice man and clearly knows his stuff:

 

http://www.chroniclelive.co.uk/sport/how-much-would-cost-buy-4803989

 

“The wages last year were £64m from a revenue of £94m, so that is about 70%, so they are 20% over the top.”

 

Splash another £20m on players would you mike, it'll be 'reet.

 

Do you or do you not accept that in today's top flight football, most if not all (other) clubs do not live within their means, and indeed many receive outside investment from their owners? If so, how do you expect us to compete with them long term? There's a balance to be struck here between financial awareness and controlled ambition, which is not only absolute, but also relative to our competitors, and we're nowhere near getting it right. If I was a shareholder of NUFC I would be delighted by Ashley's management, but I'm not. I'm a football fan, and I want to be entertained for the money and effort I put into the club, not support a balance sheet, but a team sheet. If Ashley does not understand the difference between a SD shop and NUFC he's even thicker than he looks.

 

Do you thing living outside of your means is a viable long-term option?  No.  Is living within your means?  Probably.  OK, so we win there.  And ofc, I will put the big  assumption that we invest sufficiently and progress in lots of different areas.

 

I'm a football fan too, but I'd rather support a well run club that operates within its means on money the club makes, which doesn't have to rely on some oil rich arab family whose fundamental purpose for ownership is to use the club as an advertising vehicle or on money made illegally from the fall of the Soviet Union.

 

We'll be sitting handsomely in the lower leagues a few years down the line if we don't keep up with the competition, but hey ho, at least we'll have paid off our debt! We win indeed.

 

As for that last sentence about not wanting an owner who uses the club as an advertising vehicle: are you for fucking real!?

 

 

WUM. Him, not you. Time for bed.

[Guest bimpy474]

Ben Arfa, Marveaux, Sissoko *shudders* and Jonas are probably the "wide players."  You're right though, we need to improve that area.

 

But what do you prefer?  Improve those four or improve the Cisse, Shola strike force?

 

So our two first team wide player options consist of at least three players playing out of position?

 

As opposed to Papiss Cisse playing in his own position alone or with another striker in Gouffran?

 

Gee tough one.

 

4-3-3 Gouffran left, Cisse middle, Ben Arfa right. Jonas can feck off.