Rafael Benitez

[Interpolic]

:lol:

[Darth Crooks]

If he carries on with his model of 'sensible finance' he won't have a PL club it's as simple as that. That doesn't make me wanting a blank cheque for Rafa. This isn't a relatively high margin business as far as I can tell.

[Hughesy]

I don't know enough about accounts to know exactly what we could be spending tbh, but it seems to me that we only spend actual cash we have in the bank whereas other clubs seem able/willing to borrow against guaranteed cash still to come.

 

From a business perspective it makes perfect sense but it fails to acknowledge the fundamental differences between a normal business and a football club.

 

Thing is though - it doesn't really make sense from a business perspective.  Lots of businesses have uneven income streams over the course of a year, but will still require funds to carry out day to day tasks which they will invariably need to borrow.

[NG32]

I'm sure Ashley and Llambias stated that we would only buy players with cash up front but we would then sell players to other clubs allowing them to pay for our players spread over a number of seasons.  Chocking ourselves of money in the bank.

 

Absolutely senseless.

 

 

[Shays Given Tim Flowers]

Why is Ashley NUFC's only line of credit?

[Shays Given Tim Flowers]

Why were we relegated in 2015.

[Hughesy]

Didn't we get a £40,000,000 parachute payment?

 

A. charney quoted in annual account that the loss of central distributed revenue after relegation is 30m.  I believe the so called central distributed revenue includes prize money, tv broadcast revenue and parachute payment.  Bit odd if it's not the case.

 

B.  We just receive it once as we promoted back immediately.  No more 40m this summer.

I don't wish to appear pedantic, however ,90 million more than offsets 40 million like

 

That's future revenue which is unearned in accounting sense, I guarantee you won't see this 90m in next account, if you mean the EPL TV broadcast rights income.  Whether this amount is spendable is judgemental - but the cash has not yet received so if the club has to spend it NOW it has to be FINANCED by Ashley own money.  Practically speaking, Ashley has to sell his shares to generate 90M cash and provide to Rafa, interest free, and he can only get it back 1 year later.

 

It is complicated, probably, to those who don't know accounting and financing. 

 

It doesn't need to be financed by Ashley - the club will no doubt have a revolving credit facility that it can draw funds under to finance ongoing business costs or the club could securitise the guaranteed sums and spend the cash now.

[Shays Given Tim Flowers]

Why did Ashley have to loan the club loads of interest free money?

[Shays Given Tim Flowers]

Why doesn't the club receive revenue for Sports Direct Advertising?

[Shays Given Tim Flowers]

Why has our commercial performance been so poor under Ashley's tenure?

[Dave]

I don't know enough about accounts to know exactly what we could be spending tbh, but it seems to me that we only spend actual cash we have in the bank whereas other clubs seem able/willing to borrow against guaranteed cash still to come.

 

From a business perspective it makes perfect sense but it fails to acknowledge the fundamental differences between a normal business and a football club.

 

Thing is though - it doesn't really make sense from a business perspective.  Lots of businesses have uneven income streams over the course of a year, but will still require funds to carry out day to day tasks which they will invariably need to borrow.

Of course, but the ideal scenario is that you always have enough free cash to do whatever you want without having to borrow any more. We're seemingly trying to run that model at all times but the current context is completely unsuitable for it.

[Hughesy]

It would probably be cheaper to get out a loan for the debt that is owed to Ashley, pay interest on it and then get Ashley to actually pay market value for the free advertising.

[Dave]

Didn't we get a £40,000,000 parachute payment?

 

A. charney quoted in annual account that the loss of central distributed revenue after relegation is 30m.  I believe the so called central distributed revenue includes prize money, tv broadcast revenue and parachute payment.  Bit odd if it's not the case.

 

B.  We just receive it once as we promoted back immediately.  No more 40m this summer.

I don't wish to appear pedantic, however ,90 million more than offsets 40 million like

 

That's future revenue which is unearned in accounting sense, I guarantee you won't see this 90m in next account, if you mean the EPL TV broadcast rights income.  Whether this amount is spendable is judgemental - but the cash has not yet received so if the club has to spend it NOW it has to be FINANCED by Ashley own money.  Practically speaking, Ashley has to sell his shares to generate 90M cash and provide to Rafa, interest free, and he can only get it back 1 year later.

 

It is complicated, probably, to those who don't know accounting and financing. 

 

It doesn't need to be financed by Ashley - the club will no doubt have a revolving credit facility that it can draw funds under to finance ongoing business costs or the club could securitise the guaranteed sums and spend the cash now.

DO YOU WANT TO DO A LEEDS OR SOMETHING?

[Zero]

I hear businesses can borrow money against projected earnings these days too.

 

It is meaningless in accrual accounting sense. 

 

Not sure what your point is here - we have a guaranteed income that is due at various stages over the season.  It makes perfect sense to borrow against guaranteed income streams.

 

The income is unearned.  Guaranteed future income in accrual accounting sense is not in the book yet.  You are basically spending before receiving in accrual accounting sense. Even if Ashley showing "ambition", how about next year? Cut back spending or continue to spend the next year revenue?

 

On top of that, I assume it's 3% interest cost per annum, so it's close to 3m interest cost. 

[Hughesy]

I don't know enough about accounts to know exactly what we could be spending tbh, but it seems to me that we only spend actual cash we have in the bank whereas other clubs seem able/willing to borrow against guaranteed cash still to come.

 

From a business perspective it makes perfect sense but it fails to acknowledge the fundamental differences between a normal business and a football club.

 

Thing is though - it doesn't really make sense from a business perspective.  Lots of businesses have uneven income streams over the course of a year, but will still require funds to carry out day to day tasks which they will invariably need to borrow.

Of course, but the ideal scenario is that you always have enough free cash to do whatever you want without having to borrow any more. We're seemingly trying to run that model at all times but the current context is completely unsuitable for it.

This isn't meant to be patronising and apologies if I've misunderstood, but I'm not sure I know of many companies (if any) (including FTSE 100 companies) that won't borrow money.  Debt isn't an issue - in many ways, with debt as cheap as it is, it's a sensible business decision.

[Twinport53]

I hear businesses can borrow money against projected earnings these days too.

 

It is meaningless in accrual accounting sense. 

 

Not sure what your point is here - we have a guaranteed income that is due at various stages over the season.  It makes perfect sense to borrow against guaranteed income streams.

 

The income is unearned.  Guaranteed future income in accrual accounting sense is not in the book yet.  You are basically spending before receiving in accrual accounting sense. Even if Ashley showing "ambition", how about next year? Cut back spending or continue to spend the next year revenue?

 

On top of that, I assume it's 3% interest cost per annum, so it's close to 3m interest cost.

 

Why are 19 other clubs spending that way.

[Hughesy]

I hear businesses can borrow money against projected earnings these days too.

 

It is meaningless in accrual accounting sense. 

 

Not sure what your point is here - we have a guaranteed income that is due at various stages over the season.  It makes perfect sense to borrow against guaranteed income streams.

 

The income is unearned.  Guaranteed future income in accrual accounting sense is not in the book yet.  You are basically spending before receiving in accrual accounting sense. Even if Ashley showing "ambition", how about next year? Cut back spending or continue to spend the next year revenue?

 

On top of that, I assume it's 3% interest cost per annum, so it's close to 3m interest cost. 

Not sure why the accounting treatment is particularly important to be honest.  It's quite common to borrow against future income.

 

As for future years, you continue to borrow against that particular year's money.  You're going to receive it, so there's no reason not to spend some of it.  Given the situation we are in where we absolutely have to stay up this season, now is not the time to not spend.

[LRD]

3m vs strengthening the team, increasing the chance of survival and going for a higher league finish and prize money which would cover the interest.

 

Let's save the 3m instead.

[Dave]

I don't know enough about accounts to know exactly what we could be spending tbh, but it seems to me that we only spend actual cash we have in the bank whereas other clubs seem able/willing to borrow against guaranteed cash still to come.

 

From a business perspective it makes perfect sense but it fails to acknowledge the fundamental differences between a normal business and a football club.

 

Thing is though - it doesn't really make sense from a business perspective.  Lots of businesses have uneven income streams over the course of a year, but will still require funds to carry out day to day tasks which they will invariably need to borrow.

Of course, but the ideal scenario is that you always have enough free cash to do whatever you want without having to borrow any more. We're seemingly trying to run that model at all times but the current context is completely unsuitable for it.

This isn't meant to be patronising and apologies if I've misunderstood, but I'm not sure I know of many companies (if any) (including FTSE 100 companies) that won't borrow money.  Debt isn't an issue - in many ways, with debt as cheap as it is, it's a sensible business decision.

[Wullie]

If every other club is borrowing in order to spend their guaranteed income to strengthen, you have to be pretty bloody stupid to employ a strategy of basically just keeping your fingers crossed and hoping they don't all strengthen enough to relegate you, especially when you're only starting from a Championship squad to begin with, unlike 17 of your 19 competitors.

[Zero]

I don't know enough about accounts to know exactly what we could be spending tbh, but it seems to me that we only spend actual cash we have in the bank whereas other clubs seem able/willing to borrow against guaranteed cash still to come.

 

From a business perspective it makes perfect sense but it fails to acknowledge the fundamental differences between a normal business and a football club.

Okay Dave, try to get it.

 

To be precise, in terms of "spending power", it is related to "net profit", not cash.  You can take a look at our accounts bottom line, the net profit.  That's roughly the real saving.  of course amortization played a part but roughly you can calculate our real spending power by this way (just for example): throughout 5 years we spend 10m net, and our profit is 2m per year, then our real spending power is 12m per year.  Very rough one, but wont varied much.

 

On the other hand, cash is related to "the payment".  If we don't have enough cash in our bank, we need other means to finance it, either from players sales, bank loan or owner loan.  This is not related to spending power, it's purely about the requirement for making a transfer to happen.  Unless the two teams agreed to defer the payment, if a club has no cash on hand, it cannot buy any players. 

 

So in our case, what Ashley means for no more injection is

1. No more loss business (I.e break even) and

2. No more personal cash in case the club has no cash to pay for the transfer.

 

It's complicated.  Try to understand it.

 

[Sean]

So what are you asking Ashley to do now? give a free check book to Rafa? Sell the club for nothing to a sugar daddy?  I am not defending the fat c*** but sometimes your "requirement" are just unrealistic.  Basically you are asking Ashley to give out his own money for Rafa to play and for your entertainment.  And within the whole process he gets nothing but potential huge loss if we relegate.  Tell me why would he do so?  Ambition? Ambition for what? Oh yeah I am the owner of a top 6 finish club, and the cost is 100m or even more?  What's the point?

 

I am very very puzzled.  You can blame Ashley for lots of poor decisions but to blame him for not being a sugar daddy and give out money like donation is ridiculous.  He DID give the money within the club to Rafa to spend, as I stated before, and it is the future income that has not been received that is in question.  So all additional money would come from Ashley pocket, and why would he do so? You keep on saying he should give out in order to be ambitious or to try, but what's the benefit for Ashley? Some suggest he can take it back later and it's just a kind of investment - ok I can't imagine what's the reaction here if his loan to the club is reduced later.  FYI his loan to the club, which is interest free, just keep on increasing since the takeover.

 

Be realistic, please.

 

Lost for words. Where did anyone mention sugar daddy? Myself I'd like him to run us like an actual fucking football club, nothing more. I don't give 2 fucks about his personal cash, I would however like the club to have access to all the money it generates (and yes that includes profit from the club shop, and also money for all the fucking Sports Direct advertising around the place). Ashley is robbing us blind and taking the piss at the same time and some of us are thankful for that. Jesus.

[TRon]

What's ironic is, by holding on until we've got X amount of money in the bank, it's ended up being worth half as much anyway because of the explosion in player values. Caused by other clubs spending money borrowed on future income.

[Altamullan]

Clock is ticking but I'm going off Rafa's words:

"We have to wait until the 1st of September and everything will be different... Still working on players behind the scenes... They know (the fans) which is the situation. That some of the players maybe they have to go. They know already or maybe a long time ago... still we have ten days until the end of the transfer window and we have too many players around..."

 

[Hanshithispantz]

I don't know enough about accounts to know exactly what we could be spending tbh, but it seems to me that we only spend actual cash we have in the bank whereas other clubs seem able/willing to borrow against guaranteed cash still to come.

 

From a business perspective it makes perfect sense but it fails to acknowledge the fundamental differences between a normal business and a football club.

Okay Dave, try to get it.

 

To be precise, in terms of "spending power", it is related to "net profit", not cash.  You can take a look at our accounts bottom line, the net profit.  That's roughly the real saving.  of course amortization played a part but roughly you can calculate our real spending power by this way (just for example): throughout 5 years we spend 10m net, and our profit is 2m per year, then our real spending power is 12m per year.  Very rough one, but wont varied much.

 

On the other hand, cash is related to "the payment".  If we don't have enough cash in our bank, we need other means to finance it, either from players sales, bank loan or owner loan.  This is not related to spending power, it's purely about the requirement for making a transfer to happen.  Unless the two teams agreed to defer the payment, if a club has no cash on hand, it cannot buy any players. 

 

So in our case, what Ashley means for no more injection is

1. No more loss business (I.e break even) and

2. No more personal cash in case the club has no cash to pay for the transfer.

 

It's complicated.  Try to understand it.

 

What a fucking knacker