Rafael Benitez

[Sean]

You want Ashley out, you have to make NUFC toxic to Sports Direct.

 

This is the crux of the issue. No matter the protests etc the best way to hurt Ashley is by harming Sports Direct. How we go about that is another question though.

[Unbelievable]

"I knew that the club would cost me money every year after I had bought it. I have backed the club with money. You can see that from the fact that Newcastle has the fifth highest wage bill in the Premier League. I was always prepared to bank roll Newcastle up to the tune of £20 million per year but no more. That was my bargain. I would make the club solvent. I would make it a going concern. I would pour up to £20 million a year into the club and not expect anything back."

 

Not once has he put a penny of his own money in, not once, other than when he bought it and to add to the club's debt to pay for his own mistakes.

 

Please explain what is loan from club owner and why it has increased to 129m term loan + 33m further loan = 164m as per latest account

 

A loan is money owed (to Ashley), which needs to be paid back at some stage and is interest bearing (we pay for it in free advertising). It is not the same as putting money in and expecting nothing in return. The debt was 70m when he bought us (mainly related to late 90's stadium extension as a 57m mortgage which had to be repaid in the event of a change in ownership). He then added 29m to pay off existing player transfer fees that were spread out in one go, another 29m as the cost of the first relegation (his mistake) and another 33m after the second relegation (again his mistake). He also profits from this loan fiscally as he offsets it in his holding company, hence paying less tax over his profits. So in short: no, a loan is entirely different to putting his own money in (as most other club owners have done by the way).

[Sean]

Why would anyone expect a Premier League club to have access to significant funding? Haven't you been keeping up with the news this summer that they're all absolutely skint?

 

How about just go to have a read on our annual account? I know ur hatred against the fat cunt but unless he bribed the accountant, the account is showing something else.

 

He's outsourced as much as possible so that the club doesn't make anywhere near as much money in the accounts as it should - a lot of profit is diverted elsewhere, i.e. through Sports Direct. I know thats probably ly a bit hard for you to understand like.

[Twinport53]

Zero is blatantly Kieth Bishop.

[Sean]

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

 

[Disco]

Zero is blatantly Kieth Bishop.

 

Is he Keith Bishop's brother?

[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.

 

Why are 19 other clubs spending that way.

 

Disregarding the sugar daddy club, lots of EPL clubs are actually doing a breakeven summer, and that's exactly the result of spending before receiving.  They knew the income would jump last summer and so they spent the money a year earlier, and now they are taking it back by no more net spending this summer.

 

However to those that failed the gamble and relegated, they would take a huge hit and that's exactly what we did during McClarens nightmare. 

 

I am not defending Ashley for not taking the gamble / tricked Rafa, just that I am saying it is unrealistic to ask him to do the gamble when he has failed once and I can't see the benefit for him to do it.  As I said before, the money saved can act as the reserve for relegation cost and that's the best defence to him against Rafas ultimatum.

[High Five o]

Zero man, jesus

[Zero]

Why would anyone expect a Premier League club to have access to significant funding? Haven't you been keeping up with the news this summer that they're all absolutely skint?

 

How about just go to have a read on our annual account? I know ur hatred against the fat c*** but unless he bribed the accountant, the account is showing something else.

 

He's outsourced as much as possible so that the club doesn't make anywhere near as much money in the accounts as it should - a lot of profit is diverted elsewhere, i.e. through Sports Direct. I know thats probably ly a bit hard for you to understand like.

 

Yea talking about commercial income lost, how much did we lost per year? Any concrete examples? What's the difference between us and say, Watford or Stoke?

[Unbelievable]

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.

 

Especially in a market where the value of assets (players) is rapidly increasing. 90m today probably gets you more value than 100m in a year's time, and the difference won't even be anywhere newr that big considering current interest rates.

[Hughesy]

"I knew that the club would cost me money every year after I had bought it. I have backed the club with money. You can see that from the fact that Newcastle has the fifth highest wage bill in the Premier League. I was always prepared to bank roll Newcastle up to the tune of £20 million per year but no more. That was my bargain. I would make the club solvent. I would make it a going concern. I would pour up to £20 million a year into the club and not expect anything back."

 

Not once has he put a penny of his own money in, not once, other than when he bought it and to add to the club's debt to pay for his own mistakes.

 

Please explain what is loan from club owner and why it has increased to 129m term loan + 33m further loan = 164m as per latest account

 

A loan is money owed (to Ashley), which needs to be paid back at some stage and is interest bearing (we pay for it in free advertising). It is not the same as putting money in and expecting nothing in return. The debt was 70m when he bought us (mainly related to late 90's stadium extension as a 57m mortgage which had to be repaid in the event of a change in ownership). He then added 29m to pay off existing player transfer fees that were spread out in one go, another 29m as the cost of the first relegation (his mistake) and another 33m after the second relegation (again his mistake). He also profits from this loan fiscally as he offsets it in his holding company, hence paying less tax over his profits. So in short: no, a loan is entirely different to putting his own money in (as most other club owners have done by the way).

 

I'll never ever get the Ashley line about not knowing about the repayment of the debt to fund the stadium.  Change of control provision is included in pretty much every loan agreement - even if you did no due diligence at all, you would expect there to be one.  In any event, it's relatively common to speak to a bank and ask them to continue to provide the loan.

[tmonkey]

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.

 

Firstly, we could sign players paid via installments. Refusal to do so is idiotic and imo motivated by a desire to hold back, or withdraw, cash whilst gambling on the squad being good enough to survive. But then a club generating the turnover ours does (usually top 7 in UK, top 20 worldwide) wouldn't have been relegated twice (and almost relegated a few more times) if we weren't owned by an idiot putting his own self interests first.

 

Secondly, Mike Ashley can't use a lack of funds available as an excuse if he's actively reducing the club's revenues by giving free advertisement away to Sports Direct, which benefits him and him alone. That's some serious advertising real estate he's giving away to himself for free.

 

Thirdly, if reports are to be believed Rafa isn't just upset with the lack of money available despite the promises. It's also about the club not bothering to bring in who he wants, even if they're available for cheap or on a loan. The reporting around Tammy Abraham for example suggests that Rafa wanted him, had him lined up after speaking to him, but the club never bothered to make a proper move which is why Tammy opted for Swansea. Similar to Keegan and Hyppia, or whoever Rafa was angry about in the January transfer window (when Ashley & Co effectively apologised as they hadn't anticipated Rafa making things public).

 

Ultimately though, would you really want to trust Mike Ashley over Rafa Benitez? Purely in terms of personality Ashley is as legally close as you can get to a modern day slave owner operating in the retail sector. We've had Panorama documentaries and MPs/newspapers going after him because he's such a dodgey businessman, and the tax authorities have already raided his premises and arrested a number of people he's associated with over fraud. He's been proven a liar in court with respect to football, we know he's employed people at NUFC who have acted shadily (e.g. Wise & co buying via select agents), he's clearly secretive and aloof, he utilises PR against fans, he employs questionable people to roles they shouldn't be anywhere near, so on and so forth. Not sure why you'd side with a person like that over the equivalent of a footballing saint in Rafa. 

[Unbelievable]

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.

 

[Sean]

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.

 

Disregarding the sugar daddy club, lots of EPL clubs are actually doing a breakeven summer, and that's exactly the result of spending before receiving.  They knew the income would jump last summer and so they spent the money a year earlier, and now they are taking it back by no more net spending this summer.

 

However to those that failed the gamble and relegated, they would take a huge hit and that's exactly what we did during McClarens nightmare. 

 

I am not defending Ashley for not taking the gamble / tricked Rafa, just that I am saying it is unrealistic to ask him to do the gamble when he has failed once and I can't see the benefit for him to do it.  As I said before, the money saved can act as the reserve for relegation cost and that's the best defence to him against Rafas ultimatum.

 

So explain why our club has had so many income streams denied to it/taken away by Ashley? So that he can say the club's not as profitable as it is in reality.

 

How much would we get for the advertising space taken up for free by Sports Direct? Take a guess.

 

Fail to see why you're so invested in spinning things so ridiculously unless as mentioned theres some incentive for you.

 

 

[Zero]

"I knew that the club would cost me money every year after I had bought it. I have backed the club with money. You can see that from the fact that Newcastle has the fifth highest wage bill in the Premier League. I was always prepared to bank roll Newcastle up to the tune of £20 million per year but no more. That was my bargain. I would make the club solvent. I would make it a going concern. I would pour up to £20 million a year into the club and not expect anything back."

 

Not once has he put a penny of his own money in, not once, other than when he bought it and to add to the club's debt to pay for his own mistakes.

 

Please explain what is loan from club owner and why it has increased to 129m term loan + 33m further loan = 164m as per latest account

 

A loan is money owed (to Ashley), which needs to be paid back at some stage and is interest bearing (we pay for it in free advertising). It is not the same as putting money in and expecting nothing in return. The debt was 70m when he bought us (mainly related to late 90's stadium extension as a 57m mortgage which had to be repaid in the event of a change in ownership). He then added 29m to pay off existing player transfer fees that were spread out in one go, another 29m as the cost of the first relegation (his mistake) and another 33m after the second relegation (again his mistake). He also profits from this loan fiscally as he offsets it in his holding company, hence paying less tax over his profits. So in short: no, a loan is entirely different to putting his own money in (as most other club owners have done by the way).

 

Give me examples that a normal club in EPL would have an income item called "owners donation".

[High Five o]

"I knew that the club would cost me money every year after I had bought it. I have backed the club with money. You can see that from the fact that Newcastle has the fifth highest wage bill in the Premier League. I was always prepared to bank roll Newcastle up to the tune of £20 million per year but no more. That was my bargain. I would make the club solvent. I would make it a going concern. I would pour up to £20 million a year into the club and not expect anything back."

 

Not once has he put a penny of his own money in, not once, other than when he bought it and to add to the club's debt to pay for his own mistakes.

 

Please explain what is loan from club owner and why it has increased to 129m term loan + 33m further loan = 164m as per latest account

 

A loan is money owed (to Ashley), which needs to be paid back at some stage and is interest bearing (we pay for it in free advertising). It is not the same as putting money in and expecting nothing in return. The debt was 70m when he bought us (mainly related to late 90's stadium extension as a 57m mortgage which had to be repaid in the event of a change in ownership). He then added 29m to pay off existing player transfer fees that were spread out in one go, another 29m as the cost of the first relegation (his mistake) and another 33m after the second relegation (again his mistake). He also profits from this loan fiscally as he offsets it in his holding company, hence paying less tax over his profits. So in short: no, a loan is entirely different to putting his own money in (as most other club owners have done by the way).

 

Give me examples that a normal club in EPL would have an income item called "owners donation".

He could have signed a sponsorship deal with sports direct and funded us that way. You know, pay for the advertising space.

[Sean]

"I knew that the club would cost me money every year after I had bought it. I have backed the club with money. You can see that from the fact that Newcastle has the fifth highest wage bill in the Premier League. I was always prepared to bank roll Newcastle up to the tune of £20 million per year but no more. That was my bargain. I would make the club solvent. I would make it a going concern. I would pour up to £20 million a year into the club and not expect anything back."

 

Not once has he put a penny of his own money in, not once, other than when he bought it and to add to the club's debt to pay for his own mistakes.

 

Please explain what is loan from club owner and why it has increased to 129m term loan + 33m further loan = 164m as per latest account

 

A loan is money owed (to Ashley), which needs to be paid back at some stage and is interest bearing (we pay for it in free advertising). It is not the same as putting money in and expecting nothing in return. The debt was 70m when he bought us (mainly related to late 90's stadium extension as a 57m mortgage which had to be repaid in the event of a change in ownership). He then added 29m to pay off existing player transfer fees that were spread out in one go, another 29m as the cost of the first relegation (his mistake) and another 33m after the second relegation (again his mistake). He also profits from this loan fiscally as he offsets it in his holding company, hence paying less tax over his profits. So in short: no, a loan is entirely different to putting his own money in (as most other club owners have done by the way).

 

I'll never ever get the Ashley line about not knowing about the repayment of the debt to fund the stadium.  Change of control provision is included in pretty much every loan agreement - even if you did no due diligence at all, you would expect there to be one.  In any event, it's relatively common to speak to a bank and ask them to continue to provide the loan.

 

100%, he knew all about it. It's just a great excuse to not invest and to get some simpletons to agree with that.

[Zero]

Nah, enough, I just don't understand what's the point of arguing like I am defending the fat cunt.  I am just saying look at the account and be realistic, unless there is a sugar daddy owner, what we can spend this summer is more or less around 20-30M unless Ashley put his own money in or spend future income which doesn't make sense in Ashley perspective.  The so called "spending 70m without additional funding from Ashley" does not exist from day one accounting to annual accounts, that's it.  Yes it is due to relegation cost, yes it is due to his past stubbornness, yes if he is gutsy enough he can gamble by using future revenue (which does him absolutely no good).  But I am just saying it is unrealistic as it simply won't happen.  Okay?

[High Five o]

No

[Sean]

Not defending him? OK then.

[Zero]

"I knew that the club would cost me money every year after I had bought it. I have backed the club with money. You can see that from the fact that Newcastle has the fifth highest wage bill in the Premier League. I was always prepared to bank roll Newcastle up to the tune of £20 million per year but no more. That was my bargain. I would make the club solvent. I would make it a going concern. I would pour up to £20 million a year into the club and not expect anything back."

 

Not once has he put a penny of his own money in, not once, other than when he bought it and to add to the club's debt to pay for his own mistakes.

 

Please explain what is loan from club owner and why it has increased to 129m term loan + 33m further loan = 164m as per latest account

 

A loan is money owed (to Ashley), which needs to be paid back at some stage and is interest bearing (we pay for it in free advertising). It is not the same as putting money in and expecting nothing in return. The debt was 70m when he bought us (mainly related to late 90's stadium extension as a 57m mortgage which had to be repaid in the event of a change in ownership). He then added 29m to pay off existing player transfer fees that were spread out in one go, another 29m as the cost of the first relegation (his mistake) and another 33m after the second relegation (again his mistake). He also profits from this loan fiscally as he offsets it in his holding company, hence paying less tax over his profits. So in short: no, a loan is entirely different to putting his own money in (as most other club owners have done by the way).

 

Give me examples that a normal club in EPL would have an income item called "owners donation".

He could have signed a sponsorship deal with sports direct and funded us that way. You know, pay for the advertising space.

 

Yea, by market price, additional 4m per year?  unless it is the difference between relegation or not, would this help to give us an additional Batshuayi?

[High Five o]

"I knew that the club would cost me money every year after I had bought it. I have backed the club with money. You can see that from the fact that Newcastle has the fifth highest wage bill in the Premier League. I was always prepared to bank roll Newcastle up to the tune of £20 million per year but no more. That was my bargain. I would make the club solvent. I would make it a going concern. I would pour up to £20 million a year into the club and not expect anything back."

 

Not once has he put a penny of his own money in, not once, other than when he bought it and to add to the club's debt to pay for his own mistakes.

 

Please explain what is loan from club owner and why it has increased to 129m term loan + 33m further loan = 164m as per latest account

 

A loan is money owed (to Ashley), which needs to be paid back at some stage and is interest bearing (we pay for it in free advertising). It is not the same as putting money in and expecting nothing in return. The debt was 70m when he bought us (mainly related to late 90's stadium extension as a 57m mortgage which had to be repaid in the event of a change in ownership). He then added 29m to pay off existing player transfer fees that were spread out in one go, another 29m as the cost of the first relegation (his mistake) and another 33m after the second relegation (again his mistake). He also profits from this loan fiscally as he offsets it in his holding company, hence paying less tax over his profits. So in short: no, a loan is entirely different to putting his own money in (as most other club owners have done by the way).

 

Give me examples that a normal club in EPL would have an income item called "owners donation".

He could have signed a sponsorship deal with sports direct and funded us that way. You know, pay for the advertising space.

 

Yea, by market price, additional 4m per year?  unless it is the difference between relegation or not, would this help to give us an additional Batshuayi?

Some owners pay above market price for club sponsorships. Like you know, a clever accounting trick to inject funds to the club.

[Zero]

Not defending him? OK then.

 

I said I am very puzzled that people are suggesting Ashley to in fact act like a sugar daddy this summer which is unrealistic, and this is partly due to an over estimation of our club spending power which the annual account has showed, even if taken into account those "manipulation" Ashley did.  Got it?

[Optimistic Nut]

I thought I was reading Paully's longest ever post there until I saw the misquote.

[Paully]

Superb post by tmonkey on the previous page!