Takeover Thread - July 1st statement, Staveley letter to Tracey Crouch (and response) in OP

[RS]

The wages will be offset by sales. Colback for one is finally off the books

ASM to Man U

[Shearergol]

That £17m surely went straight to the owner, not the club? If I put a fiver deposit down for a toaster, the fiver is given to the owner of the toaster, not the toaster itself?

 

The club is 100% owned by the owner though, so it's the same thing, no?

[gdm]

The wages will be offset by sales. Colback for one is finally off the books

 

We had already written off his wages.

 

Very well but the point I’m making is we arnt going way above and beyond our quoted budget. I don’t see these deals as confidence from Ashley that the club will soon be sold or anything like that, simply we’ve a £35m budget and we are there or there abouts

[gjohnson]

The wages will be offset by sales. Colback for one is finally off the books

 

We had already written off his wages.

 

It's not beyond this club to have continued to include  dthem in normal wage costs. There's probably some creative accounting trick which will have let them do it so they can continue to plead poverty. Wouldn't surprise me at all...pay a knowledgeable account a few hundred thousand to look like the salary has been paid in full, while still paying the wage then claiming a high wage bill as an excuse not to spend millions. Sounds like a typical Ashley MO to me

[Darth Crooks]

That £17m surely went straight to the owner, not the club? If I put a fiver deposit down for a toaster, the fiver is given to the owner of the toaster, not the toaster itself?

 

The club is 100% owned by the owner though, so it's the same thing, no?

 

Anything could have happened. That deposit isn’t the same as him taking it out of personal wealth although it objectively is. It’s linked with the club.’ People cheat that’s what businesses do’ as a great man once said

[Yorkie]

That £17m surely went straight to the owner, not the club? If I put a fiver deposit down for a toaster, the fiver is given to the owner of the toaster, not the toaster itself?

 

The club is 100% owned by the owner though, so it's the same thing, no?

 

I don't understand business transactions of this scale so am happy to have it explained why I'm wrong: but surely if I want something to become my property - I give money to the owner of that property, rather than to the property itself? So the 17mill goes to Ashley and he can do with it whatever the hell he wants?

 

So the toaster owner could put that fiver towards a new heating element to improve the toaster, but they're not entitled to. They could go and spend it on anything.

[Penn]

You can't 'write off' salary costs. Colback's value as an asset on the balance sheet was written off, not his wages.

 

 

We were paying Colback £200k a month and that cost was going through our P&L. Now it's not. So his wages are off the books.

[Jackie Broon]

That £17m surely went straight to the owner, not the club? If I put a fiver deposit down for a toaster, the fiver is given to the owner of the toaster, not the toaster itself?

 

The club is 100% owned by the owner though, so it's the same thing, no?

 

I don't understand business transactions of this scale so am happy to have it explained why I'm wrong: but surely if I want something to become my property - I give money to the owner of that property, rather than to the property itself? So the 17mill goes to Ashley and he can do with it whatever the hell he wants?

 

So the toaster owner could put that fiver towards a new heating element to improve the toaster, but they're not entitled to. They could go and spend it on anything.

 

I think the £17m went to St James Holdings Ltd, not Ashley directly. I'm not sure what that means in terms of Ashley being able to pocket the money.

[gjohnson]

You can't 'write off' salary costs. Colback's value as an asset on the balance sheet was written off, not his wages.

 

 

We were paying Colback £200k a month and that cost was going through our P&L. Now it's not. So his wages are off the books.

 

Didn't they claim that they'd written off the value of his contract including wages for the duration to look like they'd spent the money already...don't understand accounts that well but I'm sure that was the perceived consensus here....make the wage bill look massively inflated while not actually paying anything out as a veiled excuse for not spending

 

This is the accounting trick I guess. Assume Colback is worth nothing (fair in my view), then his value is surely just his remaining wages? Since he's presumably been paid by us till his release, as we didn't pay up his contract to let him be a free agent until it expired his wage should still be on the overall wage bill?

 

More than likely massively wrong, but that's how it looks to an accounting ignoramus

[Shearergol]

That £17m surely went straight to the owner, not the club? If I put a fiver deposit down for a toaster, the fiver is given to the owner of the toaster, not the toaster itself?

 

The club is 100% owned by the owner though, so it's the same thing, no?

 

I don't understand business transactions of this scale so am happy to have it explained why I'm wrong: but surely if I want something to become my property - I give money to the owner of that property, rather than to the property itself? So the 17mill goes to Ashley and he can do with it whatever the hell he wants?

 

So the toaster owner could put that fiver towards a new heating element to improve the toaster, but they're not entitled to. They could go and spend it on anything.

 

But on that same note, if there was a transfer budget of £30m, he could just use that to buy some more shops. So the £17m will in some form go towards him spending on players, whether it's specifically earmarked or not.

[Penn]

You can't 'write off' salary costs. Colback's value as an asset on the balance sheet was written off, not his wages.

 

 

We were paying Colback £200k a month and that cost was going through our P&L. Now it's not. So his wages are off the books.

 

Didn't they claim that they'd written off the value of his contract including wages for the duration to look like they'd spent the money already...don't understand accounts that well but I'm sure that was the perceived consensus here....make the wage bill look massively inflated while not actually paying anything out as a veiled excuse for not spending

 

What they did was write off the asset value of a number of players from the balance sheet, which increased the expenditure going through the profit and loss account and therefore decreased our reported profit figure. The actual players themselves were never disclosed, so it's hard to judge how justified it was from an accounting perspective.

 

It was nothing to do with wages. The asset value is determined by transfer fees and any other costs related to the transfer (agent fees for e.g.), so the value of Colback's write off would've been trivial any way because he came on a free.

 

If a player comes off the wage bill he comes off the wage bill. The accounting doesn't particularly matter - it's less cash going out of the business which is what matters.

[Anderson]

The £17m would have been payable to Ashley through one of his holding companies. Won't have touched the club. The club is largely financially self-sufficient and the few instances where Ashley's actually injected cash into have coincided with relegation iirc.

[Shearergol]

You can't 'write off' salary costs. Colback's value as an asset on the balance sheet was written off, not his wages.

 

 

We were paying Colback £200k a month and that cost was going through our P&L. Now it's not. So his wages are off the books.

 

Didn't they claim that they'd written off the value of his contract including wages for the duration to look like they'd spent the money already...don't understand accounts that well but I'm sure that was the perceived consensus here....make the wage bill look massively inflated while not actually paying anything out as a veiled excuse for not spending

 

What they did was write off the asset value of a number of players from the balance sheet, which increased the expenditure going through the profit and loss account and therefore decreased our reported profit figure. The actual players themselves were never disclosed, so it's hard to judge how justified it was from an accounting perspective.

 

It was nothing to do with wages. The asset value is determined by transfer fees and any other costs related to the transfer (agent fees for e.g.), so the value of Colback's write off would've been trivial any way because he came on a free.

 

If a player comes off the wage bill he comes off the wage bill. The accounting doesn't particularly matter - it's less cash going out of the business which is what matters.

 

How was your holiday Luke? Glad to be back to work?

[gjohnson]

You can't 'write off' salary costs. Colback's value as an asset on the balance sheet was written off, not his wages.

 

 

We were paying Colback £200k a month and that cost was going through our P&L. Now it's not. So his wages are off the books.

 

Didn't they claim that they'd written off the value of his contract including wages for the duration to look like they'd spent the money already...don't understand accounts that well but I'm sure that was the perceived consensus here....make the wage bill look massively inflated while not actually paying anything out as a veiled excuse for not spending

 

What they did was write off the asset value of a number of players from the balance sheet, which increased the expenditure going through the profit and loss account and therefore decreased our reported profit figure. The actual players themselves were never disclosed, so it's hard to judge how justified it was from an accounting perspective.

 

It was nothing to do with wages. The asset value is determined by transfer fees and any other costs related to the transfer (agent fees for e.g.), so the value of Colback's write off would've been trivial any way because he came on a free.

 

If a player comes off the wage bill he comes off the wage bill. The accounting doesn't particularly matter - it's less cash going out of the business which is what matters.

 

Isn't asset value also based on how much the contract is worth? As Colback was free, if you exclude his contract he would have never been an asset worth more than 0, so how could he have been written off without some creativity in the numbers

[LV]

Where’s Judge Holden these days?

[Penn]

You can't 'write off' salary costs. Colback's value as an asset on the balance sheet was written off, not his wages.

 

 

We were paying Colback £200k a month and that cost was going through our P&L. Now it's not. So his wages are off the books.

 

Didn't they claim that they'd written off the value of his contract including wages for the duration to look like they'd spent the money already...don't understand accounts that well but I'm sure that was the perceived consensus here....make the wage bill look massively inflated while not actually paying anything out as a veiled excuse for not spending

 

What they did was write off the asset value of a number of players from the balance sheet, which increased the expenditure going through the profit and loss account and therefore decreased our reported profit figure. The actual players themselves were never disclosed, so it's hard to judge how justified it was from an accounting perspective.

 

It was nothing to do with wages. The asset value is determined by transfer fees and any other costs related to the transfer (agent fees for e.g.), so the value of Colback's write off would've been trivial any way because he came on a free.

 

If a player comes off the wage bill he comes off the wage bill. The accounting doesn't particularly matter - it's less cash going out of the business which is what matters.

 

Isn't asset value also based on how much the contract is worth? As Colback was free, if you exclude his contract he would have never been an asset worth more than 0, so how could he have been written off without some creativity in the numbers

 

Contract value (i.e. salary) doesn't factor into asset value - it's transfer fee plus any other directly attributable purchase costs. But you're right - Colback's value on the books would've been trivial (agent's fees, any other costs associated with the transfer itself). The idea the club booked a big write-off on Colback was invented by this forum/NUFC twitter.

[gjohnson]

You can't 'write off' salary costs. Colback's value as an asset on the balance sheet was written off, not his wages.

 

 

We were paying Colback £200k a month and that cost was going through our P&L. Now it's not. So his wages are off the books.

 

Didn't they claim that they'd written off the value of his contract including wages for the duration to look like they'd spent the money already...don't understand accounts that well but I'm sure that was the perceived consensus here....make the wage bill look massively inflated while not actually paying anything out as a veiled excuse for not spending

 

What they did was write off the asset value of a number of players from the balance sheet, which increased the expenditure going through the profit and loss account and therefore decreased our reported profit figure. The actual players themselves were never disclosed, so it's hard to judge how justified it was from an accounting perspective.

 

It was nothing to do with wages. The asset value is determined by transfer fees and any other costs related to the transfer (agent fees for e.g.), so the value of Colback's write off would've been trivial any way because he came on a free.

 

If a player comes off the wage bill he comes off the wage bill. The accounting doesn't particularly matter - it's less cash going out of the business which is what matters.

 

Isn't asset value also based on how much the contract is worth? As Colback was free, if you exclude his contract he would have never been an asset worth more than 0, so how could he have been written off without some creativity in the numbers

 

Contract value (i.e. salary) doesn't factor into asset value - it's transfer fee plus any other directly attributable purchase costs. But you're right - Colback's value on the books would've been trivial (agent's fees, any other costs associated with the transfer itself). The idea the club booked a big write-off on Colback was invented by this forum/NUFC twitter.

 

Well either way they did it, it made them look like they spent a hell of a lot more than they actually did, and used it as an excuse for not spending later, or to make the profit look more healthy should any of the written off assets actually be sold.

 

Writing off the value of an asset you still have is surely just a way to hide money. Nearest thing I can compare in real terms is if I fill in a tax return and write off the value of my car, but then keep the car which is officially worth 0, but in real life is worth about 10k. I still have a 10k asset, but on paper it looks like I don't.

 

Well aware it's not that simple, but that's how it reads to a layman

[nufcjb]

I'm happy we are spending money so that Bacon head will not have any excuses when he fails miserably with setting up the team.

[Penn]

Well either way they did it, it made them look like they spent a hell of a lot more than they actually did, and used it as an excuse for not spending later, or to make the profit look more healthy should any of the written off assets actually be sold.

 

Writing off the value of an asset you still have is surely just a way to hide money. Nearest thing I can compare in real terms is if I fill in a tax return and write off the value of my car, but then keep the car which is officially worth 0, but in real life is worth about 10k. I still have a 10k asset, but on paper it looks like I don't.

 

Well aware it's not that simple, but that's how it reads to a layman

 

Every club (and business) should write off an asset if it's not actually of any value any more. If a player has no re-sale value and is rotting in the under-23s their asset value should be impaired and expensed.

 

Actually, looking at the NUFC accounts, I'm not even sure this happened.

 

2017 - Amortisation and impairment of players' registrations: £35,753k

2018 - Amortisation and impairment of players' registrations: £41,336k

2019 - Amortisation and impairment of players' registrations: £38,611k

 

Not a significant variance there. Think the whole idea of a big random increase in write-offs one year to massage the profit figure might have been a myth.

 

 

[gjohnson]

I'm happy we are spending money so that Bacon head will not have any excuses when he fails miserably with setting up the team.

 

Still a feeble amount compared to other sides. The excuse that we couldn't invest as much as others is still there and will be the go to when rock bottom after 10 games.

 

Swear the club is still living in the mid90s where 7m would get you a good probably 'B' list player. Not one of the very best, but still very good...Kind of Asprilla signing, and completely not realized that these days the equivalent is 30-40m at least.

 

Yes they paid 40m for Joelinton, but that was clearly a massive balls up somewhere down the line

[gjohnson]

Well either way they did it, it made them look like they spent a hell of a lot more than they actually did, and used it as an excuse for not spending later, or to make the profit look more healthy should any of the written off assets actually be sold.

 

Writing off the value of an asset you still have is surely just a way to hide money. Nearest thing I can compare in real terms is if I fill in a tax return and write off the value of my car, but then keep the car which is officially worth 0, but in real life is worth about 10k. I still have a 10k asset, but on paper it looks like I don't.

 

Well aware it's not that simple, but that's how it reads to a layman

 

Every club (and business) should write off an asset if it's not actually of any value any more. If a player has no re-sale value and is rotting in the under-23s their asset value should be impaired and expensed.

 

Actually, looking at the NUFC accounts, I'm not even sure this happened.

 

2017 - Amortisation and impairment of players' registrations: £35,753k

2018 - Amortisation and impairment of players' registrations: £41,336k

2019 - Amortisation and impairment of players' registrations: £38,611k

 

Not a significant variance there. Think the whole idea of a big random increase in write-offs one year to massage the profit figure might have been a myth.

 

Pretty certain it was widely published that they wrote off a load. Might have been in a rare Charnley statement, but they definitely used it as a reason for not spending the vastly increased tv money while the likes of brighton and Bournemouth spent significantly more

 

edit...weren't the write off placed under exceptional costs rather than amortisation. Pretty sure Saivet was in there and that's a hell of a lot more than amortisation

[jdckelly]

The £17m would have been payable to Ashley through one of his holding companies. Won't have touched the club. The club is largely financially self-sufficient and the few instances where Ashley's actually injected cash into have coincided with relegation iirc.

yep and even then the money he injected was interest free loans to the club which iirc were repaid fairly quickly.

[Anderson]

Well either way they did it, it made them look like they spent a hell of a lot more than they actually did, and used it as an excuse for not spending later, or to make the profit look more healthy should any of the written off assets actually be sold.

 

Writing off the value of an asset you still have is surely just a way to hide money. Nearest thing I can compare in real terms is if I fill in a tax return and write off the value of my car, but then keep the car which is officially worth 0, but in real life is worth about 10k. I still have a 10k asset, but on paper it looks like I don't.

 

Well aware it's not that simple, but that's how it reads to a layman

 

Every club (and business) should write off an asset if it's not actually of any value any more. If a player has no re-sale value and is rotting in the under-23s their asset value should be impaired and expensed.

 

Actually, looking at the NUFC accounts, I'm not even sure this happened.

 

2017 - Amortisation and impairment of players' registrations: £35,753k

2018 - Amortisation and impairment of players' registrations: £41,336k

2019 - Amortisation and impairment of players' registrations: £38,611k

 

Not a significant variance there. Think the whole idea of a big random increase in write-offs one year to massage the profit figure might have been a myth.

 

Pretty certain it was widely published that they wrote off a load. Might have been in a rare Charnley statement, but they definitely used it as a reason for not spending the vastly increased tv money while the likes of brighton and Bournemouth spent significantly more

 

edit...weren't the write off placed under exceptional costs rather than amortisation. Pretty sure Saivet was in there and that's a hell of a lot more than amortisation

 

Yep, Penn’s looking in the wrong place. Was 18 accounts I think. Not sure what any of this has to do with Colback mind, and is all kosher from an accounting PoV - although did result in bottom line showing a much larger loss that the operating result.

[Anderson]

Just double checked, was 17 accounts (released in 18) & Penn's completely wrong. Was an onerous contract provision, rather than an impairment of asset value, to the tune of £21m.

[Guest neesy111]

Penn was wrong, I don't believe it.