Half year financial results for 2007

[macbeth]

I've managed to get a new page up which tries to explain the financial results issued by the club last week.

 

Please give this a read, and make comment. I'm struggling to try and stay calm and analytical, and need feedback !

 

Details at http://www.nufc-finances.org.uk/20071.htm

[Guest]

The club have received £3.3m in compensation for the injury to Michael Owen. The club have used this amount to reduce their costs. This means that they would have normally had to say that their costs were up from £40.3m to £45.1m, but instead made it look more acceptable at £41.8m

 

What a load of sh*te man.

 

Where's the reasoning that "but had Owen been fit, we might have scored an extra 15-20 goals this season, been 4 places (or £2m higher), and still in cup competition.

 

[Guest Invicta_Toon]

I've managed to get a new page up which tries to explain the financial results issued by the club last week.

 

that's about the size of it

[Rich]

The club have received £3.3m in compensation for the injury to Michael Owen. The club have used this amount to reduce their costs. This means that they would have normally had to say that their costs were up from £40.3m to £45.1m, but instead made it look more acceptable at £41.8m

 

What a load of sh*te man.

 

Where's the reasoning that "but had Owen been fit, we might have scored an extra 15-20 goals this season, been 4 places (or £2m higher), and still in cup competition.

 

 

I second this, like. Why can't we just get fed well-balanced analysis rather than anti-Shepherd propaganda if we must get fed anything at all? Dear me, I've just had a quick scan and the amount of "only" and "but" comments on display have put me right off.

 

Aye, criticise the club/board for things that they deserve criticism on, but like Nut says, when you take a point like the Owen one and twist it that way without thinking twice then your credibility gets damaged somewhat.

[OzzieMandias]

Aye, criticise the club/board for things that they deserve criticism on, but like Nut says, when you take a point like the Owen one and twist it that way without thinking twice then your credibility gets damaged somewhat.

 

How's the information "twisted"? The wage bill would have been even higher without the £3.3 million knocked off. Fact. It's essentially risen by around 12 percent.

[ToonTastic]

But the money was paid so it didn't. I don't understand the point ? With that logic we should remove from the budget all insurance costs.

[OzzieMandias]

The point is that a one-off payment doesn't change the underlying picture of a wages/turnover ratio now running at a staggering 67 percent.

[Guest TheKingOfNewcastle]

There's no escaping the fact that those figures are worrying, that we're in decline and Shepherd is a cunt.

[Colos Short and Curlies]

The point is that a one-off payment doesn't change the underlying picture of a wages/turnover ratio now running at a staggering 67 percent.

 

So say we had won the UEFA cup and received say £10million prize fund 9made up figure - I don't know the prize fund) would it be fair to include this in turnover as its a one off cash injection?

 

Not denying the ratio is high, but you have to include all your costs and income however they arise

[ToonTastic]

Yes but the 3.3m is there in our bank and the details will change again in the summer therefore although we are at 67% without the cash, without the injury we also would not have bought martins and wouldnt have that £10m debt and his wages. So what would that have brough the wage bill down to and the clubs funds. You can't just account and discount the bits you want. Yes Freddy does that in his talks about that but it's expected really from him. Fans just want the good honest truth and the finances explained in most cases.

[Slugsy]

I'm more concerned about our ever increasing overdraft.

[OzzieMandias]

The point is that a one-off payment doesn't change the underlying picture of a wages/turnover ratio now running at a staggering 67 percent.

 

So say we had won the UEFA cup and received say £10million prize fund 9made up figure - I don't know the prize fund) would it be fair to include this in turnover as its a one off cash injection?

 

 

Well it certainly couldn't have been counted on as a recurring event.

[OzzieMandias]

Yes but the 3.3m is there in our bank and the details will change again in the summer therefore although we are at 67% without the cash, without the injury we also would not have bought martins and wouldnt have that £10m debt and his wages. So what would that have brough the wage bill down to and the clubs funds. You can't just account and discount the bits you want. Yes Freddy does that in his talks about that but it's expected really from him. Fans just want the good honest truth and the finances explained in most cases.

 

Well, the explanation of the wage bill figure is that it has had the one-off Owen compensation knocked off it, thus partially disguising an actual rise of around 12 percent.

[macbeth]

Thanks, thsi was exactly what I was after.

 

I've changed the wording so that it says that the underlying wage costs are up 12%, and that the overall underlying costs are £45m rather than £42m

 

Last year (and the year before) the club isolated the exceptional costs that they had incured due to replacing the manager. They viewed this as one-off costs that they wouldn't have in a normal year. They then quoted the wages ratio without these one-off costs, as it reduced it by ~4%. That it was the 4th exceptional year in 8 was exceptional.

 

If the one-off manager costs are ignored, or included, the one-off insurance costs should be ignored or included.

 

In trying to caluclate the full year results I doubled the underlying £30m and took off £3.3m.

 

The comment about including one-off cup-winning monies, the answer is yes. The club has three parts to its business matchday, commercial and media (TV). If they had a good cup run and got more matchday revenue and more TV revenue that would be part of their normal business. They have never put "money fomr players injured on international duty" down as one of their normal expected sources of revenue, so it shouldn't be counted as normal.

[Martin Lol]

Yes but the 3.3m is there in our bank and the details will change again in the summer therefore although we are at 67% without the cash, without the injury we also would not have bought martins and wouldnt have that £10m debt and his wages. So what would that have brough the wage bill down to and the clubs funds. You can't just account and discount the bits you want. Yes Freddy does that in his talks about that but it's expected really from him. Fans just want the good honest truth and the finances explained in most cases.

 

Well, the explanation of the wage bill figure is that it has had the one-off Owen compensation knocked off it, thus partially disguising an actual rise of around 12 percent.

 

Did the annual wage bill really increase by 12%?  I don't profess to be an expert on matters financial, but reading Macbeth's link, I gained the impression that the £3.3m may have been double counted.  Macbeth said the £3.3m had been used to reduce costs to a "more acceptable £41.8m".  He then goes on to say that the wages figure of £27m would have risen to £30.3m if it hadn't been for the £3.3m compensation.  Has the compensation been counted twice or are the wages part of the £41.1m? 

 

Additionally, are the wages all employees or just the players' wages?  If it's the latter, I can't really see how the wages could have increased by such a percentage when 6 players (including some high earners) have gone and only 4 (with only 2 high earners) have come in.  One other thought comes to mind.  Are the signing on fees listed as players wages or other payments elsewhere in the accounts?  With Duff reputedly getting over £4m as a signing on fee, if that one off payment was treated as wages, it would rather distort the figures for the year. 

 

Don't think that I'm picking holes in the figures because I'm not, I'm not taking sides, just simply raising some questions.

[ToonTastic]

Yes but like I said no injury and no Martins so we would be £10m better off and wouldn't have his wages to pay which would bring the 12% down again.

[Martin Lol]

Thanks, thsi was exactly what I was after.

 

I've changed the wording so that it says that the underlying wage costs are up 12%, and that the overall underlying costs are £45m rather than £42m

 

Last year (and the year before) the club isolated the exceptional costs that they had incured due to replacing the manager. They viewed this as one-off costs that they wouldn't have in a normal year. They then quoted the wages ratio without these one-off costs, as it reduced it by ~4%. That it was the 4th exceptional year in 8 was exceptional.

 

If the one-off manager costs are ignored, or included, the one-off insurance costs should be ignored or included.

 

In trying to caluclate the full year results I doubled the underlying £30m and took off £3.3m.

 

The comment about including one-off cup-winning monies, the answer is yes. The club has three parts to its business matchday, commercial and media (TV). If they had a good cup run and got more matchday revenue and more TV revenue that would be part of their normal business. They have never put "money fomr players injured on international duty" down as one of their normal expected sources of revenue, so it shouldn't be counted as normal.

 

You replied to part of my previous post while I was typing it!

[ToonTastic]

They have never put "money fomr players injured on international duty" down as one of their normal expected sources of revenue, so it shouldn't be counted as normal.

 

To be honest this sort of thing has never happened before to the club

[macbeth]

Yes but like I said no injury and no Martins so we would be £10m better off and wouldn't have his wages to pay which would bring the 12% down again.

 

Okay so if Owen gets fit will the wages drop again ? Will you expect the club to sell Martins (or Owen) or will our wage bill still include both of them for next season?

 

The wages for the first half of the season were £27m, when you took off the £3m insurance money for Owen. What do you expect the wages to be for the second half of the season ? I think they'll be reported as £30m. The total for the year coming to £57m. This is the same as the last year to July 2006. (The 2006 figure was £52.2m for 11 months, the 2005 figure was £50.2m for 12 months). The club, I guess, will say the wages are unchanged. The underlying wages figure is over £60m which would mean a £3m, or 5% rise on the 2006 figure.

 

The club says the ratio of wages to turnover target is 50%. By the end of the year they will report either 57/83 = 68% or 60/84 = 72% as the current position.

 

An extra  £15m next season from Sky would take the ratio down to 61%.

[NE5]

The club have received £3.3m in compensation for the injury to Michael Owen. The club have used this amount to reduce their costs. This means that they would have normally had to say that their costs were up from £40.3m to £45.1m, but instead made it look more acceptable at £41.8m

 

What a load of sh*te man.

 

Where's the reasoning that "but had Owen been fit, we might have scored an extra 15-20 goals this season, been 4 places (or £2m higher), and still in cup competition.

 

 

aye, without even looking, I KNOW that macbeth will portray the club in the worst light possible, and not consider the playing side of it.

 

So why bother.

 

Just think where we would be if we hadn't bought Woodgate, Dyer, Bellamy, Robert, Parker, Butt, Martins, Owen etc etc over the past years, instead buying players for 500 grand or something to keep the books right.

 

 

[Taylor Swift]

To be fair NE5, even though one can see that Macbeth does try to put the club in a bad light in the finances page, there's no doubt that we should be worried about the turnover/wages ratio. It's just not sustainable.

[Guest]

To be fair NE5, even though one can see that Macbeth does try to put the club in a bad light in the finances page, there's no doubt that we should be worried about the turnover/wages ratio. It's just not sustainable.

 

How not? People have been saying "it's not sustainable" for the last 4-5 years, yet we're still here spending relatively big sums of money for players.

[OzzieMandias]

Yes but like I said no injury and no Martins so we would be £10m better off and wouldn't have his wages to pay which would bring the 12% down again.

 

Alas, though, here in the real world, Owen WAS injured.

[NE5]

To be fair NE5, even though one can see that Macbeth does try to put the club in a bad light in the finances page, there's no doubt that we should be worried about the turnover/wages ratio. It's just not sustainable.

 

Most people are aware the position is not a good one. Even though they think the club should go and buy half a team every summer.... for some reason, he doesn't seem to comment towards these people, only people like myself who openly disagree with him and see how he puts it across.

 

However, he puts his points across with this intention to portray the club badly, he has admitted it [and no I can't dig it out because it was on the old board]. It's all he goes on about, and personally I'm not the slightest bit interested in what he posts anymore, if I ever was, because I KNOW it is deliberately set out to portray the club in this way.

 

The choice is a stark one. Do we want Newcastle United to compete with the other top clubs, or not. If you don't want to see the club take financial risks on the back of having a big fanbase, prepare yourself for REAL mediocrity.

 

 

[OzzieMandias]

The club have received £3.3m in compensation for the injury to Michael Owen. The club have used this amount to reduce their costs. This means that they would have normally had to say that their costs were up from £40.3m to £45.1m, but instead made it look more acceptable at £41.8m

 

What a load of sh*te man.

 

Where's the reasoning that "but had Owen been fit, we might have scored an extra 15-20 goals this season, been 4 places (or £2m higher), and still in cup competition.

 

 

aye, without even looking, I KNOW that macbeth will portray the club in the worst light possible, and not consider the playing side of it.

 

So why bother.

 

Just think where we would be if we hadn't bought Woodgate, Dyer, Bellamy, Robert, Parker, Butt, Martins, Owen etc etc over the past years, instead buying players for 500 grand or something to keep the books right.

 

 

 

Aye, and just think where we'd be if we hadn't bought Marcelino, Maric, Viana, Cort, Luque, Bassedas and Boumsong.