Spend big now or clear the debt first?

[Colos Short and Curlies]

To be fair audit accounts still show the company in the way that the direcotrs want it to be shown!

There's very little analysis on how the interest (for example) is incurred or the length of any less than ideal purchase agreements are for.

 

Thats why we have due dilligence, to get the real story

 

No that's true, but in the grand scheme of things they are fairly minor details. If there are liabilities, they'll be on the balance sheet. Sure auditors won't concern themselves with a few hundred grand here or there on a company like NUFC, but these dubious reports suggest something major which simply can't have been the case if everyone was doing their job.

 

More likely that this lack of spending was always the intention.

 

You'd be surprised!

[Dokko]

Can't see why we cant clear the debt now and spend a little to improve the defense, then make the club self sufficient from there.

 

At some stage he will have to wipe the debt if he wants the club to run itself.

 

At some stage he needs to spend some money to improve the squad so we can compete in the EPL at the level we should be.

[ChezGiven]

Can't see why we cant clear the debt now and spend a little to improve the defense, then make the club self sufficient from there.

 

At some stage he will have to wipe the debt if he wants the club to run itself.

 

At some stage he needs to spend some money to improve the squad so we can compete in the EPL at the level we should be.

 

This is a legitimate business not laundering Russian money through 'donations'.

 

SJHL has to pay off the debt, if Ashley invests £80m to pay the debt off thats twice the fabled £40m that got knickers wet weeks ago. If he was to clear the debt and invest £10m, that would enormous.

[Dokko]

Can't see why we cant clear the debt now and spend a little to improve the defense, then make the club self sufficient from there.

 

At some stage he will have to wipe the debt if he wants the club to run itself.

 

At some stage he needs to spend some money to improve the squad so we can compete in the EPL at the level we should be.

 

This is a legitimate business not laundering Russian money through 'donations'.

 

SJHL has to pay off the debt, if Ashley invests £80m to pay the debt off thats twice the fabled £40m that got knickers wet weeks ago. If he was to clear the debt and invest £10m, that would enormous.

 

Haven't got a clue what you are talking about there, sorry.

 

From what i've heard its £40m actual loaned debt, and £40m stadium debt. Both hold the club back from being self sufficient, and with the extra £40m per season in TV revenue now is a perfect time to get rid of both, or at least one.

 

Spending £10-20m right now will only give the club the great foundation it needs for next season were we can bring in top players, ATM we just need players. No point going into this very important season without some decent spending imo, you'll just have to pay double to catch up next.

 

[Taylor Swift]

Could it be possible that Ashely and his team knew all about the debt and the original plan was to actually try to reduce it first?

 

It'd be quite naive to assume that they didn't know about the debt beforehand (since we all seem to know about it) but that does not exclude the possibility that their original plan was to withhold the club's expenditure and then find ways to reduce the debt, which is obviously (along with finding ways to increase revenue) what the review is about.

 

Does it really matter what is done first though? Long term the only thing that'll be matter is the amount of £ that Ashley invests in the club. Like Chez mentioned, if he wipes out the debt that's essentially giving £80m to the club. Short-term we'll be fine with a couple of makeshift defenders. Sam and Owen will be worth more than a few points for us I expect so we'll have a decent chance of Europe and then push on in the next season. There's really no rush considering we seriously haven't been going anywhere in the past few years.

 

Edit - Expectations need to be lower, for Sam's benefit and the club's future.

[Guest Gemmill]

To be fair audit accounts still show the company in the way that the direcotrs want it to be shown!

There's very little analysis on how the interest (for example) is incurred or the length of any less than ideal purchase agreements are for.

 

Thats why we have due dilligence, to get the real story

 

No that's true, but in the grand scheme of things they are fairly minor details. If there are liabilities, they'll be on the balance sheet. Sure auditors won't concern themselves with a few hundred grand here or there on a company like NUFC, but these dubious reports suggest something major which simply can't have been the case if everyone was doing their job.

 

More likely that this lack of spending was always the intention.

 

You'd be surprised!

 

Unless there's been errors made by the auditors, there shouldn't be anything in the way of material undeclared liabilities that have been turned up since Ashley's purchase.  If there are, whoever signed the last audit report can expect a call from Ashley's lawyers.

 

Seriously though, you don't really think that in a business as uncomplicated as a football club, the auditors have missed some huge hole in the balance sheet?  It's not like this is a bank with complicated hedge funds or something, it's a fairly simple business to understand.

[Baggio]

People seem to be complaining that West Ham, Man City and Portsmouth are spending money but I honestly wouldn't swap the group of players we've brought in for any of there's.

 

We have a far bigger potential than any of these clubs IMO but perhaps we're going to have to take a step back before we can properly move forward and hopefully reach our potential.

[Colos Short and Curlies]

To be fair audit accounts still show the company in the way that the direcotrs want it to be shown!

There's very little analysis on how the interest (for example) is incurred or the length of any less than ideal purchase agreements are for.

 

Thats why we have due dilligence, to get the real story

 

No that's true, but in the grand scheme of things they are fairly minor details. If there are liabilities, they'll be on the balance sheet. Sure auditors won't concern themselves with a few hundred grand here or there on a company like NUFC, but these dubious reports suggest something major which simply can't have been the case if everyone was doing their job.

 

More likely that this lack of spending was always the intention.

 

You'd be surprised!

 

Unless there's been errors made by the auditors, there shouldn't be anything in the way of material undeclared liabilities that have been turned up since Ashley's purchase.  If there are, whoever signed the last audit report can expect a call from Ashley's lawyers.

 

Seriously though, you don't really think that in a business as uncomplicated as a football club, the auditors have missed some huge hole in the balance sheet?  It's not like this is a bank with complicated hedge funds or something, it's a fairly simple business to understand.

 

You're right, auditing ManU was one of the easiest jobs I've done.

 

Wasn't implying that PKF or whoever does the audit have missed anything, just that they may have been slghtly lenient in offsetting liabilities and assets etc or been creative wth capitalising various costs - nowt illegal like!

 

Also, I'm fairly sure that Ashleys lawyers wouldn't be able to sue the auditors if he used the accounts to base his decision to buy on, its only existing shareholders who the auditors have a duty of care to interms of investment decisions - or thats how I understood my last training course to be saying?

[BottledDog]

I think it's just to provoke debate tbh Derg. My opinion is that some sort of middle ground needs to be found as the club probably couldn't continue the way it has been but at the same time extra bodies (especially at the back) are essential.

 

Fair call, and I would have said the same had we still had Shepherd and the Halls in charge. But I don't think it is to much to ask (After Abramovic immediately wiped out Chelsea's debts, or when we see West Ham and Man City significantly boost their squads despite (certainly Man City) having significant debt issues) to not have supporters still feel the need to worry for the clubs financial health rather than the squad on the pitch post takeover.

 

Jaysus, Man U have spent big again and they have 3 times our debt, but they can service the interest on that debt comfortably, primarily due to it not amounting to any more than they had previously payed out in dividends and corporation tax as a publicly quoted company.

 

That is surely something we should also be benifiting from.

 

Being a perdantic accountant here but you pay the same corporation tax regardless of you being a plc or limited company.

 

Also ManU may have 3 x our debt, they also have at least 3 times our imcome!

 

As a fella in desperate need of an accountant, I'll bow to that.   Just got the patter from something Gill said - "Manchester United is supporting the senior debt, which is around £265million to £275million. People need to recognise the cost of servicing the interest on that debt is not in excess of the what we were previously paying in dividends and corporation tax as a publicly quoted company."

 

Nevertheless, my point stands.

[Guest Invicta_Toon]

Taylor27

 

please delete the ridiculous third option in this poll, it's a total joke, and I know how much you don't stand for that sort of shite on your watch

[Parky]

Taylor27

 

please delete the ridiculous third option in this poll, it's a total joke, and I know how much you don't stand for that sort of shite on your watch

 

Oi!

[Guest Invicta_Toon]

Taylor27

 

please delete the ridiculous third option in this poll, it's a total joke, and I know how much you don't stand for that sort of shite on your watch

 

Oi!

 

purely in the interests of moderator impartiality Parky

[ChezGiven]

Can't see why we cant clear the debt now and spend a little to improve the defense, then make the club self sufficient from there.

 

At some stage he will have to wipe the debt if he wants the club to run itself.

 

At some stage he needs to spend some money to improve the squad so we can compete in the EPL at the level we should be.

 

This is a legitimate business not laundering Russian money through 'donations'.

 

SJHL has to pay off the debt, if Ashley invests £80m to pay the debt off thats twice the fabled £40m that got knickers wet weeks ago. If he was to clear the debt and invest £10m, that would enormous.

 

Haven't got a clue what you are talking about there, sorry.

 

From what i've heard its £40m actual loaned debt, and £40m stadium debt. Both hold the club back from being self sufficient, and with the extra £40m per season in TV revenue now is a perfect time to get rid of both, or at least one.

 

Spending £10-20m right now will only give the club the great foundation it needs for next season were we can bring in top players, ATM we just need players. No point going into this very important season without some decent spending imo, you'll just have to pay double to catch up next.

 

 

Quite straightforward, you want him to clear the debt, which means taking £80m from one business account and putting it into SJHL. That, plus investment in players would be an unprecedented level of cash into a club. Has Abramovich put £100m into Chelsea in one pre-season? Maybe but thats a ridiculous benchmark anyway.

[Matt]

You're right, auditing ManU was one of the easiest jobs I've done.

 

Also, I'm fairly sure that Ashleys lawyers wouldn't be able to sue the auditors if he used the accounts to base his decision to buy on, its only existing shareholders who the auditors have a duty of care to interms of investment decisions - or thats how I understood my last training course to be saying?

 

Cheers. I'm sat here doing something very dull and you've reminded me of the joys of the sort of in-house training courses i used to have to do and everything doesn't seem so bad!

 

I always thought that a material misstatement was one which would affect the economic decision-making of users of that information. Not sure about the duty of care thing, but the audit procedures undertaken would comfortably cover anything that would affect a takeover decision.

 

 

[Guest Invicta_Toon]

the two aren't mutually exclusive, Parky is just spreading disinformation

[James]

Taylor27

 

please delete the ridiculous third option in this poll, it's a total joke, and I know how much you don't stand for that sort of shite on your watch

 

I wasn't on watch and its too late now.

[Guest Invicta_Toon]

Taylor27

 

please delete the ridiculous third option in this poll, it's a total joke, and I know how much you don't stand for that sort of shite on your watch

 

I wasn't on watch and its too late now.

 

dropped the ball again. you must be on your final warning by now

[Guest shaun11177]

If Ashley repays the 80m debt that makes the club worth another 80m if he were ever to sell it i.e it would be worth 133m+80m. To get rid of the debt completely even with the new tv deal could take 8 years.

 

Next season:

The Turnover 100m

Wages 60m

Running the club 25m

Interest 5m

Profit to reduce loan 10m

 

in the meantime we need a few players and the conclusion of any review will give the answer-Ashley will have to buy them.

[Colos Short and Curlies]

You're right, auditing ManU was one of the easiest jobs I've done.

 

Also, I'm fairly sure that Ashleys lawyers wouldn't be able to sue the auditors if he used the accounts to base his decision to buy on, its only existing shareholders who the auditors have a duty of care to interms of investment decisions - or thats how I understood my last training course to be saying?

 

Cheers. I'm sat here doing something very dull and you've reminded me of the joys of the sort of in-house training courses i used to have to do and everything doesn't seem so bad!

 

I always thought that a material misstatement was one which would affect the economic decision-making of users of that information. Not sure about the duty of care thing, but the audit procedures undertaken would comfortably cover anything that would affect a takeover decision.

 

 

 

No it wouldn't, we set out our terms so that we are only liable to the shareholders of the company at the time of the audit, every engagement has a disclaimer regarding third party use - hence the usual use of Due Diligance

 

Essentially an audit should uncover anything untoward, but for anyone to use published accounts as a base for a takeover is asking for trouble tbh, you get the figures but not how they are made up. If we were to get hold of the audit file however I'd agree that a sensible decision could be made.

 

The review should be enough evidence that MA didn't believe that the published accounts had enough information in them for him to run the club

[Mick]

Cracking debate.

[Heron]

Spend now, and then get a decent young squad in that we can rely on to do well and get us into europe for a few years while we clear the debt. Then get better players in to push for Champions League.

[ChezGiven]

We dont really need to spend that big anyway. If we brought in three more player (2 defenders and a midfielder) i'd be quite happy to start the season. As Baggio says, i prefer our squad to Pompey's, Man City's and West Ham's. If we didnt have the strikers we have then there may be a case for £25m player but we are fairly sorted up front.

[Baggio]

We dont really need to spend that big anyway. If we brought in three more player (2 defenders and a midfielder) i'd be quite happy to start the season. As Baggio says, i prefer our squad to Pompey's, Man City's and West Ham's. If we didnt have the strikers we have then there may be a case for £25m player but we are fairly sorted up front.

 

Our squad is far better than any of there's IMHO, our problem is we're light on numbers and short at the back.

 

Now Allardyce has said he wants big defenders mainly to stop us conceeding at set pieces, players like this don't cost a fortune usually unless you're talking about the genuine top class defenders who wouldn't join us anyway, a solid left back and 2 centre backs would transform our season and could be the difference between Europe and the lower half of the table.

 

he'll get them too IMO.

[ChezGiven]

We dont really need to spend that big anyway. If we brought in three more player (2 defenders and a midfielder) i'd be quite happy to start the season. As Baggio says, i prefer our squad to Pompey's, Man City's and West Ham's. If we didnt have the strikers we have then there may be a case for £25m player but we are fairly sorted up front.

 

Our squad is far better than any of there's IMHO, our problem is we're light on numbers and short at the back.

 

Now Allardyce has said he wants big defenders mainly to stop us conceeding at set pieces, players like this don't cost a fortune usually unless you're talking about the genuine top class defenders who wouldn't join us anyway, a solid left back and 2 centre backs would transform our season and could be the difference between Europe and the lower half of the table.

 

he'll get them too IMO.

 

We're light on numbers at the back but up front, atm, we have loads of cover and options. He's got a month to sort it all out but i think the LB needs sorting asap.

 

He'll bring people in, without a doubt. If he gets quality players for the positions that are obvioulsy needed, we've got every chance of finishing above the three clubs mentioned.

[Haz]

NUFC has to operate on the red Queen theory - you have to run as fast as you can to stay in the same place.  Therefore, if he wants to make money out of NUFC, by all means attack the debt, but in modest and continuous way, but maintain the product on the pitch.  He knows the only way to make a profit or make NUFC attractive, is to be attractive on the park.

 

That means a reasonable outlay for players, to sustain any progress in the league. Doesnt have to be Hollywood signings and it doesnt need to be either/or.  We wont look attractive to potential purchasers, or even attractive to the fans if we are looking over our shoulders by Xmas, for the sake of some prudent signings.