Our finances

[Park Life 70]

we have people saying 'ugg, line go up, bad Ashley'.

 

I'm not by the way. I'm saying "line go down, Ashley bad".

 

Shepherd raised costs and raised revenue. The former was prohibitive.

 

Ashley's mistake wasn't increasing costs but reducing revenue. He's lowered costs, but the loss of income has taken away our competitive advantage over smaller clubs with a lesser fanbase. That's a lot harder to get back on track than spending is. Spending decisions are made in an instant. It takes years to build the profile that people are willing to invest in.

 

Ashley's stupidity dropped 9000 people off the gate. Halved our sponsorship deal. Significantly reduced TV earnings. Outsourced catering has lost a wedge. All commercial sales are down.

 

His contempt for the club, players, managers and fans has done this. Costs could have been brought under control without the level of alienation that caused such a drop in revenue.

 

Baby bathwater.

[U_V 0]

The answer to your first paragraph is two trending lines. One is costs going up and the other is revenues which are going down. Each month/year those trends continue, the more the loss per year. In 2006, the losses were smaller than in 2007 because our revenue was higher and our costs were smaller. Those trends were set in place by contracts in the preceding and current years. Downward trending revenue and upward trending costs will lead to bankruptcy.

Income:

http://www.football-finances.org.uk/newcas...008/income3.htm

 

It's up & down due to yearly variations in how well we do in cups/europe or the league, but I don't see a major significant downward trend there, and due to UEFA cup in 07 & increased TV money in 08 it was on the up. Costs were up year on year of course, mainly down to wages, but that was not an inevitable rise, it could have been stabilised. That will usually be to the detriment of the squad as we are now seeing, but we've had to cut back and rebuild before, there's nothing to say we wouldn't have done it again under H&S without getting to the stage of being in real danger of relegation (notwithstanding a major injury crisis like we had in the first half of 06-07). We have a much lower wage bill now, but at the cost of a significantly weaker squad. Far too weak for my liking, in that if one or two of a number of key players get injured, suffer a loss of form, or god forbid sold we're screwed and could easily go straight back down.

 

Second paragraph, i agree and this is where my lack of accountancy skills means i have to say, not sure. If you read the article in the OP again, he says its not until 2009 where the club makes an actual operating loss of 9m. This is before interest, tax, amort, etc. When you add that in its something like a 38m loss which if offset by 23m in sales (real cash). This concerns me too because it makes me think that the books were cooked before they got the club and they were therefore able to write down more 'paper losses'.

 

He addresses this in the article.

 

So how does a club go from making a small profit in 2005 to a large loss in 2009, especially in a period when the money from television has significantly increased? The step graph above clearly shows that Newcastle’s TV money has indeed increased in that period by £10 million, but all of that has been wiped out by falls in both match day income of £6 million and commercial revenue of £4 million, meaning no revenue growth at all. Despite that, player costs have shot up: wages by £21 million and player amortisation £6 million. The deficit has been mitigated to some extent by lower interest charges £4 million and higher profit from player sales £10 million.

 

Its not that clear an analysis.

Is there really much scope for cooking the books? Surely if this were true Ashley the club insider would have mentioned it.

 

I made the comment about bankruptcy because Shepherd would not have seen the financial crisis coming and its my strong belief that re-financing the club during and immediately after the crisis would not have been possible. It would had to have been sold or closed.

From the 07-08 accounts:

 

At the beginning of 2007 the Group began work on a major refinancing project which was due to be in place by 30 June 2007.

 

There's no details of what this entailed, but the assertion in the article that we'd hocked everything to the hilt is clearly wrong. I'm not convinced there was actually any need to get further into debt - that's just 1) Ashley's choice to pay up front, and 2) Ashley's incompetence in running the club causing drastically reduced turnover (media increases excluded), increasing costs, and getting relegated.

 

Rectifying his mistakes by slashing costs to those of a club on half the turnover we SHOULD be making as a minimum with our potential (if we were a half well run, stable mid-table club) and bringing in mates rather than the most competent people possible to run it and thus dragging attendances, interest in the club, and eventually revenue down to match it is not what I call running the club well and cause for optimism. Ashley's ONLY plus point over the last lot is that he has the cash to cover for his mistakes. However if he intends to pay himself back, which it seems he might (we will make a significant cash profit this year even if relegated so his plan to "break even" in 5 years has nothing to do with year-on-year numbers) then it is us who will suffer in the long run by having far less resources to build a successful team than we should have.

[Park Life 70]

Bloody complex innit.

[ChezGiven 0]

UV, that link tells you all you need to know apart from the costs. From the 2003 peak of CL money, it all starts to go to shit.

 

Add in this graph

 

http://www.football-finances.org.uk/newcas...08/payroll3.htm

 

and you have exactly the picture i was painting.

 

The spike in revenue from TV in 2008 was well anticipated, everyone knew it was coming so wages kept going up and as you say a re-financing plan was in place. At a minimum of 11,7% and certainly not at a fixed rate which would have gone through the roof post-crisis.

 

The main issue, as i'm sure you agree, is the drop off in income in 2009. All of that drop (99m to 86m) is attributable to him (lower corporate) the team's peformance (lower TV) and the overall state of the club (lower attendances). It doesnt explain the trends from 2003 to 2008 but his management of it is utterly absurd and takes me back to my original point. He's a cunt.

[U_V 0]

UV, that link tells you all you need to know apart from the costs. From the 2003 peak of CL money, it all starts to go to shit.

 

Yeah, well obviously revenues are going to drop from a year when you're in the CL to not being in it. But I don't think we ever budgeted expecting to be in the CL (despite a lot of people now claiming financial recklessness from Shepherd demanding we spend even more than the budgeted amount we'd pre-spent on Woodgate before we were assured of getting in in Summer '03). The falls after that were not massive, and were not irrevocably on the way down either. Two of the revenue streams were up in the year prior to Ashley taking over, and the one which is least impacted by the immediate performance of the team in that year, ie the commercial revenue, was constantly rising until Ashley turned round the finances. With the initial euphoria which greeted Ashley's arrival, you would have expected that to increase even further but that wasn't reflected in the figures.

 

The costs rose more than they should have IMO in 2007, but I think that was somewhat borne of necessity and down to 2 reasons:

1) Owen's injury meant we needed another first choice striker in. Good one's don't come cheap and on low wages, I doubt we would have gone for Martins had Owen not been crocked. In fact Owen's compo from the FA (which is not reflected in those costs) more than paid Martins' wages that year.

2) Knowing the TV revenues were about to jump up the following year, we had some leeway in what we could allow the wage bill to rise to.

 

It was definitely a mistake to allow that to continue to rise in 2008 when we had to start footing the bill for Owen again. If Owen's compo is taken into account, then the wages actually only went up by £4m in 2007 but then jumped up £13.8m in 2008 under Ashley.

Edited December 15, 2010 by U_V

[Problem Child 0]

In the space of two years we went from owing the banks £77m to owing Mike Ashley £282m.

 

No.

 

£138m is the cost of the club which Ashley lent to SJ Holdings when he purchased the club. £107m is the net debt position in 2008, 4 months after Ashley took control giving a gross debt of £245m in 2008. This increases because the company continued to make losses in 2008 so that gross debt of SJ Holdings and the club became £282m in 2009.

 

The money owed to Ashley by SJ Holdings fell from £138m in 2008 to £132m in 2009 because Ashley paid himself £6m back. This is the main idiotic thing i can see as far as i can tell.

Precisely. He paid himself back part of the purchase price out of the club’s coffers, which implies he sees the loan to SJP Holdings as a loan to the club. I can’t belief anyone is falling for this holding company nonsense, even the FA have seen through that one.

Yes but at the same time you see the bank loans reduce to £0m in that figure and it then states "Since the 2009 year-end, Ashley advanced a further £25.5 million to keep the club ticking over in the Championship"

 

Not sure what you are trying to imply but him being personally £6m better off wouldnt be accurate.

Accounts can be manipulated to tell any story and it’s only if you have access to every shred of data that the truth can be ascertained. As we don’t have access to these details keeping it simple offers the clearest picture >>> income down, attendances down, debt rocketing away into the stratosphere. Yes or No?

[LeazesMag 0]

We're 8th and have had some absolutely brilliant results and there is no reason for optimism?

 

Also, i know people dont like CT's opinions but tbf, i'd be embarrassed to let fans of other clubs see us characterise 8th as struggling. We all know why we can think that because we all expect it to go wrong. However, as of today, we arent struggling this season.

 

I'm optimistic that we will strengthen this January based on the last 2 windows. I'm far less optimistic that Pardew can keep us going at the same level nevermind improve us but lets wait and see.

 

Ashleys a cunt but i'm not going to stick my head up my arse because of it.

 

not sticking my head up my arse at all. And while I don't particularly care for the thought that other fans see us dismissing being 8th in the table, there is a long way to go yet, this season. I just don't think Mike Ashley will ever harbour any serious ambitions at this football club, a few results [defeats or wins] is neither here nor there.

 

On the other hand, I didn't care when other fans supposedly "laughed" at us, so why give a toss if they think we are "arrogant" ? [ presume that is what you are getting at here CG ]

 

I don't think I'm either anyway, I'm just aware we are one of the biggest clubs in the country, and I'll counter that by also admitting that we have never had the success to justify that to other supporters - hence the reason they aren't aware of how big this club should be.

 

Good post. There is a long way to go and it was only a few weeks back i was brimming with optimism just to come crashing back down to earth when we looked shit again.

 

Yes i do think we might look a bit arrogant by saying we are struggling because others wont look at it the way we do. They dont have the gnawing feeling at the pit of their stomach that things will go to fucking shit without warning (that all too recognisable feeling we all felt last monday) and they havent watched us all season and seen that along with the potential to play well, there is also a team of shite just waiting to dribble out the back of 11 pairs of shorts at a moment's notice. They just see the geordies are in 8th, arent they doing well. The proximity in points to 17th place is rarely mentioned.

 

As for the ambition question, the only thing i can say is that with the new financial rules coming in, business margins and large home crowds will give us an edge over oil men and chicken farmers if expenditure is limited by turnover. A decent manager is the crux of the issue though, so who knows what Pardew will bring to that.

 

I'm not going to disagree about large home crowds. They have to be attracted to the club though, it's not automatic, they are there but only if we can get them to come. So to that extent, your comment about "others seeing the Geordies in 8th position aren't they doing well", in my opinion that is part of my point ie others don't realise that for us, 8th position is not good enough. Thats not to say we should be booing them, just that we should be aware it's not good enough and trying to do better. Liverpool for instance are in crisis if they are not in europe. We should also be seen in this light.

 

A decent manager, with backing, is the essence of every successful club. You need both. A good manager will leave for a club with more backing. Owen Coyle will get a bigger job than Bolton, no disrespect to Bolton.

 

Contrary to what others insinuate I say - and I have corrected them on occasions - I don't want the club to spend tons of money and bankrupt itself, but we should be among the top speculative clubs, all the time, to tap the fanbase which is potentially even bigger than 52,000. The Keegan years showed this.

 

 

What a load of shite you talk at times Leazes.

 

There is absolutely no comparison with Liverpools success over the last 40 years to our lack of it.

 

Liverpool used to wine everything not so long ago, we have to go back to the 50's ffs.

 

We were in the right place at the right time under KK but still won fuck all. It was a nice ride but you seem to think that those few years in the last 50 give us all sort of stature rights. Your just plain daft at times.

 

Read the post CT, read the post.

 

Potential, is the word you are looking for.

 

I said we "should be" and we should. It's a fact Liverpool won everything going during a magnificent 4 decades for them, but you tell me any reason why we would not be more than capable of doing the same, when we have bigger support ?

[LeazesMag 0]

I think most people don't care about the finances as long as the club isn't going to go bust. I don't see any satisfaction in running at break even or better, I'd rather we were in debt, buying players and competing for trophies. It's not up to me to decide what is financially prudent, I don't give a toss about it frankly. What Ashley's done at our club baffles me and I don't trust him one iota with its future.

 

exactly.

[Park Life 70]

Basically revenue always goes down when you aren;t competitive, but to be competitive you need to invest. [/threadclosed]

[LeazesMag 0]

Good thread lads.

 

Mike Ashley is a fat cunt.

 

 

No ambitions though. Cost cutting is ludicrous. Idiot with ambition and certain bankruptcy FTW

 

u-turn of the decade

[Kitman 2188]

I think most people don't care about the finances as long as the club isn't going to go bust. I don't see any satisfaction in running at break even or better, I'd rather we were in debt, buying players and competing for trophies. It's not up to me to decide what is financially prudent, I don't give a toss about it frankly. What Ashley's done at our club baffles me and I don't trust him one iota with its future.

Unfortunately, that doesnt make any sense. You cant expect the club not to go bust and be in debt.

 

Aren't all the other PL clubs in debt though (and loss making too)? They aren't about to go bust unless their benefactors put them under, are they? It's totally obvious Ashley is subsidising the club and without his support it would go under, I get that. But so what? There can't be many clubs that make profits and the situation must have been obvious when he bought the club. I know the Shepherd and the Halls left a financial mess when he bought the club, again he should have known this.

 

My frustration is that he seems to be applying financial strictures to the club that no-one else is adopting. That might be prudent business, we might be ahead of the curve and other clubs may have to fall into line, or whatever. However I can see that with more investment, we would do significantly better. I want more ambition - I say that as a fan, not their financial director.

 

Chez, I understand the economics don't make sense, but in my view, if he couldn't afford to put the money in, he shouldn't have bought the club in the first place. My view isn't driven by business logic or analysis, I'm just a fan who wants the club to do well. I really haven't bothered to go into the detail of the finances, so I'm talking from the heart not the head.

[Christmas Tree 3997]

We're 8th and have had some absolutely brilliant results and there is no reason for optimism?

 

Also, i know people dont like CT's opinions but tbf, i'd be embarrassed to let fans of other clubs see us characterise 8th as struggling. We all know why we can think that because we all expect it to go wrong. However, as of today, we arent struggling this season.

 

I'm optimistic that we will strengthen this January based on the last 2 windows. I'm far less optimistic that Pardew can keep us going at the same level nevermind improve us but lets wait and see.

 

Ashleys a cunt but i'm not going to stick my head up my arse because of it.

 

not sticking my head up my arse at all. And while I don't particularly care for the thought that other fans see us dismissing being 8th in the table, there is a long way to go yet, this season. I just don't think Mike Ashley will ever harbour any serious ambitions at this football club, a few results [defeats or wins] is neither here nor there.

 

On the other hand, I didn't care when other fans supposedly "laughed" at us, so why give a toss if they think we are "arrogant" ? [ presume that is what you are getting at here CG ]

 

I don't think I'm either anyway, I'm just aware we are one of the biggest clubs in the country, and I'll counter that by also admitting that we have never had the success to justify that to other supporters - hence the reason they aren't aware of how big this club should be.

 

Good post. There is a long way to go and it was only a few weeks back i was brimming with optimism just to come crashing back down to earth when we looked shit again.

 

Yes i do think we might look a bit arrogant by saying we are struggling because others wont look at it the way we do. They dont have the gnawing feeling at the pit of their stomach that things will go to fucking shit without warning (that all too recognisable feeling we all felt last monday) and they havent watched us all season and seen that along with the potential to play well, there is also a team of shite just waiting to dribble out the back of 11 pairs of shorts at a moment's notice. They just see the geordies are in 8th, arent they doing well. The proximity in points to 17th place is rarely mentioned.

 

As for the ambition question, the only thing i can say is that with the new financial rules coming in, business margins and large home crowds will give us an edge over oil men and chicken farmers if expenditure is limited by turnover. A decent manager is the crux of the issue though, so who knows what Pardew will bring to that.

 

I'm not going to disagree about large home crowds. They have to be attracted to the club though, it's not automatic, they are there but only if we can get them to come. So to that extent, your comment about "others seeing the Geordies in 8th position aren't they doing well", in my opinion that is part of my point ie others don't realise that for us, 8th position is not good enough. Thats not to say we should be booing them, just that we should be aware it's not good enough and trying to do better. Liverpool for instance are in crisis if they are not in europe. We should also be seen in this light.

 

A decent manager, with backing, is the essence of every successful club. You need both. A good manager will leave for a club with more backing. Owen Coyle will get a bigger job than Bolton, no disrespect to Bolton.

 

Contrary to what others insinuate I say - and I have corrected them on occasions - I don't want the club to spend tons of money and bankrupt itself, but we should be among the top speculative clubs, all the time, to tap the fanbase which is potentially even bigger than 52,000. The Keegan years showed this.

 

 

What a load of shite you talk at times Leazes.

 

There is absolutely no comparison with Liverpools success over the last 40 years to our lack of it.

 

Liverpool used to wine everything not so long ago, we have to go back to the 50's ffs.

 

We were in the right place at the right time under KK but still won fuck all. It was a nice ride but you seem to think that those few years in the last 50 give us all sort of stature rights. Your just plain daft at times.

 

Read the post CT, read the post.

 

Potential, is the word you are looking for.

 

I said we "should be" and we should. It's a fact Liverpool won everything going during a magnificent 4 decades for them, but you tell me any reason why we would not be more than capable of doing the same, when we have bigger support ?

 

Nope, its the word you should have used.

[LeazesMag 0]

We're 8th and have had some absolutely brilliant results and there is no reason for optimism?

 

Also, i know people dont like CT's opinions but tbf, i'd be embarrassed to let fans of other clubs see us characterise 8th as struggling. We all know why we can think that because we all expect it to go wrong. However, as of today, we arent struggling this season.

 

I'm optimistic that we will strengthen this January based on the last 2 windows. I'm far less optimistic that Pardew can keep us going at the same level nevermind improve us but lets wait and see.

 

Ashleys a cunt but i'm not going to stick my head up my arse because of it.

 

not sticking my head up my arse at all. And while I don't particularly care for the thought that other fans see us dismissing being 8th in the table, there is a long way to go yet, this season. I just don't think Mike Ashley will ever harbour any serious ambitions at this football club, a few results [defeats or wins] is neither here nor there.

 

On the other hand, I didn't care when other fans supposedly "laughed" at us, so why give a toss if they think we are "arrogant" ? [ presume that is what you are getting at here CG ]

 

I don't think I'm either anyway, I'm just aware we are one of the biggest clubs in the country, and I'll counter that by also admitting that we have never had the success to justify that to other supporters - hence the reason they aren't aware of how big this club should be.

 

Good post. There is a long way to go and it was only a few weeks back i was brimming with optimism just to come crashing back down to earth when we looked shit again.

 

Yes i do think we might look a bit arrogant by saying we are struggling because others wont look at it the way we do. They dont have the gnawing feeling at the pit of their stomach that things will go to fucking shit without warning (that all too recognisable feeling we all felt last monday) and they havent watched us all season and seen that along with the potential to play well, there is also a team of shite just waiting to dribble out the back of 11 pairs of shorts at a moment's notice. They just see the geordies are in 8th, arent they doing well. The proximity in points to 17th place is rarely mentioned.

 

As for the ambition question, the only thing i can say is that with the new financial rules coming in, business margins and large home crowds will give us an edge over oil men and chicken farmers if expenditure is limited by turnover. A decent manager is the crux of the issue though, so who knows what Pardew will bring to that.

 

I'm not going to disagree about large home crowds. They have to be attracted to the club though, it's not automatic, they are there but only if we can get them to come. So to that extent, your comment about "others seeing the Geordies in 8th position aren't they doing well", in my opinion that is part of my point ie others don't realise that for us, 8th position is not good enough. Thats not to say we should be booing them, just that we should be aware it's not good enough and trying to do better. Liverpool for instance are in crisis if they are not in europe. We should also be seen in this light.

 

A decent manager, with backing, is the essence of every successful club. You need both. A good manager will leave for a club with more backing. Owen Coyle will get a bigger job than Bolton, no disrespect to Bolton.

 

Contrary to what others insinuate I say - and I have corrected them on occasions - I don't want the club to spend tons of money and bankrupt itself, but we should be among the top speculative clubs, all the time, to tap the fanbase which is potentially even bigger than 52,000. The Keegan years showed this.

 

 

What a load of shite you talk at times Leazes.

 

There is absolutely no comparison with Liverpools success over the last 40 years to our lack of it.

 

Liverpool used to wine everything not so long ago, we have to go back to the 50's ffs.

 

We were in the right place at the right time under KK but still won fuck all. It was a nice ride but you seem to think that those few years in the last 50 give us all sort of stature rights. Your just plain daft at times.

 

Read the post CT, read the post.

 

Potential, is the word you are looking for.

 

I said we "should be" and we should. It's a fact Liverpool won everything going during a magnificent 4 decades for them, but you tell me any reason why we would not be more than capable of doing the same, when we have bigger support ?

 

Nope, its the word you should have used.

 

most people probably realised that. You were just being pedantic.

[ChezGiven 0]

I think most people don't care about the finances as long as the club isn't going to go bust. I don't see any satisfaction in running at break even or better, I'd rather we were in debt, buying players and competing for trophies. It's not up to me to decide what is financially prudent, I don't give a toss about it frankly. What Ashley's done at our club baffles me and I don't trust him one iota with its future.

Unfortunately, that doesnt make any sense. You cant expect the club not to go bust and be in debt.

 

Aren't all the other PL clubs in debt though (and loss making too)? They aren't about to go bust unless their benefactors put them under, are they? It's totally obvious Ashley is subsidising the club and without his support it would go under, I get that. But so what? There can't be many clubs that make profits and the situation must have been obvious when he bought the club. I know the Shepherd and the Halls left a financial mess when he bought the club, again he should have known this.

 

My frustration is that he seems to be applying financial strictures to the club that no-one else is adopting. That might be prudent business, we might be ahead of the curve and other clubs may have to fall into line, or whatever. However I can see that with more investment, we would do significantly better. I want more ambition - I say that as a fan, not their financial director.

 

Chez, I understand the economics don't make sense, but in my view, if he couldn't afford to put the money in, he shouldn't have bought the club in the first place. My view isn't driven by business logic or analysis, I'm just a fan who wants the club to do well. I really haven't bothered to go into the detail of the finances, so I'm talking from the heart not the head.

 

There are some clubs who have spent loads and have either gone bust or are now seriously reigning in the spend and there are a raft of clubs who are about to. Bolton being a good example of what is coming, we arent much different to anyone else in terms of spending power. When you add in our spend in January and the summer and set it against other clubs in the prem we arent the 3rd bottom spenders any more. I doubt many will spend in January but i reckon we will do another £5m, which would take us to about £15m in 12 months.

 

My view is that apart from lacking investment (no more than £10m would be realistic) in 08/09 he hasnt done much wrong financially. Its not this which is the problem with Ashley. The year he took over our revenue was £99m but our spend was £107m, to balance that year out, spend has to be £91m the following year if revenue stays the same. As revenue dropped £13m he had to find £21m in savings to sort out the problem. We sold £23m worth of players.

 

The debt/loss thing is just like the debt/deficit issue for countries. Debt is not the problem, its the deficit (loss) that affects your ability to raise finance. If you have a huge loss, no-one will lend as you are a risk. If you have a huge debt but break even, people will lend to you.

 

Our finances were about as bad as it can get when he took over as we were at the end of our credit line. Whether a plan was in place to re-finance in June 2007 or not is irrelevant because by 2008 the world of 'finance' had changed forever. Me knowing what happened next makes me think that we would have been fucked. Shepherd cant be held to blame for not fore-seeing the crisis either, i want to be clear on that.

 

Anyway, my point is one of optimism (where i came in on this) because once the rules change, we have to break even or limit losses anyway. My hope is that we are getting the financial side sorted out in preparation for this. Being 8th when no-one dared to hope for more than 17th whilst doing this, lets me see the glass half full. I'm not trying to defend him, the facts are the club was not healthy financially when he came in, £45m of debt had to be paid off there and then, the banks would not lend NUFC a penny more with him as the new owner and the club was stuffed with overpaid, poor footballer taking up more wages than was viable. It got worse from there because of his idiocy but it could have been a lot worse as finance basically disappeared.

[spongebob toonpants 3584]

The only conclusion that I can draw from the Mike Ashley ownership of the club is that football is a joke at our expense

 

The seemingly infallible ability to make the worst possible decision at any given time.....

 

to choose Wise over Keegan, to sell in that window, to refuse to support then sack the one man who against all odds had returned dignity and premiership football to our club, to be responsible for Joe Kinnear......

 

But even in the face of such ridiculous ineptitude to have the club in a comfortable mid table position, having romped the Championship, with the most exciting young footballer in Britain grabbing headlines l r and c, still able to pull in over 50k for a televised match,

 

We all know that we will get sucked back in only for that bastard to fuck us all over again. It would be easier if his bizarre running of the club had left us broke relegated and looking at administration. This state of affairs just prolongs the agony.

 

 

Agony?

 

8th in the leagure

Beating Sunderland 5-1

Beating Liverpool 3-1

Watching players like Tiote, Barton and Carrol

 

Best agony in my lifetime tbh

 

How old are you,5?

[Kitman 2188]

I think most people don't care about the finances as long as the club isn't going to go bust. I don't see any satisfaction in running at break even or better, I'd rather we were in debt, buying players and competing for trophies. It's not up to me to decide what is financially prudent, I don't give a toss about it frankly. What Ashley's done at our club baffles me and I don't trust him one iota with its future.

Unfortunately, that doesnt make any sense. You cant expect the club not to go bust and be in debt.

 

Aren't all the other PL clubs in debt though (and loss making too)? They aren't about to go bust unless their benefactors put them under, are they? It's totally obvious Ashley is subsidising the club and without his support it would go under, I get that. But so what? There can't be many clubs that make profits and the situation must have been obvious when he bought the club. I know the Shepherd and the Halls left a financial mess when he bought the club, again he should have known this.

 

My frustration is that he seems to be applying financial strictures to the club that no-one else is adopting. That might be prudent business, we might be ahead of the curve and other clubs may have to fall into line, or whatever. However I can see that with more investment, we would do significantly better. I want more ambition - I say that as a fan, not their financial director.

 

Chez, I understand the economics don't make sense, but in my view, if he couldn't afford to put the money in, he shouldn't have bought the club in the first place. My view isn't driven by business logic or analysis, I'm just a fan who wants the club to do well. I really haven't bothered to go into the detail of the finances, so I'm talking from the heart not the head.

 

There are some clubs who have spent loads and have either gone bust or are now seriously reigning in the spend and there are a raft of clubs who are about to. Bolton being a good example of what is coming, we arent much different to anyone else in terms of spending power. When you add in our spend in January and the summer and set it against other clubs in the prem we arent the 3rd bottom spenders any more. I doubt many will spend in January but i reckon we will do another £5m, which would take us to about £15m in 12 months.

 

My view is that apart from lacking investment (no more than £10m would be realistic) in 08/09 he hasnt done much wrong financially. Its not this which is the problem with Ashley. The year he took over our revenue was £99m but our spend was £107m, to balance that year out, spend has to be £91m the following year if revenue stays the same. As revenue dropped £13m he had to find £21m in savings to sort out the problem. We sold £23m worth of players.

 

The debt/loss thing is just like the debt/deficit issue for countries. Debt is not the problem, its the deficit (loss) that affects your ability to raise finance. If you have a huge loss, no-one will lend as you are a risk. If you have a huge debt but break even, people will lend to you.

 

Our finances were about as bad as it can get when he took over as we were at the end of our credit line. Whether a plan was in place to re-finance in June 2007 or not is irrelevant because by 2008 the world of 'finance' had changed forever. Me knowing what happened next makes me think that we would have been fucked. Shepherd cant be held to blame for not fore-seeing the crisis either, i want to be clear on that.

 

Anyway, my point is one of optimism (where i came in on this) because once the rules change, we have to break even or limit losses anyway. My hope is that we are getting the financial side sorted out in preparation for this. Being 8th when no-one dared to hope for more than 17th whilst doing this, lets me see the glass half full. I'm not trying to defend him, the facts are the club was not healthy financially when he came in, £45m of debt had to be paid off there and then, the banks would not lend NUFC a penny more with him as the new owner and the club was stuffed with overpaid, poor footballer taking up more wages than was viable. It got worse from there because of his idiocy but it could have been a lot worse as finance basically disappeared.

 

Good post.

 

I think the problem is that many fans, myself included, expected a rich man coming in to finance the club from his own pocket. Ashley encouraged this image, saying he just wanted to have a bit of fun and the appointment of Keegan etc did nothing to dispel that myth. Then all of a sudden the shutters came down, to the extent that when only a limited amount of investment in Jan 2008 would likely have kept us up, he spent nothing.

 

If there'd been more transparency on the finance, perhaps he'd have had an easier ride. My own take is that with some limited investment he could have saved himself a lot of money, and perhaps some of his reputation with the fans, and I don't think that's a hindsight thing, it was obvious at the time. That's where his footballing inexperience and bloody mindedness, plus lack of good advisers around him, really cocked it up. imo.

 

Maybe he intends to slowly put that right (the CT view), although the Hughton debacle suggests he's been slow to learn his lesson.

Edited December 15, 2010 by Kitman

[ChezGiven 0]

Maybe he is just preparing us to be sold? Getting the wages down is a means to that too.

 

The Hughton decision certainly shows he hasnt learned much from his mistakes. If he invests in January then it might be clearer what his intentions are. With Gosling, Ben Arfa and 2 new recruits we might do alright second half of the season. A lot depends on Pardew too who has yet to convince me he isnt a cunt.

[TheMoog 0]

Be nice if true:

 

http://www.dailymail.co.uk/sport/football/...-EXCLUSIVE.html

[Kitman 2188]

Just suppose Ashley has these Qataris lined up and it's nailed on they will buy the club for a ridiculous price.

As with Man City, it's highly likely they'd want their own high profile manager in when they take over. As money isn't a problem, Pardew would be due a big pay off i.e 5 x annual salary. But this wouldn't deter the new owners from buying the club or paying him off.

 

Against this backdrop, the length of Pardew's contract makes perfect sense. He'd only be a caretaker manager pending the sale, but they'd have taken the opportunity to put a big lump of cash into his pocket at the arabs' expense for doing very little, basically because he's a mate. In the meantime if he does a good job it boosts his reputation and if he doesn't, it's not his fault.

 

I may be being unduly cynical......

[dbsweeney 0]

I can understand why, along with Spurs and few others, we'd be a club that's attractive to buyers.

 

If I'm right (and that's a big if), with the new spending rules coming in you can only spend according to what you bring in in terms of profit—or something like that.

 

If that's the case, that's why Man U are in a good place 'cause, even though they have mega-debt, they also bring in A LOT of cash yearly through the millions of zombies that follow them worldwide in shirt sales and the fact that, week-in-week-out, they have a full stadium.

NUFC don't have the following that Man U has, but we do bring in a lot more cash than other clubs do 'cause we're not a minnow and we pack in around 50 000 each week into SJP. That fact alone makes us attractive—correct??

[Guest]

Good thread lads.

 

Mike Ashley is a fat cunt.

 

 

No ambitions though. Cost cutting is ludicrous. Idiot with ambition and certain bankruptcy FTW

 

u-turn of the decade

 

 

Comprehension issues.

[Happy Face 29]

Maybe he is just preparing us to be sold? Getting the wages down is a means to that too.

 

The Hughton decision certainly shows he hasnt learned much from his mistakes. If he invests in January then it might be clearer what his intentions are. With Gosling, Ben Arfa and 2 new recruits we might do alright second half of the season. A lot depends on Pardew too who has yet to convince me he isnt a cunt.

 

It's another gamble, but giving Pardew £500k a year rather than giving hughton what he's worth (£1m+ a year at least) will save Ashley a minimum of £2.5m over the length of his contract.

 

Minimising wages is the only lesson Ashley has learned.

[Happy Face 29]

Just suppose Ashley has these Qataris lined up and it's nailed on they will buy the club for a ridiculous price.

As with Man City, it's highly likely they'd want their own high profile manager in when they take over. As money isn't a problem, Pardew would be due a big pay off i.e 5 x annual salary. But this wouldn't deter the new owners from buying the club or paying him off.

 

Against this backdrop, the length of Pardew's contract makes perfect sense. He'd only be a caretaker manager pending the sale, but they'd have taken the opportunity to put a big lump of cash into his pocket at the arabs' expense for doing very little, basically because he's a mate. In the meantime if he does a good job it boosts his reputation and if he doesn't, it's not his fault.

 

I may be being unduly cynical......

 

giving Pardew £500k a year rather than giving hughton what he's worth (£1m+ a year at least) will save Ashley a minimum of £2.5m over the length of his contract.

 

Minimising wages is the only lesson Ashley has learned.

 

I think people are fitting the facts around a sale they're hoping for, rather than looking at it for what it is.

 

Love your avatar by the way, pissed myself when i saw that sign at the match.

[Christmas Tree 3997]

Be nice if true:

 

http://www.dailymail.co.uk/sport/football/...-EXCLUSIVE.html

 

 

That's all we need a foreign committee. Better the devil you know at the moment.

[Happy Face 29]

Be nice if true:

 

http://www.dailymail.co.uk/sport/football/...-EXCLUSIVE.html

 

 

Since taking over the club three years ago he has poured in more than £250m of his own money to invest in transfer, re-pay debts and loans and working capital. The accounts are expected to show another £30m-plus loss following relegation to the Championship.

 

Why trust a story where the journalist hasn't done the most basic fact checking? He's made a £20m+ profit on the transfer market

 

It's basically an Ashley propaganda piece.

 

Same line as 2 years ago.... “Just print that we paid £250 Million for the club”.

Edited December 16, 2010 by Happy Face