Kitman 2188 Posted March 8, 2012 Share Posted March 8, 2012 That commercial drop-off is what I was wondering about earlier. If that estimate for 2011 is close to being right it's shocking. It would mean our commercial income is almost a third of what it was when Ashley arrived. It's been said money is tight, but in the same period villa have almost trebled theirs from £6m to £18m and arsenal have added about 50% to go from £30m (where we were) to £45m. What does commercial income cover HF? Is it everything from shirts to pies, bars, restaurants etc? I wonder whether a bit of the shortfall is accounted for by the sponsorship deal......didn't the NR money get spent upfront by Shepherd leaving nowt left in the pot till the end of the deal? Or maybe that's ancient history.... Link to comment Share on other sites More sharing options...
Happy Face 29 Posted March 8, 2012 Share Posted March 8, 2012 That commercial drop-off is what I was wondering about earlier. If that estimate for 2011 is close to being right it's shocking. It would mean our commercial income is almost a third of what it was when Ashley arrived. It's been said money is tight, but in the same period villa have almost trebled theirs from £6m to £18m and arsenal have added about 50% to go from £30m (where we were) to £45m. What does commercial income cover HF? Is it everything from shirts to pies, bars, restaurants etc? I wonder whether a bit of the shortfall is accounted for by the sponsorship deal......didn't the NR money get spent upfront by Shepherd leaving nowt left in the pot till the end of the deal? Or maybe that's ancient history.... Shops and sponsorship basically. Dunno if that includes pie and pint shops (outsourced or not) or if that goes into the matchday income (which also has a way to go towards full recovery). Link to comment Share on other sites More sharing options...
Baggio 0 Posted March 8, 2012 Share Posted March 8, 2012 Surely Villa's have gone up because of shirt sponsorship, where as the drop from ours since the season before is down to reduced deal we signed while in the championship. Seems a moot point anyway as we know we've got an improved deal already signed. Link to comment Share on other sites More sharing options...
Happy Face 29 Posted March 8, 2012 Share Posted March 8, 2012 Surely Villa's have gone up because of shirt sponsorship, where as the drop from ours since the season before is down to reduced deal we signed while in the championship. Seems a moot point anyway as we know we've got an improved deal already signed. You can see it dropping year on year every year since he arrived. I've got no idea how that breaks down in terms of Shirt sponsor, match sponsors, shirt sales etc, but the shirt deal being a one off drop suggests it's something other than that. Link to comment Share on other sites More sharing options...
Baggio 0 Posted March 8, 2012 Share Posted March 8, 2012 Also as far as the gate receipts go, it's worth remembering that apart from the expected hit from the large family section, we only played one cup game at home all season and the same goes for this year too. European qualification and a decent run will boost this a fair bit. Link to comment Share on other sites More sharing options...
Baggio 0 Posted March 8, 2012 Share Posted March 8, 2012 Surely Villa's have gone up because of shirt sponsorship, where as the drop from ours since the season before is down to reduced deal we signed while in the championship. Seems a moot point anyway as we know we've got an improved deal already signed. You can see it dropping year on year every year since he arrived. I've got no idea how that breaks down in terms of Shirt sponsor, match sponsors, shirt sales etc, but the shirt deal being a one off drop suggests it's something other than that. Well yes, it was dropping off by people refusing to buy food and drink in the ground to apparently hit Ashley in the pocket. Again that's not really a revelation. Link to comment Share on other sites More sharing options...
Kitman 2188 Posted March 8, 2012 Share Posted March 8, 2012 Surely Villa's have gone up because of shirt sponsorship, where as the drop from ours since the season before is down to reduced deal we signed while in the championship. Seems a moot point anyway as we know we've got an improved deal already signed. If that's right I suppose the good news would be that revenue will grow again on the back of that new deal. Plus we must be on the telly more these days. If Ashley stopped antagonising the fan base they might do a bit better mind Link to comment Share on other sites More sharing options...
Baggio 0 Posted March 8, 2012 Share Posted March 8, 2012 Also, pure speculation here and hopefully someone can put me right, but would all of the money brought in by people paying the 3 year season ticket in advance gone into the account at the time? So the 2 years following have suffered because of that? Link to comment Share on other sites More sharing options...
Happy Face 29 Posted March 8, 2012 Share Posted March 8, 2012 Also, pure speculation here and hopefully someone can put me right, but would all of the money brought in by people paying the 3 year season ticket in advance gone into the account at the time? So the 2 years following have suffered because of that? Think they've said the income on that will be spread across the term. Link to comment Share on other sites More sharing options...
Kitman 2188 Posted March 8, 2012 Share Posted March 8, 2012 Also, pure speculation here and hopefully someone can put me right, but would all of the money brought in by people paying the 3 year season ticket in advance gone into the account at the time? So the 2 years following have suffered because of that? I expect they have to spread the income over the 3 years i.e. you only book revenue for a particular season to the profit and loss account for that year Link to comment Share on other sites More sharing options...
Matt 0 Posted March 8, 2012 Share Posted March 8, 2012 The club sold players worth £36.7m spent more than £25m on bringing talent to Tyneside. http://www.chronicle...72703-30490016/ Not sure how the last 2 tally with £5.4m net receipt. Because they have worded it very carefully. We have spent £25m (cash) since June 11, so this figure will be in the next set of accounts. This number won't appear at all in those about to be released. The reason the club is keen to point this out is because we will be booking a massive gain on the Carroll sale with little to offset it and I reckon our pre-tax profit is likely to be in the £20m area, unless there has been some huge impairments on the squad, which I can't see happening. £20m clear profit is not a figure they'd be keen to stress in their initial public sounding. Far better to promote the 'slow and steady' story. All expectations management. We are still in debt to Mike Ashley as well, payable on demand. We are not debt free. That's a mirage. He could demand repayment and liquidate the club. But he could do that anyway as the 100% owner. He is under no obligation to continue running a business, it is in his gift to close it down whenever he likes (it would be stupid of course). To all practical purposes, the 'loan' is equity but is on the books as a loan because firstly it's tax efficient and secondly that it serves a nice reminder of all the cash Mike had to plough into the club having neglected to look at so much as the published accounts before buying the club. Link to comment Share on other sites More sharing options...
Kitman 2188 Posted March 8, 2012 Share Posted March 8, 2012 That's a mirage. He could demand repayment and liquidate the club. But he could do that anyway as the 100% owner. He is under no obligation to continue running a business, it is in his gift to close it down whenever he likes (it would be stupid of course). To all practical purposes, the 'loan' is equity but is on the books as a loan because firstly it's tax efficient and secondly that it serves a nice reminder of all the cash Mike had to plough into the club having neglected to look at so much as the published accounts before buying the club. How is it tax efficient Matt? If there's a simple explanation...... Link to comment Share on other sites More sharing options...
Guest Your Name Here Posted March 8, 2012 Share Posted March 8, 2012 That's a mirage. He could demand repayment and liquidate the club. But he could do that anyway as the 100% owner. He is under no obligation to continue running a business, it is in his gift to close it down whenever he likes (it would be stupid of course). To all practical purposes, the 'loan' is equity but is on the books as a loan because firstly it's tax efficient and secondly that it serves a nice reminder of all the cash Mike had to plough into the club having neglected to look at so much as the published accounts before buying the club. How is it tax efficient Matt? If there's a simple explanation...... Tax efficient or not, at some point he is going to want that money back and I'd wager NUFC will pay a high price when he does. Link to comment Share on other sites More sharing options...
Matt 0 Posted March 8, 2012 Share Posted March 8, 2012 That's a mirage. He could demand repayment and liquidate the club. But he could do that anyway as the 100% owner. He is under no obligation to continue running a business, it is in his gift to close it down whenever he likes (it would be stupid of course). To all practical purposes, the 'loan' is equity but is on the books as a loan because firstly it's tax efficient and secondly that it serves a nice reminder of all the cash Mike had to plough into the club having neglected to look at so much as the published accounts before buying the club. How is it tax efficient Matt? If there's a simple explanation...... Interest is tax deductible. So if the club makes £10m profit, then 26% (£2.6m) goes to the taxman. The remaining £7.4m can be paid as dividends, held in the company, whatever is preferred. But if Ashley decided interest is payable (there are limits set by HMRC on what is allowed) at say 7% a year on the £140m (which is not unreasonable) then the club pays £9.8m interest and only £0.2m profit. The taxman takes 26% of that (about £52k) and the club can use the remaining £148k. Ashley's company then has the £9.8m of income. It gets a bit more complicated after that, because ultimately the interest has to escape the corporate chain at some point and what often happens (but I dont think is the case here) is that one of the companies in the chain is offshore (Guernsey of Cayman registered for example) where there is little or no tax on dividends and the cash can be extracted there. There is a whole plethora of legislation around this which goes well beyond my understanding, but the fundamental is that you can reduce the overall tax burden on the company through this 'tax shield'. The other benefit is being able to improve returns from a liquidation process. If you imagine that you were owed £50m by a company in which you also owned all the shares and the other creditors were owed £25m, then you probably want to use your position as majority creditor to your advantage if the company becomes distressed. This is the calling card of the feller up at Rangers. Not that I'm saying Ashley is doing that- far from it- he is likely owed 99% of the total club's debt so it's not an issue. But it's why some people use secured intercompany loans rather than common equity, which always ranks last in line for the spoils. Link to comment Share on other sites More sharing options...
Kitman 2188 Posted March 8, 2012 Share Posted March 8, 2012 That's a mirage. He could demand repayment and liquidate the club. But he could do that anyway as the 100% owner. He is under no obligation to continue running a business, it is in his gift to close it down whenever he likes (it would be stupid of course). To all practical purposes, the 'loan' is equity but is on the books as a loan because firstly it's tax efficient and secondly that it serves a nice reminder of all the cash Mike had to plough into the club having neglected to look at so much as the published accounts before buying the club. How is it tax efficient Matt? If there's a simple explanation...... Tax efficient or not, at some point he is going to want that money back and I'd wager NUFC will pay a high price when he does. Lending the money means he doesn't have to sell his shares to get his money back. As a fan I'd far rather he got paid back when he sells up and the money go to fund the team instead. But he's obviously entitled to have his money back at the end of the day, he gave it to the club to fund its operating losses in the first place. Link to comment Share on other sites More sharing options...
Matt 0 Posted March 8, 2012 Share Posted March 8, 2012 Lending the money means he doesn't have to sell his shares to get his money back. As a fan I'd far rather he got paid back when he sells up and the money go to fund the team instead. But he's obviously entitled to have his money back at the end of the day, he gave it to the club to fund its operating losses in the first place. He doesn't have to sell his shares anyway- he can just pay a dividend out and get a return that way. Either way, he'll only really get his cash back when the club is eventually sold. At that point the loan is irrelevant. It's the same choice between buying a wallet for £50 or the same wallet for £100, but it's already stuffed with £50 in notes. Same deal. Link to comment Share on other sites More sharing options...
Baggio 0 Posted March 8, 2012 Share Posted March 8, 2012 I think what he's put in falls into 2 groups, £111 million to cover loses and the rest as a cash advance and I presume he's having the advance back this year. Link to comment Share on other sites More sharing options...
Kitman 2188 Posted March 8, 2012 Share Posted March 8, 2012 But the loans are interest free aren't they Matt? So isn't this really about getting your money out easily? Or do you think he will charge interest in the future? In any event I assume charging interest on shareholder debt would only make sense if the recipient of the interest is either in tax losses (or can access them) or is sitting in a tax haven (otherwise in an overall sense you've just transferrred tax to your parent co). If it's the latter I assume they'd have to pay withholding tax on interest payments anyway? And I vaguely recall you don't get anywhere with offshore companies these days if the ultimate owner is UK resident (which is why the likes of Philp Green are resident in Monaco). Hey ho. It's been years since I looked at UK tax..... Link to comment Share on other sites More sharing options...
Kitman 2188 Posted March 8, 2012 Share Posted March 8, 2012 Lending the money means he doesn't have to sell his shares to get his money back. As a fan I'd far rather he got paid back when he sells up and the money go to fund the team instead. But he's obviously entitled to have his money back at the end of the day, he gave it to the club to fund its operating losses in the first place. He doesn't have to sell his shares anyway- he can just pay a dividend out and get a return that way. Either way, he'll only really get his cash back when the club is eventually sold. At that point the loan is irrelevant. It's the same choice between buying a wallet for £50 or the same wallet for £100, but it's already stuffed with £50 in notes. Same deal. Yeah, you're right, I wasn't thinking about dividends. I suppose there's a limit on what dividend you could pay if the company's making losses.... Link to comment Share on other sites More sharing options...
Matt 0 Posted March 8, 2012 Share Posted March 8, 2012 (edited) But the loans are interest free aren't they Matt? So isn't this really about getting your money out easily? Or do you think he will charge interest in the future? In any event I assume charging interest on shareholder debt would only make sense if the recipient of the interest is either in tax losses (or can access them) or is sitting in a tax haven (otherwise in an overall sense you've just transferrred tax to your parent co). If it's the latter I assume they'd have to pay withholding tax on interest payments anyway? And I vaguely recall you don't get anywhere with offshore companies these days if the ultimate owner is UK resident (which is why the likes of Philp Green are resident in Monaco). Hey ho. It's been years since I looked at UK tax..... I'm not saying Ashley is interesting in a massive tax dodge or in dripping cash out of the club so the loans will most likely stay interest free, I'm just talking in general terms. I don't think the current structure is any quicker at realising value than pure equity. If anything it might make it more complex depending on how they structured the steps. Yeah, you're right, I wasn't thinking about dividends. I suppose there's a limit on what dividend you could pay if the company's making losses.... There are ways and means round that as well! Edited March 8, 2012 by Matt Link to comment Share on other sites More sharing options...
Kitman 2188 Posted March 8, 2012 Share Posted March 8, 2012 (edited) There are ways and means round that as well! As no doubt a certain *ahem* rotund former shareholder figured out Thanks for the info Matt, more interesting than HF's fecking graphs Edited March 8, 2012 by Kitman Link to comment Share on other sites More sharing options...
ChezGiven 0 Posted March 8, 2012 Share Posted March 8, 2012 That commercial drop-off is what I was wondering about earlier. If that estimate for 2011 is close to being right it's shocking. It would mean our commercial income is almost a third of what it was when Ashley arrived. It's been said money is tight, but in the same period villa have almost trebled theirs from £6m to £18m and arsenal have added about 50% to go from £30m (where we were) to £45m. What figure you looking at? The commercial income topped out in 2007 at £27.6m, The only other year it could have been near that was 2002/3. It starts its downward trend from 2007 though, it would be too simplistic to suggest that this was the year Ashley bought the club. Link to comment Share on other sites More sharing options...
Guest Your Name Here Posted March 8, 2012 Share Posted March 8, 2012 Lending the money means he doesn't have to sell his shares to get his money back. As a fan I'd far rather he got paid back when he sells up and the money go to fund the team instead. But he's obviously entitled to have his money back at the end of the day, he gave it to the club to fund its operating losses in the first place. Aye, but a fair whack of those losses where down to him creating the instability that saw us relegated, and the rest he inherited on the back of not undertaking Due diligence? Don't see why the supporters should cover his mistakes Link to comment Share on other sites More sharing options...
ChezGiven 0 Posted March 8, 2012 Share Posted March 8, 2012 Lending the money means he doesn't have to sell his shares to get his money back. As a fan I'd far rather he got paid back when he sells up and the money go to fund the team instead. But he's obviously entitled to have his money back at the end of the day, he gave it to the club to fund its operating losses in the first place. Aye, but a fair whack of those losses where down to him creating the instability that saw us relegated, and the rest he inherited on the back of not undertaking Due diligence? Don't see why the supporters should cover his mistakes Thats like saying the Greeks shouldnt pay their debts back because their politicians cooked the books. He's a fucking idiot for not knowing the debt was there, its still our debt though. Link to comment Share on other sites More sharing options...
Kitman 2188 Posted March 8, 2012 Share Posted March 8, 2012 Lending the money means he doesn't have to sell his shares to get his money back. As a fan I'd far rather he got paid back when he sells up and the money go to fund the team instead. But he's obviously entitled to have his money back at the end of the day, he gave it to the club to fund its operating losses in the first place. Aye, but a fair whack of those losses where down to him creating the instability that saw us relegated, and the rest he inherited on the back of not undertaking Due diligence? Don't see why the supporters should cover his mistakes I think he's entitled to get his loan money back at some point but I'd prefer it not to be at the expense of the team. This summer could be pivotal in that sense imo Link to comment Share on other sites More sharing options...
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