£111million

[peasepud 59]

That's what we owed Ashley at end of last season which must be repaid when we're sold plus £35m more on overdraft.

 

 

Financially sound

[Rob W 0]

better than ManU, Citeh, Portsmouth, W Ham, Greece, Liverpool ...............................

[Christmas Tree 4827]

That's what we owed Ashley at end of last season which must be repaid when we're sold plus £35m more on overdraft.

 

 

Financially sound

 

It has been argued many times on here that this "must be repaid" line is rubbish.

 

If and when he sells, the price a buyer pays will be the price, end of.

 

It's like you lending yourself 30,000 for fancy wallpaper for your home. Doesn't mean that if you sell a buyer is going to pay you that 30,000 on top of the real price, no matter how much you want it.

 

At the end of the day you will only get the market value. Same with Newcastle.

[Happy Face 29]

THE state of Newcastle United’s finances can today be revealed.

 

The club has published its latest set of accounts, which covers the period leading up to its relegation to the Championship.

 

Details of major developments during the course of the Magpies’ successful promotion campaign are also given in the papers, which reveal:

 

The legal case resulting from the departure of ex-boss Kevin Keegan cost the club more than £5.3m

 

United’s wage bill soared to more than £71.1m by the end of its time in the Premier League

 

The Toon now owes owner Mike Ashley £111m

 

The sports billionaire has ploughed an extra £25.5m into the club’s coffers

 

Player costs worth more than £21m have been saved since relegation.

 

United’s accounts were due to be filed at Companies House at the end of March but they were posted late by the club.

 

They have now been made available and tell of the impact of dropping from English football’s top flight.

 

The director’s report, signed by MD Derek Llambias, says: “A disappointing 2008/09 season for Newcastle United culminated in an 18th place finish in the FA Premier League and relegation to the Football League Championship for the 2009/10 season.

 

“The financial effects of relegation will be most evident in the financial statements for the year ending June 30 2010 but it has also impacted on the results for the year under review.”

 

It goes on to reveal the club’s turnover fell to £86.1m from £99.4m the year before.

 

Despite the reduced income, the wage bill rose to £71.1m from £70m in 2008/9 and that meant salary costs ate up a staggering 82.6% of all the cash coming into the club.

 

Later in the accounts, it is revealed that since relegation wage bill savings have been made, which will include the departure of high-earning players like Michael Owen, Mark Viduka, Obafemi Martins and Damien Duff.

 

The papers state: “The playing registrations of certain players have been disposed of subsequent to the balance sheet date for a total consideration, net of associated costs, of £21,103,000.”

 

It adds: “Subsequent to the balance sheet date, the playing registrations of certain players have been acquired for total consideration, including associated costs of £3,221,000.” That will take account of the signing of players including Mike Williamson, Fabrice Pancrate and Danny Simpson.

 

The level of Mike Ashley’s investment in the Toon is also revealed.

 

He is now owed £111m by the club, which must be paid back to him immediately in the event of a change in ownership.

 

The accounts add: “Subsequent to the year end, the ultimate controlling party, Mr MJW Ashley, has advanced additional funding of £25.5m.”

 

Under a heading of “Change of Team Management,” the papers state: “In September 2008 Kevin Keegan left his position as first team manager and subsequent to the year end, in October 2009, a Premier League Manager’s Tribunal upheld a claim of constructive dismissal brought by Mr Keegan in relation to his departure.

 

“Costs relating to this matter, totaling £5,342,000 (including staff costs of £2,256,000) have been charged in full in the year to June 30 2009.

 

“In January 2008, Sam Allardyce’s contract was terminated. Costs relating to this and the accompanying changes in backroom staff, totalling £4,597,000, were recognised in the prior year.”

 

It is also revealed £1,357,000 was paid to the club’s solicitors Freshfields Bruckhaus Dennger for the services of former chairman Chris Mort, who was at St James’ between June 2007-June 2008.

 

http://www.chroniclelive.co.uk/north-east-...72703-26357235/

[Happy Face 29]

In a nutshell (from quayside on NO):

 

Turnover was £86 million (all 3 areas of revenue matchday, media and commercial were down on the previous year)

 

Wages (including Keegan's £2.2m payoff) £73m

 

Profit on transfers £23m

 

Other costs £51m

 

Therefore the Loss = £15m so it was an improvement on 2008 but, due to the fall in turnover, not a massive one.

 

As at 30th June Ashley had loaned £111m making his investment a total of £247m. He took no money out in interest. At one point in the year his loan was up to £112m.

[Happy Face 29]

The highest paid director (presumably Llambias) is on £155k with £16k going into his pension.

 

Chicken feed tttt.

[Matt 0]

That £111m will be a darn sight higher in the next lot of accounts. Nothing will be fixed until the club addresses the issues around the players on inflated wages signed at the start of the Ashley era: Barton, Smith, Coloccini in particular. Aside from actually paying them out, they distort what other squad members feel they should be paid and what incoming players will demand.

 

The key issue is that the club continues to bleed cash, as it has been doing now for the last 5 years. That overdraft position is horrific at a time of year when most of the season ticket money should already be banked.

[Happy Face 29]

It adds: “Subsequent to the balance sheet date, the playing registrations of certain players have been acquired for total consideration, including associated costs of £3,221,000.” That will take account of the signing of players including Mike Williamson, Fabrice Pancrate and Danny Simpson.

 

http://www.chroniclelive.co.uk/north-east-...72703-26357235/

 

When added to the £23m transfer profit for 2009 and the £5k transfer outgoings in 2008 they've given us a figure for Ashley's overall transfer profit of £20m.

[ewerk 31203]

The highest paid director (presumably Llambias) is on £155k with £16k going into his pension.

 

Chicken feed tttt.

 

Approximately 13% of what they were paying for Mort.

[Happy Face 29]

The highest paid director (presumably Llambias) is on £155k with £16k going into his pension.

 

Chicken feed tttt.

 

Approximately 13% of what they were paying for Mort.

 

 

Similar to what Owen earned in a week

[Andrew 4857]

The highest paid director (presumably Llambias) is on £155k with £16k going into his pension.

 

Chicken feed tttt.

 

Approximately 13% of what they were paying for Mort.

 

mort didnt come across as a slimy dispicable cunt though

[The Fish 10965]

The highest paid director (presumably Llambias) is on £155k with £16k going into his pension.

 

Chicken feed tttt.

 

Approximately 13% of what they were paying for Mort.

 

mort didnt come across as a slimy dispicable cunt though

the worst ones don't

[TheMoog 0]

How does one loan one's self money?! Surely he owns the club, the money he's put in is payment of running costs, like it costs to keep a car maintained and running?

[NJS 4411]

How does one loan one's self money?! Surely he owns the club, the money he's put in is payment of running costs, like it costs to keep a car maintained and running?

 

As I understand it the club owes the money to the company he setup to buy the club - two separate entities.

 

CT has it wrong imo - if he was going to "write off" the loan he would have converted it to equity with no value which is what Abramovitch did - keeping it as a loan suggests intended repayment.

[Park Life 71]

How does one loan one's self money?! Surely he owns the club, the money he's put in is payment of running costs, like it costs to keep a car maintained and running?

 

As I understand it the club owes the money to the company he setup to buy the club - two separate entities.

 

CT has it wrong imo - if he was going to "write off" the loan he would have converted it to equity with no value which is what Abramovitch did - keeping it as a loan suggests intended repayment.

 

That's how I read it.

[AmericanMag 0]

better than ManU, Citeh, Portsmouth, W Ham, Greece, Liverpool ...............................

[Christmas Tree 4827]

How does one loan one's self money?! Surely he owns the club, the money he's put in is payment of running costs, like it costs to keep a car maintained and running?

 

As I understand it the club owes the money to the company he setup to buy the club - two separate entities.

 

CT has it wrong imo - if he was going to "write off" the loan he would have converted it to equity with no value which is what Abramovitch did - keeping it as a loan suggests intended repayment.

 

I don't disagree with that but the key is "intended". What he intends and what will happenare two different things.

 

A buyer takes debt into consideration when buying a company. That's why you sometimes see company change hands for a £1

 

keeping the £111 as a debt gives him numerous options in an uncertain financial world including things like administration etc

[Happy Face 29]

He's also changed the terms of his loans from instantly repayable upon the sale of the club to repayable on demand btw.

[peasepud 59]

He's also changed the terms of his loans from instantly repayable upon the sale of the club to repayable on demand btw.

 

Which I assume could mean one of two things,

 

either its intended as a slight sweetener for prospective purchasers ie not exactly due the day they buy the club but at some later date

 

or worryingly, the club repays it when he decides, in other words he has a bad day gambling on the stock exchange and decides to recoup his losses by calling in the debt.

 

 

Personally, Im more willing to believe its the second option ie giving him leeway to call it in at anytime.

 

 

Im waiting to see St James Holdings accounts which are also overdue with Companies House.

[Happy Face 29]

I don't think it was ONLY repayable when sold in the past, it could have been reduced at any time but it had to be repaid if the club changed hands....and that restriction has been lifted...which suggests it's the first of your two options.

 

While giving him credit for that kind of sweetner, it makes one wonder about how much Ashley was actually willing to forfeit when selling and casts further doubt on the claims of an £80m asking price with no other strings attached for Moat last summer....which I doubted all along as it was

[Matt 0]

I disagree that the fact the debt to Ashley remains is a sign that he wants it back.

 

If Ashley converted his debt to equity and club went bust, he'd be at the back of the queue- as it is he has equal claim on pretty much all of the clubs assets (although I suspect the overdraft is subject to a debenture, so this would be paid out first). Debt also allows him to improve the tax position. On the off-chance we were ever likely to make a profit, he could place a reasonable commercial rate on the lending which would be paid to him as interest but not subject to corporation tax. If that ever occurs, expect our shares to ultimately be attributed to an offshore company.

 

Chelsea only converted their position to keep UEFA off their case for the club licencing scheme.

 

As for making it payable on demand, this doesn't make any material impact. He's not going to get much money back that way- he'll only earn it by returning the club to profitability then either repaying over a period of time or selling the club at that point.

 

No-one is going to buy the club with £100m repayable on demand. It would have to be settled or restructured.

[adios 717]

better than ManU, Citeh, Portsmouth, W Ham, Greece, Liverpool ...............................

 

 

That's what we owed Ashley at end of last season which must be repaid when we're sold plus £35m more on overdraft.

 

 

Financially sound

 

It has been argued many times on here that this "must be repaid" line is rubbish.

 

If and when he sells, the price a buyer pays will be the price, end of.

 

It's like you lending yourself 30,000 for fancy wallpaper for your home. Doesn't mean that if you sell a buyer is going to pay you that 30,000 on top of the real price, no matter how much you want it.

 

At the end of the day you will only get the market value. Same with Newcastle.

 

I've actually gone through the forgot password rigmarole to laugh at this. Do you think Ashley is running Newcastle as a sole trader?

[Christmas Tree 4827]

While you were having a little chortle you could explain your amusement. I see little difference with what I or matt have said, only he expresses it better and seems to have a working knowledge of brokering this type of business deal.

 

 

No-one is going to buy the club with £100m repayable on demand. It would have to be settled or restructured

Edited May 2, 2010 by Christmas Tree

[accadacca 0]

In a nutshell (from quayside on NO):

 

Turnover was £86 million (all 3 areas of revenue matchday, media and commercial were down on the previous year)

 

Wages (including Keegan's £2.2m payoff) £73m

 

Profit on transfers £23m

 

Other costs £51m

 

Therefore the Loss = £15m so it was an improvement on 2008 but, due to the fall in turnover, not a massive one.

 

As at 30th June Ashley had loaned £111m making his investment a total of £247m. He took no money out in interest. At one point in the year his loan was up to £112m.

 

Imagine what the next set of accounts are going to be like - drop in turnover will be at least £25m tho' some high earners were ditched - its going to be a bloodbath ! The wage bill is still huge, and MA could be looking at a huge loss despite winning the CCC with average gates of 42,000.

 

The fact is that there are still too many players on ludicrous wages of between £40m and £65m - Enrique,Nolan, Smith, Barton, Colocinni, Gutierrez - they alone take around £18m out of whatever the turnover figure is !! Butt's £40k plus wages are soon to be off the books, but then there are lads on £20k/£30k per week like Saylor, Harper, Ameobi and Lovenkrands.

 

Absolutely mental.

[The Fish 10965]

While you were having a little chortle you could explain your amusement. I see little difference with what I or matt have said, only he expresses it better and seems to have a working knowledge of brokering this type of business deal.

 

 

No-one is going to buy the club with £100m repayable on demand. It would have to be settled or restructured

Don't let his patter fool you, he gets confused easily