Ashley's taken £11m out of the club in 2012

[The Fish 10965]

Thought I'd stick this in here.

 

 

Financial figures for 2011-12, for the 20 clubs which were in the Premier League during 2010-11. All details from most the published annual reports at Companies House. Net debt is as stated in the accounts; debts minus cash held at the bank. The separate categories of turnover are rounded down or up, so added together do not always tally with the total turnover figure.

ARSENAL

 

Accounts for the year to 31 May 2012

Ownership: Arsenal Holdings PLC major shareholders are: Kroenke Sports Enterprises UK (registered in Delaware, owned by US resident Stan Kroenke) 62%, Red and White Securities Limited (registered in Jersey, owned by Russian resident Alisher Usmanov and Farhad Moshiri) 27%

Turnover: 3rd highest in league, £245m (down from £258m in 2011)

... Gate and matchday income: £95m

... TV and broadcasting: £85m

... Retail: £18m

... Commercial: £34m

... Property Development: £8m

... Player Trading: £3m

Wage bill: 4th highest, £143m (up from £124m)

Wages as proportion of turnover: 58%

Profit before tax: £37m (up from £15m)

Net debt: £98m

Interest payable: £15m

Highest Paid Director: Ivan Gazidis, £2.05m

State it's in:

The year fans voiced discontent with what they receive for their £95m matchday outlay. Arsenal were until very recently hailed as an ideal club, their policy of US owner Stan Kroenke putting no money in lauded as a "self-sustaining model." Many supporters now view that that as meaning they fund the club, to bank profits at the expense of football success. The £3m player trading figure within Arsenal's turnover is an accountancy device which does not reflect the £65m profit made selling stars including Cesc Fabregas, Samir Nasri and Gael Clichy. Arsenal's "model" has not been hailed much since.

ASTON VILLA

 

Accounts for the year to 31 May 2012

Ownership: Owned by Randy Lerner, via Reform Acquisitions LLC, a USA company

Turnover: 9th in league, £80m (down from £92m in 2011)

... Gate and matchday: £20m

... TV and broadcasting: £47m

... Commercial: £14m

Wage bill: 7th, £70m (down from £83m)

Wages as proportion of turnover: 87.5%

Loss before tax: £18m (following £54m loss last year)

Net debt: £122m

Interest payable: £7m

Highest paid director: £256,000 to unnamed director (Paul Faulkner is the chief executive)

State it's in:

Exceptional among the US buyers, Randy Lerner has spent hugely on Villa – in equity and loans, now at £107m - yet his initially promising tenure has declined. Lerner has been financially hit by the banking crisis, having sold his MBNA company in return for Bank of America shares, and he is trying to cut back on overspending and losses. Ashley Young, Gareth Barry, James Milner and Stewart Downing, four England internationals, are now memories; Villa's accounts state Paul Lambert's "youthful, highly motivated first team squad … will prove eminently sustainable in the long term." That remains to be seen, and is not a statement of grand ambition.

BLACKBURN ROVERS

 

Accounts for the year to 30 June 2012

Ownership: Owned by Venkateshwara Hatcheries (Venky's) of Pune, in India

Turnover: 19th in league, £54m (down from £58m in 2011)

... Gate and Matchday: £6m

... TV and Broadcasting: £42m

... Commercial: £9m

Wage bill: 15th, £50m (same as 2011)

Wages as proportion of turnover: 93%

Profit before Tax: £4m (following loss of £19m in 2011)

Net debt: £25m

Interest payable: £0.2m

Highest paid director: Unnamed, £135,000

State it's in:

One figure encapsulates the puzzle about why Venky's, a large chicken concern in India, have so scrambled Blackburn Rovers' fortunes. The accounts show the owners have loaned the club £21m, interest free. That is the policy of a benefactor owner, and considerably exceeds the small amounts the trustees of Jack Walker's estate parted with over the previous decade. So Venky's have spent millions on Blackburn, only to undermine the club with inexplicable managerial decisions and the needless loss of excellent directors they inherited. Rovers recorded a profit in 2011-12 due to player trading, principally selling Christopher Samba, but relegation will have been financially hideous.

BOLTON WANDERERS

 

Accounts for the year to 30 June 2012

Ownership: 95% owned by Edwin Davies, resident in the Isle of Man, a tax haven, via his private trust, Fildraw, registered in Bermuda

Turnover: 15th in league, £65m (down from £68m in 2011)

... Gate and matchday: £8m

... Hotel: £6m

... TV and broadcasting: £43m

... Corporate hospitality: £2m

... Merchandising: £2m

... Sponsorship \ advertising: £4m

Wage bill: 13th, £55m (down from £56m in 2011)

Wages as proportion of turnover: 85%

Loss before Tax: £22m (reduced from £26m in 2011)

Net debt: £137m

Interest payable: £6m

Highest paid director: £858,000, presumed to be Allan Duckworth, includes £397,000 pay-off

State it's in:

Bolton ended eleven years of Premier League earnings heavily in debt, seriously loss-making and stating they were seeking still further borrowing "to meet liabilities as they fall due. While other smaller clubs have accepted the possibility of yo-yoing down then back up from the Championship, Bolton put those years behind them and paid out the Premier League's 13th highest wage bill. The accounts reveal the extent of backing from Isle of Man resident Edwin Davies, one of the lowest profile football owners. His loans are now up to £137m – and he charges interest, £5.5m in the year, a decent earner for him, in current economic conditions.

CHELSEA

 

Accounts (of the holding company, Fordstam) for the year to 30 June 2012

Ownership: Wholly owned by Roman Abramovich, registered at Companies House as a Russian resident

Turnover: 2nd in league, £261m (up from £229m in 2011)

... Broadcasting: £113m

... Matchday: £78m

... Commercial: £70m

Wage bill: 2nd, £173m (down from £190m in 2011)

Wages as proportion of turnover: 66%

Loss before tax: £4m (following £78m in 2011)

Net debt: £878m

Interest payable: £Nil

Highest paid director: Unnamed, £911,000 (Ron Gourlay is the chief executive)

State it's in:

Roman Abramovich has taken the burden of his loans away from Chelsea football club itself, but these accounts for the holding company show the Russian oligarch's loans increased substantially in the year. Abramovich lent a further £79m to the Chelsea operation, increasing the total to a staggering £896m, poured into Chelsea since he bought the club in 2003. Some restraint is evident even in the year Chelsea's players were able to win the Champions League trophy for their paymaster. The wage bill came down and £29m was made selling fringe players. The loss of £4m would have been higher, though, without an exceptional £18m noted from two share dealings.

EVERTON

 

Accounts for the year to 31 May 2012

Ownership: Shares in the Everton Football Club Company Limited are owned by: Bill Kenwright 25%, Jon Woods 19%, Robert Earl (resident of Florida) 23%

Turnover: 8th in league, £81m (down from £82m in 2011)

... Gate and programme sales: £17m

... TV and broadcasting: £53m

... Other commercial activities: £11m

Wage bill: 10th, £63m (up from £58m)

Wages as proportion of turnover: 78%

Loss before tax: £9m (increased from £5m)

Net debt: £46m

Interest payable: £4m

Highest paid director: No directors were paid; chief executive Robert Elstone is not a director

State it's in:

The money situation reflect the impression David Moyes and his team give on the field, that Everton is pushing to the limit of its current potential. A spirited seventh place was won with only the tenth highest wage bill, but with no funding from owners, no buyer or stadium expansion, Everton are stretched inexorably into losses. Current lending arrangements from Barclays bank expire on July 31 this year, so chairman Bill Kenwright is seeking renewal at the same level, while also borrowing against future TV revenues. A football club still in its grand old ground, determined to compete in a league of sheikhs, oligarchs and US-owned corporations.

FULHAM

 

Accounts for the year to 30 June 2012

Ownership: Owned by Mafco Holdings Limited, a Bermuda (tax haven) company, which is owned by Mohamed Al Fayed and his family

Turnover: 10th in league, £79m (up from £76m in 2011)

... Gate and matchday: £11m

... Europa League: £3m

... TV and broadcasting: £51m

... Sponsorship and commercial: £12m

... Compensation: £1m

Wage Bill: 11th, £62m (up from £58m in 2011)

Wages as proportion of turnover: 78%

Loss before tax: £18m (down from £5m profit in 2011)

Net debt: £4m

Interest payable: £0.3m

Highest paid director: Unnamed, £704,000 (Alastair Mackintosh is the chief executive)

State it's in:

One of football's most surprising love affairs, Mohamed Al Fayed's 16 year commitment to Fulham, was formalised with his cancellation of £212m loans. The money loaned from Fayed's tax haven base to fund Fulham's rise was converted to equity on June 15 2012. The 2011 net debt of £193m was wiped away to stand at just £4m. Fulham are becoming regarded as an example of how, after initial investment, a smaller club can build its crowd and playing success in the Premier League and become gradually sustainable. However, largely due to making less from selling players, a £5m profit in 2011 turned to an £18m loss.

LIVERPOOL

 

Accounts for the 10 months to 31 July 2012

Ownership: Fenway Sports Group, registered in the USA, of which John W Henry is the principal shareholder

Turnover: 5th in league, £169m (down from £184m in 2011)

... Gate and matchday income: £42m

... TV and broadcasting: £63m

... Commercial activities: £64m

Wage Bill: 5th, £119m

Wages as proportion of turnover: 70%

Loss before Tax: £41m (following £49m in 2011)

Net debt: £87m

Interest payable: £4m

Highest paid director: Unnamed, £657,000 (Ian Ayre is the managing director)

State it's in:

Not where John Henry envisaged Liverpool would be when he and his Fenway Sports Group co-investors bought the club in 2010. The £169m turnover, fifth highest in the Premier League, illustrates the big club status and potential earnings which attracted the Americans to Liverpool, and why Henry believes financial fair play will benefit them. Under Kenny Dalglish Liverpool under-achieved, finishing eighth with the fifth highest wage bill. They made a £41m loss, debt is high, and the most telling figure is the £47m FSG loaned themselves in August last year. That is not what FSG saw themselves doing when they bought into the Premier League money machine.

MANCHESTER CITY

 

Accounts for the year to 31 May 2012

Ownership: Wholly owned by Sheikh Mansour bin Zayed Al Nahyan, via the Abu Dhabi United Group, registered in the United Arab Emirates

Turnover: 4th in league, £231m (up from £153m in 2011)

... Gate and matchday: £22m

... TV and broadcasting: £88m

... Commercial activities: £121m

Wage bill: 1st, £202m (up from £174m in 2011)

Wages as proportion of turnover: 87%

Loss before tax: £99m (following £197m in 2011)

Net debt: £58m

Interest payable: £3m

Highest paid director: Unnamed, £1.1m (John MacBeath was the acting chief executive)

State it's in:

The most spectacular example ever of an individual from the global super rich buying an English football club and funding it to success. Courtesy of Sheikh Mansour's oil-based fortune, ran a wage bill £40m higher than Manchester United's, from income £90m lower, and won the Premier League with the 94th minute goal by £38m Sergio Aguero. The accounts show a striking contrast between modest matchday income, £22m, with ticket prices lower than London prices, and £121m commercial income, substantially via sponsorships from Abu Dhabi companies. City say the £99m loss will come down, and given exemptions in the rules, they will comply with Uefa's financial fair play next season.

MANCHESTER UNITED

 

Accounts for Red Football Shareholder Ltd, the largest parent company in the Glazers' structure for owning United, for the year to 30 June 2011

Ownership: Owned by Malcolm Glazer's six children via Red Football LLC a company registered registered in the low tax state of Nevada, USA

Turnover: 1st in league, £320m (down from £331m in 2011)

... Gate and matchday income: £99m

... TV and broadcasting: £104m

... Commercial activities: £118m

Wage bill: 3rd, £162m (up from £153m in 2011)

Wages as proportion of turnover: 51%

Loss before tax: £5m (following a £12m profit in 2011)

Net debts: £366m

Interest and other finance costs: £50m

Highest paid director: £2,593,000 unnamed (David Gill is the chief executive)

State it's in:

The staggering business of the Glazer family and their leveraged buyout of United, now registered in the Cayman Islands tax haven and floated on the New York stock exchange. Pages of the annual report are devoted to the global sponsorships, which pushed commercial income to £118m. United remain burdened with £420m debt from the Glazers' 2005 takeover, at approximately 8.5% interest, which cost the club £50m last year. The takeover has cost United around £550m altogether. Last year the club paid a £10m dividend to the owners, a £3m management fee to the Glazers, and £558,484 interest was payable to Kevin Glazer.

NEWCASTLE UNITED

 

Accounts for the year to 30 June 2012

Ownership: Mike Ashley owns Newcastle United via his company, MASH Holdings Limited

Turnover: 7th in league, £93m (up from £89m in 2011)

... Gate and matchday: £24m

... TV and broadcasting: £56m

... Commercial activities: £14m

Wage bill: 8th, £64m (up from £54m in 2011)

Wages as proportion of turnover: 69%

Profit before tax: £1m (down from £33m in 2011)

Net debt: £129m

Interest payable: £0.07m

Highest paid director: Unnamed, £266,000 (Derek Llambias is managing director)

State it's in:

Newcastle's surprise season, Alan Pardew's shrewd recruits achieving a fifth place finish and transforming views of Mike Ashley's ability to run a football club. Ashley himself has cleared all the club's debt and loaned in £129m himself as financial ballast, before charging Derek Llambias with running affairs commercially. Football remains an unpredictable business, however, and the wage bill climbed, and profit fell, before this season's dip in performance and £27m spent on new players. The effort to keep costs down while competing is now obsessive, hence no apology for announcing a sponsorship deal with Wonga, from the barely respectable payday loan industry.

NORWICH CITY

 

Accounts for the year to 31 May 2012

Ownership: Majority owned by Delia Smith and her husband Michael Wynn Jones

Turnover: 12th in league, £75m (up from £23m in 2011)

... Gate receipts: £11m

... TV and media: £50m

... Commercial activities: £14m

Wage bill: 19th, £37m (up from £18m in 2011)

Wages as proportion of turnover: 49%

Profit before Tax: £16m (from £7m loss in 2011)

Net Debt: Nil; £1m net cash in the bank

Interest payable: £2m

Highest paid director: 1,533,000 paid to unnamed director (David McNally is the chief executive)

State it's in:

The happy state of a club properly enjoying the first year of promotion to the Premier League. Norwich used the massive TV and commercial windfall, with income up £52m, to pay off all debt while keeping wages under control. Recorded a loss of £7m to win promotion in 2011, as many Championship clubs do, then competed well, finishing 12th on the Premier League's second to lowest wage bill. Made a £16m profit, but Delia Smith and her husband Michael Wynn Jones, the 53% owners, still had a £2m interest free loan to the club outstanding at the end of the year.

QUEENS PARK RANGERS

 

Accounts for the year to 31 May 2012

Ownership: 66% by Tune QPR , registered in Malaysia, owned by Tony Fernandes and partners Kamarudin Meranun and Ruben Gnanalingam. 33% by Sea Dream Ltd, family holding of Lakshmi Mittal

Turnover: 17th in league, £64m (up from £16m in 2011)

... QPR's turnover is not broken down into TV and other activities.

Wage bill: 12th, £58m (up from £30m in 2011)

Wages as Proportion of Turnover: 91%

Loss before tax: £23m (reduced from £25m loss in 2011)

Net debt: £89m

Interest payable: £0.038m

Highest paid director: Directors of the holding company were not paid

State it's in:

Surprisingly under the Air Malaysia entrepreneur Fernandes, will be lucky to avoid a crash. Rather than banking the Premier League bonanza at a club with just 18,000 capacity at Loftus Road, supported Neil Warnock to sign eleven new players, sacked him in January 2012 then backed Mark Hughes to sign Nedum Onuoha, Djibril Cisse and Bobby Zamora. With wages 91% of turnover, narrowly survived, then backed Hughes to sign ten more players, before sacking him, and giving Harry Redknapp £20.5m to spend in January. For the owners, who have loaned in £92.5m and now borrowed £15m from Barclays, relegation will not be pretty.

STOKE CITY

 

Accounts for the year to 31 May 2012

Ownership: Owned by bet365 Group, the online gambling company controlled by Denise Coates, daughter of chairman, Peter, and family

Turnover: 13th in league, £71m (up from £68m in 2011)

... Gate Receipts: £8m

... Sponsorship and advertising: £6m

... Europa League: £5m

... TV and media: £46m

... Conferencing and hospitality: £3m

... Other: £0.6m

... Retail and merchandising: £3m

Wage Bill: 14th, £53m (up from £47m in 2011)

Wages as proportion of turnover: 75%

Loss before tax: £10m (following £6m loss in 2011)

Net debt: £14m

Interest payable: Nil

Highest paid director: Unnamed, £517,000

State it's in:

Looking fairly solid financially in this fourth year since promotion to the Premier League in 2008. Backed by the bet365 online gambling fortune of Stoke native Peter Coates and family, whose loan was up to £24m in the year. Stoke are at that awkward stage where Premier League status has been consolidated, some bigger names have been signed, and the wage bill has climbed up to 75% of income. So despite staying in the top league as they intended, the club still makes a substantial loss, hence Coates' support for financial fair play and the effort to staunch players wage inflation.

SUNDERLAND

 

Accounts for the year to 31 July 2012

Ownership: Owned by the American Ellis Short via Drumaville, a company registered in Jersey

Turnover: 11th in league, £78m (up from £79m in 2011)

... Gate receipts: £14m

... TV and media: £47m

... Sponsorship and royalties: £9m

... Conference and commercial: £8m

Wage bill: 8th, £64m (up from £61m In 2011)

Wages as proportion of turnover: 82%

Loss before tax: £32m (increased from £8m in 2011)

Net debt: £84m

Interest payable: £2m

Highest paid director: Niall Quinn, £2,432,702 (includes £2m compensation for resigning)

State it's in:

Already making losses on this scale and with the owner, Ellis Short, having loaned in £41m, could not countenance the threat of relegation, hence the sacking of Martin O'Neill. Short's experience has similarities to that of his fellow American billionaire Randy Lerner: buying a big old club in the most lucrative league in the world, then finding it costing him millions to pay players wages. The urgent focus on ensuring Sunderland did not endure the shock of relegation perhaps led Short to ask too few questions about the fascist baggage Paolo di Canio brings with him.

SWANSEA CITY

 

Accounts for the year to 31 May 2012

Ownership: Martin Morgan, 22.5%; Brian Katzen, 20%; Swansea City Supporters Society Limited (supporters trust) 20%; chairman Huw Jenkins 12.5%; Robert Davies 10%

Turnover: 15th in league, £65m (up from £12m in 2011)

... All football income: £61m

... Commercial: £4m

Wage bill: 20th, £35m (up from £17m in 2011)

Wages as proportion of turnover: 54%

Profit before tax: £17m (after £11m loss in 2011)

Net debt: Nil; £5m cash in the bank

Interest payable: £0.3m

Highest paid director: Huw Jenkins, £200,000

State it's in:

Identified by the Premier League chief executive, Richard Scudamore, as "probably the ideal ownership model," among the mostly overseas owners and tax exiles. Supporters trust owns 20%, and elects a director, alongside the businessman shareholders, who are also fans. Won friends with their elegant football, finished eleventh with the league's lowest wage bill. Banked £5m from Liverpool hiring Brendan Rodgers, then recruited Michael Laudrup and achieved more success. Just paid a £2m dividend to the shareholders, the first money they have taken out, which risks changing perceptions if it continues, particularly with the club advertising for interns to work unpaid in player performance analysis.

TOTTENHAM HOTSPUR

 

Accounts for the year to 30 June 2012

Ownership: Enic International Limited, registered in the Bahamas, owns 85% of Spurs. Joe Lewis, resident in the Bahamas, has the controlling, 70.6% ownership of Enic, with chairman Daniel Levy and family owning the other 29.4%

Turnover: 6th in league, £144m (down from £163m in 2011)

... Gate receipts, Premier League: £21m

... Europa League and cups income: £11m

... TV and broadcasting: £59m

... Sponsorship and corporate hospitality: £35m

... Merchandising: £9m

... Commercial activities: £9m

Wage Bill: 6th, £90m (down from £91m in 2011)

Wages as proportion of turnover: 63%

Loss before tax: £7m (down from £0.4m profit in 2011)

Net debt: £70m

Interest payable: £6m

Highest paid director: £2.2m paid to Daniel Levy

State it's in:

Well run, but the figures illustrate Spurs' frustrations with where they are stuck. Considering themselves the rightful north London equals of Arsenal and historically superior to Chelsea, Spurs can only get this far until they have built their long mooted new stadium. Matchday income is around one third of the cash Arsenal squeeze from the Emirates, but London prices still mean Spurs make the sixth most money in the league. Daniel Levy, one of the best paid in the boardrooms, maintains the sixth highest wage bill, so the fourth place finish under Harry Redknapp can be considered an over-achievement.

WEST BROMWICH ALBION

 

Accounts for the year to 30 June 2012

Ownership: Majority owned by the chairman, Jeremy Peace

Turnover: 14th in league, £67m (up from £59m in 2011)

... Gate receipts: £8m

... Merchandising: £3m

... TV and media: £50m

... Other commercial income: £9m

Wage bill: 15th, £50m (up from £39m in 2011)

Wages as proportion of turnover: 75%

Profit before tax: £1m (down from £9m in 2011)

Net debt: £0.5m

Interest payable: Nil

Highest paid director: Unnamed, £1,133,000 (Jeremy Peace is the executive chairman)

State it's in:

Eminently well-run. Accepted yo-yoing between Championship and Premier League for a decade, with chairman Jeremy Peace determined not to splurge into debt in either league. Now recognised for minting a style of play, with a director of football-type structure, which has survived changes of manager including Roy Hodgson's departure to become England coach. Finished 10th with the 15th highest wage bill, which was still, at £50m, 75% of turnover. Peace opposed financial fair play's introduction in the Premier League – West Brom have gained an advantage from breaking even while other clubs of a similar size have been run badly.

WIGAN ATHLETIC

 

Accounts for the year to 31 May 2012

Ownership: Owned by Dave Whelan and family, registered in the UK

Turnover: 20th in league, £53m (up from £51m in 2011)

... Premier League TV and other: £46m

... Gate and matchday: £4m

... Sponsorship and commercial: £2m

... Other: £1m

Wage bill: 17th, £38m (down from £40m in 2011)

Wages as proportion of turnover: 72%

Profit before tax: £4m (up from £7m loss made in 2011)

Net debts: £12m

Interest payable: £0.5m

Highest paid director: Not disclosed

State it's in:

Owner Dave Whelan wrote off £48m of loans he had made to the club, converting them to equity. The loan and overdraft from Barclays Bank has also been significantly reduced, from £21m to £13m. Whelan's chairman's statement says: "Financially we are in a sustainable position that allows us to significantly invest both on and off the field." Still, £8.5m further loans are outstanding to Whelan, who continues to support the club financially, and the profit was due to an £8m surplus from selling players. Whelan, however, insists the club will not continue to sell players, and is looking to create "a lasting legacy."

WOLVERHAMPTON WANDERERS

 

Accounts for the year to 31 May 2012

Ownership: Ultimately owned by Steve Morgan's company Bridgemere Investments, registered in Guernsey

Turnover: 18th in league, £60m (down from £64m in 2011)

... Gate receipts: £8m

... Sponsorship and advertising: £5m

... Premier League and broadcasting: £42m

... Commercial activities: £5m

Wage Bill: 17th, £38m (same as 2011)

Wages as proportion of turnover: 63%

Profit before tax: £2m

Net debt: Nil – Wolves had £13m cash in the bank

Interest payable: Nil

Highest paid director: £1.2m paid to unnamed director

State it's in:

Figures from Wolves' relegation season: admirable, respectable, made a profit, had no debt at all, were living within their means, just as Steve Morgan always insisted football clubs should. Yet he has been undone by the iron law that the success of a club springs from progress in the football itself. Black country rivals West Bromwich Albion, and Swansea City, have shown this can be achieved even if managers change, but Wolves had no similar system in place. Morgan's sacking of Mick McCarthy and appointment by default of Terry Connor started a miserable spiral, which can undo even the soundest of bookkeeping.

[BigWalrus 0]

I've not downloaded the accounts for last year (are they available?) and I don't think any of the news stories that announced last years figures mentioned this. I just found out off Twitter....

 

 

 

Higher than any dividend Shepherd and co ever took...combined.

 

Who is Big Chris Holt?

 

The comment about still turning a profit despite paying back £11m on the loan... The loan is entirely balance sheet based. It's a simple case of reducing the loan and reducing the cash balance, with zero impact on profitability.

 

And its completely different to paying out a dividend. This is Ashley taking back a chunk of his own cash, he's not making a return on the investment. Loan goes down, cash goes down. Net debt remains the same.

 

Shepherd and Hall didn't put a penny in, so didn't have the ability to receive loan repayments.

Edited April 19, 2013 by BigWalrus

[BigWalrus 0]

The most interesting point, which hasn't been picked up on, is that the loan has been reallocated to be due in greater than one year (it was previously a current liability). Perhaps Ashley now has no immediate desire to sell the club.

[Toonpack 9945]

I'm a company director and I am duty bound to release accounts every year and I don't detail any interest on directors loans.I just have to fill out a CT61 so the interest is taxable (this is personal tax, not corporation tax)

 

The interest just gets lumped all under the same category of non-re-imbursable expenses.

 

Caveats here - I'm not an accountant and only run a LTD company.

 

A directors loan is you taking money out, "money in" as a loan is a completely different thing and, if bearing interest, would be noted in the accounts because loan interest is tax deductible as it's an expense.

[Christmas Tree 4827]

 

Who is Big Chris Holt?

 

Big Chris Holt ?

 

Some say he wrestles alligators...

Edited April 19, 2013 by Christmas Tree

[ewerk 31203]

The most interesting point, which hasn't been picked up on, is that the loan has been reallocated to be due in greater than one year (it was previously a current liability). Perhaps Ashley now has no immediate desire to sell the club.

 

It doesn't have any practical implications for the club or the business, does it?, given that it was a loan that was never realistically payable within a year. It could be that the auditors have requested that the terms of the loan be changed before they were prepared to sign off on the accounts? In past years they've only been prepared to do so with the assurance that Ashley will continue to support the club in the forthcoming year, an assurance that is missing from the most recent accounts.

[BigWalrus 0]

It doesn't have any practical implications for the club or the business, does it?, given that it was a loan that was never realistically payable within a year. It could be that the auditors have requested that the terms of the loan be changed before they were prepared to sign off on the accounts? In past years they've only been prepared to do so with the assurance that Ashley will continue to support the club in the forthcoming year, an assurance that is missing from the most recent accounts.

 

You're right that there are no practical implications.

 

I don't think the auditors would ask a company to be less cautious in their loan treatment, it goes against everything they stand for!

 

Presenting the loan as a current debt with the narrative about supporting the club would be a more prudent treatment that the auditors would surely prefer.

[Happy Face 29]

Who is Big Chris Holt?

c'est moi

 

The comment about still turning a profit despite paying back £11m on the loan... The loan is entirely balance sheet based. It's a simple case of reducing the loan and reducing the cash balance, with zero impact on profitability.

Swiss Ramble responded to that "exactly right". I'm not fussed on the accountancy, the fact is £11m went back from the clubs coffers to Ashleys.

 

And its completely different to paying out a dividend. This is Ashley taking back a chunk of his own cash, he's not making a return on the investment. Loan goes down, cash goes down. Net debt remains the same.

Net debt hasn't stayed the same. It has dropped from £140m to £129m.

 

Shepherd and Hall didn't put a penny in, so didn't have the ability to receive loan repayments.

Yearly dividends at that time were in the range of £2.5m to £5m a year. Interest ranged from a profit of £1.6m to a loss of £7.3m in a year. We agree that this was money the club should not be hemorrhaging to no benefit. I've also said in the thread that the money paid to Ashley benefits the club in that it reduces our debts, unlike any of the payments under Shepherd described. They do offer an interesting comparison in what the club could/can afford to pay out to owners/debtors year on year.

 

It is worth noting that the club is paying Ashley £29m over 2 seasons so that he recoups everything he put in following relegation....especially when we have a summer and a season like the last one.

[BigWalrus 0]

Where are you getting your figures from?

 

Net debt this year:

There is no cash on the balance sheet, so we have £11,865k overdraft, £18,000k due in one year to MA, £110,000k due in + 1 year to MA - total of £140,865k

 

Net debt last year:

There is no cash on the balance sheet, so we have £2,070k overdraft, £140,000k due in one year to MA - total of £142,070k

 

The cash movements in the year are obviously a bit more involved than just a loan being repaid and an overdraft being taken out, but effectively, it looks like the club has extended its overdraft to repay some of the cash.

 

From MA's personal point of view, he can probably get a much better rate of return on his cash elsewhere. For his £140m invested, he's getting a pitiful 1% return. He could easily beat that with other investments, so it makes sense to extend the borrowing from the bank to fund that.

 

If he needs to stick cash back in to support the club, I have no doubt that he will, even if it's just to protect the value of his investment in NUFC.

 

The money paid to Mike Ashley hasn't reduced NUFC's debts. They have replaced the MA loan with the increased overdraft.

[BigWalrus 0]

I wouldn't take any notice of the directors' report by the way - it's littered with errors.

[Happy Face 29]

Where are you getting your figures from?

 

Net debt this year:

There is no cash on the balance sheet, so we have £11,865k overdraft, £18,000k due in one year to MA, £110,000k due in + 1 year to MA - total of £140,865k

 

Net debt last year:

There is no cash on the balance sheet, so we have £2,070k overdraft, £140,000k due in one year to MA - total of £142,070k

 

The cash movements in the year are obviously a bit more involved than just a loan being repaid and an overdraft being taken out, but effectively, it looks like the club has extended its overdraft to repay some of the cash.

 

From MA's personal point of view, he can probably get a much better rate of return on his cash elsewhere. For his £140m invested, he's getting a pitiful 1% return. He could easily beat that with other investments, so it makes sense to extend the borrowing from the bank to fund that.

 

If he needs to stick cash back in to support the club, I have no doubt that he will, even if it's just to protect the value of his investment in NUFC.

 

The money paid to Mike Ashley hasn't reduced NUFC's debts. They have replaced the MA loan with the increased overdraft.

 

So you're saying there has been no debt covered...just that Ashley has taken £11m back and made it repayable to a bank instead?

[McFaul 35]

Looking at The Fish's information, gross financial underachievement that a club like Norwich City make the same £14m commercially that a club like Newcastle United do.

[BigWalrus 0]

So you're saying there has been no debt covered...just that Ashley has taken £11m back?

 

Yes, from a high level, NUFC has paid MA £11m and taken out bank borrowing to fund this. It may have been done near to the year end, which would explain why the interest payable balance is low, so we could expect an increase there.

 

It's clear that a football club isn't going to give him the return that he'd get elsewhere (such as by taking over a high street retailer etc). NUFC has some high value assets (eg SJP) which banks will happily secure loans against. Given that the club will always struggle to generate any huge profits, it's sensible to use some bank funding rather than continue to use your own cash.

 

If we ignore the relatively small £2m variance year on year, the debt is roughly the same, but we'll now have an interest charge to pay on the increased overdraft. From MA's point of view, this charge will be smaller than the gains he can make elsewhere by using his cash on more profitable ventures, so he won't have an issue with this.

[ewerk 31203]

I can't see this bank finance that you're talking about. As far as I can see we have an overdraft of £343k, the £18m owing to MA within 12 months and then the £111m owing after 12 months.

[BigWalrus 0]

Note 14.

 

Bank overdraft in 2012 - £11,685k

Bank overdraft in 2011 - £2,070k

[Happy Face 29]

I'm happy for Ewerk & Walrus to argue the accountancy of it.

 

The point of interest for me is that Ashley is taking back almost £30m over 2 seasons.

 

It's intersting following these sorts of statements from just a few months ago....when I assume they had already done this, or were at least planning to...

 

“We’ve always said we wouldn’t take any funds out of the club – that still stays the same,”

 

“All the money we get from our commercial deals will go back on to the pitch.”

 

http://www.shieldsgazette.com/sport/football/newcastle-united/every-penny-of-wonga-cash-will-go-back-on-the-pitch-llambias-1-5015416

[BigWalrus 0]

Both of those, technically, are fine.

 

The first point is that the cash was officially loaned to NUFC, so it's not being taken out of the club, it's just being repaid. If the loan had been with the bank, with set repayments, it wouldn't be seen as the bank taking money out of the club.

 

The point about commercial deals doesn't really have any substance to it. The accounts state that the short term element of the loan is secured against next year's (ie 2012/13) TV revenue. So effectively MA is going to have his loan repaid by the TV money, which is disclosed separately to the commercial income.

[Happy Face 29]

“The figure stands at £18m now,” said Llambias. “The cash advance went down £11m.

“It’s not a loan. That’s payable when we can afford to pay. That doesn’t stop us spending. He’ll get it back when the club can afford it.”

 

http://www.shieldsgazette.com/sport/football/newcastle-united/derek-llambias-wants-newcastle-united-to-do-their-talking-on-the-pitch-1-5537102

 

So could the club afford £11m or did it have to borrow it?

 

looking at P10 of Ewerks link....

 

 

Doesn't suggest we've borrowed, or not the bulk of it.

[ewerk 31203]

Note 14.

 

Bank overdraft in 2012 - £11,685k

Bank overdraft in 2011 - £2,070k

 

Note 14 in my copy refers to deferred income?

 

http://www.nufcblog.org/nufc-accounts-2011-12.pdf

[BigWalrus 0]

Ha, schoolboy error. I've gone and downloaded the Football Club accounts rather than the consolidated group accounts.

 

That might change my view somewhat!

[BigWalrus 0]

Time to backtrack...

 

Ignore the points above about cash use and return on investments as they don't really apply given that I'm looking at the right set of accounts now.

 

Although the conclusion is the same (net debt hasn't materially changed) the way to get there is different.

 

Last year we had a positive £9.5m cash balance. This year we have a £343k overdraft. Over the course of the year, we've used the cash to pay back some of MA's loan. From MA's standpoint, the cash isn't generating any return by sitting in the bank, therefore he's better off using it where he can make more money.

 

He's taking his loan back in chunks. I imagine this will continue for the next few years.

[essembeeofsunderland 811]

He's put money in,so it's right he takes it out,if and when he want's to.

[ewerk 31203]

Time to backtrack...

 

Ignore the points above about cash use and return on investments as they don't really apply given that I'm looking at the right set of accounts now.

 

Although the conclusion is the same (net debt hasn't materially changed) the way to get there is different.

 

Last year we had a positive £9.5m cash balance. This year we have a £343k overdraft. Over the course of the year, we've used the cash to pay back some of MA's loan. From MA's standpoint, the cash isn't generating any return by sitting in the bank, therefore he's better off using it where he can make more money.

 

He's taking his loan back in chunks. I imagine this will continue for the next few years.

 

Or he could have spent it on the team.

[2bias 3]

Or he could have spent it on the team.

It's his money and he can take it back whenever he wants tbh. He has put a lot in and to be fair there is now interest on the loan.

[BigWalrus 0]

Or he could have spent it on the team.

 

He has - Sissoko, Debuchy, Haidara and Mbiwa were all signed after this.

 

We're trying to move away from funding running the club by pumping more money in. If we can fund player purchases from the funds generated by the club, we're doing well.