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Statement signals summer of discontent.

Posted on May 10th, 2010 | 157 Comments |

Mike Ashley: Playing a dangerous game.
Mike Ashley: Playing a dangerous game.
So now we know where we stand with Mike Ashley, we know what the plans and intentions are regarding the clubs latest five year plan, and upon first glance it makes grim reading.

However, this is my club, and there is only one person on here that really knows the depths of depression I can work myself into over affairs at Newcastle, he is just the same as me. So after I have been away, reflected, debated, slept, woke up, reflected a bit more, took the wife to work, popped into my work to check on things, and had breakfast, I have come to the conclusion that long term, Mike Ashley’s new strategy is just what the club needs. In five years time the club will be a much more viable prospect to invest or for someone to purchase. Which of course is great and all that, securing the future of Newcastle United blah blah. It’s the short term I worry about though, a theme I reflected upon in an article yesterday.

Chris Hughton and his team have done brillaintly in gaining promotion in such a fashion. The players play as a team and are up for the fight, something that hasn’t been seen for a while from a Newcastle team. Whatever malice is flying around needs to be kept away from the players, they have done nothing wrong and need our full support to get through the season. One would have hoped that they may get a bit of help in the battle against relegation next season in the shape of a new player or two, and this could still happen.

The statement says there are ‘no plans for new capital outlay’ on players. At first glance I read that there will be no new signings, or they will have to be freebies. After reflecting and asking the Head of Finance of a certain worldwide motor manufacturer what it could mean, and how it could apply in the context of Newcastle United. I chose to ask him as he can explain things like this in an easy to understand way, plus he knows what he is talking about. You don’t get to be in his position by being a mug!

It appears that my initial assumption could be jumping the gun. Player purchases will be generated from income coming into the club, money that is due to increase to nearly double what it was whilst in The Championship. We have sponsorship money coming in, and a new kit deal to take advantage of, all of which is new money that is coming into the club. So we could still see some new players then, and in reality most of us knew that the money wouldn’t be flying around this season. Those that didn’t know, well they do now. The ‘new capital’ part was a bit open ended in my opinion, which I is why I decided to get a Head of Finance of a certain worldwide motor manufacturer to answer the question.

I then asked him about the next part of the statement that I had questions about. From the ‘break even’ part of the statement, I took it to mean that the reported £111 million of debt would be getting repaid throughout the course of the five year plan. I put it across to him pretty much as I wrote that. His answer was a rather swift and dramatic, ‘you’re wrong on that one’.

I didn’t feel satsified with that answer so I got him to explain it to me. He says there is no mention of the debt anywhere in the statement (which I asked him to read), just the yearly losses. He seems to think that the plan details quite clearly that there is no intention for the debt to be repayed within the five years, the statement simply addresses the need to stop losing money year on year and to turn our recent loss of £37.6 million into a ‘break even’ situation by the end of the plan. That means a year on year reduction in losses of around £6.4 million, which is far less severe than the statement can read.

Having had some parts explained to me a bit better, I feel a bit more confident that we could still see the ‘1 or 2’ signings that have been mentioned. As ever, only time will tell, although I do have a sneaking suspicion that this statement could be just the start of the summer shenanigans, more of which I will detall later.

NUFCBlog Author: toonsy toonsy has written 643 articles on this blog.

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157 Responses

  1. total disgrace,all the hard work hughton and the lads have done has just been shat on by ashley

  2. Thanks for that explanation Toonsy; I find that reassuring and feel much more optimistic.

  3. Hitman – I agree, it doesn’t help them at all. But we have to roll with it I guess :(

  4. Your mate said the exact same thing as myself and a few others on last nights blog Toonsy. Noone can blame anyone for jumping the gun and assuming though.. I nearly bricked my duds when I first read the statement!

    Watch how the press destroy us now though..

  5. Actually on sleeping on the statement it isn’t as bad as first seems, especially given explanation from toonsy.

    Like any business we can’t sustain year on year losses and need a plan to make the club profitable, the only sticking point is the debt owed to Ashley – it obviously needs to be repaid but the statement doesn’t specifically say when or how this will be done, devils in the detail and more could be gleaned from what the statement doesn’t say.

    Hughton must of been aware this was coming out and his statements reflect the fact that we won’t be signing players willy nilly but expect a coule of new faces to come in for positions we’re light on – I expect Kadar and Vuckic to play bigger parts next season (albeit form the bench) and with a couple of decent players in we should be alright for lower mid table.
    We’ll just have to get used to the fact that we’re trying to emulate the likes of Brum, Stoke etc rather than Aston Villa, Spurs

  6. Well toonsy, your finance man doesn’t fill me with any confidence.

    Why have they worded like this if they mean that we will be buying new players with ‘new’ money earned from promotion?

    They must know that not all the supporters have a phd in economics – No?

    I’m taking it at face value – No money – They wouldn’t have worded it like that if there was money to spend – They wouldn’t even have mentioned new players – Why would they?

  7. Stu – I know exactly what your saying, but that lad that deals with the finance/accounts/budget for European operations (not just one site) at the certain worlds biggest motor manufacturer knew staright off pretty much what it meant.

    I agree, the fact that he knows what it meant it we dont means the statement is poorly worded. If it’s the latter then perhaps they should have waited until they have appointed the alleged media officer, who would know how to put things across in an understandable way.

  8. When The Journal attempted to clarify what “no capital outlay” means the curt response was that it meant “no capital outlay.” When The Journal asked again, through the club’s media spokesman, whether this meant there was no money to spend at all, the answer was “there will be no capital outlay on new players.”

    Charming as ever!

    Does this make it clearer?

  9. I thought i have kindly mentioned the meaning of There is no plan for “””NEW””” “”capital outlay”” on players.??? :(

  10. We can even rule out free transfers!

    There are signing on fees to be taken into account with free transfers – Not to mention the higher salaries.

    I guess a signing on fee would be capitial outlay…

    Ah well, who’s available for loan in Division 2?

  11. we will not be abled to stay in the BPL without any investment , we got beat by scunthorpe this year fer petes sake , chelsea just beat wigan 8 – 0 , i am scared of what some good teams might do to us with their high paid internationals …..

  12. Eee, I teill ye. If people wanna find Bin Laden they should tell Ashley there is a £20 note stapled on him.

    That’d hunt him down.

  13. The Journal understands the news came as a shock to Hughton who has previously spoken publicly about the need to add three or four new players before the start of next season.

    wouldnt blame hughton if he walked

  14. For those we don’t know. Capital Outlay=Capital Expenditure.

    Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

    In this case,NUFC Players.

    Basically NUFC ish already is dire condition in the revenue expenditure. So If Capital Expenditure worsen,We are really screwed.

  15. Two things toonsy;

    Your article does give me some comfort – as long as the FD of the car company’s not the guy who ran Delorean or floated the Ford Edsel!

    Re Shola’s shirt for £4.8k – I think the buyer thought he/ she was buying Shola!

  16. Toonsy

    The “break even” in five years is exactly the part which DOESN”T MAKE SENSE.
    With the mentioned increase in revenue, we should be more than breaking even next season already.

    If we simply mean to decrease the loss steadily, it could mean only one of two things…

    (A) The club will use some of the money generated to invest in new players… or
    (B) The club will use some of the money generated to pay off the debt to Ashley…

    But now you tell me… which one, (knowing what we know of Mike Ashley) do you think is more likely???

  17. Re toonsy and Eee, “I teill ye. If people wanna find Bin Laden they should tell Ashley there is a £20 note stapled on him. That’d hunt him down.”

    Noce one toonsy LOL

  18. JJ – That will only be worked out when the window slams shut, If we don’t get anyone in then we know it’s B.

    lesh – Think Japanese cars ;)

  19. Stu- at no point in statement did i read theres no money, its says they will not use money they havent got, have faith there will be 2-3 signings, dont asume were gonna sell to bring ppl in as that is just as bad as make no signings as the squad is good, n the press r gonna jump on this coz they hav a go at the press in the statement save judgement till window closes, i feel the squad is good enough to finish mid table we dont hav to worry bout top 7 teams ppl arnt bein realistic if they r we hav beat the teams from 9th downwards n i fink we can we hav alot players with a point to prove that there good enough, there will b a us against the world mentality we hav better sqaud than blackburn n birmingham n they finished top half

  20. So Toonsy, basically what your ‘Head of Finance’ mate is saying is that Ashley will be continuing to make up the shortfall between income & expenditure for 5 years until the point where income finally exceeds expenditure and thus ‘loaning’ more money to the club over that period…..

    Ha, ha, ha, ha, ha…

    Sorry, but your mate obviously does not know Mike Ashley very well does he ??

    The addtional income from TV money & commercial deals will mean we would be near to break even next year.

    The bottom line hear is that Ashley won’t be putting more money into the club, he will be taking it out….

    Did you ask your mate about Ashley changing the terms on his loan ???

    Just because the statement does not state Ashley will be taking money out, it does not mean it won’t happen.

    The statemnet did not say the price of pies was going up, but I bet they do !!

  21. Nobby – Why would my colleague know about Mike Ashley? I simply got him to answer a couple of open ended terms contained within the statement, and to explain what they meant from a business perspective.

  22. I guess there is quite a certain amount of NUFC fans here doesn’t quite understand the financial terms.

    “Break even” to be simplified means to ensure The sales or revenues necessary to cover costs and prevent a firm from operating at a loss. The breakeven may be relatively stable or it may fluctuate, depending on the company or industry. Companies with high breakevens tend to have large fluctuations in earnings from year to year.

    in conclusion,In any project,it is the point at which revenue will be sufficient to pay all required expenses and debt service.

  23. Nobby_Long says:
    May 10, 2010 at 10:07 am

    “The addtional income from TV money & commercial deals will mean we would be near to break even next year.”

    That isn’t new capital though, so what if some of our increased revenue is already earmarked for signings? Which is why it could take the 5 years for break even?

  24. If we are aiming to operate on a break even by 2015, that means that we are currently not achieving break even and are in fact making a loss.

    If we are making a loss, then outgoings exceeds income, and there is no income to spend on players.

    Am I the only one seeing things this way?

  25. Toonsy,

    Just think about it…..

    loss this year expected to be circa £32.5 million, no doubt including player amortisation – so in reality not a true loss….the actual cash deficit will be much less than that.

    Additional income next year at least £25-30m – means the club will be making an operating profit.

    the Journal’s ‘clarification’ from the club’s media spokesman resulted in the words…..’no captial outlay on new players’

    That is very clear…it does not mention ‘new capital’ …

    We all want to be positive & hope & pray that money can be found, but it is clear for those who wish to see.

    Mike Ashley will be seeking to recoup his loans over a five year period.

  26. this 5 year plan is to get ashley his loan back.
    im no finance expert but ashley getting his loan back is the only way we can start breaking even..

  27. ok

    the last time we where in the prem our wage bill was very high,

    now, we have a manager and back room staff that is on next to nothing compaired to 2 years ago

    high earning players have gone, with another one gone very soon (butt),

    fresh money comming in from puma, ,

    at the last check we where the 22nd richest (income) club in the world,,,

    what a mess our club must be in,,

    for me he is still a fat greedy bar steward :(….

    do i want trophy signings ,,, NO, i believe we can do a lot better with players who are young and hungry,, from our country,

    even though i do think CH should manage our club based on what he done this season, i have no faith in him to use the youth in our club. he likes tried and tested players,,,,,

  28. @tomlkier: yup,sort of correct to say that. Basically there should always be a certain amount of Money set aside for transfers. That’s why is called a transfer budget.

    But right now,season by season we are on deficit,not even enough to cover much of the operating expenditures.So Mike Have no choice but to rid of the transfer budget this summer.

  29. davy says:
    May 10, 2010 at 10:04 am

    At no point in the statement does it say we will not spend money we haven’t got.

    It does say there are no plans for capital outlay. Now capital outlay is – an outlay of cash to acquire or upgrade a business asset ie a player.

    Now whether we use money from the PL revenue or whether we use money from Ashley it’s still capital outlay, is it not?

    So I read it as I see it – No capital outlay, means no money to be spent.

    How hard is it to understand? We don’t need anyone to explain it to us.

  30. hitman, the five year plan is surely in place to do exactly what it says on the tin – result in the club operating on a break even basis. That implicitly means clearing debt and thus it will repay Ashley and clear the bank overdraft of £20m.

    This is no different to any business operation and whilst it’s stated that there’ll be no new captital outlay on players, that does not preclude spend from the revenue stream – where appropriate.

    Think positive guys, if the club’s able to survive in the Prem and year by year reduce its debt, then as each year goes by, it becomes more attractive to potential buyers. Think of the up-side and of Portsmouth and others that will doubtless follow in its footsteps this coming season.

  31. It all smaells of the fatman taking lots of money again out of this club.
    Where has the money went from the sales of Given, Martins, N’zogbia, Duff, Bassong etc? It clearly hasnt went on new players? wat about the parachute payment? all o this money has been lining the fatmans pockets, thats why he is richer this year according to the last rich list published!
    income for the new season is likely to double – so the losses of £32m etc could be cleared in one season.
    I want whats best for NUFC – i dont think £10-15m is an unreasonable amount to invest in which im ny opinion would do us really well for the coming season.
    If no team investment / strengthening then go knows what would happen.
    Good to have a plan in place which is transparent – it will stop the southern biased press having a go and making things up, but we do need to strengthen – Is Ashley that stupid not to see that??

  32. Sorry to be pessimistic but I’m with Nobby_Long, stu et al on this one.

    The statement is once again ambiguous if there is, in fact, money set aside for players in their estimates. If that £32.5m loss they expect to make includes expenditure on players, why not make that completely clear to fans who might not otherwise understand? Unless of course the loss doesn’t include player purchases and it means just that.

    It’s fitting that they signed off from their ‘comment’ policy to their ‘no comment’ policy with the epitome of poor PR.

    I’ve never read such garbled, unprofessional and needless ramble of bollocks in a long time, since this lot did statements. Patronising and pointless.

    What a shower of * insert expletive *.

  33. lesh says:
    May 10, 2010 at 10:31 am

    Think positive guys, if the club’s able to survive in the Prem and year by year reduce its debt, then as each year goes by, it becomes more attractive to potential buyers. Think of the up-side and of Portsmouth and others that will doubtless follow in its footsteps this coming season.

    Only one problem in that paragraph – What if the club don’t survive in the next five years?

    If we don’t bring in better players and improve the sqaud size it will be a real battle – Not guarenteed to win either.

  34. AngelOfDeath says:
    May 10, 2010 at 10:32 am

    “@Toonsy: Opps. mistake. Toyota then.”

    I couldn’t possibly say ;)

  35. bowburnmag says:
    May 10, 2010 at 10:35 am

    What a shower of * insert expletive *.

    *Shite*?

  36. Stu- do u honesty fink they arnt goin to improve the sqaud, plus what r your expectations we were never gonna go on a spending spree buying players for 5-6 million, houghton has stated many times he wants 2-3 players wit the right attitude thus expect signings like charlie adam n james perch who will cost 1-2 million, ppl hav to b realistic survival is the aim n the players hav already stated that, n do the ppl who think this sqaud isnt good enough r u the same ppl that dont even go to the match, as i said before how can anysay the likes of blackburn n birmingham n stoke hav better sqauds than we do

  37. Can anyone reading this truly believe that the best way to go forward into the PL is to state that we have £30m or £20m or any figure to spend on new players ????? All that does is allow selling clubs the opportunity to ramp up the price as well as the players agents hiking their fees.

    As I’ve said before lets wait and see what happens before we all jerk those knees

  38. Great,More optimistic fans. Please flood off the unduly worries first. Wait and see after the WC.

    For Now let’s just enjoy the 4yrs one time WC.

  39. Five year plan…..

    Year 1, pay back £20m to Mr Ashley

    Year 2 – back in the CCC….. parachute payment means breakeven…cut costs by releasing high wage earners (Smith, Barton, Colo all gone….)

    Year 3, promoted back to EPL..lower wage bill..pay back £30m to Mr Ashley

    Year 4, back in CCC …make profit from parachute payment, pay back £10m to Mr Ashley….release highest wage earners ( S Taylor, Enrique released, Carroll & Vuckic sold)

    Year 5, back in EPL….much lower wage bill, huge hike in income from Sky/ESPN/GOOGLE – pay back £40m to Mr Ashley.

    End of Year 5….Sell for £150m & run like hell

  40. its all well and good were saying there is no money to spend so we will have to get freebies or loan players now people are saying thats alright we can get beckford , kris boyd, luca toni!! beckford has signed a pre contract with everton and boyd expected to sign for brummies even so these two havent played in premiership i think it would be a gamble relying on either of them to score goals beckford scored goals in league one and boyd in spl but i have a broken leg and could score twenty goals in them leagues and luca tonis wages ashley would not meet so tell me who else wed get for nowt?

  41. davy says:
    May 10, 2010 at 10:41 am

    Read the statement – It quite clearly says we won’t be spending money on new players.

    How many free transfers improve your squad in the PL without getting a whopping big signing on fee and a big salary? We cannot offer any, so free transfers are out of the window too.

    My expectation was £15-20m, is that asking too much? Wolves and Birmingham spend about £15m last summer. They will spend similar again – So they will go further away from us.

    I’d be happy with 4th bottom now – But I fear we won’t even achieve that – We will be competing with WBA and whover else comes up. WBA will invest in the summer and we couldn’t beat them this year!

    Supporters like you get on my pecks!

    Just look at the facts and look at the bigger picture – We will be the only club in the PL who doesn’t spend any money on new players – Everyone else will.

    How can you say every other club won’t go past us is unbelievable!

  42. In an official club statement Ashley revealed last night he wants the club to “break even” by the start of the 2015/2016 season while simultaneously insisting the first priority was to “maintain Premier League status” despite the fact there will be “no capital outlay on new players.”

    When The Journal attempted to clarify what “no capital outlay” means the curt response was that it meant “no capital outlay.” When The Journal asked again, through the club’s media spokesman, whether this meant there was no money to spend at all, the answer was “there will be no capital outlay on new players.” Newcastle are currently losing almost £40m a year and also have a £20m overdraft with the bank. Ashley has made the remedying of these financial problems his first priority now that promotion has been secured….

    ashley lives on a difrent planet.

  43. can i just say that ashley is an enemy to himself! he decides to say nothing when the whole club is in turmoil then when we have something to write home about he decides to randomly send out the intention to basically turn us into a mediocre team at best for 5 years and spend as little as he can on us. i think his figures are absolute full of rubbish!

    what happened to the funds of selling the like of martins, bassong, given, milner, beye. and the massive loss of their wages too. you have about 35 mil there and we have brough in about 6 mill and also lost about 30 mil of wages with geremi, owen, viduka and now butt. I know its still high compared to some team but how csn sunderland who have a bigger transfer budget every year and wage budget not have any financial problems yet apparently weve lost 70 mil on top of the 35 mill from player sales in last year! its ridiculous and doesnt even make sense when you think about it!

    they say we needed to lose 35 mill of wages which we did but plus we sold about 20 mil worth of player and bought in 6 mill worth so seriously he is lying out of hiss ass or he has run this club so badly that we are paying the dinner ladies 20k a week to feed his fat head!

    weve just earned him an extra 40 mill for promotion minimum plus new sponsor deals and still he keeps saying about having to fork out his own money to keep us afloat still dont believe it to be fair i think hes using this so we warm to him and believe that its all cos of were afloa rubbish. after the situation he put us in with wise ande selling milner bringing in nacho dip gonzalez and xisco and stuff he deserve to fork out extra money but it all seems so fa fetched to what reality is when you write all the figures down do the adding subtracting and everything and then you realise the figures dont add up whatsoever! a loss of revenus from premiership obviously loses u money but we sold half the team with massive wages and made 20 mill on top it all doesnt wash with me this! id love for someone to really be able to look at accounts of the club because hes definitely trying to pull the wool over our eyes here!

    anyway enough of that its depressing to know the one time he opens his mouth its to try and destroy the harmony and good feeling the club have at the moment. Jonas playing world cup and having teams like roma apparently after him in champs league and coming back knowing he might have to start taking the horse and cart to matches just to save money! JOKERS!

  44. Howay Toonsy man, I can’t sit here all day….the anticipation is killing me….this better not be a wind-up

  45. for those struggling with the statement – this is what the fat b@stard is saying.

    – i’m desperate to sell the club but can’t find a mug that will give me the £250 million i want – so i intend taking back my loan asap instead of investing money in the team & hope that CH & the boys can keep us in the premier (I LOVE A GAMBLE ME ) – then i wont have any problems selling the – debt free – club to the highest bidder whilst making a healthy profit.

    SHAMEFUL

  46. divint bother trying to tell us this is a publicity stunt and hold on wait for it were going to sign kaka , ronaldo rooney and messi ashley has his way hel have the geordie dancer up front ant and dec at the back with jimmy nail holding midfielder

  47. AnydMac – I think mark douglas just hit the nail on the head, if you’ll pardon the cliche.

    I’m not sure there was any real need to make this sort of statement. Just stop doing all of those things they shouldn’t be doing and start doing things properly.

    It’s just more clumsy PR. Stardust will be going nuts about it, even if he would have us believe there is a brilliant financial plan underpinning it. Many of us wouldn’t disagree with some of what they’ve said but I don’t think it was necessary to say it and it only adds to the nonsense that it will cause because of the ‘financial’ part of it.

    In fact, if anything it makes it worse because it implies they knew this would encourage more questions and they’ve stated clearly nobody will be saying anything. Because it’s not clear in the first place, we’re not really going to be any the wiser but a lot of people are now wound up.

  48. Forgive me for saying this but we all need to get real about this club!!

    Why not give some of the promising academy products a chnace….or remain positive about the existing first team which has undoubted premiership ability.

    Our objective (whether or not it sounds negative) should be to survive next season. Then if that is secured earlier rather than later…set new objectives. Why is it that so many think it is a devine right to become a top 10 side next year.

    Take the scum for example….spent millions and still can’t break into the top ten. In fact they failed to beat wolves!!

    Lets not shower the pre-season with negativity and support the team, manager and owner.

    At least with MA we are not likely to become a portsmouth any time soon. I honestly think we will buy a couple of players….but it will be within the clubs budget to manage and not the owners.

    The last owner has a lot of explaining to do….and has never been pressed for answers. Poor managerial appointments, player recruitment and staggering wage bill. He burdened the club (albeit not deliberately) and has never really been taken to task about it.

    We need to show unity, support the players and frighten the life out of opposing teams at STJ park with a wall of noise. Take it to the teams coming here next year. Who cares if we don’t sign players like Hunt, O’hara, Wilson etc etc……all players who contributed to a successful relegation campaign for their respective clubs.

    We all may be pleasently suprised by what the squad (including reserve and academy players)show next season. Can’t wait. Bring on the mackems. Come on!!!!!!!

  49. danny – it’s barely conceivable that they would consider propaganda given the fragile nature between board and supporters.

    But why bother anyway? Do other clubs feel the need to play that game?

    It seems like it’s just a ‘virtual theory’ that gets bandied around every transfer window, ironically to justify a lack of interest/previous investment by the board.

    I know you’re only messing around and toonsy probably isn’t even implying that, but I’ve seen others suggest it’s a tactic we’re using.

    Though when I consider ,it’s about as amateur as most other things they’ve done so perhaps I’m wrong.

  50. Missing Link says:
    May 10, 2010 at 11:02 am

    If like you say the current squad is PL class, what happens when Enrique gets injured? Or Carroll, Jonas, Nolan or Routledge?

    Look at the bigger picture…

  51. Hey ppl can someone tell which team has a better saqud than ours from the bottom half of the prem bcoz i cant fink of one, yea there sum good players like bent n doyle n dorrans who is outstanding but better sqauds i dont fink there is any i predict 12th place finish

  52. EXACTLY bowburn, noones cared about him now as were back in premiership and it just doesnt make sense to send out the intention right now.

    and plus ill add to MISSING LINK- half our academy are very good prospects but they were given chanes in cup competitions and we crashed out earlier than we should have as these players played so although they will be great in future we are now in premiership its a total different kettle of fish. Im more to the fact that i think hes lying about figures and something is just not right and something seems to be going on which just doesnt sit well, like they saylet sleeping dogs lie.

  53. You lot are so easy.

    The club has been trying to move away from spending ridiculous amounts in transfers & wages for sometime now. They’re jamming it into the press mongers, other chairmen’s, players & agents heads.
    Accept or leave.

  54. Stu – take your point on injuries but we hav very good young players who shud b giving there chance, likes of vukic, inman, airey, adjei n edmundson, i agree with u on jonas n routledge gettin injured the lack of cover for the wings is my only concern yes barton n guthrie can play there but we need pace on the wing

  55. “there will be no new capital outlay on players” which is exactly what it says, not “there will be no capital outlay on new players” get the words the wrong way round and it is very different, the statement is just saying he is not investing and new capital outlay, ie, not injecting any new funds into the business (his own money)

    we have said for years that this club is big enough to generate it’s own money, 52000 paying fans, new puma deal, shirt sponsor and premier league money. Sorry but u don’t need to be a huge finance expert to understand what they are saying, I run my own business and I would not inject new capital into it every year, that means it’s constantly running at a loss, all he is doing is running the club properly (as a business) unfortunately for us they come out with ridiculously worded statements that once again attract the media and create more excuses for the likes of the mail and that mackem crank louise Taylor to put their own spin on it. We will have a steady income and less outgoings for the 1st time in years, they will have accounted for player payments coming in from bassong, given etc and there will be a proper contolled yearly cashflow forecast. To me it makes absolute sense what they are trying to do, nowhere does it say we won’t be buying any new players

  56. Although i’m one of the people who usually likes to give the doom and gloom crowd some stick for being too negative, in this instance i think that we might be looking at a very clear stance here. There is very little money if any going to be spent on tranfers. Surely if the statement was designed to give the club/manager/fans a feeling that we would be signing anyone this summer then they would of said that! Like so many other boards have done in the past: ‘We are in a dificult financial situation, but we will endevour to get the manager the players that he needs, whilst observing some financial constraints…’, or words to that effect. This statement makes no mention of that!

  57. Now then panicky peeps,

    Ed’s posted a good assessment of the implications of the statement on .org and it appears to chime with the toonsy/ Cato view.

  58. Antz says:
    May 10, 2010 at 11:17 am

    Take your point about the ridiculously worded statement, but it could back fire on them – Some supporters will read and say right fck this I’m not renewing my ticket. Sponsors could say the same ect…

    Back to BBM’s point – Why bother releasing this statement at all!

  59. Not much point in arguing the toss who’s right and who’s wrong about spending, wait til September then we’ll all know for sure!

    I’m still certain(ish) that we will purchase enough to keep us in the Prem.

  60. I would take it as it is and that there will be no net spend on players this summer so anyone coming in will either be free transfers, loans or with money made from player sales. Talk of the club will only spend what it generates is a moot point as they already say in that statement that we won’t be breaking even for a few years yet and that the overdraft is already tied up.

    Yes it’s disappointing but at least we know so we don’t spend most days throughout the summer waiting for transfer news.

    The part about there being no plans to spend I would say refers to January where if we need to bring players in as we look like getting relegated then we will, much the same way we brought players in last January to help secure promotion where you could say he learned his lesson from the previous January.

    Realistically I didn’t expect us to have much money to spend anyway so it’s no surprise, we know full well he doesn’t want to be here so what makes people think he’s going to commit more money to a club that has already cost him a fortune already where the fans have banners calling him a rapist? Lets be realistic here.

    The plus side is I could have only seen us bringing in 3 first teamers anyway so if we can get those players as free transfers then it won’t matter too much in the long run if we spend £0 or £15m.

  61. Antz,

    I hope your right…

    Its just that recent history has taught me to think of the worst possible connotations.

    But like a lot have said. We will only truely know what “no new capital outlay means” after the transfer window shuts…
    Or if we were to purchse a 3-4 Million pound signing that would already kind of put the statement into clearer perspective.

  62. Stuart79 says:
    May 10, 2010 at 11:23 am

    “Back to BBM’s point – Why bother releasing this statement at all!”

    Or at least why not wait until they have appointed a this PR person they are on about? Maybe then it could have been worded in a way that people understand that wouldn’t leave it open to questioning, the very thing the statement was seeking to avoid.

  63. ‘We are in a dificult financial situation, but we will endevour to get the manager the players that he needs, whilst observing some financial constraints…’, or words to that effect. This statement makes no mention of that!

    Exactly… that would be a statement of commitment or intent.

    Yet they leave a ridiculous statement which could have many meanings. Basically to cover their @sses no matter what they do.

  64. Stuart and “Only one problem in that paragraph – What if the club don’t survive in the next five years?”

    Same as the Prem relegation season, there’ll be a ‘plan B’ ……. er, mmm, that there’ll be three clubs worse than us?

  65. Rangerman – you said yourself not long ago that you wouldn’t be at all surprised if the club was making a small profit soon. Given the published figures that doesn’t seem to be the case but does it take into account installments on players we’ve sold? I can’t get my head around the fact we’ve operated at a loss of £30+m and we’re still going to be doing that despite extra money from TV, sponsorship, gate receipts and getting Geremi and Butt off the wage bill and presumably Xisco and maybe some others.

    Given your alternatives –

    Loans – might work but gives me an uneasy feeling for some reason.

    Freebies – aren’t really free by the time we barter for signing on fees and wages.

    Sell-to-buy – I can’t see how we can do this without replacing like for like almost. Albeit the new boys might have better legs and/or attitudes for the top flight. Apart from the ones we want to keep, I don’t see how we can get enough money to make a difference.

  66. lesh says:
    May 10, 2010 at 11:43 am

    That may or may not be the case today but will it be the same on the 1st Sept?

    All other clubs will have strengthened and we will have a couple of free transfers – Not very good free’s either as we won’t be paying a signing on fee or high wages.

  67. The purpose of the communications-related bits of the statement effectively place the responsibility for any statements on Hughton…. unless of course they use spin-doctors.

    And, if Chris’s not getting any info then what can he say.

    Welcome to the model based on North Korea’s!

  68. lesh – If anyone (rightly or wrongly) previously mocked the notion that Hughton was being used as a puppet, now is the time for reflection because that’s exactly what he could become given the statement.

  69. one step forward ten back,there was no need to release this statement,it has just caused pure anger…fkin prats

  70. bowburnmag says:
    May 10, 2010 at 11:51 am

    Surely he deserves better?

    Hung out to dry comes to mind.

    But are we really suprised? Have the club ever treated a manager with respect or dignity?

  71. When we get back into the Premiership we should be approaching the break even figure as far as I can tell if not making a small profit, either I’m off with that or Ashley intends on taking some of the money back that he put in to cover the clubs debts which would tie in with the accounts saying he can take the money back when he wants instead of when they club is sold.

    He could well think it’s going to take 5 years to get back what he’s put in if we are in the Premiership.

    I would say capital spend referred to transfer fee’s and not signing on fee’s and wages.

  72. rangerman would ashley not be better off trying to get us stable in the prem before trying to get his loan back

  73. hitman says:
    May 10, 2010 at 11:57 am
    rangerman would ashley not be better off trying to get us stable in the prem before trying to get his loan back

    Don’t be ridiculous man! That’s too much like common sense isn’t it? This is Ashley were talking about – The one man disaster show when it comes to owning a football club.

    He wants his money back asap so he can get out quicker – He knows he cannot sell it so he’s just doing it another way.

    Fck us supporters – Were still expected to keep throwing our money into the club though.

  74. Rangerman – aye, sounds about right to me. I meant that the financial implications of taking on ‘freebies’ can’t be ignored, given the circumstances. If we go down that route, those things need to be considered and undounbtedly will be. My point being, we’re not guaranteed the cream of the crop.

    stu – they say that all ‘football matters’ will be dealt with by Hughton and he will speak about those things. But it’s a football club. Everything is about the football. When he needs to start speaking to the media about why he’s not bringing in players etc, it will be his face that the supporters see and his rhetoric that they hear when really he’s just the messenger. Either that, or he’ll speak for himself and I can see him either falling out with us or falling out with his boss.

  75. After sleeping on this last night and thinking about it all morning while doing unit cost stuff, made me think. I agree with Antz to some extent. It could be a case of paying the loan back over 5 years and using some of the cash that comes via TV and prize money to buy players as well as sale of course.

    Still think Ashley is a mug for not putting a bit more in to try and increase the money earned for a higher finish, but what can we do!!

    Think putting this out now is a bit daft though, there will still be people getting season tickets, this just might have knocked that on the head.

  76. Toonsy works for Toyota. I know this because he came around to my house the other day and decided to park his car in my front room. Dodgy brakes or something. I just thought he was hammered on stella.

  77. Still don’t understand how a loss of £32m this season wouldn’t be off set by the minimum £40m we will get this season. Especially considering there will be no capital outlays in the next year.

    Doesn’t make sense to me.

    Think these questions need answered first and foremost.

  78. Stu – you could argue that they should been considered prior to the release, eh?

    But then they probably were and the lack of detail is crucially omitted for good reason.

  79. Stuart79 – It’s like I said on the previous blog. If it’s a finance forecast then you have to take everything into account to show what your operating profit or loss will be over the year.
    So, we are -£30 million AFTER the promotion prize has been paid.
    The worrying aspect for me is that the numbers are nearly the same a this year and we are supposed to have cut the wage bill, plus have the promotion money.
    Thinking about it, the only way this could work would be for the promotion prize to be the same as our share in the PL pot from 2008/2009 plus the parachute payments.

  80. hitman says:
    May 10, 2010 at 12:13 pm

    What will Jonas be thinking when he comes back from the WC? Probably thinking “Not another fcking relegation scrap”. Enrique will be courted by clubs willing to try and improve their squad – Why wouldn’t he want out too?

  81. Look,
    They are putting out these figures now, before we get any prem money, sponsorship money etc., so it looks bad to prospective sellers. So they don’t start thinking we’re swilling around in cash.
    I’m guessing no one here has run a high profile business.

  82. One thing we can be sure of is that MA will not contemplate the possiblilty of relegation and if the team’s underperforming, there’s only one head set to roll and it won’t be Llambias.

    In saying that, relegation was not contemplated in 2008/09 either!

  83. I for one would be more worried about losing Jose than Jonas but thats just me.

    I am still a glass half full person so Stu I think you and I will just agree to disagree.

    Toonsy – Please let us know soonish. Im in Brussels for the next 4 hours bored off me tits so please gimme sumat to ponder

  84. CLiNT – so presumably it’s a flawed tactic then? Because surely those high profile businessman in charge of the clubs we’ll do business with will see straight through the facade?

    So what is the point?

    Other than causing chaos amongst concerned and distrusting supporters, what has it achieved?

  85. bowburn,
    those businessmen will be going through the same thing mate.
    They’ll be trying to lower the expectations of their fans too, when it comes to splashing the cash.
    Though some of ’em will be trying to pretend that they can compete instead.
    Or saying: ‘we don’t need a new midfield’ etc.
    a la: Arsene Wenger in recent years.

  86. & let’s face it,
    it doesn’t take much to ‘disgruntle’ some of our fans, does it.
    Especially since most of ’em are already there.

  87. i dont buy into all this smoke and mirrors shite,this is ashley wanting his loan back plain and simple,i suppose its his right to want his money back,but he should of waited till we were stable in the prem first..

  88. I understand that if you’re living in or around the Toon, things are very different when it comes to the slant everyone goes with. As there are plenty that go on a downer & start seeing nothing other than doom ahead.
    But that’s cos everyone gets on a collective nerve & sticks on that mind-set.
    As i say: that’s understandable.
    Don’t mean it’s true though.

  89. But hitman,
    you can’t say that MA isn’t a crafty businessman, can you?
    That’s what they do.
    He’s gonna want the outside world to think what he wants them to think, isn’t he?

  90. MickyToon

    It clearly states estimation for the 2009/2010 season which would not include the television revenue/ season ticket sales/ merchandise and sponsorship for this season… If thats an estimation, why would they include estimation of profits for the 2010/2011 season.

    Its easy to work out…

    In our last Premiership season we ran at a loss of 36Mil…
    That was with a wage bill of 70Mil a per.
    It also includes the payments to Kinnear, Shearer, and Keegan and Dennis Wise. (estimated payouts of 10mil at least).
    Our net transfer spendings that year amounted to nothing!
    We had a poorish average attendance and our lowest season ticket sales for some time…
    We also had no sponsorship money…

    Right… this season

    Assuming the television revenue hasn’t decreased… and if anything it has increased.
    Wage bill is 30mil less.
    We have a manager on a lower salary and there won’t be changes and payments to make by sacking him/ hopefully.
    Our tranfer spendings will amount to nothing! – this alone saves us 10mil in cash.

    That already leaves us “breaking even”…

    So yes, there is very little left to spend! BUT its clear, we are already above breaking even? So why would it take 5 years to achieve this goal?

    Every position we finish in the league above 18th would give us One mil more.
    So say we came 12th, that’d be about 5mil, add to that the Puma sponsorship, it amounts to a year of around 10mil pounds profit. IN OUR FIRST YEAR BACK… NOT FIFTH YEAR!!!

  91. Clint – That’s not how it works. You can’t forecast a loss of £30 odd million and keep some back to fool people into thinking your poor.
    If you are looking for investment then you want your project to look as good as possible. Forecasting a yearly loss of £30 odd million isn’t going to attract anyone.

  92. Micky,
    i think it depends on your timing.
    That can make things look very different.

  93. CLiNT FLiCK says:
    May 10, 2010 at 12:35 pm

    I take it you also haven’t run a high profile business!

    If all these business man are soing the same thing, they all know it’s bull shit! Begs the question, what’s the point?

    It doesn’t work, never has, never will. It’s just a pie in the sky theory by staw grasping supporters.

  94. jj – I haven’t seen the accounts, if they are easily accessible and free then it won’t be hard to work out where the costs are coming from.
    I’m not a finance expert, I just run a department where I have to go to a board for investment and I have monthly finance reviews where I have to talk about my monthly/quarterly/yearly forecasts and explain if the actuals vary wildly from my forecast.
    That and a tiny bit more is as much finance info I have.

    So after that probably unnecessary waffle, unless you have both sets of accounts and the forecast for the 2010/2011 season, how can you be so certain that we are breaking even for the forthcoming season?

  95. Micky Toon, the running costs, would almost be identical to what they were in our last Premiership season… Minus the the extra wages…

    It doesn’t take a genius accountant to work that out…

    Its also clear that apart from the 30Mil a year saved in wages that we have more income than in our previous Premiership season. (we had no sponsorship money – it was spent on Owen). We won’t be paying out huge compensations to managers with 4 year contracts…

    We incurred a loss that season of 36Mil… Take away the wages, add the added income… you break even.

    Yes its not exact, but easy enough to work out we wouldn’t be running at a loss with no further expenditure…Too complicated for you???

  96. There’s no doubt these figures are very strange considering we’ve only reduced our outgoings over the last year.

  97. Wasn’t expecting miracle signings this summer just some sensible bolstering of the first team ranks from the board.

    I was thinking 15-20m would be reasonable and would stand us in good stead to stay up in the premiership.

    TBH I think any newly promoted manager with any balls was not going to be given some funds he would walk.

    CH you should be knocking of fatty’s door demanding some dollars….go on now Chris DO IT !!

  98. CH will already know exactly what’s available.
    This is just an official statement, no one in management at the club will be hearing it for the first time.

  99. it just dosnt make sense,how many other clubs who go up dont invest money in players,its suicide

  100. & anyway,
    it’s nowt that all of us didn’t already know, is it?

    Welcome to the world in the aftermath of global financial meltdown.

  101. CLiNT FLiCK says:
    May 10, 2010 at 1:27 pm

    That comment will look fcking ridiculously stupid after you’ve see every other club spend at least some money.

  102. hitman,
    how much will wba be ‘investing’?
    Or blackpool/nottsf/cardiff or leicester be?

    Not a lot, would be the quick answer.
    Mostly cos they ain’t got it to lash.

  103. CLiNT FLiCK says:
    May 10, 2010 at 1:30 pm
    hitman,
    how much will wba be ‘investing’?
    Or blackpool/nottsf/cardiff or leicester be?

    AS lot more than us!

    Having said that, they’ll only have to spend £1 to achieve that.

  104. Well you’ll be able to hold it up along with all the other dumb shit spouted then.

  105. wba won’t need to spend anyway, cos they’re a brilliant team, apparently.
    They’ve got dorrans FFS.

  106. & loads of top players will be flocking to join blacker etc.
    Especially with their wedge to spunk.

  107. That dumb shit isn’t looking too dumb now though.

    Just gullible fools still towing the party line I feel sorry for.

  108. Like the gullible fools that said we were staying in the ccc or worse?

    Sticks ‘n stones n’ all that.

  109. “Newcastle will now bolster the first-team squad by promoting Vuckic, Irish defender Stephen Folan, Aussie ace Brad Inman, Swedish starlet Samuel Adjei and Geordie striker Phil Airey.”

    There ya go, 5 new signings there ;)

  110. JJ – It’s obviously all too complicated for you because you haven’t explained anything.

  111. I’ll take your stone and hit you with my stick in a minute.

    Not in a ‘hurmur-erotic’ way, you understand…

  112. look lads, i dont know why you are even bothered, reaally i dont. i saw on one of theese blogs the other day that we were banging on about signing a player for 7.5 million. i said then you were all deluded and that ashley has never bought a player without selling one of equal value first. I think i even said we would not spend anywhere near the 7.5 million on the entire players brought in.
    This is all as expected to be honest.
    It does make we wonder though why we bothered to get promoted at all really. We will not stay up, no way. the only person that will gain in this situation is ashely as his revenue goes up by 60 million for the jump up from ccc to prem. By their own admittion, they have lost 37.5 million this last season – if you can believe a word they say. So this being the case, they stand to make over 20 million this next season on profit alone, it will be more as butt and geremi etc all gone and off the wage bill. So lets say they make 25 million profit next season… why are they saying it will lake five years to break even?? well it sounds to me like he is hoping that he can as usual spend peanuts on players and bank 25 million profit a year – in five years 125 million total thus giving ashley all his outlayed money back so the club owes him nothing. thing is though, this cunning plan means prem footy for the five years… this aint gonna happen. chances are that some of our senior players will leave now anyway, esp after hearing of ashleys latest kick in the knackers.

  113. totally agree with the clarification you got toonsy. NEW capital outlay means ash won’t be reachin into his pocket and putting NEW money into the club. whatever we spend will be money we make – tickets, shirts, sponsorships, tv, etc.
    nowhere does he mention paying off the debt (ie-the loan we owe him) – he says we’ll be working to operate at break even. meaning we won’t be spending out of our means. meaning we won’t end up in the same sinking ship as pompey. THIS IS A GOOD THING!
    have some faith guys. we won’t be signing up a 20M striker. we already knew that though. we’ll buy a few sensibly priced players that will compliment the squad and we’ll survive this season easily.

  114. I’m no MA fan…in fact, much of what he appears to have done seems to fly against common sense…
    …but we were all bitching about him this time last year, and it’s worth noting that the best possible outcome for this season has occured. It’s also worth noting that the man has made his fortune running businesses. So maybe (and this is just a theory!), just maybe, we should trust that steady progress and management will continue.
    The coming season will be the evidence to prove or disprove this theory.

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