tag:blogger.com,1999:blog-487486960623783530.post4264494106015720713..comments2024-02-29T09:58:18.342+01:00Comments on The Swiss Ramble: Newcastle United's Finances In Black And WhiteThe Swiss Ramblerhttp://www.blogger.com/profile/11423088862174893998noreply@blogger.comBlogger63125tag:blogger.com,1999:blog-487486960623783530.post-32109798300436944342014-02-02T16:57:32.038+01:002014-02-02T16:57:32.038+01:00Swiss,
Thanks for this and the other Newcastle art...Swiss,<br />Thanks for this and the other Newcastle article you've done. They make very interesting reading for a lifelong (and geographically removed) fan like me.<br />I wonder if you have any plans to do an update. It has been rather interesting at St James's Park recently...<br />Respectfully yours, IanIan in Shanghainoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-85941107839105431312011-09-13T16:18:39.064+02:002011-09-13T16:18:39.064+02:00Would the anonymous commentator from 6 February be...Would the anonymous commentator from 6 February be fat freddie sheppard by any chanceAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-46322108341626398122011-07-28T23:44:11.802+02:002011-07-28T23:44:11.802+02:00Many thanks for the reply, really appreciate it.
...Many thanks for the reply, really appreciate it. <br /><br />I really dont understand why a business which turns off escalators to save on electricity (as apparently occurred at SJP), which is desperate to boost commercial income to offset losses / afford higher wages at the same time doesn't charge for sponsorship. The implication is that Ashley is running NUFC mainly to serve the needs of SD as he is not doing everything feasible to boost NUFC income. Assuming that all advertising for SD is good for it (otherwise why on earth would he bother covering the place in SD branding?) then there is a return on any money SD pays to NUFC for using this space. <br /><br />Could I ask you what you mean specifically by how the £138m loan in SJH Ltd 'was funded'? <br /><br />The question is whether the £138m spent on purchasing NUFC shares in 2007 was lent to SJH Ltd by Ashley to buy NUFC and if this is the £138m showing on the accounts of the holding company in 2008? There is no sign of this money until 2008 so the only explanation i can think of is that this was like a leveraged buy-out, not an outright purchase as it has been presented in the press. <br /><br />I dont really understand the relationship between NUFC and the holding company though and why with only £70m of debt to be paid off and £66m of working capital to be injected, an extra £138m is owed by the club.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-73587015432826510972011-07-28T17:36:04.478+02:002011-07-28T17:36:04.478+02:00@Anonymous (4:18),
It's not absolutely clear ...@Anonymous (4:18),<br /><br />It's not absolutely clear from the accounts, but the notes that you have quoted from the related transactions section would certainly suggest that that is the case.<br /><br />However, the two main reasons for the reduction in commercial revenue are: 1. Outsourcing the catering operation, so the revenue is only the fee received from the contractor and not the full value of the catering. 2. The value of the Northern Rock sponsorship was reduced.<br /><br />You're right that the value of the loan in St James Holdings Ltd is the same as the price paid for the club, but this in itself does not tell us how the loan was funded.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-12296886215620474632011-07-28T16:18:43.704+02:002011-07-28T16:18:43.704+02:00Dear Swiss Rambler, many thanks for this post, i&#...Dear Swiss Rambler, many thanks for this post, i've come back to it many times to try and understand what is happening at the club. <br /><br />I was wondering if you could you help with a question regarding the Sports Direct sponsorhip and logos at St James Park. Is it possible to ascertain from the accounts whether SD pays NUFC for this priveledge?<br /><br />From the 2009 accounts <br /><br />'During the current and prior year, advertising and promotional services were provided to companies associated with Mr MJW Ashley, the ultimate shareholder of the company's parent company, St James' Holdings limited. No consideration was paid or payable for these services and the cost associated with the services in the prior year was £42,250.'<br /><br />From the 2010 accounts <br />'During the current and prior year, advertising and promotional services were provided to companies associated with Mr M J W Ashley, the ultimate shareholder of the company’s ultimate parent undertaking, MASH Holdings Limited. No consideration was paid or payable for these services.'<br /><br />Does this mean that Ashley is allowing SD to advertise for free at SJP? <br /><br />Your post presents the commercial / sponsorship revenue line over time and shows it decreasing, with the latest figure in 2010 being £15.4m. <br /><br />Can we conclude from these statements and data that SJP is being used by SD as a free advertising platform? Does this make sense for Ashley? He is 100% owner of NUFC and so any losses, he covers himself. He is the majority shreholder in SD so is happy to have free advertising. <br /><br />Another question that concerns me is whether the purchase by Ashley was a leveraged purchase, since the club seems to have gained £132m of debt out of nowhere which is held with the holding company and (just about) equals the money he spent on buying the club. In fact the Mike Ashley loan of £138m which appears out of nowhere in 2008 is the exact sum he paid in 2007. Odd coincidence, scandal or my lack of understanding?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-84318575131182983302011-07-17T18:15:56.520+02:002011-07-17T18:15:56.520+02:00With regard to the debt attached to St James Holdi...With regard to the debt attached to St James Holding, it looks like this being reduced (from £138mill in 2008 to £132mill in 2009) does this mean ashley is getting is outlay for the club back over time?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-4416558306722571932011-06-29T12:56:47.109+02:002011-06-29T12:56:47.109+02:00Excellent piece. Following on from the "due d...Excellent piece. Following on from the "due diligence". Wasn't it the case that due diligence was done and several anomilies identified and brought the Ashley's attention. He chose to, I suppose "ignore" is the wrong word, but he instructed his lawyers to go ahead and buy the club anyway. Remember, at the time, this was a man who had just be handed a cheque for £1.9billion a few weeks before. His buy it no matter what attitude was, although to a lesser extent, evident when buying himself and mates a drink in the Blue Bamboo - "Ah get eveyone a drink". Cheers Mike.Bobby Tnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-80012881649925110302011-02-22T20:27:51.639+01:002011-02-22T20:27:51.639+01:00@Anonymous (7:35),
It's not actually my initi...@Anonymous (7:35),<br /><br />It's not actually my initial premise, but no matter. There are plenty of quotes suggesting that the due diligence was inadequate, not least by Ashley himself.<br /><br />By the way, the fact that Mort is a Freshfields lawyer cuts no ice here. Lehman Brothers, Merrill Lynch and the Royal Bank of Scotland all had excellent reputations before they spectacularly collapsed or were bailed out.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-40349099331615512192011-02-22T19:35:27.791+01:002011-02-22T19:35:27.791+01:00I'd like to point out to you that your intitia...I'd like to point out to you that your intitial premise that Ashley did not undertake due diligence is wrong. Chris Mort, a Freshfields lawyer no less, stated on August 10th 2007 that normal due diligence was indeed undertaken. Unless people are suggesting that was a lie, this myth ought to be put to bed.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-20327253323723377072011-02-12T10:00:08.451+01:002011-02-12T10:00:08.451+01:00@Anonymous (7.15),
Thanks for that feedback. It&#...@Anonymous (7.15),<br /><br />Thanks for that feedback. It's really appreciated.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-86624307148529787582011-02-11T19:15:02.465+01:002011-02-11T19:15:02.465+01:00That anonymous commentator from 6 February is frig...That anonymous commentator from 6 February is frighteningly repulsive and ignorant. Unfortunately there is a large number of NUFC supporters who believed the lies and propoganda of the odious John Hall and his cronies. What you may not realise, Swiss Ramble, is just how Hall was able to create a situation at Newcastle where he was able to do almost what he liked without criticism. Much of this information is still to be broadcast, but somehow he was able to coerce the local evening newspaper into being his mouthpiece and had massive influence over the local authority. Many recognise they were conned into believing the continuous stream of propoganda and deceit, and some, probably including your anonymous assailant, find this difficult to reconcile and so lash out with unrestrained fury at those that remind them of their gullibility and ignorance.<br />This was a balanced and astute piece of journalism....I only wish it were published in our local morning newspaper (which has always endeavoured to remain impartial) for all to read and consider.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-79760567915436166172011-02-08T10:13:12.034+01:002011-02-08T10:13:12.034+01:00@Jon NUFC Supporter,
Thanks. Clearly, the £35m re...@Jon NUFC Supporter,<br /><br />Thanks. Clearly, the £35m received for Carroll will make a difference. My guess is that the club expected to sell him at some stage, but not for that sort of profit. However, given Ashley's statements, I'm not sure whether this will mean a dramatic change in policy.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-28890483794977315382011-02-07T17:37:23.256+01:002011-02-07T17:37:23.256+01:00Swiss,
A wonderful piece - can I ask you to use y...Swiss, <br />A wonderful piece - can I ask you to use your insight and understanding of what is good practice in the management of a football club to supplement the behind the scenes advice being given to Messrs Ashley and Llambias.<br />What would your strategy be in order to achieve the following <br />Year one 2010/11- Break even <br />2011/2012 Profitability to a point where one is able to build the team as a net buyer in team strengthening<br />2012/13 Profitability/Team building - Determine a repayment schedule to pay Mr.Ashleys's loan and purchase price back with a reasonable premium (IRR 5% p.a.? given no-one buys a football club to make money other than the Halls and Shepherds)<br />How do we get out of this hole swiss?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-26127603644164407422011-02-07T17:07:09.733+01:002011-02-07T17:07:09.733+01:00I think the better our books look the more chance ...I think the better our books look the more chance we have of getting bought!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-75621375463623743962011-02-06T14:59:21.266+01:002011-02-06T14:59:21.266+01:00I must admit that with no knowledge of accountancy...I must admit that with no knowledge of accountancy I can't comment on the detail of the figures, but when many, perhaps the majority, of other clubs are being supported by wealthy owners, NUFC aspiring to break even, or turn a profit will surely result in the club underperforming in relation to others with a similar sized fan base. For this reason Ashley's effort should be directed to finding a buyer willing to make this commitment, and selling at a price that ensures this happens quickly. Both Manchester City and Sunderland have managed this in recent years so it shouldn't be that difficult.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-69851460293480980672011-02-06T14:35:23.324+01:002011-02-06T14:35:23.324+01:00@Dave,
I think that's exactly right. In my ow...@Dave,<br /><br />I think that's exactly right. In my own small way, one of the things I'm trying to achieve with my blog is to make financial matters less opaque to football fans.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-68820253192551012512011-02-06T14:21:11.201+01:002011-02-06T14:21:11.201+01:00Overlooking the comedy and ignorance of those anon...Overlooking the comedy and ignorance of those anonymous comments, it's remarkable to read how the fear of financial meltdown has crept into the average supporter's consciousness. Not only do fans have to bear the burden of their team losing games and getting relegated but they also have to worry about their club losing money, paying wages and generating revenue. How we got into this position where raw sporting emotions got mixed up with the hard numbers in balance sheets is a curious phenomenon; it certainly gives the term "emotional investment" a new dimension.Davenoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-4407849647428874862011-02-06T14:13:32.455+01:002011-02-06T14:13:32.455+01:00@Stuckdownsouth NUFC blog,
Thanks for that. I rar...@Stuckdownsouth NUFC blog,<br /><br />Thanks for that. I rarely get such abusive comments, as I always endeavour to keep my posts balanced. In fact, I often review a club's finances at the request of some of the club's own fans, which was the case with Newcastle.<br /><br />I didn't actually view this as a pro-Ashley post in any way, shape or form, though it did point out that he was not totally bad.<br /><br />Funnily enough, two of my best mates when I was a student (many moons ago) were Geordies, when I played for the university football team. I was an old-fashioned target man, while they formed an uncompromising partnership in central defence.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-36810174907799412642011-02-06T13:33:42.090+01:002011-02-06T13:33:42.090+01:00I'm a regular poster on the Nufc blog, I thank...I'm a regular poster on the Nufc blog, I thank you doing this article and see that you have done it for various other clubs.<br /><br />I appologise for the 'idiot' who posted on above, I'm afraid that there are a very small minority of fans that when presented with argument and counter argument resort to 'come and say that to my face'.<br /><br />Please believe that the majority of us are decent intelligent people who have the ability to understand your blog, I'm not saying they're not questions for Ashley to answer, but his biggest problem is his woeful PR and inability to keep us the fans in the loop. <br /><br />Once again please except my apologises for the above so called Newcastle fan.<br /><br />Stuckdownsouth NUFC blogAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-29283168824165562402011-02-06T13:27:07.477+01:002011-02-06T13:27:07.477+01:00@Anonymous (12:38),
I don't really know where...@Anonymous (12:38),<br /><br />I don't really know where to start, beyond reminding you of the old saying that there is none so blind as he who won't see.<br /><br />You don't appear to understand the difference between a profit & loss account and a cash flow statement, nor do you grasp what EBITDA is. The cash flow statement that you dismiss is a summary of the one in the club's accounts - you know, the financial statements that are signed-off by the auditors, but in your world they're probably part of the conspiracy too.<br /><br />However, in the spirit of compromise, I'll give you a free accounting lesson. The turnover and detailed expenditure are included in the first line of the cash flow statement, "Operating Activities".<br /><br />There can be many ways of interpreting a club's accounts, I'll grant you that, which is why I go into so much detail, but your assertion that Newcastle are making a profit is a strange one. Let's go with your stream of consciousness for a moment and exclude the non-cash items like player amortisation, even though there's clearly a cost associated with buying players. Let's also deduct exceptional charges and, hey, while we're having fun interest payments. That leaves us revenue of £86m and expenses of £95m or an operating loss of £9m. Of course, this would be improved by the profit on player sales, but you don't seem to like that strategy.<br /><br />You are right that Newcastle should be profitable in the Premier League, as indeed I wrote in my penultimate paragraph, but that balanced approach is probably too balanced for your paranoia. I am no Ashley apologist and have criticised his actions where I felt that was warranted, but also praised him where I felt that was deserved.<br /><br />At no point did I address the question of your "character" in my previous response, though you have done a great job shining a light on it in your last comment with the abuse, threats, hypocrisy, etc. What I will admit to was pointing out your ignorance of matters financial. That is beyond dispute.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-78124917950137209102011-02-06T12:38:13.516+01:002011-02-06T12:38:13.516+01:00What a pathetic, small poisonous man you are. You ...What a pathetic, small poisonous man you are. You address me instead of my comments. You go after my character, not my comments or the facts. You misleading whiny little bitch. If you want to address me, then do it MAN TO MAN. The strawberry pub, you know where its at. Meet me there, then you will see what and whom you are dealing with now. You think I am a random poster, with little time but what to spend on your shitty little Ashley sh*t covered d**k post here ?<br /><br />Ashley IS making money from this club whilst asset stripping it to cover his initial exposure. I KNOW THIS. Next is Tiote, in the summer to Chelsea for 20m. Then Enrique, 15m.<br /><br />The only thing that matters is the annual cash flow. You may have mentioned EBITDA elsewhere, but I made my post news to other message boards. Seems I have gained a large following already. So not everyone has the time/lack of life to read your entire document. What people want to know now is the turnover which you illustrate badly you misleading w***er. You know exactly just what you are doing. This club IS making money and it is being absorbed by St James Holdings. <br /><br />What else is their, the rest is speculation. You made this document to sympathise with a man who is asset stripping this club until the day he walks away. You disgust me. You sit behind that pc there, safe in the knowledge only your wife if indeed you have one knows how pathetic you are. <br /><br />1. IT IS MISLEADING. Do NOT attempt to dismiss this you trashy little sh**e! The vast majority of people do not understand such tables and will surmise the totals.<br /><br />2. NO YOU DIDNT. To genuinely "seperate" them you would not have negated the speculative impact they had on ANNUAL CASH FLOW !! You lying bag of w**k. I hope people see you for what you are. I couldnt give a bell for what they see me as. YOU are misleading them, you are a Mike Ashley sympathiser who is serving this crap to placate fans.<br /><br />3. How dare you even use EBITDA. Nobody for certain can predict a players valuation, until a club comes in. That is the con here. You say you addressed it in a further paragraph, but what is the point if you have already illustrated it in the highlight of this site, which is the 5 year annual cash flow. After all, that is what the majority of fans will see. <br /><br />4. You patronise me, yet my comments exposed your intent. Spineless tw*t, you know what you're doing and in typical fashion you go after the poster and not the post becuase you 100% know what I said is true. I could dismantle your entire site for you because I know it will also contain pseudo bull s**t with the intent on gaining sympathy for that fat pig of a "man". He lost MORE than he spent in January in a Casino even though we were promised a 10m warchest. <br /><br />5. You call that a cash flow ? Wheres the turnover ? Wheres the detailed expenditure ? Again it is a vehicle to delivery an agenda, to illustrate Mike Ashley as a saviour. The real cash flow is the one I lambasted. So what of the defense ? The CLUB IS breaking EVEN. The club IS generating a PROFIT ! Where is our player money going ? Why did Ashleys puppet state that in 3 years time we MAY be free of this shackles of financial melt down ? It is PURE LIES, again to placate fans to ease the pain of when they eventually sell the clubs assets and to prevent EXPECTATION.<br /><br />You actually pass your sh**e off like this, you have ZERO interest in the club. Hughton was sacked before January for a reason. He would have been an uncontrollable entity given the intention to sell ANY of the assets. We had NO intention of purchasing players. Nzogbia from Wigan, Whelan. Come on, we may as well have put 35m on the table for Cesc Fab. <br /><br />Spineless you are. <br /><br />You talk about me, you do it to my face.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-84227635887515876572011-02-05T12:34:56.127+01:002011-02-05T12:34:56.127+01:00@Anonymous (10:51),
Maybe if you used less exclam...@Anonymous (10:51),<br /><br />Maybe if you used less exclamation marks, then you would be able to read the analysis a little better.<br /><br />1. I did not use that document to illustrate Newcastle's cash flow, but their profit and losses. The clue is in the title of the graph, "Newcastle United - Profit Trend."<br /><br />2. I have deliberately separated cash and non-cash expenses, such as amortisation and depreciation, so people can easily see the impact. The non-cash flow expenses are included in the section marked, non-cash flow expenses. Not very difficult to miss, I would have thought.<br /><br />3. I even devoted an entire paragraph to discussing EBITDA, but you seem to have managed to miss that as well.<br /><br />4. Your dramatic analysis of the 2006 results, which produces a "profit" of £13m, is not exactly news, as this is exactly the same as the figure I highlighted as EBITDA for that year (in bold, shaded in green). The only thing surprising about this "revelation" is that in your mind it is somehow worthy of four exclamation marks.<br /><br />5. For someone who is so keen to analyse the club's cash flow, please allow me to point you in the direction of the table entitled "Newcastle United - Cash Flow", which would seem to be more appropriate for the task in hand.<br /><br />I am grateful to you for one thing however, which is that this is the best attempt I have ever seen to prove the old saying, "A little knowledge is a dangerous thing."The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-6612023052419012822011-02-05T10:51:57.218+01:002011-02-05T10:51:57.218+01:00I find the five year accounts to be VERY misleadin...I find the five year accounts to be VERY misleading. <br /><br />You used that document to illustrate our annual cashflow. Yet why is there mention of EBITDA such as Player Amortisation, impairment of player values and depreciation regardless. <br />These are strictly non cash flow expenses and should NEVER be taken into account on a cash flow account. <br />They are for the stock value of such entities. If a players value declined whether it be his contract shortening or performance, this will not effect expenditure. Thats a load of utter nonesense and I knew it would be something like this which would attempt to fool the public.<br /><br />Take into consideration what I have said and how it effects EACH year. <br /><br />I will use the first year we made a loss, 2006.<br />Turnover 83.1m<br />Expenses 70.1m<br /><br />Now you chip away with "Exceptional items, Amortisation, player values, Depreciation" which is<br />3.2M, 16.2M, 1.4, 3.6M WHICH IS A MASSIVE 24.4M<br /><br />As a result, the table has the operating profit as -11.4. Now, remove Ebitda which is NONE CASH FLOW you have a PROFIT of 13m !!!!<br /><br />Plus an extra 5.2m for player sales you now have 18.2m. Rinse and report for subsequent years !!!!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-34548891505840498142011-02-03T21:28:00.252+01:002011-02-03T21:28:00.252+01:00swissrambler,
A very informative read about NUFC, ...swissrambler,<br />A very informative read about NUFC, I must say that MA's decision making process seems to be entirely at will however there does seem to be some element of a decent business strategy somewhere! What is your view on the £35m NUFC have just received for AC, in your view does it significantly alter the prospects for this great club? Thanks again for the analysis- some effort!Jon NUFC Supporternoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-61724209778182502772011-01-26T18:10:20.477+01:002011-01-26T18:10:20.477+01:00Very insightful piece of writing, please check out...Very insightful piece of writing, please check out our campaign:<br /><br />Twitter: http://twitter.com/UtdForNewcastle<br /><br />Facebook: http://www.facebook.com/pages/United-For-Newcastle/122648937801899United For Newcastlehttp://www.facebook.com/pages/United-For-Newcastle/122648937801899noreply@blogger.com