Article: How not to spend £35 million of transfer money | Football, Newcastle

If only it was that easy to offload the deadwood and replace them with quality. The deadwood tend to have at least a year or two on their lucrative contracts, which they would rather sit here and collect than go elsewhere and earn a pittance by comparison, and that's presuming that anyone would come in and offer money to any of them. The deadwood that aren't on lucrative contracts, so Best and Routledge, maybe Ranger (but he has a 5 year contract), don't necessarily need to be offloaded if their wages are as low as believed. Best is useful back-up, but I would sell Routledge if this £2m offer is true.

José has made it clear he wants out, greatly weakening our negotiation position over any transfer, especially when combined with him having just a 11 months left on his contract. Why sell Jonas? While he doesn't directly rack up goals and assists he is still a very useful player for the team; he defends well, brings the ball out from defence and brings it up the pitch for an attack, runs at defenders and terrorises them, and earns lots of free-kicks in attacking areas.

As for buying your 2-3 'quality, proven' strikers, 1-2 PL midfielders, LB, CB and RB, a transfer isn't as simple as throwing money at people (unless you're Man City, even then it doesn't always work), we're a recently promoted club who finished mid-table in their first season back in the Premiership and are living off of our reputation from 10 years ago. Not to mention that the players you've mentioned would be very expensive, and you're expecting another 6-8 to be brought in? So say £12m per striker, £8m per midfielder, £4m for defender (very conservative figures imo for the calibre you want), that's £44m-£62m you want us to spend on transfer fees alone to completely rebuild our squad...

 

I honestly wish there was a NUFC fan who has a bob or two would buy the club and invest in the team. There must be a wealthy geordie out there somewhere who has £250 million to invest surely.

 

This is a stupid way to think about it.

You have just sold a player for 35 million pounds. This 35 million pounds should be used to buy players, as it came from a player.

How do you replace Andy Carroll? Buy someone better (arguably), for cheaper! You would of still been able to buy the players you have (Ba, Cabaye etc..), and you would be a much better team, as all good teams have a brilliant striker (Van Persie, Hernandez, Drogba etc...) and you could of accelerated the process of success and profit like the OP says. (And let's not forget the money you usually would spend on the odd player here and there!)

The Man City situation is completely different, as they have bought players with money that they have not earnt/made from players, therefore why people say they have 'bought' a team.

 

I get so frustrated hearing about agents. Surely they are employed by the players and therefore they should be paying them not the club. What the f... does an agent do to earn a million quid in a transfer deal?

 

Calaye in a short response to your reply. Yes I wud love NUFC to invest 40-60mil in the squad, if thats how much the club earns from selling players.

Carroll, Nolan, Enrique = £50mil alone. Take ur pick of deadwood to add to that. Also remember when u bring in quality players, other become redundant, I used Jonas as an example. Has value, but not really a great player worth keeping if u can get 7-10 mil for.

Id like to make the point that if u think our team is stronger now, then last season u r mad. Carroll and Nolan were pivotal in our attack last year. Not to mention influential......not even mentioned the actual goals. Who have we replaced these 2 with? An injury prone Ba, still unproven in Prem, Best had a similar season to him last year... and Cabaye a totally different type of player then Nolan, he wont get more than 10 goals next year.

Facts are we need goals. Our top scorers have both left. Plus our defence remains weak in my opinion. Only got 3 centre backs (all average), left back is leaving and right back is a problem as Simpson simply isnt good enuff.

.........so much for short response....

 

The £35 million was a transfer fee and should be used up in transfer fees. Why is it paying for undersoil heating? Where is all the season ticket money, sponsorship money, TV money, merchandise money, etc etc?

As for the OP's comment on the idea of 'better performance on the pitch leads to more profit'; this is true, but Ashley doesn't care about progression as a club. He wants to earn money in the SHORT TERM by slashing costs and reducing debts and selling the club.

Also Calaye was spot on about the deadwood. Smith is in the twilight years of his career. He'll happily run down his contract here and sit on the bench because he'll only get offered half, if not less than that, of his current wages if he leaves.

Not really related to anything on this article particuarly, but I am the only one who finds the club telling Best he can leave a bit puzzling? He's fairly young, most probably on modest wages (for a footballer), and a replacement would cost much more than whatever we sell him for. Also, he is backup for two VERY injury prone strikers, Ba and Ameobi. How would selling him benefit Ashley?

After a weeks holiday it felt good to get all that out my system.

 

According to Pards agent fees can take up a lot of money............£35 million for 3 transfers is probably what we'll get told.

 

Put right.

 

TBF Smith has been linked to plenty of clubs and if we shoved him out the door, he wudn't dig his heels in to play in the reserves. Xisco is another one who has been strongly linked to go to Deportivo. Best shud stay at the moment seeing as Ba and Shola are all we have. Routledge is defo going. Ranger cud be sold to Brummies eventually. Ive no doubt Lovenkrands wud be taken on by a Championship club...same for Perch.

This view of our fringe players just seeing out their contracts is a bit misguided.

 

Ashley will not selll up, why would he ? he has got it to easy its not like anybody gives him hassle its a teddy bears picnic to him.
he can make mistake after mistake and fans still give him the benefit of the doubt.

PS YOU ARE SPOT ON

 

Exactly. he isnt even thinking of selling up, because he thinks we have all forgiven him and back him all the way. He wouldnt have the nerve to sneak back into the stadium if we actually informed him of what we really really think. Makes me sick a little bit how much my native geordieland could allow this to happen. Would never have thought it was possible. id beat **** out of him if i ever saw him, and im not joking.

 

Its gone towards reducing the debt surely? Of course he lied. At the time they made promises they had no intention of keeping to appease fans. He's not very well going to say "actually the 35m isn't going to be spent" and look like a clown. Honestly not worth getting riled about. Nothing will change our current course bar an offer which allows him to get out damage free.

 

Well theres another issue altogether. If it has gone into Ashleys pocket then 1) just say its gone towards reducing debt 2)tell fans just how much transfer budget actually is 3) How much of the natural annual turnover of £100m plus this money has gone towards reducing the debt.

If the above happened.

The main issue for me is..........Not one single penny of the £35mil shud be used towards the debt as that is a total and complete waste. You may as well have gave Andy Carroll away for ****ing free.

As it stands, not only have we not replaced AC properly, we have further reduced our attack by getting rid of Nolan. Pure farcical situation when u consider the money burning a hole in the clubs/Ashleys pockets! How much money do we need to be given to actually spend something on transfers....£50mil....£100m.....£250mil.

There is no excuse for not investing in the team. None.

 

There is no excuse for your total lack of financial knowledge. None.

 

In wat way shape or form have I shown a lack of financial knowledge....by my exaggerated ending. Wat r u a clown?

 

Ignoring earlier comments but just concentrating on your last one.

1) NUFC is a seperate legal entity to MA and money generated by the club is only his if it is passed on to him through correct channels which then have to be shown in the accounts. So far accounts show that not one penny has been paid to MA. 2010/11 accounts have not yet been released and until they do you are only guessing.

2) Turnover £100m. Where do you get this figure from? 2009/10 turnover was £52.4m down from £86m the year before. 2009/10 showed an operating loss of over £33m btw, reduced to £17m after player sales. The club has not made a profit or any sort since 2005/06. So how exactly was the club supposed to have paid any of the debt off from turnover when it can't make a profit? It is only because MA puts even more money into the club that it keeps going.

3) You say none of the £35m or any other income from player sales should be used to reduce debt. Ok then as the club runs at a trading loss how else is the debt going to be reduced?

4) As the club has debts of over £150m including a bank overdraft and no cash whatsoever where is this mountain of cash burning a hole in the clubs pockets? Or were you referring to the seperate legal entity MA specifically. In which case I think you will find he has continued to pump money into NUFC in order to keep the club operating.

The trouble is not enough fans make any effort to research the finances of the club before they make sweeping statements about the financial running of the club. If you made that little effort in regard to footballing comments you would expect to be ridiculed. Why should you be let off the hook just because it is about the finances?

Was that enough to get you started because I have loads more?

 

Ok u ignorant ****in nob.

The club made £100mil last season as TV revnues went up around £10mil to around £40mil quid. Making that £86m you mention to around £100million. Simple.

Newcastle Utd wages bill has gone down to around £55 - £60mil. Operating costs are around £20mil. Ive seen the accounts of previous years on many many occasions.

As an annual Profit/loss from last season it was in and around £20mil. Give or take.

It is understood that Mike Ashley will be taking out this £20mil every year for 5 years to pay off the £110 million loan he gave us after we got relegated.

Without AC sale, we would have gave Mike Ashley this £20mil to pay off part of the loan.

All of this vague obviously. But the preference is correct.

Incase you didnt know NUFC is a huge club compared to the average and we make around £100m due to improved TV Deal.

The AC was a one off, separate cash injection that any intelligent human being with a brain for football would invest in the team, not the training ground, not the debt, not the new tarmac road, the TEAM!!!

Better Team = More income.

My financial knowledge is of a high calibre which is why I gloss over the ****ing obvious you clown. Its like a scientist having to explain to a 5 year old.

U even said urself, we made 86m in our last season in Prem.....that has gone up.....our costs since then have gone down.....we have made money on transfers......we have had a loan from MA with the club will be paying for season after season using turnover....!!!!

 

Ignoring the abuse for a second;

1) Turnover. So you are guessing at £100m (you don't actually know). Actually i'll go with that it probably isn't far off.

2) Wages actually dropped to £47m in 2009/10 but club have stated that they have increased considerably since returning to the premiership and with new player acquisitions. Don't have a figure, but assuming you are again correct with £55m to £60m.

3) Non wage expenses last two accounting periods unchanged at £30m (£29.6m 2009/10). Assuming that these haven't risen dramatically then we may have actually made an operating profit of about £10m last season, so less tax plus player sales profit (after tax) maybe £35m profit? Interesting that you didn't take tax into account or were you suggesting we don't need to pay it?

Of which Cabaye/Nolan virtuall cancel out but we have spent money on the signing on and agent fees for Abeid, Marveaux, Cabaye and Ba. Plus training ground improvements (which I know you disaprove of) and we apparently have the funds put aside for a new striker and to finance the improved deal offered to Enrique.

I don't know how much that will leave. £10m maybe? (don't like guessing like this but it is necessary to answer your points which are largely based on guesses).

That may actually be being used to pay back some of the debt owed to MA. Talking of which ...

4) Recent article on here together with links to source showed that the MA loan with NUFC currently stands at about £141m with the club also having an overdraft of £9m (guaranteed by MA). In addition MA is owed £132m by the holding company St James Holdings. So it is going to take many years to pay off the £282m that he is owed. Also love to know how you know that MA is planning to pay of the loan with 100% of any profits made?

In all this I ignored the fact that if we spent £60m on players as you have stated you would have the club do we would have an estimated increase in our player contract amortisation of £12m per year (p&l) and that under the fairplay rules we will have to build in a market fair value financial loan interest expense (my estimate £14m minimum on current loan value) into the break even calculation. Both of which need to be taken into account by the club accountants but not by you obviously.

In short leave the finances to the club, they are showing that they know what they are doing and if you delve into the numbers a bit you can quickly see that the money to spend £35m let alone £60m on players just isn't there.

I'm also from a financial background btw. One thing is for sure though I would never employ somebody who relies so heavily on wild guesses before making sweeping statements like you do!

 

Ha ha ha. Cracking. In case you aren't aware, everybody apart from the powers that be, ARE guessing...or should that be estimating, how our finances are looking.....seeing as we don't have them in front of us. THAT INCLUDES YOU.

You would think that you worked for Ashley are something, looking at your desperation to find expense where there probably isnt any...or through tax into the equasion...

What is perfectly clear is that our balance sheet this year will look a whole lot clearer, or simplar, then previous seasons. As like you say, MA has pumped a huge loan into the club to cover all debts, losses etc the club has made.

He has basically 'done a Carol Vorderman' and took all our debts and out them into one easy to pay off loan....to him.

I like to take things and make them easier, in my nature.

On the broad scale of it, without pigeon holing every penny.

As I have said, and u have agreed, per year we make about £100m in turnover. The wage bill is around the £55m mark. Other expenses ie EBITDA is around the £20m mark. The equates to a round about profit of £25m mark, give or take. (its all estimation as we dont have the facts, not a crime)

Mike Ashley has said that NUFC "will be self sufficient in 5 years time". When I read into this, what I hear is, the loan I have pumped into the squad will be re-paid and NUFC can then start to actually make money for themselves. So in order to do this, NUFC will have to pay back what is owed to him with significant funds (about £20m) it makes every season. With a modest transfer budget around the £5m and a sell before you buy policy.

All of the above I have no problem with whatsoever. In fact I actually think it is the most sensible things NUFC, or shud that be MA, has ever done. Financially sound.

.....but my argument is this.

The club have a sell before you can buy policy. Thats fine. So we sold Andy Carroll. Now that money, on the face of it, should be used to buy. The fact it is such a huge fee should be dealt with in a positive way and seen as a real chance to have ourselves a football team to challenge for trophies and maybe even qualify for Europe.......which in turn will raise the Income....will help pay off the loan quicker....and let the club be financially self suffiecient club sooner than estimated.

Thats the basis of my argument. Cant put it any clearer. The AC money is a one off Bonus, that doesnt or shouldnt be introduced to the clubs Balance sheet per-see, but used to improve the team............which the Football club as a business ultimately lives and dies by.

......For eg if we get relegated this year, which in my opinion is a serious possiblity....you can kiss all of our financially stable, self self-sufficient plans down the toilet.

You cant treat a Football club like a Balance Sheet for a business....and ignore the football team. Because suddenly all of your best laid plans go up in smoke with relagation....BOOM £40million lost in a year.

You get me?

 

The bit in bold. I am not inventing expenses numbnuts. You get taxed if you make a profit and player contract amortisation is an accounting fact. The finance expense on the MA loans will also have to be added into the break even calculation. It is stated quite clearly in the fifa regs which unlike you I have taken the time to read. So stop wasting my time with your ridiculous guessing and get real.

You just about enough to be dangerous, but nowhere near enough to make a living in finance. Don't whatever you do give up your day job. Unless of course you have somehow already managed to get a job in finance, in which case please give up before you bankrupt somebody!