Statement signals summer of discontent.
Posted on May 10th, 2010 | 157 Comments |
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.
total disgrace,all the hard work hughton and the lads have done has just been shat on by ashley