NUFC

[aggi]

Thanks. Why the staged payments then? Newcastle are loaded.

Walmart is loaded but still screw over their suppliers with extended payment terms.

A large number of transfer fees are paid in instalments. Can only assume that there was nothing in the release clause about it being paid upfront.

[ashtonlongsider]

I'm no financial wiz but I find all these rumours around our clubs management of money frightening and the alarm bells are certainly ringing in my head.

[Paul Waine]

Villa did something similar when we signed Ashley Westwood....

https://www.mirror.co.uk/sport/football ... a-12655774

They took cash early for the sale (and paid a penalty for it) rather than waiting for when it was due.

I can't quite grasp what we did in the article.

We have 12 million due from Wood next year.

Did we take a loan now and then need to pay back more with interest next year?

Why couldn't we have taken 10 or 11 right now for the 12 we are due?

Jan-2022 BFC sold Chris Wood to NUFC. Transfer fee reported to be £25 million. Release clause reported to have been triggered. It wasn't reported at the time, but we now know that £12.5 million of the transfer fee is due to be paid by NUFC by 1st Feb 2023. We know this because on 3rd May 2022 BFC entered into an agreement with Macquarie to borrow money from Macquarie which is secured against the payment due in respect of Chris Wood's transfer from NUFC. The security agreement doesn't state how much money BFC have received from Macquarie. However, Bournemouth have done very similar deals with Macquarie. The last one was done by Bournemouth in Sept 2021 - details earlier on this thread - and details are reported in Bournemouth's latest accounts. Based on Bournemouth deal, we can estimate that BFC's deal will have been at a discount of 4% to the amount due from NUFC, so £12 million rec'd from Macquarie on 3rd May 2022 rather than £12.5 million due from NUFC by 1st Feb 2023.

So, £12m now (estimated) instead of £12.5m in 9 months time.

[Chester Perry]

Jan-2022 BFC sold Chris Wood to NUFC. Transfer fee reported to be £25 million. Release clause reported to have been triggered. It wasn't reported at the time, but we now know that £12.5 million of the transfer fee is due to be paid by NUFC by 1st Feb 2023. We know this because on 3rd May 2022 BFC entered into an agreement with Macquarie to borrow money from Macquarie which is secured against the payment due in respect of Chris Wood's transfer from NUFC. The security agreement doesn't state how much money BFC have received from Macquarie. However, Bournemouth have done very similar deals with Macquarie. The last one was done by Bournemouth in Sept 2021 - details earlier on this thread - and details are reported in Bournemouth's latest accounts. Based on Bournemouth deal, we can estimate that BFC's deal will have been at a discount of 4% to the amount due from NUFC, so £12 million rec'd from Macquarie on 3rd May 2022 rather than £12.5 million due from NUFC by 1st Feb 2023.

So, £12m now (estimated) instead of £12.5m in 9 months time.

and your right in NPV terms circa 4% (if it is really in that ball park) looks good in the current economic scenario

[Paul Waine]

I'm no financial wiz but I find all these rumours around our clubs management of money frightening and the alarm bells are certainly ringing in my head.

The club has received income (mainly tv revenue) of over £100 million a season. It pays out wages of not far short of £8 million every month. Plus transfer fees at pre-defined intervals. Yes, the accounts inform us BFC has a loan of £65 million from MSD - and that "a significant" amount, to be agreed between BFC and MSD will require to be repaid if we finish this season in 18th position (Norwich and Watford have already taken the other two relegation positions, 19th and 20th). So, bringing in £12 million 9 months early is sensible risk management. Yes, we are concerned about where the club finishes the season, but planning cashflow requirements shouldn't itself by "frightening" and set "alarm bells ringing."

In this case, this isn't rumour. It's public domain "black and white" reporting directly from Companies House filing.

UTC

[Paul Waine]

duplicate

[AshevilleNCClaret]

Jan-2022 BFC sold Chris Wood to NUFC. Transfer fee reported to be £25 million. Release clause reported to have been triggered. It wasn't reported at the time, but we now know that £12.5 million of the transfer fee is due to be paid by NUFC by 1st Feb 2023. We know this because on 3rd May 2022 BFC entered into an agreement with Macquarie to borrow money from Macquarie which is secured against the payment due in respect of Chris Wood's transfer from NUFC. The security agreement doesn't state how much money BFC have received from Macquarie. However, Bournemouth have done very similar deals with Macquarie. The last one was done by Bournemouth in Sept 2021 - details earlier on this thread - and details are reported in Bournemouth's latest accounts. Based on Bournemouth deal, we can estimate that BFC's deal will have been at a discount of 4% to the amount due from NUFC, so £12 million rec'd from Macquarie on 3rd May 2022 rather than £12.5 million due from NUFC by 1st Feb 2023.

So, £12m now (estimated) instead of £12.5m in 9 months time.

Thanks for the clarification... As an American, it is not quite the same verbiage I would use, but it makes sense now.

[RMutt]

Walmart is loaded but still screw over their suppliers with extended payment terms.

A large number of transfer fees are paid in instalments. Can only assume that there was nothing in the release clause about it being paid upfront.

Yes, and of course deliberately, and non negotiated, delayed payments. Thanks again.

[NRC]

can someone create a SPAC to allow some of us financial mortals to get in on the action?

[Chester Perry]

can someone create a SPAC to allow some of us financial mortals to get in on the action?

i wouldn't recommend it

[AfloatinClaret]

Here you go Taio:
https://en.wikipedia.org/wiki/Factoring_(finance)

[taio]

Here you go Taio:
https://en.wikipedia.org/wiki/Factoring_(finance)

What? Doesn't ease my concerns. If we need to use such a vehicle now to ease existing cash flow problems then I dread to think what happens if we get relegated.

[Elizabeth]

The club has received income (mainly tv revenue) of over £100 million a season. It pays out wages of not far short of £8 million every month. Plus transfer fees at pre-defined intervals. Yes, the accounts inform us BFC has a loan of £65 million from MSD - and that "a significant" amount, to be agreed between BFC and MSD will require to be repaid if we finish this season in 18th position (Norwich and Watford have already taken the other two relegation positions, 19th and 20th). So, bringing in £12 million 9 months early is sensible risk management. Yes, we are concerned about where the club finishes the season, but planning cashflow requirements shouldn't itself by "frightening" and set "alarm bells ringing."

In this case, this isn't rumour. It's public domain "black and white" reporting directly from Companies House filing.

UTC

Our club borrowed £65 million pound to finance this takeover.

A significant part of this has to be repaid if we are relegated this season.

The club borrows more money because it can't wait for the second and final instalment for Chris Wood due in less than a year.

If I have got this right , I cannot get my head around the complacency of some fans in these financially worrying times for the club.

[Paul Waine]

Our club borrowed £65 million pound to finance this takeover.

A significant part of this has to be repaid if we are relegated this season.

The club borrows more money because it can't wait for the second and final instalment for Chris Wood due in less than a year.

If I have got this right , I cannot get my head around the complacency of some fans in these financially worrying times for the club.

Hi Elizabeth, the loan from Macquarie, secured against the money due from NUFC by 1st Feb 2023 costs less than half the interest rate that the £65m loan from MSD costs. If the club has to pay any sums to MSD at the end of this season (I'm sure most BFC fans hope that isn't the case) then the loan from Macquarie costs roughly half the interest rate that the MSD loan is costing. I don't think any fans are complacent about the club's position in the Premier League. However, selling Chris Wood for £25 million, half paid at the time and the other half now covering loan from Macquarie is good financial business.

UTC

[jedi_master]

Hi Elizabeth, the loan from Macquarie, secured against the money due from NUFC by 1st Feb 2023 costs less than half the interest rate that the £65m loan from MSD costs. If the club has to pay any sums to MSD at the end of this season (I'm sure most BFC fans hope that isn't the case) then the loan from Macquarie costs roughly half the interest rate that the MSD loan is costing. I don't think any fans are complacent about the club's position in the Premier League. However, selling Chris Wood for £25 million, half paid at the time and the other half now covering loan from Macquarie is good financial business.

UTC

Why is it good financial business to pay needless interest on a needless loan to forward pay yourself money that you’re guaranteed to be getting in a years time anyway? Why not just wait (and thus not take a loan out and pay the needless interest) for the money you’re due - unless of course you’re in dire financial straits and needed that money immediately?

Not picking on you Paul with it, it’s a genuine query. My financial knowledge extends to my own bank accounts only!

Edit - To put another way, why are we seemingly requiring this money to partially allay future loan repayments upon relegation now? What was the plan without Newcastle buying Wood?

[Jakubclaret]

Hi Elizabeth, the loan from Macquarie, secured against the money due from NUFC by 1st Feb 2023 costs less than half the interest rate that the £65m loan from MSD costs. If the club has to pay any sums to MSD at the end of this season (I'm sure most BFC fans hope that isn't the case) then the loan from Macquarie costs roughly half the interest rate that the MSD loan is costing. I don't think any fans are complacent about the club's position in the Premier League. However, selling Chris Wood for £25 million, half paid at the time and the other half now covering loan from Macquarie is good financial business.

UTC

You may wish to reconsider that if he potentially scores the goal that relegates us which is possible.

[Paul Waine]

You may wish to reconsider that if he potentially scores the goal that relegates us which is possible.

Are you sure Chris Wood will be in the Newcastle team? We need to be successful against whoever is put in front of us, or at least match Leeds points total for our remaining 3 games.

UTC

[Paul Waine]

Why is it good financial business to pay needless interest on a needless loan to forward pay yourself money that you’re guaranteed to be getting in a years time anyway? Why not just wait (and thus not take a loan out and pay the needless interest) for the money you’re due - unless of course you’re in dire financial straits and needed that money immediately?

Not picking on you Paul with it, it’s a genuine query. My financial knowledge extends to my own bank accounts only!

Edit - To put another way, why are we seemingly requiring this money to partially allay future loan repayments upon relegation now? What was the plan without Newcastle buying Wood?

No worries, jedi, I'm happy to debate.

The club has a loan from MSD for £65 million at LIBOR + 8%. Last time I checked Libor - 3 months Libor is most likely - it was around 1.25%. So, MSD interest is 9.25% (it will change as Libor changes). Macquarie loan is costing (less than) 4% for 9 months - this is based on Bournemouth's disclosure in their accounts on their most recent loan from Macquarie, secured against one of their transfers - or 5.3% p.a.

So, if the club needs to pay down a "significant amount" of the MSD loan, the advance from Macquarie is a lot cheaper and saves the club roughly £500,000.

Of course, the club will also have other spending that needs to be financed. Like any repayment to MSD these all depend on where the club finishes the season. What was the plan if we'd not sold Chris Wood in Jan? Too many variables: would Wood have scored winners in several games? Would we already be safe from relegation? Or would we already be down and with or without Sean Dyche having gone? These are the things with cashflow management, you can have longer term strategies, but you also need to have short term tactics to achieve the best outcome at every opportunity.

UTC

[Elizabeth]

Hi Elizabeth, the loan from Macquarie, secured against the money due from NUFC by 1st Feb 2023 costs less than half the interest rate that the £65m loan from MSD costs. If the club has to pay any sums to MSD at the end of this season (I'm sure most BFC fans hope that isn't the case) then the loan from Macquarie costs roughly half the interest rate that the MSD loan is costing. I don't think any fans are complacent about the club's position in the Premier League. However, selling Chris Wood for £25 million, half paid at the time and the other half now covering loan from Macquarie is good financial business.

UTC

Hi Paul

If the Macquarie loan was a one off for the club to bring in money for future investment I wouldn’t pay it any attention. That is unlikely to be the case though.
I am not pacified by comparing interest rates on loans and believe I am witnessing financial madness going on at our club

UTC

[JohnMcGreal]

The club has a loan from MSD for £65 million at LIBOR + 8%. Last time I checked Libor - 3 months Libor is most likely - it was around 1.25%. So, MSD interest is 9.25% (it will change as Libor changes). Macquarie loan is costing (less than) 4% for 9 months - this is based on Bournemouth's disclosure in their accounts on their most recent loan from Macquarie, secured against one of their transfers - or 5.3% p.a.

So, if the club needs to pay down a "significant amount" of the MSD loan, the advance from Macquarie is a lot cheaper and saves the club roughly £500,000.

When's the open top bus parade?

[Jakubclaret]

Are you sure Chris Wood will be in the Newcastle team? We need to be successful against whoever is put in front of us, or at least match Leeds points total for our remaining 3 games.

UTC

No, are you sure he won’t be? It’s likely he’ll feature at some point & I’ll reiterate it’s possible he could score the goal that could send us down & that being the case it won’t be good financial sense far from it.

[aggi]

No, are you sure he won’t be? It’s likely he’ll feature at some point & I’ll reiterate it’s possible he could score the goal that could send us down & that being the case it won’t be good financial sense far from it.

What if he scores an own goal?

[Chester Perry]

What if he scores an own goal?

I want it to be a perfect hattrick of own goals each assisted by Tripps

[Jakubclaret]

What if he scores an own goal?

Will it be possible for an opposition own goal to get us relegated, I know it’s a massive thing statistics on this forum & what some posters live & die by, but statistically what are the chance of a striker scoring an own goal as opposed to scoring a goal in the oppositions net, I’d suggest 1 is far more likelier than the other.