by Speedo » Fri Jan 11, 2019 2:40 pm
Heisen wrote: ↑Fri Jan 11, 2019 2:12 am
Dear me, as if Ashley isn't bad enough, his only serious competition is someone having a f***ing whip round.
To be fair struggle to get investment to purchase the club does not necessarily impact the post-takeover spending power. As the purchase would clear the debt to Mike Ashley, we could reasonably take out a loan against future income (which could be very short term, e.g. against the rest of this season's income, or longer term revenues) to invest; as a business worth £300m and an annual turnover in the region of £120m, it would be straightforward and financially manageable to get a loan to provide funds for immediate investment in playing staff or training ground improvements. That could be a short term loan until TV money arrives, or a longer term investment e.g. mortgaging the training ground to finance investment in it. Of course, investing with interest-free capital (i.e. interest-free loans or pure cash) is the most favourable solution, but it's not a crisis if some amount of paid financing is required.
Also part of the issue with the way Mike Ashley runs NUFC at the moment is he runs it like a retailer - i.e. cash is king. This is a naive approach in a business that sees large capital fluctuations across the year (e.g., transfer windows, irregular TV money, 3 months a year without home games). Short-term financing that smooths that curve would enable spending without a significant financial cost.
[quote=Heisen post_id=852866 time=1547172773 user_id=229]
Dear me, as if Ashley isn't bad enough, his only serious competition is someone having a f***ing whip round.
[/quote]
To be fair struggle to get investment to purchase the club does not necessarily impact the post-takeover spending power. As the purchase would clear the debt to Mike Ashley, we could reasonably take out a loan against future income (which could be very short term, e.g. against the rest of this season's income, or longer term revenues) to invest; as a business worth £300m and an annual turnover in the region of £120m, it would be straightforward and financially manageable to get a loan to provide funds for immediate investment in playing staff or training ground improvements. That could be a short term loan until TV money arrives, or a longer term investment e.g. mortgaging the training ground to finance investment in it. Of course, investing with interest-free capital (i.e. interest-free loans or pure cash) is the most favourable solution, but it's not a crisis if some amount of paid financing is required.
Also part of the issue with the way Mike Ashley runs NUFC at the moment is he runs it like a retailer - i.e. cash is king. This is a naive approach in a business that sees large capital fluctuations across the year (e.g., transfer windows, irregular TV money, 3 months a year without home games). Short-term financing that smooths that curve would enable spending without a significant financial cost.
