The Problems Standing In The Way Of Newcastle Sale


It seems from reports in the Times and Telegraph early this morning, it seems a deal with Barry Moat could still be very close.

Mike Ashley -and-Barry-Moa-001

Ashley and Moat – shown recently

Moat, who would appoint Alan Shearer as manager, is the preferred bidder of Seymour Pierce and has been for a couple of weeks, but for almost the very first time, Derek Llambias, Newcastle’s Managing Director, has confirmed that talks are nearing an end and a deal could be made- with Moat:

Derek said:

“We have parties who are more or less at signing stage,” “It’s about getting money to the bank. We are in negotiations with Barry.”

Llambias also reiterated that no other consortium is involved in substantive discussions with the club. That after he had constantly said that two other consorita were involved, and barrty Moat could be in 3rd place.

Derek continued:

“They are well-intentioned but they have to have proof of funds before we continue and it is a very tall order and unrealistic in three weeks.”

“It is a dream and a very frustrating thing. Football is tough and very fickle. They are way behind.”

We assume these include the 401 group, who we never thought had a snowball’s chance in hell of buying the club, not at this point in any case, since they haven’t even done any due diligence.

We assume Llambias was mentioning the other consortia as a means of pressuring Moat into a £100M deal.

But it still seems that for the deal to be made a couple of things are still needed to satisfy Barclays.

There appear to be two financial issues in play:

  1. Cash Flow – the club is down to £50M in revenue and have so far reduced the wage bill from £74M to £48M, but another £10M – £15M needs to be cut off the bill.
    The wage bill was 74% of revenues last year which was high and should have been around 60%.
    So the wage bill has to be somewhere between £30M (60%) and £37M (74%), which means at least another £10M has to be cut.
  2. The club still has a £40M overdraft and that of course is too high, and also adds to the cash flow problem, because of the interest that needs to be paid on that.
    Barclays wants this overdraft reduced substantially, and it will be switched to the Moat consortium at the time of the sale.

Both the above problems can be solved by selling say another 3 or 4 high wage earners at the club – so the transfer fees will help significantly reduce the overdraft.

Players moving out – like Geremi, Xisco, Coloccini and Guteierrz will help reduce the wage bill.

But this is not easy, because how does Newcastle keep a credible squad in place if say 3 top players, or more, who may include even Steve Taylor, leave the club within the next 10 days.

Loan deals are said to be in the making, and will be executed just before the transfer window closes, and there could also be some deals for players for low transfer fees to fill out the squad.

These are the problems we think still confront Barry Moat and Ashley, and of course Barclays Bank and Seymour Harris.

We’ll have to hope that a deal can be reached by Monday, when an announcement is planned by the club.

But also that announcement may not be definitive, and may only extend the deadline for the sale, until even the end of the transfer window – to allow the player sales to be completed.

But who would have thought this thing would have occupied the whole of the summer, to the detriment of Newcastle’s preparation for the Championship.

We have to thank the coaching staff and players for starting the season well, under this cloud of confusion.

A win today at Crystal Palace would be fantastic.

Comments welcome.



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91 comments so far

  • MickMack

    Aug 22, 2009 at 12:25 AM

    Comment #1

    Rodzilla (legend) = Dennis Twice? Ed Speed? Ganiyu? I could be wrong – I apologise if I am

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  • Tino 11

    Aug 22, 2009 at 12:32 AM

    Comment #2

    MickMack – surely not Ganiyu, he’s a dark horse that Rodzilla though!

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  • Tino 11

    Aug 22, 2009 at 12:36 AM

    Comment #3

    Good article by the way ED.

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  • bill

    Aug 22, 2009 at 12:49 AM

    Comment #4

    We really need someone to come in and bankroll the club for a couple of seasons.

    From what I gather from the press is appears that Barry Moats backers have money but only seem willing to show the cash once he has completed the deal.

    I don’t know how this stacks up, but we will need a cash injection for players if we are to have any chance or getting promotion at the first attempt.

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  • Tino 11

    Aug 22, 2009 at 12:52 AM

    Comment #5

    Ah Bill, this is late for you!

    I think Ashley has agreed a fee with Moat, however i have a feeling he will pretend he’s changed his mind or pull some other stunt to get Moat to up the offer on Monday and put him under pressure as the fans will be expecting an announcement.

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  • LBToon

    Aug 22, 2009 at 12:57 AM

    Comment #6

    Ed, good article. Realistic analysis of where NUFC is at the moment.

    Keep in mind, the financial problems date back several years. The difficulty in selling the club confirms the constraining environment Ashley had to work under. Compound this with his inexperience in football and the problems with his appointed management team, and the problem got compounded.

    Fans need to accept quality players need to go to fix the books. This whole episode has shown off field problems have a direct impact on on field performance.

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  • Rodzilla

    Aug 22, 2009 at 12:58 AM

    Comment #7

    I AM THE MAIN PROBLEM STANDING IN THE WAY OF MIKE ASHLEY!

    FOR IT IS I, FAN, AND A VERY FAT ONE AT THAT, IN FACT SO FAT THERE IS NO METHOD OF MEASUREMENT KNOWN TO MAN TO GAUGE MY GIRTH; I AM THE SOLE REASON FOR THE FAILURES AND GLORY OF NUFC, SO HEREBY ACKNOWLEDGE MY EPIDERMAL RESPONSIBILITY FOR maybe being a little bit thick.

    ….er, discuss…

    (leave yers to it)

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  • Geordiedoonsooth

    Aug 22, 2009 at 1:00 AM

    Comment #8

    We have well and truely f*cked by Ashley what a w*nker

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  • baro

    Aug 22, 2009 at 1:04 AM

    Comment #9

    So one group is Barry Moat, the other is Fans 401 Ghraham Roberts or somebody, than who is the other one???

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  • Rodzilla

    Aug 22, 2009 at 1:19 AM

    Comment #10

    baro, I heard Carol Vorderman and Sue Lawley had joined the 501 Marsupial Consortium, and were looking towards merging with Farenheit 451. Apparently.

    …would be a fantastic move for the town – woop woop, it’s a black and white army!

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  • Rodzilla

    Aug 22, 2009 at 1:26 AM

    Comment #11

    ….Ashley, Mike Ashley, and Michael Ashley.

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  • baro

    Aug 22, 2009 at 1:26 AM

    Comment #12

    Rodzilla

    Who the hell r they??

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  • Rodzilla

    Aug 22, 2009 at 1:31 AM

    Comment #13

    Baro, exactly.

    …nothing is inevitable

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  • baro

    Aug 22, 2009 at 1:47 AM

    Comment #14

    why doesn’t anybody look at Haris Vuckic’s talent?
    One of the strongest players i have ever seen. He is left foot who is 16, and just turned 17. Newcastle should play with him.

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  • Rodzilla

    Aug 22, 2009 at 1:51 AM

    Comment #15

    We have plenty of young creative midfielders coming through the ranks. I’d take Midge Ure from Aberdeen anyday.

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  • Rodzilla

    Aug 22, 2009 at 1:52 AM

    Comment #16

    ..sorry baro

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  • baro

    Aug 22, 2009 at 1:53 AM

    Comment #17
  • Ben_BKK

    Aug 22, 2009 at 1:57 AM

    Comment #18

    Been on the booze a bit Rodzilla? 😛

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  • Rodzilla

    Aug 22, 2009 at 1:58 AM

    Comment #19

    …cool.

    One for the future.

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  • Rodzilla

    Aug 22, 2009 at 1:59 AM

    Comment #20

    Ben_BKK

    ….it’s Friday night. Ask me another question……

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  • baro

    Aug 22, 2009 at 1:59 AM

    Comment #21

    Rodzilla

    Have you ever seen an 6’4 16-17 year old? Who captains his countries u-19 side? Real Madrid and AC Milan after him. Just think about that?

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  • Rodzilla

    Aug 22, 2009 at 2:00 AM

    Comment #22

    …baro, just did.

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  • baro

    Aug 22, 2009 at 2:01 AM

    Comment #23

    Rodzilla Who??

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  • Rodzilla

    Aug 22, 2009 at 2:01 AM

    Comment #24

    …nah seriously though, well pleased he’s ‘on our books’.

    ….just hope he stays on them

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  • baro

    Aug 22, 2009 at 2:17 AM

    Comment #25

    Alright you guys im out…

    Hope fully we can a win tonight.. I’m sure we can make it 3 in a row… Because we now have Shola Ameobi….And Jonas now stayin…He can do one-2 passes to Jose-Enrique…Nolan and Smith can do there slide tackles…Taylors can counter attack….Hope fully Haris Vuckic plays…..NIle Ranger gets his first goal…Tamas Kadar debut…And Harper on bench……Tim Krul starting…Bradden Inman replacing Joey Barton …. Danny GUthrie replacing Duff..

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  • Rodzilla

    Aug 22, 2009 at 2:22 AM

    Comment #26

    …later, Baro. KTF.

    “The Problems Standing In The Way Of Newcastle Sale”

    …fking nobheads making sensationalist stories out of nowt, and putting potential billionaire (and normally reclusive) buyers off ever wanting to invest in a bad publicity shit-magnet, to gain some crazy sort of pseudo credibility.

    ….hmmmm.

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  • Rodzilla

    Aug 22, 2009 at 2:26 AM

    Comment #27

    …yeah, thought as much. …all a bunch of gaze……

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  • Rodzilla

    Aug 22, 2009 at 2:43 AM

    Comment #28

    I hereby certify myself, A5 HIT!

    (small, yet half the size of a big letter in a hardback A4 envelope)

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  • Rodzilla

    Aug 22, 2009 at 2:55 AM

    Comment #29

    …….

    …..
    ..

    why do my neighbour’s dogs always bark!?

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  • Rodzilla

    Aug 22, 2009 at 2:56 AM

    Comment #30

    …….neet neet, amoff noo

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  • messi_is_king

    Aug 22, 2009 at 3:32 AM

    Comment #31

    barry moat seems to hav even less money available for future transfers than mike ashley

    okay moat is a newcastle fan and will bring back shearer – but how can he takethe club forward???

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  • ginkoh

    Aug 22, 2009 at 4:47 AM

    Comment #32

    So how can Ashley take the club forward ? Maybe he still don’t know even how many players we have now. What a joke, Simpson still don’t know who’s Ashley because he never seen Ashley.

    At least Moat know what the supporters and team want. Not just know only what he want like Ashley. I guess if you ask Ashley ” Do you know our Striker scored hat-trick las game ? ” he will reply ” OH ! yes I know. It’s Great !! but what’s his name ? ”

    Oh maybe Ashley know Tottenham squad better than us. (—“—)

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  • Rangerman

    Aug 22, 2009 at 5:01 AM

    Comment #33

    So we could be selling Taylor, Jonas and Coloccini just so Moat can buy us?

    Not the best idea.

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  • Rangerman

    Aug 22, 2009 at 5:05 AM

    Comment #34

    So how can Ashley take the club forward ? Maybe he still don’t know even how many players we have now. What a joke, Simpson still don’t know who’s Ashley because he never seen Ashley.

    At least Moat know what the supporters and team want. Not just know only what he want like Ashley. I guess if you ask Ashley ” Do you know our Striker scored hat-trick las game ? ” he will reply ” OH ! yes I know. It’s Great !! but what’s his name ? ”

    Oh maybe Ashley know Tottenham squad better than us. (—”—)

    …..

    Moat knows that if he gives his pal Shearer the job the fans won’t get on his back for having to sell off most of the squad without any investment going back in to the playing side.

    Being a Newcastle fan doesn’t mean anything if you haven’t got the money to move the club forward, all this talk of American backers but what sort of group expects you to take out massive loans to get the club before committing any money?

    Doesn’t happen.

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  • baro

    Aug 22, 2009 at 5:06 AM

    Comment #35

    I wlll bet on anything to u guys if you don’t laugh…

    http://www.youtube.com/watch?v=7qAWWqyfx50

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  • baro

    Aug 22, 2009 at 5:08 AM

    Comment #36

    Rangerman

    I agree with u. Jonas, Coloccini, Taylor gone………

    Than here we go Leeds #2.

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  • ginkoh

    Aug 22, 2009 at 5:09 AM

    Comment #37

    Maybe i’m too harsh for Ashley The fact is he has many chances to make anything right but he never done that.

    I have no idea why he cannot make decision for the club not himself. and why he have to support and believe Liambias so much. (You know Liambias is not football base he’s come from casino business) When Ashley/Mort stay in charge we have no problem at all. But after Liambias come in…….

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  • ginkoh

    Aug 22, 2009 at 5:24 AM

    Comment #38

    I pretty sure if Shearer come in, Taylor will not leave. If Moat appoint Shearer and sell the players as he wish, I don’t think Shearer will stay in charge for long. Same situation like Keegan/Ashley/Wise

    But Moat is local what’s reason to do that ? I don’t think the press stated that we have to sell another 4 players before Moat can take over the club is true. It’s unreasonable at all because if Moat know he have no fund to take over the club he should not come at first. If you want to buy house around 1m and you have only 500k should you buy it ?

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  • custurd

    Aug 22, 2009 at 6:10 AM

    Comment #39

    Just a couple of questions…..

    “We assume these include the 401 group, who we never thought had a snowball’s chance in hell of buying the club, not at this point in any case, since they haven’t even done any due diligence.”

    Surely the whole concept of due dilligence is to allow any potential acquirer to evaluate a target companies assets? Wouldn’t any due dilligence be rendered moot by cashleys constant asset stripping??

    “The club still has a £40M overdraft and that of course is too high, and also adds to the cash flow problem”

    What has happened to the tens of millions of pounds from the sales of Bassong, Duff, Martins, Edgar, on top of the quoted £26 million in saved wages from departed high earners. Plus, didn’t we receive an £11 million parachute payment?

    Since ashley arrived sales have far outstripped purchases, in fact, has he actually put anything into the club apart from the boot?

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  • NUFC HOPE

    Aug 22, 2009 at 6:24 AM

    Comment #40

    i dont think we can afford to lose jonas. and at this point colo has been playing well (although is pace is an issue always). i have not seen much of his replacement yet so i cant say much (colo is huge on the wage bill tho. if it gets moat, and shearer, in place than its worth it) but jonas, on the left as a righty is key.he can cut in to the box and bend something in and can cause problems in the box although it seems that he doesnt have the confidence to shoot on break aways – like we saw at reading. he does work extremely well with with jose enrique and is not afraid to take on defenders. I WANT TO SEE SPIDEY. at least once before he leaves. get our subs out before this player.

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