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