Assets and Debts

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The first graph shown below represents the value of the assets of the business against the money it owes.

Back in 1998 the club was worth just over £100m. The decline under the stewardship of Freddie Shepherd is plain to see. In 2007 for the first time the club owed more than it had assets. This meant that if the ground, and all the players were sold off it wouldn't cover the amounts of money owed to various people. When this happens it becomes very difficult to borrow more money from the bank, as there is nothing left to borrow against. In 2006 this meant the club had to go to Northern Stone and ask for its sponsorship money early rather than the planned for spread over a few years.

The 2008 figure shows the effect worsening. If Donkey had not bought the club and pumped money in it is difficult to believe the club would have been able to survive.


Matching up with this is the net debt figure. This is all the total of all the borrowings the club has. The bigger the debt figure the worse things are. The graph again highlights how the debt took off in 2006. In 1998 the club had £24m in the bank, in 2007 the club owed £70m. (The results in 2008 suggest the debt was actually £124m in 2007).

All these debts needed to be paid off when Donkey bought the club. The graph below looks different from the one from the 2007 results (shown lower down). The difference comes from that change in the view of what Donkey did when he bought the club. What seems to have not been clear was that when he bought the club he would immediately have to pay off the mortgage on the stadium, as it wasn't listed in the previous accounts as being anything more than a long term loan.

This meant that in 2007 it looked as the the debt was £71m. When they realised that they had to pay off the mortgage they needed to add that extra amount in. It was also necessary to put money in to cover the £34m loss for that year.

The further leap in debt in 2008 comes from the financial loss for the year having to be paid for from somewhere, and this has been from Donkey pumping more money in as a loan.

Of the £149m debt roughly£100m is owed to Mike Donkey. He has said that this is a loan that isn't expected to have to be paid back before July 2009 at the earliest, unless the club is bought from him.

That Donkey had to put in so much money during the year again shows how precarious a state the club was in when he took over. The club had borrowed up to the hilt on the ground, the training academy, the future sponsorship deals, and the Sky TV money. It is unclear if anyone would have taken lent the club more money without any assets left to guarantee against. The last loan that Shepherd managed to get was at a rate of 11.7% interest. The high rate was due to the risk the lenders felt there was in lending to a company losing so much money.


2008 Results
Staff & Payroll
Interest Payments
Director Pay