[Archived] Liverpool In Difficulties

[philipl]

This will be worth watching given that places 4 to 10 are in the shake-up this season.

Liverpool's financing difficulties are a multiple worse than Man U's

[LeftWinger]

This will be worth watching given that places 4 to 10 are in the shake-up this season.

Liverpool's financing difficulties are a multiple worse than Man U's

I'd love to see them do a Leeds. I have an irrational dislike of Liverpool.

[Bazzanotsogreat]

This will be worth watching given that places 4 to 10 are in the shake-up this season.

Liverpool's financing difficulties are a multiple worse than Man U's

This is coming from the same poster, who has proclaimed the same thing about man utd- yet look at their recent record-breaking profits.

I wouldn’t listen too much to red-tops on this kind of financial issue (no offence nicko).

Lets face it no-matter what happens the big three of English football , will always be there are there about and if push comes to shove the US owners will simply sell-up. That’s the benefit of being a super-club

[Cocker]

Everyone should leave them alone. This is just the gutter press trying to stir things up.

By the way, I couldnt give a stuff about Liverpool and hope they NEVER win the league again.

[Flopsy]

bazza, dont get turnover and profits mixed up, there's a hell of a difference.

Utd are on shaky ground, Liverpool are dancing on quicksand

You're right about allways be a buyer, but it doesnt neccessarily mean that they'll get any where near the money they think its worth. I mean with teh current world wide financial climate, Hedge funds are going to be squeezed for funds, let alone blowing them on an investement so volatile as a Football team.

[Bazzanotsogreat]

bazza, dont get turnover and profits mixed up, there's a hell of a difference.

Utd are on shaky ground, Liverpool are dancing on quicksand

You're right about allways be a buyer, but it doesnt neccessarily mean that they'll get any where near the money they think its worth. I mean with teh current world wide financial climate, Hedge funds are going to be squeezed for funds, let alone blowing them on an investement so volatile as a Football team.

Flopsy my family own a small finance company- I Am all too aware of turnover and profits

[philipl]

Man U are not out of the woods by any means despite their record breaking recent results. Wait until Red Football, the parent files its accounts in April.

Liverpool now have an unpalatable choice; face massive write-offs and broken covenants by abandonning the new Anfield. Or more likely a forced sale with Dubai the probable buyer and not with the profits to Gillet and Hicks that the Times recently speculated about.

As Dubai was the target buyer Ashley had in mind when he saw a chance to make a quick profit on selling on Newcastle, Liverpool's woes have a very direct impact on us at the moment. If DIC were the owner of Newcastle then the likes of Mourinho would definitely be on the radar as the next manager.

All credit to the Mirror for going into this story when most other papers have been very superficial.

[Scotty]

This is coming from the same poster, who has proclaimed the same thing about man utd- yet look at their recent record-breaking profits.

I wouldn’t listen too much to red-tops on this kind of financial issue (no offence nicko).

Lets face it no-matter what happens the big three of English football , will always be there are there about and if push comes to shove the US owners will simply sell-up. That’s the benefit of being a super-club

As I understand it, Man U's "record-breaking profits" are only just enough to pay the interest on all their debts. In other words, they have to maintain their current level of success just to service their debts.

While I agree that they will probably never face the sort of financial meltdown that occured at Leeds, it doesn't seem to be a particularly healthy state of affairs.

As for Liverpool, they seem to be in a slightly worse state as they have a new ground to pay for - and it would seem they can't really afford it. Which means they will continue to lag behind the likes of Man U, Chelsea and Arsenal in terms of matchday revenue.

[modes98]

Flopsy my family own a small finance company- I Am all too aware of turnover and profits

Isn't it purely the amount of interest that's doing these clubs in? The profits don't cover the interest payments or just do so they in effect never pay off the capital.

Arsenal seem to be a prime example of how to run a club. They are raking it in with the new stadium.

[Bazzanotsogreat]

Man U are not out of the woods by any means despite their record breaking recent results. Wait until Red Football, the parent files its accounts in April.

Liverpool now have an unpalatable choice; face massive write-offs and broken covenants by abandonning the new Anfield. Or more likely a forced sale with Dubai the probable buyer and not with the profits to Gillet and Hicks that the Times recently speculated about.

As Dubai was the target buyer Ashley had in mind when he saw a chance to make a quick profit on selling on Newcastle, Liverpool's woes have a very direct impact on us at the moment. If DIC were the owner of Newcastle then the likes of Mourinho would definitely be on the radar as the next manager.

All credit to the Mirror for going into this story when most other papers have been very superficial.

DIC are on asset stripping organistion, they recently had a bid turned down for one of the big supermarkets. DIC would be bad for any club, but good for the clubs rivals.

Leeds were and never have been in the same As the big three clubs , they have an ability to generate extra revenue due to their global name and reputation.

If Liverpool or United were to get themselves in a Leeds type position, there owners will simply sell to another North American or far-east consortium who are attracted to there global brand

[Bazzanotsogreat]

Isn't it purely the amount of interest that's doing these clubs in? The profits don't cover the interest payments or just do so they in effect never pay off the capital.

Arsenal seem to be a prime example of how to run a club. They are raking it in with the new stadium.

Arsenal have huge debts also

[Flopsy]

fair enough. I saw record turnover, not profits and as interest rates are going up that'll effect the interest payments on the massive loans they've taken out surely?

[modes98]

Arsenal have huge debts also

Chelsea? Are there no clubs without debt these days.

I assume Arsenal's debt is alot less and the interest payments aren't as high a percentage of the profit as Manyoo or Liverpool?

Arsenal debt free by 2030, At least they have a plan lol

[brian_gallagher85]

Do clubs like Chelsea and Villa officially have debts though?

Just not sure if they have been bought on borrowed cash like Utd and Liverpool. I know they'd be screwed if the sugar daddys pulled the plug, but they aren't in debt per se?

[philipl]

DIC are an organisation which uses very astute managers and look for best returns but no way are they asset strippers in the mould of most American funds. DIC are very much in the business of value building, not maximum short term value-extraction. They are Dubai's diversification portfolio for when the oil is gone/going so they are not into strangling golden-egg laying geese.

The Glazers are asset sweaters, they make every penny and every customer work as hard as they possibly can and spend/gamble within the possible. They have £650m in debt they can service but have no realistic plans for repaying the principle other than to look opportunistically to roll it to other lenders to their advantage. A further serious down-turn in the world banking situation eg the overhang on credit cards coming home to roost as badly as sub-prime mortgages have, and the Glazers rolling room might not be enough.

Arsenal are a classic example of building for the future and structuring their business soundly- they deliberately kept football spending under strict control whilst the stadium was under construction and are enjoying the rewards now. The Emirates stadium is soundly financed using instruments Rothschilds created for them which gives the club security on repayment and debt financing without giving title to gate receipts although if Arsenal missed revenue performance targets (improbable with the new TV deals!) would probably trigger some unpleasant clauses. I had read that the Emirates would now be paid off by 2020 by which time the club will be enjoying the £100m+ pa earning capacity of a stadium which will probably still be fit for purpose another 60 years' hence.

The article my initial post links to gives comparative details for Arsenal, Man U and Liverpool.

"Last year, Liverpool's operating profits were in the region of £30m, meaning the loan would be almost 20 times operating profits. In comparison, Manchester United's are eight times, and Arsenal's just four."

I have not been following Villa that closely but they will be either debt free or nearly debt free. I don't know whether Abramovich has been funding Chelsea by debt to himself or capital recently but they were initially funded by Abramovich commiting share capital.

[Lathund]

I'd love to see them do a Leeds. I have an irrational dislike of Liverpool.

Disliking Liverpool is perfectly rational.

[LeftWinger]

Philip - you seem to have a very good understanding of all these things.

What do you think are the chances % wise of Liverpool going bust?

Are they too big a brand to go bust? Or could they theoretically do a Leeds?

[brian_gallagher85]

Disliking Liverpool is perfectly rational.

I used to be a Liverpool fan, (I was young OK) and even up to 3-4years ago I didn't have anything against them, most likely because I am surounded by a houseful of them. However ever since Benitez took over I have developed an ever increasing dislike for him, the club and their fans.

I don't know if it's solely him balling on about money, (after he spent £25 odd million on a striker and £6m on an untested defender) and the fans have become bigheaded ######....more so than usual. I keep getting the Champions League thrown at me any time the debate arises....luckily I can respond with it took you lot 12 games to win it, how many Premiership trophies at Anfield these days

[philipl]

They are a million miles from going bust - Possibly comparable with Leeds before the season they made the CL semi-finals. Ridsdale ran Leeds into the ground and kept his foot on the accelerator. Gillet and Hicks will do well to come out of it evens though.

Liverpool's on-field season is looking grim too; they are out of the Premiership race as Chelsea, Aresnal Man U have their own little battle- one might drop enough points for Liverpool to catch up but not all three of them. And Inter will kill their CL chances this year as well.

Foreign investors looking at seasoned respected sports operators like those two getting burnt with one of world soccer's biggest names are hardly going to form a queue to buy Rovers.

[cletus]

I don`t want to see the red Bin-dippers go bust, i`d just be happy to see them squander countless millions of pounds & be mid-table non-entities for evermore. I would take great pleasure in listening to their fans on phone-ins crying about how they`ve won it 5 times & got 18 league titles. I`d love to see Everton re-take their traditional position of top club on Merseyside. I cannot stand Everton either, but the look on Liverpool fans faces would be worth it!

[stuwilky]

Flopsy my family own a small finance company- I Am all too aware of turnover and profits

Does a £59m profit cover the interest on debts of £600m running at about £233k per day?

[Bazzanotsogreat]

Does a £59m profit cover the interest on debts of £600m running at about £233k per day?

Are you sure about those figures?

[philipl]

yes

[Bazzanotsogreat]

yes

sorry stu

[stuwilky]

Are you sure about those figures?

Well the £59m is what was in the accounts published lately said isn't it?

The £233k figure is the figure estimated by MUST, so is based largely in fact, with some small amount of supposition at a guess it is reasonable to expect a +/- 10% degree of accuracy.

Either way it doesn't detract from the point I was making, which is whilst Manchester United may have declared a profit, is it without including a single penny of the interest on the well publicised debt, conservatively estimated at around £600m. Those figures will no doubt be hidden somewhere in the accounts of Red Football due to be filed later in the year.