[Archived] Liverpool In Difficulties

[Shaddy]

I think what everyone is overlooking with the big clubs over extending themselves is this. They can do so safe in the knowledge that if ever push comes to shove, they can hold the various associations (Premier League, EUFA, etc) to ransom over the fact that their products are diminished by these clubs not participating.

I can just imagine Liverpool demanding more of the Premier League TV revenue, instead of the equal share all PL clubs get.

[Bazzanotsogreat]

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.

The reason i asked is thats an annual re-payment of 85000000, which seems extremley high. In 15 years united will pay back over three times the value of their original loan

[stuwilky]

Much of the loans were rumoured to have been taken out at hugely inflated rates of interest, so for this period, before any rearranging they may have been able to do for the summer, there is some of the borrowing (I dont remember the figures but it was in the hundreds of millions) that was borrowed at so called penalty rates of around 15%. The figure of circa £85m interest floats in at around 14% on the total amount.

Like I say, it is MUST's figure and not mine.

Although Id stake my mortgage on the interest on the outstanding loan being more than the "profit" realised by the subsidiary company.

[philipl]

If you go on the Glazer thread, I posted a break down of all the different tranches of borrowings. There was a lot at 11% and a final £65m at 18%! The principle borrowed is nearly £660m, not £600m so that brings the average interest rate down whilst the £85m is the cash servicing required which includes the first smidgen of repayment on one of the loans.

I think it is 2009 when the Hedge Fund wants its £215m back or they can start appointing directors leading to them legally taking control of Red Finance and removing the Glazers by 2011.

I didn't know the £59m is EBITDA. It doesn't follow that the tax is 28% but MUFC were certainly tax paying before the Glazers got hold of them and I doubt there are tax losses for offset. The Depreciation and Amortisation will be substantial given the transfers they have been paying for- at least £10m.

MU's numbers are significantly worse than the headlines lead everyone to believe.

As I mentioned previously, the crunchy numbers will be Red Football's where they have to consolidate MUFC with the financing.

[philipl]

BNSG wrote: "The reason i asked is thats an annual re-payment of 85000000, which seems extremley high. In 15 years united will pay back over three times the value of their original loan."

If you have a mortgage, you are probably paying between 4.7% and 6% interest rate. Take your monthly payment and multiply that by the number of months that the mortgage runs for and you will come up with a number which is a multiple of the amount you have borrowed.

Now imagine paying an effective average rate of over 11% which is what the Glazers are doing on their £660m.

The problems of compounds on compound interest.

[stuwilky]

The tax on the "profits" of £59.8m, is apparently £17m.

So a post tax profit of £42m then.

A very rosy picture being painted in a very successful season (certainly when they compare it to the last season where there was no title and not much progress in the Champions League) and you will see that people are quick to compare the two....

The crunch is whether or not they can raise the capital to pay back the hundreds of millions required to soon.....

[neekoy]

I hope Man Utd and Liverpool both go under, two clubs which irritate me to no end with the constant we are/we are banter back and forward.

Also bringing them back ot the pack with massive debt and a requirement for fire sales of players mean Rovers and others have a better shot at increasing their position within the league.

[Anti Euro Smiths Fan]

"Benitez considers suing American co-owner Tom Hicks".

The news that Jurgen Klinsmann was offered the Liverpool job earlier in the season seriously undermines the position and authority of Benitez.

It's been a somewhat turbulent season off the pitch for Liverpool. Benitez's decision to sack his assistant manager and fellow Spaniard Pako Ayesteran, who was said to be a popular figure among the Liverpool players, may have caused some unhappiness and division within the squad earlier in the season. While I suspect that relations between Benitez and the American owners may now be at an all-time low following the public disclosure about Klinsmann from Hicks.

It wouldn't be a big surprise if Benitez left at the end of the season, though I still expect Liverpool to finish in the top four by May. Fernando Torres is a wonderfully gifted and elegant player who possesses all the attributes in terms of skill, speed and technical ability that you would want from a striker. For me, Torres is one of the top three foreign players in the Premiership, alongside Ronaldo and Fabregas.

As long as Torres and Steven Gerrard stay fit, then I would expect Liverpool to be in the top four by the end of the season - but whether that will be enough to satisfy the American owners is open to question. I think co-chairman George Gillett was quoted at the start of the season as saying that Liverpool need to win the Premiership.

[RevidgeBlue]

"Benitez considers suing American co-owner Tom Hicks".

The news that Jurgen Klinsmann was offered the Liverpool job earlier in the season seriously undermines the position and authority of Benitez.

It's been a somewhat turbulent season off the pitch for Liverpool. Benitez's decision to sack his assistant manager and fellow Spaniard Pako Ayesteran, who was said to be a popular figure among the Liverpool players, may have caused some unhappiness and division within the squad earlier in the season. While I suspect that relations between Benitez and the American owners may now be at an all-time low following the public disclosure about Klinsmann from Hicks.

It wouldn't be a big surprise if Benitez left at the end of the season, though I still expect Liverpool to finish in the top four by May. Fernando Torres is a wonderfully gifted and elegant player who possesses all the attributes in terms of skill, speed and technical ability that you would want from a striker. For me, Torres is one of the top three foreign players in the Premiership, alongside Ronaldo and Fabregas.

As long as Torres and Steven Gerrard stay fit, then I would expect Liverpool to be in the top four by the end of the season - but whether that will be enough to satisfy the American owners is open to question. I think co-chairman George Gillett was quoted at the start of the season as saying that Liverpool need to win the Premiership.

The Americans could have avoided pussyfooting about and just sacked Benitez on the basis he's a crap manager under whom Liverpool have no more chance of winning the League than we have!.

[thenodrog]

The Americans could have avoided pussyfooting about and just sacked Benitez on the basis he's a crap manager under whom Liverpool have no more chance of winning the League than we have!.

Seconded.

[thenodrog]

For me, Torres is one of the top three foreign players in the Premiership, alongside Ronaldo and Fabregas.

A fine player but if we were in the school playground picking strikers then Adebayor, Drogba and Berbatov would come before Torrez in my team................. imo.

[philipl]

The Guardian has broken down the Man U debt/interest situation.

The club is paying £42m on £535m of debt secured against it.

Red Football is paying £20m of interest on £125m of debt secured against other Glazer assets which the Glazers are now trying to transfer onto MUFC.

In the same meeting that the Glazers gave the Government undertakings not to breal with the collective EPL negotiations for TV rights, the Glazers also gave an undertaking not to raise prices at Old Trafford...

[thenodrog]

Red Football is paying £20m of interest on £125m of debt secured against other Glazer assets which the Glazers are now trying to transfer onto MUFC.

Thats steep isn't it?

[philipl]

It shows what the lending institutions considered the risk to be- yes its 18%

[LeftWinger]

Does Uniteds pre-tax profit include player trading?

Sorry if it's been mentioned - but it's confusing some of this stuff!

[philipl]

I haven't checked but I suspect not= United is being run to release cash to service the owners' debts.

A deeply depressing article on the subject of foreign ownership.

[thenodrog]

I haven't checked but I suspect not= United is being run to release cash to service the owners' debts.

A deeply depressing article on the subject of foreign ownership.

I don't find it the slightest bit depressing.

[philipl]

Liverpool moving closer to refinancing and having £350m of debt land on their balance sheet

Plus a few other unresolved local difficulties.

[joshbrfc]

them new yank owners are a***oles

thats basically it

[brian_gallagher85]

Great financial insight there Josh

[philipl]

Liverpool Echo reported DIC have offered to buy Hicks out.

[joshbrfc]

Great financial insight there Josh

with you im guessing thats sarcasm

i bet the liverpool fans hate the enew owners. trying to get rid of rafa.

can you imagine our anger if somenone new came and tookover and they tried getting rid of hughes, there would be some rovers fans that are brainless that would be happy to see the back of hughes. but those that have a brain will know what im talkin about

hicks is a tit, after everything rafas done, their will be clubs around the world, and countries that wouls snap rafa up straight away.

[neekoy]

Rafa is overrated

He took a team at Valencia that was primed for success and built by someone else (a team that had already reached two CL finals) and won some titles. Most above average managers could have achieved the same thing.

He took a Liverpool team that was built by someone else and was already showing success and spent a shedload of dollars and turned them into a worse team.

He is useless in the transfer market, relying on his heritage to be a drawcard for quality foreign players.

And for those who mention the CL and FA Cup win, Liverpool played 10 minutes of football relying on the heart of SG to get them to a penalty shootout. Ancelotti learnt from his mistake in the CL and cleaned them up second time around, no SG inspiration, no Liverpool.

This year it has all been about Torres, without him Pool would be in the bottom half of the table.

I have no doubt the replacement of Benitez with Mourinho would bring them the title they for some reason feel they deserve.

Also, I hope they are the next Leeds

[mattjansen]

This year it has all been about Torres, without him Pool would be in the bottom half of the table.

You say that based on his excellence in defence?? They let in 14 goals in 21 games and lost the amazing amount of two league games. If thats trouble ill take it seven days a week.

[thenodrog]

It goes further than that. Lpool imo are suffering from bad direction at the top level and have been for some years.

But as a manager Benitez has spent a fortune on top of the kings ransom that Houllier blew before him. Benitez is imo actually a worse manager than Houllier because his man management skills are virtually non existent. He does not appear to have grasped the fact that unhappy players do not lead to a successful team.