Liverpool Me and You. The club we all part own sinks deeper into the mire.


A few weeks ago I put up a list of all the EPL clubs with thoughts on their finances.  Now I’m trying to do some updates club by club. Here’s more on  Liverpool- and this time I want to try and put forward a different idea.  One that says that the way a club is viewed emotionally, will affect its finances.

It is something that the newspapers and others studiously avoid – probably because they constantly avoid the issues that I allude to here.

But this is Untold – the blog that treads where no one dares to trod.

Or something…



  • Turnover: £164.2m
  • Operating profit: £24.9m
  • Net debt: £261.7m- £237 to the banks who want to get their money back.  Before the Americans came to this backwater of pre-civilisation the debts were about £45m.
  • Interest payment: £36.5m.  Per annum.  Each annum.
  • Get a licence for the Champs League under new regs: Not a cat in hell’s chance
  • What the figures don’t tell you… This is financial madness on a global scale.  The ground if full, there has been Champs League every year, TV revenue has been of the highest, and yet there is still no way to pay the interest due out of the profit.  The club is 99% doomed.  There is darkness, nothing, darkness – and just to cap it all there is the emotion issue – see below.  There is also the emotional issue – see below.   There is also the fact that the auditors in 2009 said, there is “a material uncertainty which may cast significant doubt” over whether Liverpool would even be able to “continue as a going concern”.   You don’t have to own a business to know what a powerful blow that is to any company.
  • The crisis comes in 2010 because the banks want another hefty repayment – £100m in this case.  Even if Liverpool can find a buyer (see below), that does not put any money into the transfer pot.

The new factor we haven’t really touched on before.

There is something that people don’t talk about but which is important.  The emotional side of Liverpool, and how that emotion values their shares.

It is the feeling for Liverpool outside of the hard core fans who will always  be supporters.  The general ambiance of goodwill that all clubs rely on in order to bring in money.  The point I am raising is that it could be changed by negative publicity surrounding any of three factors

a) The failure this year to get into the Top 4. Remember the press are very much involved in this season as a topic, not last season.  If a club fails or succeeds this season, that is everything – no one cares about the past.

b) The recognition, if any of the press give space to it, that we are approaching the 25th anniversary of Heysel.  I know the press did a lot about the tragedy of Hillsborough and quite rightly honoured the deceased and criticised the authorities, so they might be Liverpooled out  – but if the story comes around it won’t do much for Liverpool’s reputation.

c) The recognition that this is the 20th anniversary of Liverpool not winning the league.  I know the press prefer to do x years since Arsenal won anything, but one or two might start to run this anniversary.

If any of these stories get covered big time, I think Liverpool will find money harder to come by.

The bid on the table

There is a bid in front of Liverpool’s owners: the Rhône Group’s £110m offer for a 40% stake leaving the two Americans with obviously 30% each.   But none of that money would go to Tom Hicks or George Gillett.  It would go to cut the £237m debts to RBS (which I own – well I own a bit of it) and the American bank Wachovia.

Under their proposal, Rhône Group don’t get interest payments on the £110m, because it is real investment, for shares, not more debt.   Which sounds unlikely, but that is what they are saying.  (Mind you Gillett etc said exactly the same thing).

You’d think that was enough, but immediately sources inside Liverpool say that they could now start building the new stadium they need.   You can tell how totally demented they have now become, by the fact that the club is talking about the stadium doing for the area what the Ems did for Highbury.

If you think that, go take a look at the desolate and wrecked area around Liverpool’s ground.  Compare and contrast with the cost of houses in Highbury.  Holloway Road and Seven Siters are not the most wonderful place in the universe, I admit, but compared to Anfield…

In a desperate survival bid last summer Hicks and Gillett put £60m into the club of their own money (there were a lot of stories about one of the American companies simply not paying its bills as they scrabbled for the cash).  This money was required by RBS as part of its willingness to allow the club to continue.

Indeed I suppose that whereas we once called the club Liverpool Insolvency, and then Liverpool Weetabix (which is what one of the owners modelled the purchase of Liverpool on), we could now call Liverpool RBS .  And since the voters of the UK own RBS, it could be, Liverpool Me.  Or maybe maybe it is Liverpool Me and You.

Which is a bit of a revolting thought really.

What the EPL and FA have to say about this crisis….


See the full list of financial reports on EPL clubs here

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16 Replies to “Liverpool Me and You. The club we all part own sinks deeper into the mire.”

  1. I remember years ago Patrick Barclay ran a piece where he concluded that no club had ever survived the deterioration of its locality to thrive as a top club. He cited many examples (most of which I can no longer remember – this was in the early 90’s) but kept coming back to Liverpool and the Stanley Park area. He said at that time that Liverpool could only draw on their “history” and all that entails for so long, then they would have to start doing some deep soul searching about their future.

    I guess this shows two things:

    1. Patrick Barclay was, and remains, years ahead of his time. One of the few shining lights in a world of jounalistic despair.

    2. The period of Liverpool relying on their “history” and “mystique” is still with us, but fades with every year that we move away from their glory years.

    Good article.

    On another note and sticking with finances, it will be interesting to see Chelsea’s next year. For all this stuff about “breaking even” and “balancing the books” the one big question they never answered was “what are your budgetary constants?” in other words, what are the “normal” seasonal expectations that go into Chelsea’s break-even model? As an example, Arsenal budgeted average crowds of 47,000 and European Football once every 3 years (or was it 4?) to break even with the new stadium. Chelsea have gotten used to deep, deep runs in Europe each year and still lose 40+million each year (even in years when they spend virtually zero in transfers – and I believe Zhirkov’s transfer wasnt included in last years accounts as they finished on 30 June and his transfer took place on 6 July, so add another 18million loss to next year straight away). What effect will this year have on their accounts? How far away from breaking even are Chelsea really? Realistically they should be budgeting not even making European Football every season but why do I get the feeling they still have this “2 Champions League triumphs in 10 years” ridiculousness still built into their break-even calculations?

  2. Tony —

    Here’s an article in the NY Times about crazy U.S. debt that seems to echo all you have written on the finances of Premier League football clubs:

    From the article: “In addition, she said, many companies whose debt matured in 2009 and 2010 have been able to extend their loans, but the extra breathing room is only adding to the bill for 2012 and after.

    The result is a potential financial doomsday, or what bond analysts call a maturity wall. From $21 billion due this year, junk bonds are set to mature at a rate of $155 billion in 2012, $212 billion in 2013 and $338 billion in 2014.

    The credit markets have gradually returned to normal since the financial crisis, particularly in recent months, making more loans available to companies and signaling confidence in the pace of economic recovery. But the issue is whether they can absorb the coming surge in demand for credit.”

    If you substitute “companies” for “English football clubs” or “Liverpool,” then it becomes an article fit for Untold!

    I’m not sure what you will make of it, but I think it only adds to your argument that football is not in a bubble. The similarities are uncanny. If this article is right about how cost of debt worldwide will explode in 2-4 years, can you imagine how much it would cost a middling football club?

    Thank God for Arsene Wenger.

  3. Ahem,

    The Holloway Road is a Cultural Mecca!

    Don’t get me started on the Seven Sisters.
    An arterial Sp*d ridden highway, named after some suicidal cliff (maybe not!),
    masquerading as a part of North London’s topography.

  4. Regarding the Seven Sisters Road. The bit with Finsbury Park off to the North of it is OK (despite the dodgy hotels that seem to all be being knocked down at the moment). It’s after that as you move further East that it goes downhill fast!

    Who can forget the Leyton Buzzards

    Saturday night beneath the plastic palm trees
    Dancing to the rhythm of the Guns of Navarone
    Found my Mecca near Tottenham Hale Station
    I discovered heaven in the Seven Sisters Road.

    Obviously written by a Spud mind – no Gooner would go anywhere near Tottenham Hale station! We were all down Upper Street!

  5. Spot on Tony. Coincidentally, I was having this argument with some Liverpool fans just this morning. I’d say they are in greater danger than United, being as they have a large deadline looming.

  6. Another excellent article, Tony. This site has become a regular port of call for me to read your thoughtful analysis and insight.

    I have also written a blog about Liverpool and the money men, which you might find interesting at

    Another blog which might appeal to your love of football and finance is a review of Arsenal’s latest accounts at

  7. I guess the LFC Supporters Trust has been saying for a few years that they can raise the money to buy out the Yanks to a significant degree. What’s so terrible about that? The guys seem to fear it more than anything……..

    To be fair, I reckon you’d get £75m for Gerrard + Torres, maybe more, I don’t know. Those two really are top drawer…..if you did that and you got to the Champions League group stages next year, you might make it. With wages presumably £10m lower, you’d be OK on interest charges for a year. But then you’d be struggling for Top 4 thereafter. So you might need to hire an Arsene Wenger-type who can ‘do an Anelka’ a few times to bring the debt down. Any candidates out there??

    Thing with LFC is that many of its fans come in from outside the city now. So the fact that the area is poor only becomes an issue if the national/global allure of the support base disappears. It’s the same with Arsenal and MUFC too now. Folks flying in from Ireland, north and south. Folks going up north from London each weekend. I remember a Coke exec in NW London being a Utd season ticket holder in the 1990s….it’s still the same, I think……

    As far as the area goes, Merseyside had 12 years of European regeneration money from 1994 to 2006 and may still get a bit more adjustment money. You don’t transform housing stock with that though, although they did up the centre, the road to the airport is much smarter and the airport’s transformed too. Quite a bit of money gone into technology parks, but they didn’t merge the Unis like Manchester did.

    The difficulty as I see it is that they don’t see the changing dynamics soon enough: the football club was the last bastion of hope during the terrible era of the 1980s, when they had riots, war with Whitehall and all the traditional industries went sour. That era coincided with the greatest era of the football club, so you can see why it’s quite emotional to them. It was the one bright thing in the city. Stein used to say that only two Old Firm derbies a season stopped SW Scotland being an Ulster in the 1960s and 1970s. I wonder if the same was true on Merseyside, that only both clubs doing so well stopped meltdown and complete degeneration in the 1980s…….

    I must say that LFC is the club where fan ownership or, at least, significant fan stake in ownership makes the most cogent sense. It’s most like Barcelona in terms of an identity with the Merseyside diaspora.

    To me, the biggest problem is that an external pricing would say this:

    £24.5m operating profit = £250m on a P/E of 10. IF you think they will make that much going forward…….big if…

    Add on £100m based on stadium, new stadium plans and income from old stadium site. IF you think they’ll build one……..big if…..

    Anything else?? tricky.

    So that’s £350m on an as:is.

    Thing is: there’s downside risk. Which is significant with Man City as they are, Spurs as they are etc etc.

    Is there any upside?? Dunno. But you’d need to question it……

    So I’d say that as a first estimate I’d be questioning whether the club’s true price, free of debt, is much more than zilch.

    Which isn’t what Tom and Jerry want to hear, is it??

    To me, the only way out is fans saying: we’re buying our birthright back. What’s the profit T+J need to get them out? Then as fans we buy them out. Then we run it like Barcelona.

    I just wonder whether the Yanks are so money obsessed that they would destroy part of English football’s heritage.

    Something to ask Barack Obama perhaps??!!

  8. Depends which way you walk from the stadium on how crappy things are viz.

    *Highbury Fields/Highbury Grove/much of Upper Street are super-smart, although I wish Boris would hurry up and sort out the ghastly mess at Highbury Corner

    *Holloway Road has a gigantic Waitrose worker’s co-operative, what more do you want?

    *The quality of some of the housing developments round the stadium in my view is laugh-out-loud hilarious, especially what looks like turquoise hardboard cladding to the new flats on Drayton Park; the grey-and-red Newlon flats next to the Arsenal Museum block look a little more robust

    *Was the Club involved in redeveloping Hornsey Street, the road lined with new housing blocks that leads to the town dump? I feel for the poor bastards living there, the flats look like they’re made of plastic – what’s wrong with the proper, brick-built social housing like Peabody and Samuel Lewis and the old London County Council used to provide? Those have stood the test of time.

  9. The legacy of the LCC may have stood the test of time, but unfortunately didn’t survive the ‘Enlightenment’ that followed in the wake of Thatcherisim/New Labour.

    On the subject of ’79 & the 80’s,
    I had no idea that this existed, thanks Countryman!

  10. I’ll give you Upper Street, and all the way down to the Angel – some nice restaurants, and sensible environment (actually I don’t know what that phrase means, but I quite like it so I am leaving it in).

    Actually I think I just wrote sensible environment out of sheer amazement that Fulham have just scored a 4th. I hope they make it to the Final, not least because they won’t then bother to turn up for the last game of the season.

    But, back to the text, I am still not that overwhelmed by Holloway Road. I have always liked Finsbusy Park, and Clissold Park – my dad used to take me to both when I was a nipper.

    (Do people still say “nipper”) (It means young child).


  11. Fulham Knocked Juventus for FOUR (4). Unbelievable! Liverfool is through as well though. How much will they be able to make from the Europa escapade?

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