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.
- 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
Return to the home page of Untold, and the stunningly exciting index of articles by going clickty-click-click
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