By Tony Attwood
Christian Purslow, MD of that amusing little club up in the north west, has finally admitted that the club can’t service the debt. While Kenneth Dalglish MBE (a man whom all football fans must remember as a sensational player, and a man of considerable dignity in the aftermath of Hillsborough) seems now to have wandered off the planet by suggesting last week that Liverpool could win the EPL. Perhaps he was still thinking about wat J Redknapp told us on TV (that Liverpool had £35m fresh money to spend last summer).
But stepping aside from the gibberish, slowly the truth is emerging.
This little bloggette has been claiming for two years that Liverpool are in very very deep financial trouble. Of course the pop press don’t want to know by and large because it doesn’t fit the image of the club, and Sky don’t want to know because they’ve paid for loads of live games. But the truth is out there.
They are hanging by a thread.
I detect an element of change within the club, however. After all the wild talk in the press of six buyers lining up, (only for them to vanish) the sheer desperation within the club is at last being admitted.
Of course it might be a game of one-upmanship over Man IOU who still deny (against all the evidence) that they have any problems, but more on that in a moment.
Part of the problem with Liverpool is that there is such strife within the company. The bank has installed a Chelsea season ticket holder as chairman, the official owners are talking about refinancing, the rest of the board say they oppose it, and the bank is charging the club £2.5m a week interest surcharge for not paying money back on time.
Purslow remains adamant that Liverpool is not on the edge of being insolvent, and will not sell players, to pay off debt. But such statements have to be taken alongside the statement that “we are highly profitable”. Such a statement can only be made by changing the definition of “profit” to exclude interest on debt, rather in the manner that Big Brother changed the definition of “peace”, and “plenty” in 1984. As chairman of a company myself, I can tell you what my fellow directors, shareholders and bankers would say if I tried that lie.
So there’s still talk of someone coming in and buying – but after all the stuff about the Chinese government taking over the club, (remember that one – everyone was running the story) nothing can be believed.
In the end RBS has an obligation to its owners (the UK government) to get its money back, and it will do that, no matter what. And that’s the point. NO MATTER WHAT. The ultimate power-wielder within the club couldn’t care a toss about what happens to the club as long as it gets its money out and soon. And that is why things look so desperate. And that’s also why statements about the club being profitable should serve as a warning. Only a club on the edge of the precipice would ever say that.
But let’s move on for a moment to that other jolly gang of northerners – the Manchester IOU group. Here total denial is the absolute order of the day – but if we look at what the club is doing, once again we can see just how desperate things are getting.
David Gill, resident nutter-in-chief, says the £716m debts and £400m interest a year, are nothing to do with the club, but are Glazer issues. And yet the Glazer’s own 100% of the club, and as shown here repeatedly, not a single one of their other businesses is generating any cash to pay that interest. It has to be paid by Man IOU.
So what’s the game here? While Liverpool are selling players but denying it, Man IOU have another strategy.
The Glazers have decided to stop offering most players new contracts when the existing deal has two years to run. Instead they have ordered that with just one or two exceptions, contracts will only be renewed when one year is left.
The benefit to the Glazers is that as there is no new contract there is no increase in wages. Of course such a situation means that should any player be sold (or should he decide to walk) the value of the player declines quickly. Think Chamakh for instance, who eventually came on a free.
The Rooney character is excluded from the deal, and Evra could be too. But Berbatov, Fletcher, Carrick and Park look like being left in the cold along with four others whose contract ends in 2012.
And if you think that crazy, try this one. You will remember all the fuss about Wenger only offering one year contracts to players over 30? It was the reason that Pires – that most wonderful, creative and inventive of players, left us. The Glazers have now gone one better and said, “no buying of players for large transfer fees if they are over 25!!!
It seems that the Berbatov deal of £30m for a 27 year old was considered a step too far. Gill has called it the “last of his kind”.
Instead (and this will kill you when you read it, so make sure you have an oxygen tank and a nurse nearby), they are looking to “do an Arsenal” and buy in players for low fees whom they can develop. Theoretically Bébé fits into this category, at £7m although since he was available on a free two months before, it doesn’t quite fit with the image that the owners are trying to project.
In reality they, like every other club, are seriously looking at the way Arsenal have got Ramsey, Theo, Cesc, Vela, Clichy, Diaby, Van Persie, Denilson, Song, Wilshere, Bendtner, Gibbs… all for nothing, or modest amounts (when the talent is considered).
The lesser beings like Notlobia want to do it because they don’t have the mony, and the larger entities like Liverpool and Man IOU want to do it, because they can afford nothing else.
So, Liverpool and Man IOU can deny all they like, and can claim that they are highly profitable enterprises, but both are sinking fast, and a little peek behind the scenery shows not desperation (they’ve already done that and moved on), but the edge of catastrophe.
Yes, they could come out ok at the end, and another big money man or corporation could move in, at least in the case of Liverpool. But you have to wonder.
For Liverpool, anyone buying now will have to put millions upon millions in to rebuild the team, and that will exclude them from Europe for several years to come. With Man IOU, you really have to start wondering where it will end because the Glazers need Man IOU to pay their interest. Without Man IOU the whole Glazer empire falls and they personally go bankrupt.
Wherever it does end, aren’t you glad we didn’t go down that route?
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