The State of Liverpool FC

[Jim D]

Rundown of the club's finances in much simpler terms.....this whole situation is a complete nightmare.

 

Posted by B_H_B on RAOTL

 

The State of Liverpool FC – An Idiots Guide

 

While "senior sources" at the club (Christan Purslow) try to facilitate a smear campaign against the manager, pretend everything is rosy at the club and briefs the press to headline the Rick Parry pay off on the day the club's financials are tactically released on election results day; here's what's really going on at Liverpool Football Club:

 

 

The figures released on Friday 8th May 2010 indicate that Liverpool FC is in net debt to the tune of £351m; an increase of £52m from last year’s figure.

 

A total of £233.996m is owed to RBS, in addition to an inter-company loan of £144.441m owed to “Kop Cayman”; a company owned by Gillett and Hicks based in the Cayman Island for tax reasons; a company that have loaned Liverpool FC £144.441m at an interest rate of 10%. This is the “own money” that Gillett and Hicks claim to have put into the club. In reality, they’re just charging the club 10% interest for lending that money through an offshore limited liability company that they aren’t even personally liable for – Liverpool FC are.

 

Liverpool FC are not paying the interest off on that £144.4m however. It is being charged as a “compound interest”, meaning the interest isn’t paid, but is instead “rolled up” to the grand total. For example, this year (if I’ve got this right):

 

£144.4m @ 10% interest = £14.44m payable this year.

 

Instead of paying that £14.44m, it is rolled onto the total making the outstanding debt owed to Kop Cayman £158.88m. The following year this is then charged at a further 10% interest:

 

£158.88m @ 10% interest = £15.88m payable next year.

 

Instead of paying that £15.88m, it is rolled onto the total making the outstanding debt owed to Kop Cayman £174.76m. The following year this is then charged at a further 10% interest:

 

£174.76m @ 10% interest = £17.76m payable next year.

 

Instead of paying that £17.76m, it is rolled onto the total making the outstanding debt owed to Kop Cayman £192.52m etc etc etc...

 

The debt soon spirals out of control, as you can see; and don’t forget, this only concerns the £144.4m owed to Gillett and Hick’s Cayman Islands company – it doesn’t concern the huge £234m owed to RBS.

 

The financial figures released last week are for the 2008/09 season.

 

Those figures declare the club made a loss of around £52m for that year, due to the interest repayments on the loans and another £22m spent on the new ground; on what that was spent on we have no idea. There’s nothing to show for it anyway – and the total spend on the new ground now exceeds £50m. To put that into perspective – Sunderland managed to build the 48,000 seat Stadium of Light for a lot less than that. We have a few fences up at the back of the Anfield Road End!

 

Anyway – we made a loss of £52m that year despite finishing 2nd in the league and reaching the latter stages of the Champions League. The accounts also declared a profit made on player transfers (despite Purslow telling us we don’t need to sell players to balance the books and service debt, and Rafa being accused of wasting millions on players – the accounts prove otherwise).

 

What are next year’s figures (which will reflect the financial state we’re in today) going to look like with a 7th place league finish and an early elimination from the Champions League? We will also have an increased debt to service as explained above.

 

Then what about the figures for the next financial year when there’s no Champions League money at all coming in?

 

While the current owners are in place, we are going to continue to fall further and further into debt. We cannot meet the repayments on the loan as it stands now, and with our revenue due to fall with the lack of Champions League football, we’re on the brink of going into administration.

 

Anyone with hopes of making any signings in the summer or any future transfer windows needs a reality check. We are going to be very lucky to be hold onto the players we’ve got, never mind being able to bring anybody else in.

 

Gerrard and Torres don’t want to leave because they don’t like the manager (Purslow is feeding this story to the media to whip up the “Rafa Out campaign”); they want to leave as they know there is zero chance of any new players of any quality arriving at the club in its current state. They also know there’s zero chance of any top class manager coming to the club if Benitez decides to walk or is pushed; no manager worth his salt would come to work at the club under these conditions. They know the club is only going one way.

 

Until Gillett and Hicks are removed from the club, we’re only going to decline. It really is as simple as that. Nothing else matters.

 

And remember – these debts haven’t been accumulated through overspending in trying to buy success and compete like was the case at Portsmouth, Leeds and various other clubs – they are entirely generated through debt loaded onto the club just so Gillett and Hicks can own us and bleed us dry with expense claims, management fees, arrangement fees for every refinance deal and wasting over £50m of the club’s money on a non-existent new stadium.

 

This isn’t the result of bad individual club management as Richard Scudamore of The Premier League claims; it is the result of a leveraged buyout that has loaded the cost of buying the club onto the club to repay. Something The Premier League, The FA, UEFA and FIFA should be doing everything in their power to prevent ever happening again.

 

 

2007: £44m debt (£3m per year to service)

2008: £350m debt (£36.5m per year to service)

2009: £378m debt (£40m per year to service)

2010: ???

 

Those are the levels of debt on the club, with it being only £44m before Gillett and Hicks bought the club. Therefore the club’s profits were able to be invested back into the squad, allowing us to compete on the pitch. We’re now crippled by debts we cannot service, when that £40m leaving the club each year in interest repayments should be being spent on new players.

 

£76.5m has left the club in interest repayments alone in the past 2 years – and in that time – the manager has not spent a single penny on new players. It’s been a sell to buy policy, with profits being made on transfers in the past few transfer windows as the books needed to be balanced; all while the clubs around us are spending to strengthen. How can we be expected to compete under those conditions?

 

The debt is growing with every passing day. As a result of the lack of investment in the squad (as well as bad luck with injuries / poor decisions / players out of form etc), we’re paying the price on the field with declining performances which will therefore reduce the club’s revenue even further – giving us even less money to service increasing debts. A vicious circle. It’s unsustainable.

 

Liverpool FC is paying £110,000 every single day in interest repayments to service a debt we should never have in the first place. That’s £110,000 a day of the club’s money that me and you generate, that we should be seeing spent on new players or developing the club; instead – we are standing back and watching the club being raped in front of our very eyes.

YANKS OUT!

Edited May 11, 2010 by Jim D

[aka Dus]

Adds nothing new to the knowledge pool to be honest. Fyds would have done better in less wordz. Or maybe not...

[Zoob]

I think it's a pretty good summary. Problem is that most people on forums already know the problems and how dire a situation we're in, but I fear that the majority of fans are unaware.

[fyds]

Adds nothing new to the knowledge pool to be honest. Fyds would have done better in less wordz. Or maybe not...

Oh I would

 

He's got a few things wrong (namely the Kop Cayman bit) and other bits missing too - , TV tevenue, Euro revenue and Standard Chartered, and so on.

[Stevie H]

Adds nothing new to the knowledge pool to be honest. Fyds would have done better in less wordz. Or maybe not...

have you read the takeover thread? succinct fyds is not.

[Hodgson for Chelsea]

Rundown of the club's finances in much simpler terms.....this whole situation is a complete nightmare.

 

Posted by B_H_B on RAOTL

 

The State of Liverpool FC – An Idiots Guide

 

While "senior sources" at the club (Christan Purslow) try to facilitate a smear campaign against the manager,

 

 

Eh? When has Purslow done that?

[Jarg Armani]

Eh? When has Purslow done that?

 

Bank Holiday weekend mostly.

 

There's a thread about him down there.

[Red Kent]

Eh? When has Purslow done that?

 

More-or-less at every opportunity.

[Hodgson for Chelsea]

Delusional nonsense the stuff about Purslow.

[Red Kent]

Delusional nonsense the stuff about Purslow.

 

Are you sure, be interested to know your take.

[Lark]

funny maddock named ayres and nash as the senior sources t other day. Everyones got it in for rafa. Someone (durango) told various forums that purslow had inquried after vdv without rafa's knowledge while in madrid, also heard on the jungle drums was a spanish journalist who asked purslow is rafa going then, purslow replied, i hope so cos i want his house. This convo wasn't banter but said with absolute seriousness apparently. Oh and last but not least following rafa(sorry his agent) leaking stories that he might be off to juve purslow leaked a variety of stories to a couple of hacks that rafa had delayed two meetings with broughton, in an attempt to unsettle rafa or something like that.

 

nice to see the traditions of "we dont talk" being lost in the battle for hearts and minds.

[Hodgson for Chelsea]

Everyone talks to the papers at every club at every level.

 

Rafa and GH before him were very good at briefing the press and to a large extent controlling what the fans were thinking.

 

Singling out Purslow is ridiculous.

[Molby]

Everyone talks to the papers at every club at every level.

 

Rafa and GH before him were very good at briefing the press and to a large extent controlling what the fans were thinking.

 

Singling out Purslow is ridiculous.

 

 

who is this f***ing prick?

[Spiblish]

who is this f***ing prick?

Was thinking the same !!!

[Raj]

who is this f***ing prick?

 

 

haha. its christian himself.

hello christian

[Metro]

Just five words to say...."thanks, messrs Moores and Parry"

[Hodgson for Chelsea]

who is this f***ing prick?

 

Obviously one of the minority who can see the wood for the trees.

 

Lets f*ck off any kind of rational thinking and turn it into heroes and villains.

 

Everyone uses the press these days. Just trying to balance out the pathetic witch hunt. Leaking information to the press is not the Liverpool way, but if we're going to have a go at the owners or Purslow, what about Rafa? Has he never done it for his own gain? Course not, it's Rafa.

[Cheesecake]

funny maddock named ayres and nash as the senior sources t other day. Everyones got it in for rafa. Someone (durango) told various forums that purslow had inquried after vdv without rafa's knowledge while in madrid, also heard on the jungle drums was a spanish journalist who asked purslow is rafa going then, purslow replied, i hope so cos i want his house. This convo wasn't banter but said with absolute seriousness apparently. Oh and last but not least following rafa(sorry his agent) leaking stories that he might be off to juve purslow leaked a variety of stories to a couple of hacks that rafa had delayed two meetings with broughton, in an attempt to unsettle rafa or something like that.

 

nice to see the traditions of "we dont talk" being lost in the battle for hearts and minds.

 

then Purslow deserves the same s*** as Messrs Gonorrhea & Herpes get. Hopefully with new owners Purslow will be first against the wall and shot with pellets made from his own s***.

[Molby]

Obviously one of the minority who can see the wood for the trees.

 

Lets f*ck off any kind of rational thinking and turn it into heroes and villains.

 

Everyone uses the press these days. Just trying to balance out the pathetic witch hunt. Leaking information to the press is not the Liverpool way, but if we're going to have a go at the owners or Purslow, what about Rafa? Has he never done it for his own gain? Course not, it's Rafa.

 

except Rafa is on our side whereas Purslow is an uber c*** judas who tried to take us all for fools with his re-invention of the definition of transfer budget

 

Rafa's briefing alerted people to the troubles at our club whereas Purslow's simply undermine the office of the manager

 

what are you, some kind of monumental thicko?

 

do not post your opinions on this forum again

[Hightown Phil]

except Rafa is on our side whereas Purslow is an uber c*** judas who tried to take us all for fools with his re-invention of the definition of transfer budget

 

Rafa's briefing alerted people to the troubles at our club whereas Purslow's simply undermine the office of the manager

 

what are you, some kind of monumental thicko?

 

do not post your opinions on this forum again

 

But he got a sponsorship deal innit.

[Lark]

except Rafa is on our side whereas Purslow is an uber c*** judas who tried to take us all for fools with his re-invention of the definition of transfer budget

 

fairs fair there have been a number of occassion where it appears rafa or his agent have leaked stories to the press (madrid interest) to gain leverage even before the yanks came along. I agree sometimes the leaks have been used to get more money for the transfer kitty which is for our benefit (i personally thinks its destabilising but if others dont mind and think its for the benefit of the team, fair enough, i can see that point of view too) but i think there's an argument to be had that sometimes its been used to leverage and cement his power and position within the club. Which i'm not entirely sure is healthy.

 

I dont think you can put the re-invention of the transfer budget on purslows shoulders either, he merely confirmed to sos, in his own way, that this was the yanks plan, i dont know whether he let on this was the yanks plan for the next five years. This five year plan of 20m including player wage increases was detailed in prospectus passed around by investment backs roschild and meryl lynch early in 2009 i think.

 

I'm not saying purslow is without fault btw, if he's guilty of leaking stories, in a game of t** for tat with the manager on the owners behalf or to cement his own position within the club, he too should go, there has to be accountability for such in house spats becoming common knowledge, and there has to be realisation that as a method of trying to get your way its destablising and demoralising for all concerned and especially us the fans. All these power plays, leaks and lack of communication are awful to watch from the outside, there's no sense of any of them trying to work together for mutual benefit, and as a result i've come to think a clean sweep of the whole lot of them is the only solution.

 

Which is a shame because i think rafa is a decent manager when he's focusing on the forthcoming game. I presume purslow has his talents and it seems he along with nash and ayres have vastly improved the commercial revenue of the club.

 

I hope broughton has knocked there heads together in these meetings and quickly signs us off to a new owner who can re-stabilise the club.

[Flight]

Obviously one of the minority who can see the wood for the trees.

 

Lets f*ck off any kind of rational thinking and turn it into heroes and villains.

 

Everyone uses the press these days. Just trying to balance out the pathetic witch hunt. Leaking information to the press is not the Liverpool way, but if we're going to have a go at the owners or Purslow, what about Rafa? Has he never done it for his own gain? Course not, it's Rafa.

 

 

 

I'd really appreciate it if you could use your singular clarity of assessing the situation to tell us all whether Purslows series of rants in his meeting with SoS were the actions of a snake in the grass deceiver or an incompetent fool out of his depth.

[Hodgson for Chelsea]

except Rafa is on our side whereas Purslow is an uber c*** judas who tried to take us all for fools with his re-invention of the definition of transfer budget

 

Rafa's briefing alerted people to the troubles at our club whereas Purslow's simply undermine the office of the manager

 

what are you, some kind of monumental thicko?

 

do not post your opinions on this forum again

 

Rafa wants to keep his job Molby. Do you think the continuous mentions of the great riches at Juve are simply the press making sh*t up, whereas the references to meetings and tensions in the board room are what? As I said they all talk to the press.

 

I was referring to the 1 + 1 = 5 assumption that the person briefing the press is Purslow.

 

But yeah, 'monumental thicko'. Rafa = untouchable, anyone else = axis of evil. Simple really, how did I miss that.

 

There's little point in posting - one by one the people prepared to debate the topics affecting the club have left the forum. Ironically many of those who have stayed aren't even members of SOS. Says it all.

[surf]

 

 

A total of £233.996m is owed to RBS, in addition to an inter-company loan of £144.441m owed to “Kop Cayman”; a company owned by Gillett and Hicks based in the Cayman Island for tax reasons; a company that have loaned Liverpool FC £144.441m at an interest rate of 10%. This is the “own money” that Gillett and Hicks claim to have put into the club. In reality, they’re just charging the club 10% interest for lending that money through an offshore limited liability company that they aren’t even personally liable for – Liverpool FC are.

 

 

YANKS OUT!

 

 

i dont get this bit. where did the 144m come from? if g&h put it in then why would they be liable for it? it's their money. or is it just strangely phrased?

 

dont mean to nitpick, it's a fantastic article

 

[Hodgson for Chelsea]

I'd really appreciate it if you could use your singular clarity of assessing the situation to tell us all whether Purslows series of rants in his meeting with SoS were the actions of a snake in the grass deceiver or an incompetent fool out of his depth.

 

I wish I had the answers, I really do.

 

All I am saying is it is a bit easy to simply classify this as goodies vs baddies.

 

As the post above by someone else states - there are various parties talking to the press, with various interests in mind.

 

It seems strange that Purslow would be going hell for leather to get rid of Rafa when he is the one who tied him to the club for 5 years. But of course, people use that as a stick to beat him with as well, so it's a thankless task for him isn't it.