Liverpool FC Forum

[Paul C]

£22m price of failure Nov 5 2004

EXCLUSIVE by Chris Bascombe, Liverpool Echo


LIVERPOOL FC have announced record losses of £21.9m.

Figures for the past financial year reflect the Reds' failure to qualify for last season's Champions League, worth an estimated £15m.

The annual shareholders' report reveals the huge cost of sacking Gerard Houllier and his back-room team, including Phil Thompson, Joe Corrigan and Christian Damiano, also contributed to the losses.

Termination payments for staff and players, Emile Heskey among them, who were considered surplus to requirements cost an astounding £10.7m.

The club showed a £3.6m profit a year ago, but chief executive Rick Parry today stressed cutting debts was the key financial target for the past 12 months, and these had dropped from £18.9m to £15.4m

Manager Rafael Benitez will get the funds to replace long-term injury victim Djibril Cisse. The planned move to a new stadium is still on course for the 2007-8 season.

[Paul C]

I posted mine 1 minute before Redrider posted his 

[Redtribe]

lol

[jonnymac1979]

Looks like this one was left alone though, the forgotten, lesser thread.

This will end up in the twilight zone.

[supersub]

[The_Rock]

Thinking of posting this in the other thread but it has got locked...............

To all GH lovers....love him for another reason......   .

10.7 million given to Houllier, Phil Thompson, Joe Corrigan and Christian Damiano ...WTF

http://www.eurosport.com/home....6.shtml

Liverpool's Houllier pay-off revealed

Liverpool paid more than £10 million (€15 million) to pay off former coach Gerard Houllier and his backroom staff, the English Premier League club announced on Friday. The club's annual statement showed a record £21.9 million loss on the year and a total debt of £15.4 million.






However the focus of the accounts given to shareholders was the 10.7 million pounds under the heading 'termination payments'.

That comprised of compensation paid to Houllier, Phil Thompson, Joe Corrigan and Christian Damiano following their sacking in May.

The wage bill showed only a slight rise from £54.4 million to £54.9 million.

"The loss is essentially attributable to two factors," chief executive Rick Parry told the club's website. "The loss of Champions League revenue and the decision to change the management team."

Liverpool made just three million pounds from the UEFA Cup run to the last 16 in 2004 compared to the £14 million achieved when they won the trophy in 2001.

The club's loss is an indication as to why forward Michael Owen was sold to Real Madrid for eight million pounds at the start of the season, especially as they paid out £14 million for forward Djibril Cisse from AJ Auxerre in a deal arranged by Houllier before his departure.

Owen was joined through the exit door by fellow England forward Emile Heskey to Birmingham City and Danny Murphy to Charlton Athletic for a combined sum close to £10 million, allowing new manager Rafael Benitez to sign Xabi Alonso, Josemi and Luis Garcia.

Benitez has already confirmed he intends to buy another striker in the January transfer window to replace Cisse, who is out for the rest of the season with a broken leg suffered in the draw with Blackburn last Saturday.

Parry added: "The loss in itself does not constrain player spending, after all we did invest significantly in the summer.

"It is the level of debt and future cash flows that govern our transfer activity."

Cisse's absence has been compounded by a hamstring injury to forward Milan Baros with Benitez rating him as '50-50' for the clash with Birmingham on Saturday.

[laza]

Dont mention the war

Price you pay when you move on the boss and move in someone else , it also makes the progress that Rafa has done ,with whats available so far even more remarkable in my opinion

Though like someone i think it was Woollyback in the other thread im wondering why Heskey would get a payout when he was transferred

[azriahmad]

The compensation payments shows what kind of big wage package and remaining duration the management staff had prior to Liverpool teminating their services.

Don't be frightened or shocked to see such losses as a significant chunk of the loss came from the Heskey sale. He cost us 11 million but was sold for some 5 million, so 6 million of the losses come from this transaction and does not have a physical cash out flow impact, as the cash out flow had been spent when we bought him. Without this "accounting loss", the loss would only be 15.9 million, out of which 10.7 million loss was due to one-off loss incurred to sack the management. That leaves us with a loss of only 5.2 million, which is not too bad. Remember, we did not have the 15 million or so funds which would have been generated by participation in the CL. This is why active and prolonged CL participation is so crucial these days.

CL participation through the group stages will yield this much, while an extended run until the finals netted Porto some 20-25 million but would have netted Real Madrid or Manure in excess of 30 million. These would 2 make more money because they are more "commercialised" and "merchandised".

I hope the way I tried to explained the above makes some semblance of being sensible.

I did mention in an earlier post that Liverpool had debts of some 19 million, a figure I got from newspaper reports from the due dilligence exercise conducted by the Thais. Now at least, the debts have been reduced to 15.4 million.

[azriahmad]

BTW lads, Liverpool will lose more money if and when we sell Diouf as there is no way we can ever recoup the 10 million he cost us...

[Ciggy]

What about still payin that stinkin diouffs wages how much does he get off us a week   Sooner he gets sold the better even if its 2 mill we get back from him, we are starting a fresh now, a good run in CL if we qualify, should pay some debts off.

[azriahmad]

I think, as he is on a loan deal, we are not paying the full amount but we are paying the difference between what Bolton are willing to pay in wages and his actual contractual wages at Liverpool. Example, if he is contracted on 30,000 a week and Bolton only agreed to pay 15,000 per week and we sign a loan deal with Bolton, Liverpool would still have to pay the difference - 30,000 less 15,000. This is the arrangement Inter (or is it AC Milan) had with Crespo and Chelsea.

[Ciggy]

Sooner hes off our books and hands the better that goes for diao aswell total waste of money.

[kindaconfused]

azriahmad

Surely the loss as you state of the sale of Emile Heskey is assuming he hasn't been written down over the period (advise me if I have it round me neck).

This leads on as to how clubs value players which I presume are assets in the accounts etc.

[Redrider]

Pleased to see that so many are concerned about the Financial Health of the Club, after all it is our money through the sale of Season Tickets and purchases of all the various TV subscriptions, magazines, clothing etc. from supporters ALL OVER THE WORLD, that keeps the club viable.
We should be concerned as to how the Financial Mangement team are using our Funds.
Personally, I am concerned at the waste on transfer fees, wrong players, wrong price, poor recovery on player sales. Agents taking our management to the cleaners etc. Real Madrid taking the p#ss out of us.
There is a lot to concern us. Do not be fooled by Parry's rosy statements, many would say just the same to gloss over the fact that they were doing a poor job.
I am concerned with the new stadium price, too much at £120m for 60,000 seats. Will the extra seats make that much difference, say £6m a year.  That takes 20 years to pay off without interest, can we afford this and a new highly paid team.
We need success to fill a bigger Stadium 80,000, built for the same price or less if we could put partisan bias aside and share with Everton, if they could afford it. ?
There are lot's of questions here ? You do not need to sensationalise to ask the questions and then question the answers.
Remember it's your money that they are using either to 'good effect' or just p#ss#ng away.
Keep alive lad's, don't just rely on trusting that it will be alright !  Look at Leeds, no joke. !!

[banana]

10,7 millions in termination pay packages. That is a lot of money. And it comes straight out of the fans pockets. I thought Houllier only had one year left of his contract. But now I understand why Moores waited so long to fire his sorry @ss. If he had been fired a year earlier it would maybe have costed 50% more? This is one of the biggest scandals in the history of LFC. I never thought a football club could be robbed this way. A big slap in the face for those who thought Houllier loved this club. Greedy bast@rd.