Liverpool FC Forum

[Reg]

Liverpool report losses of £50 million
Liverpool have reported a loss of almost £50 million for the last financial year as a result of failed new stadium costs and pay-offs to former manager Roy Hodgson and other staff.

11:10AM BST 03 May 2012

Despite owners Fenway Sports Group wiping out debts of £200m with their Oct 2010 purchase of the club, they had to write off a further £35m associated with the doomed HKS-designed Stanley Park project of predecessors Tom Hicks and George Gillett.

And Hodgson's exit in Jan 2011, after just 191 days in charge, and the departure of former managing director Christian Purslow, contributed to a further £8.4m relating to contract terminations, accounts filed to Companies House show.

Current managing director Ian Ayre insists the accounts, without that "extraordinary" expenditure, are in good shape.
"I guess people will focus on the loss of £49.4m and there's no business - or people running any business - who are going to be pleased with any loss," he told the Liverpool Echo.

"But I think the important indicator here is this £59m charge for exceptional items and as a business that's been in a transition, it's about moving from where we were to where we want to be. "We have written off a huge amount on the stadium project. A big chunk of that £50m loss relates to the HKS project - which is now defunct - and associated costs around that."

Following their Liverpool takeover in 2007, Hicks decided to abandon established plans for a new ground in Stanley Park and engaged Dallas-based architects HKS, who came up with an ambitious glass and steel design.

Soon after taking over, FSG scrapped that project but there were still residual costs associated with legal, planning and design fees, which needed to be settled and resulted in a huge deficit.

"With new ownership that was kind of milling around within the club's accounts and there was a very definite need to move that out," said Ayre.
"It is a huge loss but that goes with a lot of other things that nobody was really happy with in that period.
"So rather than dwell on it, we've very smartly made the decision to remove it from the club's accounts.
"It is a big write-off but it means that it's gone forever now and we can move forward now without that around our neck.
"And it also means that we are in pretty good shape in being a sustainable business. It's a positive step forward."

Ayre insisted the amount of money spent on contract terminations was less unusual, although dispensing with Hodgson after six months in charge was out of the ordinary for Liverpool, who have a history of sticking with managers for much longer.

"It's nothing untypical of anything in football. Contracts are typically fixed term," said Ayre of the pay-offs.
"When you make a decision to terminate somebody, the right and proper thing to do is honour the pay-out of that contract.
"This relates to Roy and to some of his backroom staff and also to Christian Purslow leaving. It's standard across football.
"It's unfortunate to have to have them - nobody wants to see anybody go - but in certain circumstances it's right to make a change and that's what that relates to."

On the accounts as a whole Ayre said they were in better shape long-term as a result of the action taken by the owners.
The figures do not include the kit deal signed with American company Warrior Sports, which is worth at least £25million a year.
"If we had not written off these extraordinary costs, we would have been looking at breaking even," Ayre said.

"We have reduced interest charges from £18m to about £3m. That puts us in a much stronger position to utilise our revenues more effectively on the team.

"These figures in many ways represent the commitment of the owners, in paying down the acquisition debts and in other areas.
"What is reflected in these accounts was going on around the time they actually came into the club.
"It's not where we are today. It's a year on, so it was a big commitment at an early stage
"The owners have continued to make changes and commitments.

"They have made some great investment at the start; they cleaned up a lot of what was a problem at Liverpool and they have invested in both the team on and off the pitch.

"They continue to do that and look at what's right - and what works and what doesn't work."
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Its very upsetting that we're still paying for the disasterous ownership under Twit &*****. However some of the loses were avoidable such as those associated with Woy, the ***** players he bought and the wages and loses incurred getting rid of them. We"ve got good owners, but now the Liverpool end has to perform, the owners have done their bit.

[devaney]

Has anybody got a link to the full company accounts

[jacdaniel]

I dont know too much about finances but it doesn't sound fantastic.  Sounds like we're still cleaning the mess that H + G left behind.

[RichardLFC1]

Yeah Were still cleaning up There mess but it was to be expected. As Ayre says its gone now and it puts us in a positive light for the future.

This ownership know what they are doing and im confident "at the end of the storm theres a golden sky" 

This summer i think we will sell more than buy maybe we might spend more on players but the wage bill will be less.

[tubby]

Id like to say hopefully this time next year we will be reporting profits but without a new stadium I can't see that happening.

[SouthCoastShankly]

Pretty much all the losses were classed as "exceptional items". I'm not worried.

[kazza]

This is the final thorn left by the previous owners and the new owners probably knew about this and accepted it as part of the purchase price. It is good they wrote it off so that it is gone forever and we can move forward. It is good news in the sense it tells us the new owners are a good setup as the previous ones would have rolled it forward. Unhappy about the loss but happy in what I see in the owners. If we can just sort out the stadium then the future will be bright indeed and we will cement our place as an elite club which we are in danger of losing.

This summer will be intresting... Without CL do the owners reduce the losses by selling more than they buy and risk no CL next year as well or go for it a bit, accept another year of losses and buy players that will give us CL again. Gerrard getting older worries me as we need a long term replacement that can make the same impact.

[Greavesie]

I'm pretty much following the general consensus, hopefully that's the last we have to hear of the gillett and Hicks era at Liverpool Football Club, my only concern is how much this leaves us for transfers, which are vital

[Kharhaz]

Yeah Were still cleaning up There mess but it was to be expected. As Ayre says its gone now and it puts us in a positive light for the future.

This ownership know what they are doing and im confident "at the end of the storm theres a golden sky" 

This summer i think we will sell more than buy maybe we might spend more on players but the wage bill will be less.

The wage bill was one of FSG's major concerns when they took over. Aquilani, Cole, Degen, Poulsen, who we could only shift out on loan, dont justify the wages that they are on. If we can shift these players, and other "deadwood" around the club then our figures will look much better.

[lakes10]

I dont know too much about finances but it doesn't sound fantastic.  Sounds like we're still cleaning the mess that H + G left behind.

the funny thing is that its not that bad.
at the end of last year the thinking was it could be up to 100mil.
it seems the owners fix the bleed by gutting of things paying for the hording boards around the site of the new ground, think they were costing someting like 15k a year, small things like that add up.

just got to work out how this work with the new rules in buying players.

[stmichael]

doesn't surprise me one bit. only arsenal and newcastle aren't in the black in the entire league.

[metalhead]

previous owners and no CL did hit us pretty hard, so no surprise there, hopefully we can recoup our losses in 2 or 3 years time

[Kenny Kan]

Suarez 7 RAWK

[Reg]

I'm pretty much following the general consensus, hopefully that's the last we have to hear of the gillett and Hicks era at Liverpool Football Club, my only concern is how much this leaves us for transfers, which are vital

Back at the oldest question of all - new plyer or a new stadium to generate revenue.

For 30 years we've put it off but it HAS to be a new stadium, we can't starve ourselves of revenue any longer.

Give me that Cardiff Millenium stadium any day of the week, I was there when we beat the Gooners 2-1 in the FA cup final.

[Kenny Kan]

Has anybody got a link to the full company accounts

http://dl.dropbox.com/u/6622840/Liverpo ... 202011.pdf