Liverpool FC Forum

[ivor_the_injun]

Morgan should either show his maths or shut up.

His latest barking is just another reason why Moores was absolutely right to not deal with him - he tries to work the fans up with foundationless comments. It's blatant press-grabbing, and if that's the kind of businessman he is, we should steer well clear.

[Red H]

Thanks for the explanation.  On first glance Morgans comments were alarming, but this seems to make more sense now.  I also concur with the sentiments about Morgan.

[48-1119859832]

What happens if he is actually right and we're in that much debt? I mean we've spent a hell of a lot on players and never really made in profits in selling them apart from Fowler and Owen. He could be telling the truth altho I do hope he's lying thru his teeth.

[anfieldadorer]

Morgan: "Liverpool need money, I have"

[azriahmad]

Morgan is not on the board of directors of the club but he is a shareholder. Hence, by legislation almost anywhere in the modern world, he would be called to the AGM via a notice which is included in the annual report. Hence, he has access to the already published annual report but only when it's published and a notice of AGM is issued. He is not privy to the day-to-day running information. This is what he is trying to get into and so far is unsuccessful.

As to the "total debt" comment, I believe he is saying that Liverpool FC's total liabilities (banks, creditors and total payables) total near £73 million while the total assets (book value of players, receivables, debtors) total somewhere near £55.9 million. With the book amount of liabilities exceeding the book amount of assets, Liverpool is said to be "in a net debt position of £17.14 million", this figure is the difference of the respective book amounts between assets and liabilities.

However, Liverpool FC is very much a going concern, which has registered a healthy increase in its turnover thanks to its CL exploits and with us still in the knock-out stage this year, our turnover, at worst if we do not progress much further, will still be very respectable although some 10% or 15% less than last year. Because of this, Liverpool's creditors will generelly still give indulgence and wait for the scheduled payments instead of demanding full payment immediately. If we continue to participate in the CL and keep progressing to the QFs or SFs every season in the future, we will register a healthy turnover and will be able to overturn this "net debt" position within 5 years. The CL is that lucrative and manure's financial strength has been largely built on that.

As a businessman, he knows this concept of credit but statement on the debts exceeding £70 million is purely to jolt the more emotional supporters into joining him and his crusade to force Moores to give in to his plans.

Another factor is that the assets are at "book value". I bet that Stevie G is accounted for at his contract value since he cost us next to nothing and if his market value were to be stated, the "net debts" will be wiped out.

[anfieldadorer]

loss and profit

[azriahmad]

Well done, man! I can't get a hold of this from my parts of the world.

Anfieldodorer my good fellow, can you do me a favour and post a copy of the balance sheet and if possible funds flow statement or cashflow statement? The balance sheet will tell us a lot - assets, liabilities and would shed much needed light on the creditors of 73million quid Morgan's harping about and we can also see the debtors.

The cash flow statement will shed some light on the actual flow of money but the balance sheet is the one which will give us a lot of clues.

Cheers, mate.

[anfieldadorer]

no probs, azri:

balance sheet:

[anfieldadorer]

and cash flow statement:

[azriahmad]

Thanks, mate.

Now, the above financial statements don't look nowhere near as bad as Morgan said.

Yes, the net debt has increased but the cash balance has also increased, by a bigger amount. Creditors, presumably player transfer-related. has increased by 13 mil but the debtors, presumably also from player transfer out has increased by 10 million and during the year, the club reduced its bank borrowings by almost 2 million.

On top of this, the club's revenue increased by almost one-thirds by 30 million pounds. Hence, this illustrates perfectly that a good CL run is essential. The full financial effects of our CL participation last season would require more analysis as the playing season and our CL run is spread over 5 months in the financial year of 2004 and 5 months in the financial year of 2005 so we can't just deduct the difference between 2005 and 2004 to come up with the figure. Liverpool FC is very much a going concern, and Morgan's statement is like saying that all of those liabilities/debts are due immediately, which is utter bollox.

Without the CL, the revenues whould have been far less. A good CL run every season, not necessarily culminating in ultimate victory, would put us in good stead indeed. Winning the CL makes all of us very happy, but there is the cost of player bonuses. I don't know how our players' bonuses are contracted but going to the semis of the CL every season would pull in a lot of money over the next few years and a run like this is essential for us.

We have lost a lot of ground in the past to manure and Arsenal due to our previous non-participation in the CL.

[Leonmc0708]

I came across this in the BBC website.

Morgan sounds Reds debt warning

Liverpool shareholder Steve Morgan has reiterated his calls for the club to find new investment after alleging the Reds are more than £70m in debt.
Morgan, who has previously tried to buy the club, said the official figure of £17m hid other financial problems.

"When you take creditors and worsening financial conditions into account, the debt, I believe, is nearer to £73m," said Morgan at the club's AGM.

"It's imperative to get extra financial investment. We're on a dangerous line."

The figures in the club's financial report show the club made a gross profit of £7.53m on the year, which included their Champions League win, compared to the previous year's loss of £18.22m.

But in the same period, the net debt rose from £15.38m to £17.14m.

"New investment is needed sooner rather than later," added Morgan, the club's third biggest shareholder.

"Manchester United still make double what we do on match days.

"All I can say to the board is that we've been waiting for over two-and-a-half years and we need the investment sorted out."

Director Keith Clayton agreed that the club needed more funds but said the plans for a new stadium were crucial for the future of the club.

"It's still our view that we need further investment to sustain success on the field and the new stadium," said Clayton.

"We are at a critical point of our history and we need to get this right.

"We accept that the estimate of £160m for the new stadium is not far away from the figure but we do have contingency plans at Anfield."

Other figures in Liverpool's annual report showed their wage bill had been reduced by £2m to £64m, representing 53% of the club's turnover, while turnover had risen by 32% to £121.05m.

Liverpool have been linked to the American-based Kraft family and Thailand Prime Minister Thaksin Shiniwatra.

I have not seen Liverpool's annual report and don't have access. Anyone has any ideas on how to get hold of one? Only then can some light be shed on this allegation.

Liverpool has net debts of £17.14 million. Presumably this is debts owing to financial institutions. If Morgan claims that Liverpool have "total debts of £73 million" if all creditors are included, this means that Liverpool has some £55.9 million creditors of various forms - transfer payments committed but to be paid in instalments etc. I can't really fathom that Liverpool has so much debts with the bulk in the form of other creditors in addition to bank loans of some £17 million, because we don't spend that much in the transfer matket.

Morgan is a media whore who will sully any name in his pursuit of a place on the board and control of the club.

By his reckoning all business is in debt and should cease trading.

[7_Kewell]

Morgan has just shown how pathetic he really is.....what outcome did he expect to come from this?  Liverpool fans to be protesting outside the ground demanding Moores out? 

The guy has shown his true colours and i, for one, am glad he's been refused influence on our board.