Liverpool FC Forum

[Redrider]

It is hard to be critical of David Moores, as an out and out fan of LFC his heart is undoubtedly in the right place. However, in terms of business decisions with the advent of big TV money we have now moved into a new age for Football Club's. To be truely successful we need a form of International Financial awareness that hitherto was not required at LFC. Success on the pitch has to complemented with a management team who are up to speed with how to raise sponsorship and deal with players agents in all of the worlds continents.
We will not survive, with David Moores and Rick Parry, running the club like a 'Good Old Boy's' Rugby Club, great values and great tradition etc.
We need a change aswell as more money, let's hope the two come as a package.

[69-1067957946]

It is hard to be critical of David Moores, as an out and out fan of LFC his heart is undoubtedly in the right place. However, in terms of business decisions with the advent of big TV money we have now moved into a new age for Football Club's. To be truely successful we need a form of International Financial awareness that hitherto was not required at LFC. Success on the pitch has to complemented with a management team who are up to speed with how to raise sponsorship and deal with players agents in all of the worlds continents.
We will not survive, with David Moores and Rick Parry, running the club like a 'Good Old Boy's' Rugby Club, great values and great tradition etc.
We need a change aswell as more money, let's hope the two come as a package.

Very good post, I coulden't put it better my self.

Moores and Parry may be nice men, but that dosen't make them qualified to run LFC.

By the way, how come Parry is always in Barbados?

[JBG]

By the way, how come Parry is always in Barbados?

Thats a good point!

He was there in May/June when the search for a new manager was on. He claimed he was at a "Masters" football tournament! 

[69-1067957946]

He was also there recently, I think it was when Cisse broke his leg.

[Redtribe]

Maybe he is looking for John Barnes Granny!!!

I know i know its Jamaica

[Redrider]

He was also there recently, I think it was when Cisse broke his leg.

He was at a 'Plaster Casters Convention'      

[spud]

There is absolutely no doubt that we are approaching the cross-roads for LFC. Make the right choice and we can go upward and onward, make the wrong choice and we could end up like other big names in decline.
Spud is absolutely correct that the business management of the club is inept, it is from another age. While the partriarchal principles employed by Moores are very laudable and probably run with complete integrity. In the world of today's high finance football we need to add a sharper edge.
Players and staff employed by LFC are entitled to feel secure in their employment and receive handsome pay-offs when they are 'made redundant'' however, we do need to protect ourselves from missuse of our asset values: MO, Mcmannaman and Real Madrid have heavily 'wiped our eye' in recent years. It seems to me that we also pay over the odds for players and give them contracts that make it impossible for us to dispose them without continuing to pay half their salaries etc. Unfortunately, I think we have been too generous in the past.
I am also extremely concerned about the new Stadium Expenditure, £120m for 60,000 seats is preposterous, the Millenium Stadium cost £75m for 80,000 seats. Yes, I know the argument, that more seats means more revenue, but spending £120m for an extra 15,000 seats is madness, it will take 15/20 years before we go into profit.
A cash injection from a new board member would be welcome and pump prime the purchase of a decent striker, but the real benefit to the club has got to be the addition of some umph! to our business affairs. I do not see this happening via well-meaning input from fan's, I believe we already have that from David Moores. We need to accelerate and move on !!

Absolutely spot on.

Rick flying half way across the world to sit on a potty next to some Asian PM is a clear indication of the current financial position.

Lets look at the FACTS surrounding the Granada investment (I've just dug them up)

In July 1999 Granada took an equity stake in the club of 9.9% and paid £22M.

In September 1999 (2 months later and unknown to LFC), Granada took a 4.99% equity stake in Arsenal and paid them £40M.

Why........?

Those who know little blame Granada and say they were underhand and employ double standards.

Those with some business acummen commend Arsenal and look at LFC as being naive and inexperienced.

One club is run by a professional businessman, one club is run like a boys club.

The employees of the professional businessman won the Prem League last year and will probably do so this year.

They are also building a £360M stadium, and have made £M's on transfers building an academy on the back of one player that LFC didn't take a buy option on  - because they wanted to buy an unproven Senegel international for £10M who's now out on loan.

I'm not negative, just factual.

[Redrider]

Moores and Parry have to be applauded for taking the first step and retiring Houllier. But they now need to take the next step which is personally dangerous for them. How do they bring in more power to the boardroom without diluting their own positions ? Difficult for them and that is why they are stalling on the moves from Morgan.

[bigmick]

Very informative and interesting post from Spud. The Granada stuff is mind-boggling don't you think?

[Redrider]

Mick, The general opinion of LFC, is of a well managed club. However, the truth of the matter is that the tremendous level of support at home and accross the world has provided a level of funding that, together with injections from David Moores has covered up a certain level of profligacy and an inability to cut good deals.
It is only when bad results come to the surface, like the £22m loss that we start to question some of the deals and Spud is quite correct with his analysis of the situation, there are many club's around who cut better deals than our management.
I think it is about time for Moores and Parry to move to one side and bring in some new 'blood' to sharpen our act. Moores should stay on the board and Parry should move into a non-executive role, where they are both available to provide the traditional view and maintain the club's integrity. But we need some sharper knives in the draw to deal with the like's of Granada and the Real Madrid's of this world.

[Pool Boy]

As an accountant looking at these figures the situation is not as bad as thought.......The club is £18m in debt after reporting a £22m loss.......the loss arises because we have invested in the region of £100m in players....they are treated as an asset in the clubs accounts and are written off over the term of their contracts usually 5 years....that means we take a hit of around £20m per year until they are fully written off.....and sometimes quicker if they go out on loan or we sell them at a loss to the original purchase price.

The £18m debt figure repesents the cashflow position of the company after paying for all those players......baring in mind the club spent £14m on Cisse this summer......I'm not sure this figure is taken into account in this debt figure. Qualification for the champions leage second round would bring significant rewards.....looking at the size of the debt in relation to the income streams out there make it manageable. The problem is can our current squad qualify on a regular basis for the CL....if so then the debt will reduce and money will be available to invest in the squad. We are a smaller version of Leeds Utd.....they gambled on CL revenue and got way in debt and then didn't have the income to support it. Debt is not bad....but only as long as it's manageable....you cannot spend big without having success down the line......Lean years ahead unless investment comes in to play.....but we are by no means in the sorry state some are saying.

[JohnBull]

I don't know where the idea that Moores is putting his hand into his own pocket comes from.

The only man offering his OWN hard earned is Morgan. A grafter who made his own dosh and is putting his money where his mouth is. The stumbling block is the share value that Moore is claiming as opposed to the realistic price that Morgan is offering.

Within the last year I've seen single shares go for £4k and £1,800 - BIG difference for the same loaf - it just depends on who is buying. When your buying a majority holding as Morgan wants he did the right thing and got an independent valuation which was something like 40% less than Moores'.

The present debt is a result of poor boardroom decisions but I can bet my bottom dollar that none of them are losing out.

We are a rich mans plaything with a crew of leeches hanging on the gravy train - How much do they want for a sausage roll?- seems fair to me!!!!! SUCKERS

[spud]

Mick, The general opinion of LFC, is of a well managed club. However, the truth of the matter is that the tremendous level of support at home and accross the world has provided a level of funding that, together with injections from David Moores has covered up a certain level of profligacy and an inability to cut good deals.
It is only when bad results come to the surface, like the £22m loss that we start to question some of the deals and Spud is quite correct with his analysis of the situation, there are many club's around who cut better deals than our management.
I think it is about time for Moores and Parry to move to one side and bring in some new 'blood' to sharpen our act. Moores should stay on the board and Parry should move into a non-executive role, where they are both available to provide the traditional view and maintain the club's integrity. But we need some sharper knives in the draw to deal with the like's of Granada and the Real Madrid's of this world.

Redrider - agree again.

I see people are critising GH for taking LFC to the cleaners with regard to contract pay out [especialliy when the view is he failed]. 

What they fail to recognise that once again, LFC handed him a contract that had no performance measures or capped pay-out's should the contract be terminated due to poor performance.

In fact, it indicates that there is no business plan at all, i.e., no formal agreement on performance and the setting and measurement of objectives.

It's all indicative of good old gentlemens agreements and trust.

We really are very poor and it's costing us a fortune.

GH has probably spent £3K on a French lawyer who's drove a Citroen bus through a shabby contract and Rick has done a compromise agreement to bring a swift end to proceedings so we can move on.

Even Chelsea screwed Claudio R when they sacked him, Peter Kenyon saw to that and paid him the minimum.

I will say again.....a change in management and a change in playing staff is only part of our problem.  We need a Board shake up.  If they have got anything about them they'll bring in some professional help before someone does it for them.

Good results will only disguise this underlying issue.

Pool Boy - I accept your view that debt is not bad and its cashflow that ultimately brings a business down.  I'm not convinced that the club has the expertise to manage this either.

I'm delighted to see this topic getting the appropriate level of attention because it's serious stuff.

[kindaconfused]

I don't think peeps are suggesting that debt is the end of the issue but when it moves from a profit to a loss linked with some poor purchases and off loading players below value.

Link this with the fact that there are business men in the sidelines offering money (in exchange for sharing of the power) gives you cause for concern.

Regarding the accounts the issue is where is the money to, say buy a top notch tried and tested striker of say £24m, without loans I dont see where it is. The accounts without further loans or cash input (in exchange for ownership) then this means we have reached are peak in terms of buying new players. We may buy lesser players with single figures but the dream (mine) of bringing a star in are gone.

Morgan et al see this in the accounts and thats why they are circling around, and when you say the figures aren't that bad then as far as football clubs go they are not and the same goes for a business but if you want to start buying a few more stars then it is.

[JohnBull]

ONE superstar would make little difference at the stage we are in at the moment.
I'd rather see Raffa bring in a few so called "lesser" players who make up a Team.

Trust in the Boss - You know it makes sense!!