Liverpool FC Forum

ycsatbjywtbiastkamb » Sat Feb 23, 2013 11:31 am wrote:i know these are all just twitter rumours to be taken with a pinch of salt, but if the rumours are true imo it`s not a great sign when owners need to bring someone else in to help finance the stadium redevelopment.

It's not so much a "need" as it is a preferance.  They would prefer to bring in someone else to foot the bill, offering them a stake in the club, and BTW that stake will cost alot more in percentage terms than what they paid for the club.  It's just good business.  I'd rather see them making money back on their investment in this manner than to see them simply taking money out of the club.

The Good Yank » Sat Feb 23, 2013 4:35 pm wrote:

ycsatbjywtbiastkamb » Sat Feb 23, 2013 11:31 am wrote:i know these are all just twitter rumours to be taken with a pinch of salt, but if the rumours are true imo it`s not a great sign when owners need to bring someone else in to help finance the stadium redevelopment.

It's not so much a "need" as it is a preferance.  They would prefer to bring in someone else to foot the bill, offering them a stake in the club, and BTW that stake will cost alot more in percentage terms than what they paid for the club.  It's just good business.  I'd rather see them making money back on their investment in this manner than to see them simply taking money out of the club.

hmmm...i`m not convinced mate.
not so long ago tom werner said that fsg had the funds to compete with anyone in the game but if that statement was true i doubt they`d be looking for other people to come in and invest in the club.
i just hope if fsg are a bit skint that they dont try to cash in on our assets on the pitch, that `every player has his price` line that they trotted out last summer sounded a bit ominous to me.
it`s pointless building a bigger stadium if you havent got a team good enough to fill it.

ycsatbjywtbiastkamb » Sat Feb 23, 2013 4:51 pm wrote:

The Good Yank » Sat Feb 23, 2013 4:35 pm wrote:

ycsatbjywtbiastkamb » Sat Feb 23, 2013 11:31 am wrote:i know these are all just twitter rumours to be taken with a pinch of salt, but if the rumours are true imo it`s not a great sign when owners need to bring someone else in to help finance the stadium redevelopment.

It's not so much a "need" as it is a preferance.  They would prefer to bring in someone else to foot the bill, offering them a stake in the club, and BTW that stake will cost alot more in percentage terms than what they paid for the club.  It's just good business.  I'd rather see them making money back on their investment in this manner than to see them simply taking money out of the club.

hmmm...i`m not convinced mate.
not so long ago tom werner said that fsg had the funds to compete with anyone in the game but if that statement was true i doubt they`d be looking for other people to come in and invest in the club.
i just hope if fsg are a bit skint that they dont try to cash in on our assets on the pitch, that `every player has his price` line that they trotted out last summer sounded a bit ominous to me.
it`s pointless building a bigger stadium if you havent got a team good enough to fill it.

FSG are basically a bunch of investors and bringing in another investor is just the way they do business, its similar to venture capitalists who have investors, buy business build them up or split them, sell them off and make money, the difference is that the money made is building up the asset and making money on the TV rights, merchandise, advertising, naming rights and increasing the value of the asset. They will always be looking for more investors, its not about being skint its about adding, value, expertise, contacts etc. If for instance the investor is from Qatar, they will also bring more money from that region, advertising, supporters etc.

ycsatbjywtbiastkamb » Sat Feb 23, 2013 4:51 pm wrote:

The Good Yank » Sat Feb 23, 2013 4:35 pm wrote:

ycsatbjywtbiastkamb » Sat Feb 23, 2013 11:31 am wrote:i know these are all just twitter rumours to be taken with a pinch of salt, but if the rumours are true imo it`s not a great sign when owners need to bring someone else in to help finance the stadium redevelopment.

It's not so much a "need" as it is a preferance.  They would prefer to bring in someone else to foot the bill, offering them a stake in the club, and BTW that stake will cost alot more in percentage terms than what they paid for the club.  It's just good business.  I'd rather see them making money back on their investment in this manner than to see them simply taking money out of the club.

hmmm...i`m not convinced mate.
not so long ago tom werner said that fsg had the funds to compete with anyone in the game but if that statement was true i doubt they`d be looking for other people to come in and invest in the club.
i just hope if fsg are a bit skint that they dont try to cash in on our assets on the pitch, that `every player has his price` line that they trotted out last summer sounded a bit ominous to me.
it`s pointless building a bigger stadium if you havent got a team good enough to fill it.

The unconvincing part of this conversation is the fact it is based on a dubious twitter rumour.

as i said SCS i`m taking those twitter rumours with a pinch of salt but saying that i wouldnt be totally shocked if they turned out to be true either. redeveloping stadiums is an expensive business.
btw can any of our posters who live stateside fill us in on whats happening with the red sox? last time i heard they were bottom of the league and in need of major reinvestment.
i think the baseball season starts soon so did fsg splash out big money in the baseball transfer market?

Personally and purely on guess work I dont think FSG will re develop and will just look to sell
and move on from the project to focus on American sports.

They will stabalise the club financially and cut and run with a tidy proft which was no doubt
their minimum expectation from the off.

Dont think they have the capacity to move it forward now so if they can find a buyer and make
a profit it makes sense for them and for the club.

Truth be told we need more than they can provide to try and restore former glory and whilst its
nice to dream you can do it without big investment the reality is very different.

I’m reasonably happy with the path we are on in terms of ownership and strategy. We have been making year on year loses lately which is mainly due to an unsustainable wage bill which was totally out of control by the 2010/2011season thanks to Hicks, Gillett and Purslow. Ultimately this was putting the long term future of the club in jeopardy. FSG have been quite aggressive in reversing this trend and have also made a more than reasonable amount of money available for transfers. Ticket prices have been frozen and they want the club to increase revenues through commercial development, something we have neglected for far too long.

The cost of redeveloping Anfield has been estimated at £150 million. This isn’t an unreasonable amount for the club to borrow from the bank for a capital expenditure project and FSG could quite comfortably underwrite the loan. But if we go down this route we will have to allocate a large chunk of annual revenue to pay back the loan and interest for many years. This is money that could otherwise be allocated to our annual wage bill and transfer budget. So it wouldn’t surprise me if FSG are looking for investors who could help us avoid this in exchange for them giving up some equity. But these sort of deals hardly ever go through as when the price reaches a point where its attractive for the party selling it becomes unreasonable for the buyer.

It will be interesting to see how they finance the Anfield redevelopment as the traditional methods of borrowing the money will affect financing for the football side of the club in the short to medium term future and John Henry has said he doesn’t believe this is the right way to do it.

Part of the money will have to go to paying off the loan, but the club will be making a substantial amount from the increased capacity on ticket sales, and concessions.  I could be very wrong, but I'm pretty sure the extra income from the increased cap will pay off the loan amounts, and then some.  FSG are smart business people, and know how to structure a loan.  They may even be able to freeze payments on the loan until the stadium renovations are complete, but I don't know.

From Skysports

Liverpool's debt has increased to £87.2million after they posted a loss of £40.5m in their annual accounts.

The figures apply to the 10 months between 1 August 2011 to 31 May 2012 to coincide with the football season.

Although commercial revenue increased, so did the Anfield club's liabilities, but managing director Ian Ayre played down the significance of the rise in debt levels.

"It's definitely not something I believe anyone should be worried or concerned about. It is seasonal - our debt goes up and down," he said.

"We have money to pay out and money coming in, just like any business.

"The difference in football is some of the swings are significant, so if you look at player trading, we may need to make investments as we do in the summer before our key revenues come in: big sponsorships cheques, big ticket revenues, all the media revenues etc.

"It's definitely not something I believe anyone should be worried or concerned about. It is seasonal - our debt goes up and down."

"You come to Christmas when you maybe have less revenue coming in but you have got money that needs to go out, both on playing deals that you are doing at the time but also on historic player deals.

"Debt has increased but I think it's a factor of doing business in the time and place we are."

Other contributing factors to the increase in debt were player instalment payments plus exceptional payments of just over £9.5m, relating to matters such as the stadium project, general restructuring and pay-offs to senior employees who left the club.

"We see a big charge within the accounts for amortisation (depreciation in value) of players that have been disposed of within the period that perhaps came in on a higher cost," added Ayre.

"We've made losses as a result of selling them but at the same time we've improved our longer-term position in terms of our wage bill by reducing the wages for those particular contracts.

"We've in the same period refinanced our lending facilities, which gives us ability for working capital to operate as a business."

Since the end of the accounts reporting period, owners Fenway Sports Group have injected £46.8m into the club via a non interest-bearing inter-company loan while credit facilities were also refinanced with three major banks, providing £120m of facilities for three years.

I hope the Arabs looking to buy Arsenal take a look at us when they get rebuffed, we need some serious money invested into the club or we are destined for midtable obscurity. FSG have bullshitted us and leveraged the club with the banks exactly like twit and tw@t did.

A lot of that 9 million was paying off Joe fecking Cole.

If the vultures were swirling above Suarez before they will be flying a little
lower now after these results no doubt.

We've assumed 80 million of debt with feck all to show for it. Again.

Reg » Mon Mar 04, 2013 2:16 pm wrote:We've assumed 80 million of debt with feck all to show for it. Again.

Loans from the owners to allow money to be spent on player purchases

Here is a quick summary of the accounts released today which show the position as of 31st May 2012.

•Rather than a normal full 12 months, the results only cover the 10 month period from 1st August 2011 to 31st May 2012, as the club has changed their accounting period to align with the footballing season like most other clubs. Next year we will see accounts for a full 12 month period.
•The above fact skewers any assessment of performance which requires annualisation and assumptions for costs as well as commercial revenue.
•Net debt as of 31 May 2012 was up from £65.4m to £87.2m from the previous year, with £69.9m owed to the bank & the rest to FSG.
•In August 2012 (after the accounting period being discussed) FSG provided a £46.8 interest free loan to the club (on top of the £30m provided last year), which was used to reduce the bank debt mentioned above, which ultimately saves the club money on interest.
•£9.6m was paid in termination payments to departing staff, thought to include Dalglish and his coaching staff, Comolli, Brukner, etc.
•It’s difficult to assess accurately due to the shorted accounting period but the wage bill does not seem to have been slashed to the levels most had assumed.
•Transfers included in the period are;
-In (Enrique, Coates and Bellamy)
-Out (Ince, Jovanovic, Ayala, El Zhar, Kyrgiakos, Insua, Poulsen, Meireles, Ngog and Degen)

•The next set of accounts which will be released in 12 months time will cover the period from 1st June 2012 to 31 May 2013. Effectively Rodgers’ first season in charge.
•The next set of accounts will include revenue from commercial deals with Warrior, Chevrolet and Garuda. An estimated £15-20m addition to commercial revenue from the current accounts.
•Next set of accounts will cover £5m compensation paid to Swansea for Rodgers and other backroom staff, as well as any pay offs to Jen Chang and departing players like Joe Cole and Aquilani.
•Transfers covered in the next accounting period will include:
-In (Borini, Allen, Assaidi, Sahin, Yesil, Sturridge and Coutinho)
Out (Aurélio, Amoo, Darby, Kuyt, Rodriguez, Aquilani, Bellamy, Adam, Eccleston, Cole, Sahin and Doni)
•Staff costs in next year’s accounts will include wage increases for the likes of Suarez, Skrtel, Agger, Shelvey, Sterling, Suso, etc.
•The next set of accounts will not include the increased TV rights revenue which will begin in the 2013/2014 season. This revenue will be included in the accounts after next.


My conclusion is that as of 31st May 2012 the club was obviously in far better condition than when FSG first took charge and we were heading in the right direction. But there was still an awful lot of work to do if we were to become a competitive self sustaining club that meet FFP regulation.