Liverpool FC Forum

by **Ciggy** » Wed Feb 01, 2006 12:03 am

Liverpool FC Financial Report

Liverpool FC shareholders received their annual financial report today (31st January), ahead of the club's 113th AGM, and found very positive figures.

The key points of the report include:

£7.53m profit, against the loss of £18.2m last year

Huge decrease in percentage spent on wages

Massive increase in percentage of income from Cup competitions

Actual figure for winning the Champions League

Also detailed is severance pay, TV revenue, merchandise increase, problems with renewal of sponsorship deal with Carslberg, income from sales of Diouf, Baros and Josemi.

Interestingly, there is nothing about the new stadium; neither money spent so far on the planning nor the expected or impending costs of construction work. This is sure to be something which will be raised at the AGM.

Profit & Loss and Net Debt Figures

Liverpool FC reported a profit of £7.53m after tax, against a loss of £18.2m last year. The club's net debt is recorded as £17.1m - slightly up from £15.4m and due to purchases in the transfer market.

Wages and Severance Pay

This is a huge positive for the club, £64.2m has been spent on wages - 53% of the club's income and down from the massive 72% of the previous year. The 'acceptable' percentage for Premiership clubs is around 60%.

£10.75m was lost as severance pay to Gerard Houllier and other members of the coaching staff who left; including Phil Thompson and Sammy Lee.

Player Sales and Income

Sales of the Milan Baros, El Hadji Diouf and Josemi brought in a total of £13.845 million.

Purchase of Jan Kromkamp costing £4.345 million.

Therefore meaning Baros and Diouf were sold for £9.5m in total. It is speculated Diouf went to Bolton for a fee of around £4.5m.

Television Revenue

A surprising 6.7% fall, although largely due to the new domestic Premiership deal. The club received £28.699m (compared to £30.773m in 2004). This figure is expected to remain similar for the next three years.

Cup Competitions

Increase of a massive 480%, obviously largely due to the Champions League success. The figure is up from £5.454m to £31.723m.

Champions League

Total revenue generated was £28.8m.

Premiership Income

4% increase, due to the capacity at Anfield being maximised. 2004 figure was £22.005m, 2005 is £22.928m.

Sponsorship

This figure is up 13%, although is the one disappointing aspect of the report. This is due to the delay in renewal with sponsors Carlsberg which lead to problems with Reebok and seems to have had a knock on effect which means the club will have a new kit sponsor (Adidas) this year.

Retail and Merchandise

The delay in the sponsorship deal with Carlsberg (see above) meant the late release of the new away shirt, despite a high demand and therefore sales of which are not included in this area, which is for up to July 31st 2005 only.

The figure is reported at £12.312m, up 5% from £11.701m the previous year.

Predictions and hopes for next financial year

The club predicts losses through bonuses for the Champions League win which were included in contracts of players and staff.

Money will be spent on squad rebuilding but at the same time trying to restrict wages to the reasonable 60% figure.

Predicted increase in retail and merchandise for 2006.

AGM Details

The annual general meeting for shareholders takes place on 23rd February .

Last year’s stormy scenes are not expected to be repeated, key issues will no doubt be the failure to capatalise on Champions League success in terms of sponsorship and the knock-on effect on retail income, the new stadium and future plans.

Article Copyright © This Is Anfield (.com)

by **drummerphil** » Wed Feb 01, 2006 12:12 am

very interesting but somehow expected the cl victory with all the knock ons to be worth more.

by **Cool Hand Luke** » Wed Feb 01, 2006 12:24 am

I think the amount of players we had on our books and the size of the wage bill that he inherited really hampered Rafa’s plans. It is taking time to get rid of the :censored:

from our squad. Having players out on loan means you still have to pay a certain percentage of their wage, and I imagine we must have certain cap on the amount of wages we can pay out, especially after what happened under Houllier.

I mean we still have 12 players out on loan:

Kirkland – W.B.A
Raven – Tranmere
Whitbread - Millwall
Medjani - Metz
Diao – Portsmouth
Potter - Southampton
Cheyrou - Bordeaux
Foy – Wrexham
Gonzalez - Real Sociedad
Le Tallec - Sunderland
Mellor – Wigan
Pongolle - Blackburn

I know a number of them are youngsters, but it is a problem. 12 players is way too many, having 4 or 5 youngsters out on loan is fine, but our situation is ridiculous. I can see most of those players not being here next season. And our first team squad is almost full in terms of numbers, except for maybe 1 or 2 places, so those players out on loan are going to have to replace existing first team squad players or be sold.

In terms of the squad, things have progressed well, and we can see some clear structure, but there is still some players that need shifting, hopefully by the time next September comes we wont have any players like this holding us back.

by **Ciggy** » Wed Feb 01, 2006 12:25 am

Cant believe the profit even after winning the Cl is only 7.53 million? b@stard new stadium is costing a fortune and we have till the end of february to either scrap it or share with the bitters, if we dont get an investment or a stadium sponsor.

Liverpool chairman David Moores believes the Reds' Champions League glory is merely the 'first chapter in the modern-day history' of his club.

Writing in his annual report to shareholders, Moores added: 'This is a valuable springboard for further and sustained success.'

The financial report will show Liverpool - who will hold their annual general meeting on February 23, two days after the first leg of the Champions League last 16 clash with Benfica in Lisbon - made a profit after tax of £7.53million last year.
That compares with the previous year's loss of £18.22million, although the net debt has risen from £15.38million to £17.14million.

The accounts also reveal Liverpool have cut their wage bill from £66million to £64million - 53% of overall turnover, compared to 72% the previous year.
Turnover has risen by 32% to £121.05million, compared to the previous year's £91.57million.

Moores describes the 37 points which separated Liverpool from Chelsea last year as something 'that should not be acceptable' - adding the fifth-placed finish was 'sobering'.
But he is quick to praise manager Rafael Benitez.

'He has not shirked from difficult decisions - and since the change of manager, significant changes have occurred,' said Moores.
'I genuinely believe that real and tangible progress is under way.'

The business review in the Liverpool accounts maintains, however, that 'strict borrowing control will remain a key pre-requisite in the overall financial management of the club'.

by **Sabre** » Wed Feb 01, 2006 12:26 am

Drummerphil, there's a lot of hype with CL incomes, and there are many regular CL teams in financial crisis.

Good read CGGY, and interesting, and good to know.

Rafa is not only a good tactician, but also cares to look after LFC in the long term. Good work

I know a number of them are youngsters, but it is a problem. 12 players is way too many, having 4 or 5 youngsters out on loan is fine, but our situation is ridiculous. I can see most of those players not being here next season. And our first team squad is almost full in terms of numbers, except for maybe 1 or 2 places, so those players out on loan are going to have to replace existing first team squad players or be sold.

Your point is very understandable, but I disagree.

Only Rafa knows what's in his mind, but if we attend to what Aiestaran and Otxotorena will understand for work with youngsters and reserves, I don't think they're very keen on the reserves league.

Around here we care a lot for the youth system (and both Aiestaran and Otxoto are basques) . I think it's actually much better for the reserves and 20-23 year old players to play in competitive leagues like the premier, the primera, or even the Championship league in England. Xabi Alonso was in Eibar for instance, and knew well the toughness of the segunda division (in which physicallity is the main factor). He came from there with lots of things learnt.

I don't know what they pretend to do with the reserves team, but I think they'll make an extremely young team with it, with no under 23 players. I know that this is a wild guess, but it's my opinion! I think they're doing well in loaning players.

by **Ciggy** » Wed Feb 01, 2006 12:29 am

Cool Hand Luke wrote:I think the amount of players we had on our books and the size of the wage bill that he inherited really hampered Rafa’s plans.

What about Dudek though Luke he's on about 60 grand a week and cant even get a game.
I agree with you to many players on the books that we are still paying wages for Salif Diao 5 million and we cant even get a fiver for him :no

by **Cool Hand Luke** » Wed Feb 01, 2006 12:37 am

Dudek on £60,000? Wow, can that really be true? I reckon its closer to £40,000. The board have been really complacent in letting us buy so many players, Houllier kept buying with out selling, that was the problem.

And most of the top clubs, they have a limit on the amount of first team squad players they can have, usually about 25, any other players usually are reserve players, youngsters, who are on very small contracts and of small length. I can see things going this way under Rafa, but you have to question how did the board let it get to this situation? Should they not be held accountable?

by **Cool Hand Luke** » Wed Feb 01, 2006 12:44 am

Sabre wrote:Drummerphil, there's a lot of hype with CL incomes, and there are many regular CL teams in financial crisis.

Good read CGGY, and interesting, and good to know.

Rafa is not only a good tactician, but also cares to look after LFC in the long term. Good work

I know a number of them are youngsters, but it is a problem. 12 players is way too many, having 4 or 5 youngsters out on loan is fine, but our situation is ridiculous. I can see most of those players not being here next season. And our first team squad is almost full in terms of numbers, except for maybe 1 or 2 places, so those players out on loan are going to have to replace existing first team squad players or be sold.

Your point is very understandable, but I disagree.

Only Rafa knows what's in his mind, but if we attend to what Aiestaran and Otxotorena will understand for work with youngsters and reserves, I don't think they're very keen on the reserves league.

Around here we care a lot for the youth system (and both Aiestaran and Otxoto are basques) . I think it's actually much better for the reserves and 20-23 year old players to play in competitive leagues like the premier, the primera, or even the Championship league in England. Xabi Alonso was in Eibar for instance, and knew well the toughness of the segunda division (in which physicallity is the main factor). He came from there with lots of things learnt.

I don't know what they pretend to do with the reserves team, but I think they'll make an extremely young team with it, with no under 23 players. I know that this is a wild guess, but it's my opinion! I think they're doing well in loaning players.

The reserve team should have players ranging from 17 to a maximum of 21. But Ideally you would want most your reserve players to be 20 or under.

Players between 19-22 may be loaned out, but after that it is just a waist.

I can’t see any of those players being here next season except Gonzalez and maybe Pongolle and Le Tallec.

Is it worth any oh the 12 players playing in the reserves? No.

They are all at an age where they need to be in a first team squad.

by **RUSHIE#9** » Wed Feb 01, 2006 12:50 am

Very interesting reading there CIGGY; Although I'm no financial wizz (I wouldn't be driving a used Focus if I were

) it still seems to me that there has been some poor descision making at the very top level and some major complacency on behalf of the clubs hierachy. Admittedly the reduction in the outlay on wages from 72% down to 53% is comendable but as is stated the club lost out on revenue from the new away shirt due to the late closure of the sponsorship deal with Carlsberg which is disappointing. Whether or not the situation is changing and as Mr Parry says lessons have been learn't from the stevie g episode there still seems to have been a very lackadaisical approach to other very important issues.

The report also mentions the absolutely VULGAR cost of disposing of Houllier and his staff and it has clearly hindered the club in a major way and to the tune of £10.75m is an amount I'm sure Rafa would have spent more wisely; at this point i'd have to question why it cost so much to dispose of a relatively small group of people and was there an element of sentimentality about relieving GH of his duties and thus led the chairman to ease his 'guilt' by overpaying the departing manager. The figures also showing the cost of disposing of GH's major and expensive flops bring home how over the top the fee's paid for these players were.

The glaringly obvious ommission from the report is the new stadium. After what i think maybe coming close to two years since the last mention by the club of this project for means that it is either time for the board to come clean and admit that it has finally gone tits up or admit that it is now dependant on new investment being brought into the club.

I'd like to point out here that this isn't intended to be an attack on the hierachy of the club but surely some tough questions still have to be posed to them at the AGM on some very important issues that are going to shape the future of the club.
I'm sure that one that will be posed - but if anybody on here is priviledged enough to be going should ask - is 'What the feck are this company - HAWKPOINT - actually doing to find outside investment as they've been looking for the best part of 2 years as all of the interest from outside investors upto now seems to have come about from them approaching the club directly and not through Hawkpoint as far as we know.

On the whole though the club does look to be heading in the right direction on and off the pitch for the moment; long may it continue.

by **ynwa** » Wed Feb 01, 2006 1:07 am

Kirkland Raven Whitbread Medjani Diao Potter Cheyrou (thought we sold him) Foy Gonzalez Le Tallec Mellor Pongolle surly if sold a few of these players the profet would be more and wining the cl thought we got more money then we recied. which of the players will be worth keeping

by **LiverpoolMadman** » Wed Feb 01, 2006 5:33 am

Kirkland – W.B.A, Raven – Tranmere, Whitbread - Millwall, Medjani - Metz, Diao – Portsmouth,
Potter - Southampton, Cheyrou - Bordeaux, Foy – Wrexham, Gonzalez - Real Sociedad, Le Tallec - Sunderland, Mellor – Wigan, Pongolle - Blackburn

Some of these players still have future in Liverpool.

We have already have Rafa (one of the best manager who knows to spend less but still winning title) with us for the next 3 years but it's won't last long. What we need is someone who can invest money but I don't think DM will sell his share .

by **Big Niall** » Wed Feb 01, 2006 10:44 am

I'm dissapointed that winning the CL which is worth 20-25m only brough profits to £7m.

And people here think GH rebuilt this club - he nearly destroyed it and we are still paying the cost of having him and his rubbish players.

by **The_Rock** » Wed Feb 01, 2006 10:49 am

Can't believe the club is still in debt after last season's champions league run. Looks like we need to go on another victories run to reduce the debt.

by **andy_g** » Wed Feb 01, 2006 11:25 am

if you look at those figures closely you can see that we are 25 million up on last year and that we also made 25 million more on the CL than last year. so were actually in a very similar position everywhere else. the fact that the wage bill has dropped nearly 20% of overall income but is only about a 2 million saving in real terms is actually a cause for concern. our wage bill is still way too high, we're paying a fortune for players who will probably never kick a ball for us again. if we don't have another big success this season and carry on with these outgoings we'll be in the red again before you can say 'new stadium'.

by **Rafa D** » Wed Feb 01, 2006 12:04 pm

Excellent Post CGGY. Just a few thoughts on are loaned out players:

Kirkland - Got to go, Reina and Carson better and less injury prone, reported to be £23'000 a week and Houlier signed him on longest possible contract!! 2 1/2 years left

Raven - Youngster , haven't heard much about , generally a bad thing.

Whitbread - Looks like he has got potential, Rafa seems to like him, think he will get one more season

Medjani - Another Houlier signing, out on loan to a french team - enough said

Diao - Coming back from his loan soon, still contracted for 1 1/2 years!!!

Potter - Good youngster, just don't think he is LFC quality.

Cheyrou- The signing that represents GH. Still here for 1 1/2 years. £20'000 a week approx.

Foy - Young winger out on loan at Wrexham, Unfair to judge.

Gonzalez - English Embassy taking the :censored:

- is he a Manc

Le Tallec - Wrong attitude, can't see him being here next year, also around £20'000 a week.

Mellor - Tries hard, his awareness is not at the right level.

Pongolle - Looked good this season , give him a chance.

Just my thoughts

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