Actually they're both reporting the exact same thing. Sky are focussing on the positives of the financial report - turnover and external debt reduction. BBC and the Guardian are focussing on the fact we have posted an overall loss. Debt is one of many balance sheet items that form an overall profit/loss figure.
The Times article offered a little more objectivity -
Liverpool remain confident of achieving their objective of adhering to Uefa’s Financial Fair Play (FFP) rules despite recording annual losses of almost £50 million as the implications of their ongoing absence from the Champions League and the legacy of Tom Hicks and George Gillett Jr, the club’s previous owners, continues to bite.
In the last two financial years, Liverpool have posted losses totalling £90 million during a period in which, under FFP, owners are allowed to absorb aggregate losses of £37.2 million for 2011-12 and 2012-13. From 2015-16, the maximum permitted loss over three seasons - as opposed to two - will fall to £25 million and will be reduced further from 2018-19.
As is the case with all other member clubs, Liverpool are permitted to offset costs from youth development, infrastructure, community projects and the wages of any player signed before July 2010 against their losses. That could potentially allow them to comply with FFP requirements and with several lucrative commercial deals signed in the last 18 months, adherence is not expected to be an issue when Liverpool’s next set of accounts are published next year.
One of the primary causes of Liverpool’s latest losses was player transfers and the need for them to write down the contracts of a number of players. Around £50 million was spent on signings with only £8 million recouped, while Joe Cole and Alberto Aquilani both received a seven figure sum as a payout to leave Anfield.
The sense that Liverpool are emerging from the precipice of financial meltdown is supported by their bank debts being reduced by £19.9 million and turnover exceeding £200 million for the first time, with the figures relating to the 12-month period to May 31 last year. The annual report also showed that the club’s financial position has been bolstered by an inter-company interest-free loan of £46.8 million from Fenway Sports Group (FSG), the owner.
That collateral was injected by FSG to pay off debts relating to past failed stadium projects under Hicks and Gillett. The club are now expected to submit a planning application to redevelop Anfield in the coming months.
The absence of Champions League revenue was once again apparent in Liverpool’s accounts but despite having access to that lucrative income source, Ian Ayre, the managing director, believes the club are in good financial health and expects further improvements in the near future as the impact of recent commercial deals becomes apparent.
“These results demonstrate that the financial health of the club continues to make good progress as we continue our journey to transform the club on and off the pitch,” Ayre said.
“Over the past four or five years, revenue has been consistently increasing from around £170 million in 2009 to over £200 million today - and external debt has decreased significantly to less than £50 million.
“With a hugely supportive ownership group, we have taken a measured approach to bring back financial stability to this great club by ensuring it is properly structured on and off the pitch. These financial results are now up to 18 months old and we have continued to make further progress since this reporting period.
“Our strong links remain with our existing partners signing new deals with Standard Chartered, Garuda and Carlsberg, and we have recently announced five new partnerships which endorses the global appeal of the LFC brand.
“We continue to invest in our digital and TV platforms and recently announced nine new television partnerships allowing millions of fans across the world to watch Liverpool games and receive exclusive content.
“We have also seen good progress being made regarding a proposed stadium expansion at Anfield. Any final decision continues to be based on certainty. However since the partnership was established between Liverpool City Council, Your Housing Group and LFC only 16 months ago, we regard the progress as extremely positive.
“Given where Liverpool Football Club was only a few years ago, the progress that has been made since FSG acquired the club has brought back much needed stability with an ambitious vision which everyone is focused on.”
Key points
- Annual loss of £49.8m (£40.5m in previous accounts which covered a shorter, ten month period)
- Turnover up to £206.1m (£169m in previous accounts)
- Net bank debt down by £19.9m to £45.1 m (£65m in previous accounts)
- Commercial revenues up to £97.7m (£63.9m in previous accounts)
- Media revenues of £63.8 million (£62.8m in previous accounts)
- Administrative expenses at £213.1million (£176.5m in previous accounts)
- Interest payments £4.5 million (£3.7m in previous accounts)
- Players net book value £121.8m (£110.5m previous accounts)
- Interest free intercompany loan (via FSG) of £46.8 million to Liverpool.
The key point for this set of the accounts is we have done extraordinarily well to clear much of the H&G debt without external help (the exception is the FSG interest free loan to clear stadium debt). Another really key point is these accounts are 6 months behind at any point in time, as the article points out although we currently are in a position that would fall foul of FFPR, however the forecast is that we will be out of this position soon. We have not yet to take credit for costs associated with youth development and we have other sponsorships revenue that has not been factored in. And this is all without CL, assuming we achieve CL this season our losses disappear with TV money alone.
We are moving in the right direction. The club is competently clearing debt, minimising cost and maximising revenues - all in preparation for FFPR that start hitting hard starting in 2015.