Liverpool FC Forum

[LFC2007]

Actually RBG Henry said they wanted LFC to be self sustaining in his first press conference.  I don't even think he'd left the courthouse yet.

He also said he wanted us to compete at the top end of the market ,you cant have both mate .

To be clear, Henry said the following just after the takeover:

But Henry has warned that NESV will be frugal owners, quipping: "I don't have 'Sheikh' in front of my name."

"When we spend a dollar, it has to be wisely," the American tycoon said. "We cannot afford player contracts that do not make long-term sense. We have to be smart, bold, aggressive."

So if manager Roy Hodgson wants funds to strengthen a squad that is currently heading toward the second tier, the commercial department will have to get busy.

"When we looked at Liverpool, the first thing that struck was there are opportunities here to really build a winner," Henry said. "The revenue potentials around the world — it is a global football club — and especially with the financial fair play rules, it is really going to be revenue that drives how good your club can be in the future. That is one thing that we think we are good at."

Red Sox fans across the Atlantic can testify to that.

"When we arrived at the Red Sox (in 2002), the New York Yankees were a juggernaut and it wasn't that much of rivalry," Henry said. "We turned it into a rivalry where we have gone toe-to-toe with the Yankees even though they have got a much higher revenue.

"They keep going up but we have gone up faster. We have got to the point where if you look at our wins and losses against the Yankees over the last nine years, we are almost dead even. ... If you think Boston is somehow on a par economically with New York, that's simply not true."

AP

[ethanr]

Not sure why people are flipping out.  Look at the clubs in England who are spending more than us.  Manchester City will, in no possible way meet the FFP rules if they aren't allowed to cheat out of it.  Chelsea are in the exact same boat as them.  United have over £600 million in debt ON THE CLUB, and that will come back and bite them eventually because the glazers don't want to pay that off themselves. 

Arsenal spend less because of their sales, Newcastle as well, and Spurs are really the only club close to us.  They are willing to spend, but they aren't going to go splash out crazy money anymore now that harry's gone.  They'll get a decent sum for Modric, which they'll probably reinvest, but that won't increase their net spend.  The difference is that spurs and newcastle have been making intelligent signings.  Spurs have recently got VDV, Parker, and Adebayor on loan, which were 3 really decent moves.  Newcastle with Ba for free, Cisse for 12, Tiote for 4, Cabaye for 6, and Debuchy looks like he could be a talent.  We have been bullied by the price for our moves for Carroll, Hendo, and Downing, and it's completely understandable FSG want to wait and see where Rogers is going before they let him spend a whole ton of money.

Our owners are trying to do it right.  It seems they are willing to spend more than Arsenal, which is great because we could be the higher-spending logical club of the premier league.  Right now United seem to do nothing in the market one transfer window, then go crazy the next.  They've got way too much debt building up tho and that could crumple them in the future.

[electrum2012]

The problem with the approach that FSG have is that it is going to take 4-5 years to work, assuming it does work.

The saddest part of their ownership is that they are exactly like H & G in the most important aspect- passion for football...where is it? Non existent..they try to avoid using the word "brand" but that is EXACTLY what LFC is to them.

Yes the Sheiks and Abramovichs are throwing crazy money around but they are PASSIONATE about the sport itself NOT in building a a business.

As liong as the club remains in yank ownership this will probably never change and I fear that LFC will lose it's "soul "over the next few years.

More diuturbingly I think that the gap between us and top 4 will be so wide once FSG have milked our fanbase for all the revenues they can get via deals with the likes of  Warrioe etc etc that we will forever be "also rans.."

I hope BR can pull a rabbit out of his hat during his tenure ...but I'm not optimistic.

[red till i die!!]

Not sure why people are flipping out.  Look at the clubs in England who are spending more than us.  Manchester City will, in no possible way meet the FFP rules if they aren't allowed to cheat out of it.  Chelsea are in the exact same boat as them.  United have over £600 million in debt ON THE CLUB, and that will come back and bite them eventually because the glazers don't want to pay that off themselves. 

Arsenal spend less because of their sales, Newcastle as well, and Spurs are really the only club close to us.  They are willing to spend, but they aren't going to go splash out crazy money anymore now that harry's gone.  They'll get a decent sum for Modric, which they'll probably reinvest, but that won't increase their net spend.  The difference is that spurs and newcastle have been making intelligent signings.  Spurs have recently got VDV, Parker, and Adebayor on loan, which were 3 really decent moves.  Newcastle with Ba for free, Cisse for 12, Tiote for 4, Cabaye for 6, and Debuchy looks like he could be a talent.  We have been bullied by the price for our moves for Carroll, Hendo, and Downing, and it's completely understandable FSG want to wait and see where Rogers is going before they let him spend a whole ton of money.

Our owners are trying to do it right.  It seems they are willing to spend more than Arsenal, which is great because we could be the higher-spending logical club of the premier league.  Right now United seem to do nothing in the market one transfer window, then go crazy the next.  They've got way too much debt building up tho and that could crumple them in the future.

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The UEFA Financial Fair Play Rules: An Introduction to Breaking Even - Daniel Geey
Sport Finance
The Basics

The new UEFA Financial Fair Play Rules (FFPRs) relate only to participation in the Champions League and Europa League, and not to domestic leagues as yet. Each club that believes it can qualify for that season’s European competitions must, prior to the beginning of that season, apply for a UEFA Club Licence. From the 2013-14 season, the licence stipulations will include adherence to the FFPRs. Until the 2013-14 season there are no sanctions for breaching the FFPRs.

The Football League has recently decided to adopt a version of the FFPRs for Championship clubs which will come into force in the next few years.

The FFPRs will therefore start to bite for UEFA competition from the 2013-14 season. The rules need to be borne in mind, however, from the 2011-12 season onwards because the 2011-12 and 2012-13 accounts will be used to determine a club’s license application in the 2013-14 season (the first monitoring period). See the table and explanation below.

Excluded Items

The rules incentivise investment in youth development and club infrastructure. Such infrastructure includes stadium and training ground development and expenditure on a club’s academy. UEFA is keen to encourage spending in these areas which means that any such running and financing costs are not included in the FFPRs break-even calculation. The idea being that the more the commercial revenue growth funded by long term infrastructure investment the larger the revenue will be to balance against expenditure.

Break-even(ish)

Although break-even usually means expenditure must equal revenue, there are the acceptable deviation provisions in the FFPRs which mean clubs do not have to actually break-even until 2018/19 season at the earliest.

The below table sets out for each monitoring period, the acceptable level of losses that are permitted through equity investment by an owner.



Acceptable Deviation Levels

Monitoring Period

Number of Years

Years Included

Acceptable Deviation (€m)

T-2

T-1

T

Equity Investment

Non Equity Investment

In taking the first row as an example, the rules come into force in the 2013-14 season (the first monitoring period). The reason why this is important is because, in the first monitoring period, two years worth of accounts are used to assess whether a particular club can successfully apply for its UEFA Club License. Therefore a club’s accounts for years 2011-12 and 2012-13 are used to determine the license application.

The table shows that the acceptable deviations (i.e. losses) vary quite considerably. From the first 2013/14 monitoring period, an owner can invest up to €45m over two seasons in exchange for more shares in the club. It means an owner can after the 2013-14 season on average only exchange €15m worth of cash for shares each year to spend on transfers and wages etc. That figure is reduced to €10m per season (€30m over three seasons) for the 2015-16 season. If an owner does not put any money into a club by way of cash for shares, each club’s acceptable loss (by reference to the last column in the table) is a mere €5m over three years.

Conclusion

As you can see, once the FFPRs become incorporated into the UEFA License criteria, clubs will have to ensure they have done their sums to come within the acceptable deviation provisions. Exempting stadium financing and youth development costs along with allowing a degree of loss making for the first few monitoring periods gives clubs some breathing space to ensure rule compliance. Future columns will assess other rules which may have the effect of assisting clubs in adhering to the FFPRs.

Next time: Manchester City and Etihad: A breakdown of the deal from the Financial Fair Play perspective

Have a look at the FFW Financial Fair Play resource page to take a more in-depth look at the challenges that lie ahead for clubs. http://www.ffw.com/feature/financial-fa ... rules.aspx

it wont matter to the likes of city as they will just get increased sponsorship deals to balance it out.there could also be more loop holes in this than a kite stuck in a tree.
i agree that we need to be shrewder in the market and think we could have got more bang for our buck like the clubs and the examples of players you used but have we learned a lesson?.£10 mil for borini,maybe another 10 for dempsey and then 15 for allen to me seems overpriced for their services.
is allen really going to be any better in 3 years time than say hendo or shelvey?.or is it just that rodgers thinks so.
we got bullied because we allowed ourselves to be when signing those players as we didnt face any competition for their signatures and we still payed well over their worth.
our net spend will be little by the end of the transfer window and maybe they have an air of caution on rodgers and want to see how he goes before they pump it in but thats just wishful thinking imo.
i would totally understand this austerity if we were pumping money into a stadium,but were not and if we do it will mean even less for transfers during that period.
like most ive been waiting for the demise of manure but it hasnt come yet despite their massive debt. and i doubt it ever will.should they get into trouble a similar scenario to us will emerge and they will be bought.
the only bad thing that could happen to them in the next couple of years is that whisky nose retires and they suffer a little setback but it wont be for long as maureen or somebody equivalent will take the reigns.

[parchpea]

My own thoughts are that FSG see Liverpool as a 'doer upper' really and the plan is to
tweak the thing, tart it up, and flog it on for a decent profit.

Naturally they will say the right things and that but deep down they know they cannot
really restore the club to former glories without investing in a new ground (which they
will never do in my opinion) or going head to head with arab and oil money, again
which they cannot and will not do.

Once they get it up to scratch and looking like it can be taken places then maybe they
can lure in a buyer with enough spending power to finish the job and in turn earn them
a very tidy profit on their initial investment.

[RED BEERGOGGLES]

To bring an similar amount of clarity John Henry also stated the following :


“I don't think any thinking individual buys a sports franchise these days or an English football club to make money,” he said.

The American continued, "Maybe a few, but they should have their head examined. It's about competing at the highest level in
the world's largest sport for us, that's why we are here."

"Our clear focus from day one of our ownership has been - and will be - to improve the club and focus on what it will take to put
Liverpool FC consistently in a position to challenge for trophies


I posted  this back in 2011 ,when SOS were viewed as doom mongers by some posters for seeking assurances on the promises made by John Henry
I mean its not like I'm just starting to have my doubts about them ,they have already reneged on building a new stadium /renovating Anfield ,and
recently we have been informed that finishing fourth takes priority and competing for England's more illustrious trophies will come second .
Now we have to sell before we buy 

RED BEERGOGGLES » Sat Feb 05, 2011 11:43 am

I'm also struggling to see how S.O.S have been deemed by some posters as stepping over the mark here ,surely its now considered an essential part of any business to make legitimate requests and then submit them through a solicitor ,that way it will ensure the promises we have heard  from the new owners actually come to fruition rather than turn into shattered dreams ..... I mean don't get me wrong I like the new owners and they seem like decent people.... but will I ever trust them after who they preceded and the nightmare we had to endure ,simple answer is NO .....you see when you get burned as badly as we did
its hard trusting someone to the extent of leaving them to their own devices , and for that reason alone, I am heartened by the fact  S.O.S are sleeping with one eye open ,and leaving nothing to chance any more . Everything by the book no more gentlemen's agreements ,no more false dawns ,no more broken promises .

[SouthCoastShankly]

I think too many on here are being cynical.

Ask yourself, would you want another upheaval of new ownership?

IF yes, what's to say the new owners won't be another H&G. We at least know FSG aren't that.

My personal opinion is the success of the FSG business model hinges on FIFA implementing successfully the Financial Fair Play rules. These rules start to become reality from next season. If FIFA fail to deliver an enforceable set of Financial Fair Play rules then FSG will certainly jump ship. They are not going to be generous beneficiaries who are willing to make a loss for the fun of owning a football club. They are a sporting franchise business, they will actively avoid unmanageable debt and for all intents and purposes be looking to avoid financial risk.

I live in the world of business cases and financial justifications. Looking in from the outside, FSG are implementing a system where they will only invest in players where there is a justifiable reason. That reason is not "to be successful", there is no emotion in business. The reasons will be financially motivate, I.e. profit. Don't be dismayed though, winning trophies and being a success drives profit, they understand that.

I want instant success and generous investment like all other football supporters but I do not want it at the risk of our financial stability. No one on here predicted the demise of Rangers, they had no sustainable business model. I think we do, we just need to learn some patience and wait to see how the FIFA financial fair play rules pan out.

[Benny The Noon]

I think too many on here are being cynical.

Ask yourself, would you want another upheaval of new ownership?

IF yes, what's to say the new owners won't be another H&G. We at least know FSG aren't that.

My personal opinion is the success of the FSG business model hinges on FIFA implementing successfully the Financial Fair Play rules. These rules start to become reality from next season. If FIFA fail to deliver an enforceable set of Financial Fair Play rules then FSG will certainly jump ship. They are not going to be generous beneficiaries who are willing to make a loss for the fun of owning a football club. They are a sporting franchise business, they will actively avoid unmanageable debt and for all intents and purposes be looking to avoid financial risk.

I live in the world of business cases and financial justifications. Looking in from the outside, FSG are implementing a system where they will only invest in players where there is a justifiable reason. That reason is not "to be successful", there is no emotion in business. The reasons will be financially motivate, I.e. profit. Don't be dismayed though, winning trophies and being a success drives profit, they understand that.

I want instant success and generous investment like all other football supporters but I do not want it at the risk of our financial stability. No one on here predicted the demise of Rangers, they had no sustainable business model. I think we do, we just need to learn some patience and wait to see how the FIFA financial fair play rules pan out.

First thing - its UEFA FFP model. The punishments will be fines - big clubs will just pay them off - and if they do start to threaten clubs to be kicked out of the CL you then have the first step towards the European League breakaway - FFP will not be enforced very strictly.

[RED BEERGOGGLES]

I think too many on here are being cynical.

Ask yourself, would you want another upheaval of new ownership?

IF yes, what's to say the new owners won't be another H&G. We at least know FSG aren't that.

My personal opinion is the success of the FSG business model hinges on FIFA implementing successfully the Financial Fair Play rules. These rules start to become reality from next season. If FIFA fail to deliver an enforceable set of Financial Fair Play rules then FSG will certainly jump ship. They are not going to be generous beneficiaries who are willing to make a loss for the fun of owning a football club. They are a sporting franchise business, they will actively avoid unmanageable debt and for all intents and purposes be looking to avoid financial risk.

I live in the world of business cases and financial justifications. Looking in from the outside, FSG are implementing a system where they will only invest in players where there is a justifiable reason. That reason is not "to be successful", there is no emotion in business. The reasons will be financially motivate, I.e. profit. Don't be dismayed though, winning trophies and being a success drives profit, they understand that.

I want instant success and generous investment like all other football supporters but I do not want it at the risk of our financial stability. No one on here predicted the demise of Rangers, they had no sustainable business model. I think we do, we just need to learn some patience and wait to see how the FIFA financial fair play rules pan out.

Good post mate ,but its easier said than done removing emotion from football ,Liverpool fans are driven passionate advocates of this club remaining
unique in its structure ,and not just another business model ...The danger of not being a special club ,and joining these soulless clubs like Arsenal
is (If you have ever visited the Emirates Library )   frightening enough without adding this all consuming need to be in the Champions League only
for the owners financial gain .

I mean all this talk of business models and self sustenance is all very shrewd and clever ,but it still remains a constant that our owners continually
renege on the  promises they made earlier in their tenure .

[LFC2007]

I mean all this talk of business models and self sustenance is all very shrewd and clever ,but it still remains a constant that our owners continually
renege on the  promises they made earlier in their tenure.

What would those be?

[ycsatbjywtbiastkamb]

I think too many on here are being cynical.

Ask yourself, would you want another upheaval of new ownership?

IF yes, what's to say the new owners won't be another H&G. We at least know FSG aren't that.

My personal opinion is the success of the FSG business model hinges on FIFA implementing successfully the Financial Fair Play rules. These rules start to become reality from next season. If FIFA fail to deliver an enforceable set of Financial Fair Play rules then FSG will certainly jump ship. They are not going to be generous beneficiaries who are willing to make a loss for the fun of owning a football club. They are a sporting franchise business, they will actively avoid unmanageable debt and for all intents and purposes be looking to avoid financial risk.

I live in the world of business cases and financial justifications. Looking in from the outside, FSG are implementing a system where they will only invest in players where there is a justifiable reason. That reason is not "to be successful", there is no emotion in business. The reasons will be financially motivate, I.e. profit. Don't be dismayed though, winning trophies and being a success drives profit, they understand that.

I want instant success and generous investment like all other football supporters but I do not want it at the risk of our financial stability. No one on here predicted the demise of Rangers, they had no sustainable business model. I think we do, we just need to learn some patience and wait to see how the FIFA financial fair play rules pan out.

the FFP rules are just a paper tiger mate, clubs will easily find a way around them.
i dont even think the political will is there to enforce them anymore, i read this article which explained that the FFP rules were originally proposed back in the days when english clubs were regularly getting 2-3 teams into the CL semi finals and all the top players were playing in england, it looked like the premier league was going to dominate the world and what really worried the powers that be was that the premier league wanted to spread their product worldwide with this game 39 sh1.te and all that malarky.
fifa and uefa realised if prem games were being played in foreign cities that particular nations domestic league would suffer.
fifa were worried that the premier league just cared about money not the good of the worldwide game so fifa etc looked at ways of curtailing that power.
as it is since then the two spanish giants have had a resurgence as have bayern munich etc and a lot of the top players have moved away from england.
i think fifa / uefa see the panic as being over, yes they want clubs in the long term to be well run for the general good of the game but i think it will be an evolutionary process, i cant see them really enforcing the FFP rules aggressively, if english clubs had won every CL since 2005 it may have been a different story though.
it was an interesting article, surprising how political footy is.

[SouthCoastShankly]

I think too many on here are being cynical.

Ask yourself, would you want another upheaval of new ownership?

IF yes, what's to say the new owners won't be another H&G. We at least know FSG aren't that.

My personal opinion is the success of the FSG business model hinges on FIFA implementing successfully the Financial Fair Play rules. These rules start to become reality from next season. If FIFA fail to deliver an enforceable set of Financial Fair Play rules then FSG will certainly jump ship. They are not going to be generous beneficiaries who are willing to make a loss for the fun of owning a football club. They are a sporting franchise business, they will actively avoid unmanageable debt and for all intents and purposes be looking to avoid financial risk.

I live in the world of business cases and financial justifications. Looking in from the outside, FSG are implementing a system where they will only invest in players where there is a justifiable reason. That reason is not "to be successful", there is no emotion in business. The reasons will be financially motivate, I.e. profit. Don't be dismayed though, winning trophies and being a success drives profit, they understand that.

I want instant success and generous investment like all other football supporters but I do not want it at the risk of our financial stability. No one on here predicted the demise of Rangers, they had no sustainable business model. I think we do, we just need to learn some patience and wait to see how the FIFA financial fair play rules pan out.

First thing - its UEFA FFP model. The punishments will be fines - big clubs will just pay them off - and if they do start to threaten clubs to be kicked out of the CL you then have the first step towards the European League breakaway - FFP will not be enforced very strictly.

Not 100% true. The FFFR are linked to a UEFA club licence. The proposed ultimate punishment for missing the FFFR for a club is not being granted a UEFA club licence, subsequently not being eligible for participating in European competitions.

This is what FIFA/UEFA must enforce. Without this threat being real, clubs will not treat the rules seriously.

[SouthCoastShankly]

I think too many on here are being cynical.

Ask yourself, would you want another upheaval of new ownership?

IF yes, what's to say the new owners won't be another H&G. We at least know FSG aren't that.

My personal opinion is the success of the FSG business model hinges on FIFA implementing successfully the Financial Fair Play rules. These rules start to become reality from next season. If FIFA fail to deliver an enforceable set of Financial Fair Play rules then FSG will certainly jump ship. They are not going to be generous beneficiaries who are willing to make a loss for the fun of owning a football club. They are a sporting franchise business, they will actively avoid unmanageable debt and for all intents and purposes be looking to avoid financial risk.

I live in the world of business cases and financial justifications. Looking in from the outside, FSG are implementing a system where they will only invest in players where there is a justifiable reason. That reason is not "to be successful", there is no emotion in business. The reasons will be financially motivate, I.e. profit. Don't be dismayed though, winning trophies and being a success drives profit, they understand that.

I want instant success and generous investment like all other football supporters but I do not want it at the risk of our financial stability. No one on here predicted the demise of Rangers, they had no sustainable business model. I think we do, we just need to learn some patience and wait to see how the FIFA financial fair play rules pan out.

Good post mate ,but its easier said than done removing emotion from football ,Liverpool fans are driven passionate advocates of this club remaining
unique in its structure ,and not just another business model ...The danger of not being a special club ,and joining these soulless clubs like Arsenal
is (If you have ever visited the Emirates Library )   frightening enough without adding this all consuming need to be in the Champions League only
for the owners financial gain .

I mean all this talk of business models and self sustenance is all very shrewd and clever ,but it still remains a constant that our owners continually
renege on the  promises they made earlier in their tenure .

Which promises have they neneged on?

Form my memory they were extremely careful, and continue to, not to commit to "promises".

[Benny The Noon]

I think too many on here are being cynical.

Ask yourself, would you want another upheaval of new ownership?

IF yes, what's to say the new owners won't be another H&G. We at least know FSG aren't that.

My personal opinion is the success of the FSG business model hinges on FIFA implementing successfully the Financial Fair Play rules. These rules start to become reality from next season. If FIFA fail to deliver an enforceable set of Financial Fair Play rules then FSG will certainly jump ship. They are not going to be generous beneficiaries who are willing to make a loss for the fun of owning a football club. They are a sporting franchise business, they will actively avoid unmanageable debt and for all intents and purposes be looking to avoid financial risk.

I live in the world of business cases and financial justifications. Looking in from the outside, FSG are implementing a system where they will only invest in players where there is a justifiable reason. That reason is not "to be successful", there is no emotion in business. The reasons will be financially motivate, I.e. profit. Don't be dismayed though, winning trophies and being a success drives profit, they understand that.

I want instant success and generous investment like all other football supporters but I do not want it at the risk of our financial stability. No one on here predicted the demise of Rangers, they had no sustainable business model. I think we do, we just need to learn some patience and wait to see how the FIFA financial fair play rules pan out.

First thing - its UEFA FFP model. The punishments will be fines - big clubs will just pay them off - and if they do start to threaten clubs to be kicked out of the CL you then have the first step towards the European League breakaway - FFP will not be enforced very strictly.

Not 100% true. The FFFR are linked to a UEFA club licence. The proposed ultimate punishment for missing the FFFR for a club is not being granted a UEFA club licence, subsequently not being eligible for participating in European competitions.

This is what FIFA/UEFA must enforce. Without this threat being real, clubs will not treat the rules seriously.

Can you really see them stopping clubs like Madrid or Barce or Chelsea or the Mancs competing in the CL ? The first one they attempt to kick out the rest follow and we get a European League controlled by the clubs away from UEFA and all the money will be with them

[RED BEERGOGGLES]

I mean all this talk of business models and self sustenance is all very shrewd and clever ,but it still remains a constant that our owners continually
renege on the  promises they made earlier in their tenure.

What would those be?

There exists plenty of quote's made by John Henry ,it would be slightly desperate of me if I felt the need to garner everyone ,but the main ones are
this proposed stadium ,which I am sure you will concur is becoming a real bug bear ,because we are no nearer resolving that particular problem than
when Hicks and Co were here ... John Henry was also insistent  that Liverpool would eventually challenge United and Man City at the top ,but if that
means Liverpool supposedly evolving into a business model akin to Arsenals, then you only have to collate the number of times Arsenal have challenged
for the league since adapting this method ..... Or for that matter won a trophy .