Liverpool FC Forum

[hawkmoon269]

Someone once said, "Help, I need Somebody".  That's me, I need some help.

Can anyone shed some light on Liverpool's financial standing?  With the Morgan deal apparently dead, and no more news on the US or Asian takeover's, do we have enough money in the kitty?

With plans for a new stadium and massive investment need to strengthen the team, where will the money come from?  Has money been put aside over the years!  Are we selling of the family jewels, and leasing them back?  Grants, loans, what?

Are we going to be massively in debt, or are we already there?

Can someone tell me?

[stmichael]

ask this man 

[hawkmoon269]

I heard he was the one to ask, but hell if I can find him!!!  

[Redrider]

There is nothing set aside in the current accounts for the cost of building the stadium, which means it is all to be funded from borrowings which are in return repaid from future revenues.
The increased revenues from an additional 20,000 seats filled for every game will amount to a maximum of £13m per annum, they can not count on having maximum 60,000 for every game so lets say £10m each year additional revenue.
The Stadium will cost circa £150m for sure, plus interest on the borrowings, say a total of £200m, it will therefore take 20 yrs before they have paid off the cost of the Stadium with the additional revenues it will produce.
Most business models try to right off the cost of speculative investment within half that time.
All this means that with a current debt, unless some additional form of finance can be found that there is not enough money in the coffers to both improve the team and fund a new stadium. The operating profit in 2003 was only £2.7m, that figure in itself will need to be re-produced for the next six years alone to recover the 2004 operating loss of £16.8m.
The club is not badly in debt, by any stretch of the imagination, but neither is it awash with assets, the current grounds (Melwood and Anfield) are only valued at £39m and the players at £58m and there are creditors and liabilities to the tune of £62m, which leaves a balance of £35m.
Not bad, but not great. !!
I will be surprised if the plans to build the Stadium advance much until some additional form of Finance is on the table, because it is not apparent in the current books !!

[hawkmoon269]

That's about what I thought.

The bottom line then, if we are to be successful in the modern game of football, is that we need a fresh influx of capital.  But it is a catch-22 position.  No businessman is going to just give the money away, he'll want a return on his investment (there are very few multi-billionaires about who want to play "football club").  To get him this, in terms of overseas market opportunities, advertising revenue, etc, we need to have a successful club.  To be successful we need money invested in the squad.  And the spiral continues.....

[Redrider]

Rick Parry is a serious hinderence to LFC current progress. As a Chief Exec he has fouled up during the Houllier years in negotiating poor deals and not controlling expenditure on doubtful players.
He is now backed into a corner where all his financial mismanagement is coming home to roost, the coffers are empty, Moores can not refill them, Rafa needs money for players. His only way out is to look for outside investment.
The best offer currently on the table comes from a man who will sack Parry the instant he takes control, so he is stalling looking for an offer that retains his position and power. Meanwhile, we have to watch idiots like Rooney celebrating our demise in front of the Kop.
To compete with the best in our own league we urgently need 3 or 4 outstanding players, if Parry were to get his act into gear and look to bring in some of the heralded new investment we could be out there looking for and signing the best talent available.
Come the summer we will be sat here having finished below 4th slot, still with Parry claiming that life is wonderful, and that his plans for a new (by now £150m!!) stadium are still on track because of the excellent deal he has just made in selling Steven Gerrard.
Is this the complacent, sub-standard way we wan't to move forward ? I don't think so!

[Big Niall]

The players are valued at 58m, as Cisse was bought for 14m (and its too soon for his value to have dropped) and Gerrard is probably valued at about 24m, then that means the rest of the squad are only worth about 20m.Thats not even one Rooney! are they that bad?

[stmichael]

Rick Parry is a serious hinderence to LFC current progress. As a Chief Exec he has fouled up during the Houllier years in negotiating poor deals and not controlling expenditure on doubtful players.
He is now backed into a corner where all his financial mismanagement is coming home to roost, the coffers are empty, Moores can not refill them, Rafa needs money for players. His only way out is to look for outside investment.
The best offer currently on the table comes from a man who will sack Parry the instant he takes control, so he is stalling looking for an offer that retains his position and power. Meanwhile, we have to watch idiots like Rooney celebrating our demise in front of the Kop.
To compete with the best in our own league we urgently need 3 or 4 outstanding players, if Parry were to get his act into gear and look to bring in some of the heralded new investment we could be out there looking for and signing the best talent available.
Come the summer we will be sat here having finished below 4th slot, still with Parry claiming that life is wonderful, and that his plans for a new (by now £150m!!) stadium are still on track because of the excellent deal he has just made in selling Steven Gerrard.
Is this the complacent, sub-standard way we wan't to move forward ? I don't think so!

Oh for crying out loud. some people on this forum are never happy.

I know he's not the most popular on this forum but thought I'd throw in my pennyworth.

Over the last 16 months he has led a battle almost single-handedly against a barrage of self and vested interests and tawdry local and national politics. I refer of course to the groundshare battle and attempts to get planning permission for the new ground.

So far only a tiny % of the shenanigans we've had to put up with as a club has surfaced publically. I think there's probably a book's worth of info there and it'll be a damn interesting one (considering writing it myself).

A new ground is essential if we're to start attracting the revenues we need to challenge the likes of the Mancs. We need the extra capacity, earning potential, improved corporate possibilities, vastly improved adminstration facilities.

The plans would also bring much needed regeneration to the Anfield-Breckfield community, acting as conduit to further funding and a provider of jobs and a better community.

Against this we have people delay the project, some for personal gain, some political and some in an effort to damage us as a club. Some of this has been deliberate, some through incompetence. It has cost us millions.

Parry has steered through this dreadful minefield with remarkable skill, diplomacy and dignity. It has taken up a massive amount of his time and energy.

To me defeating the groundshare proponents and getting planning permission was the most important issue affecting this club over the next 25 years. Investment without this would be neutered.

For that herculean struggle alone I think he deserves massive praise.

[Redrider]

Lets not go overboard now. The management style of David Moores and Rick Parry worked well in the football era where other clubs were run by the like of Ken Bates and Terry Venables, where it was easy to stand head and shoulders above their bent activities just by playing a straight game. This philosophy worked well for LFC for a number of years.
However, with the advent of big money TV and global marketing the nature of the management game has changed, Parry and Moores have been doing a creditable job in trying to keep pace but they are being left behind in comparison with the Kenyon and David Dein etc. never mind the global masters at Real Madrid.
Parry's weakness has been exposed in the loss of Macmanaman for no fee and the low fee obtained for Owen, both deals should have been stitched up by a business strategy that recognised the weakness of the club's position and reacted in time. The same can be said of the contracts that Houllier and his staff were engaged on that created large payments for their pay-off that became the price of their failure.
Parry has not paid enough attention to player purchases made during his tenure, the outstanding example of which is Diouf, a known playboy in France was recruited as a 'Top-Dollar' purchase when some greater analysis of his lifestyle and background would have revealed weaknesses that would have killed the purchase or at leat reduced the fee to take account of the risks involved.
As a result of the money wasted in the Houllier era and the recent pay-offs we are now left in a situation where current player purchases are being funded from current and future revenues.
The only ways out of this situation are to stop spending or to re-finance the club, unfortunately neither route is very palatable to Rick Parry, refinancing will almost certainly involve a change of management and to stop spending having taken on-board a new team manager will bring inevitable problems with success on the pitch and more financial doom!

[hawkmoon269]

It is certainly not the fans fault if it is 15 years since we won a league championship.  Is it the managers' fault, or the people who choose the managers?

[The_Rock]

the only reason i can tolerate parry is because he opposed to the ground sharing (unlike morgan)..... but really, he does not make a sound CEO.

CEOs around the world are sacked at the 1st sign of loss.....

[116-1105728556]

stmichael

Just remember RR is different guy but to say we go and build a new ground will bring in more revenue is too damn simple. We build and have less money for players and players means trophies (with it so far).

So there is a balance and a trading off. There is also time the ground will take 2 years to build but then where will we be in terms of trophies?

For me we are at a watershed because once we slip down the league are revenues will reduce which I think is whats going to happen which then puts a greater emphasis on better players so then we will need the money that we used for the ground even more.

I disagreed with Redrider (RR) on this one originally but seeing the performance of the team lately I think its vital that we concentrate on the players to the detriment of the ground.

But if you want a monument (Moores et al) to celebrate yer time being in charge of the club then you go for the ground.
Start reading between the lines its all there for all to see it!

[Redrider]

the only reason i can tolerate parry is because he opposed to the ground sharing (unlike morgan)..... but really, he does not make a sound CEO.

CEOs around the world are sacked at the 1st sign of loss.....

Bang on Rock,
I suspect Morgan was only interested in ground share because of our weak financial position and his desire to strengthen the team.