by Redrider » Thu Jan 20, 2005 11:23 am
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 !!