Liverpool FC owners lose £42.6m

I was reading that earlier zed, it would seem they could be in serious doo-doo.

It's sort of like they come along, dig a massive hole, put everybody in it and then scarper with all the dirt!
Liverpool will be alright as there is always a rich ego somewhere that will relish the challenge of succeeding where others fail or who just likes to say they own Liverpool football club.
Wonder what the ticket prices will be when they finally do move stadiums as that is a lot of debt to pay off for an ongoing concern?

hi Zed, made this....





could not get all the zeros on there, scary!

David Conn - Great as always

The Guardian

No new stadium. A huge debt. Despite their promises, Hicks and Gillett have 'done a Glazers'Tom Hicks and George Gillett claimed they were different to Manchester United's owners, but they have betrayed their promises to Liverpool's fans

When contemplating the hideous financial figures released yesterday by Liverpool Football Club and the owners' holding company, Kop Football, memories drift instinctively back to the promises Tom Hicks and George Gillett made when they swept into the club triumphantly two years ago. Then, it was all smiles, scarves, and warm words. The pair gushed about Liverpool's marvellous heritage; the Kop, which, clearly, they had been carefully briefed to namecheck, and out there on the Anfield pitch they did pretty well to restrain themselves from calling the great English football club a franchise.

Nothing was straightforwardly said about the blatant fact that the pair were financing their £185m takeover with borrowed money, or that the club itself would then be made to pay off those loans. The pair did, however, tell fans they were not going to "do a Glazers". Yet as these accounts now confirm, that is exactly what they did.

The Glazer family bought Manchester United in 2005 in the teeth of bitter opposition from fans who understood that their club would be laden with the debts the new owners had borrowed to take it over. At Liverpool, the fans, desperate for success and change, largely accepted the patter and the assurances that the pair were different from the Americans who bought United, and Hicks and Gillett were welcomed into the boss seats at Anfield.

It is vital to remember why Liverpool was for sale in the first place. It was done solely so that the club could build a new stadium of a size to compete with Manchester United, who have 76,000 paying fans at Old Trafford, Arsenal, who make packets at the 60,000-seat Emirates Stadium, and Chelsea, who have Roman Abramovich's wallet. Liverpool's chairman, David Moores, and chief executive, Rick Parry, believed they could not borrow the necessary money to build a new stadium without a rich backer standing behind the club.

Moores personally made £90m from selling to Hicks and Gillett the majority shareholding he bought for very much less, back in the days when the Kop was a terrace and young people from the local area could afford to stand on it. Around Anfield, an economically blighted neighbourhood marked by rows of boarded up streets, regeneration plans are based around the proposed new stadium. Yet there is no sight nor sound of the money to build it, and that is the deepest betrayal of the tenure of these two owners.

The accounts, in some ways, confirmed what we already knew. Hicks and Gillett did "do a Glazers"; they have taken out a £350m loan to cover their initial takeover, fund player signings and running costs, and by January this year had spent £313m of it. The club itself, which enjoyed a bumper year in 2007-08, had to provide £36.5m to pay the interest on that. With so much money already borrowed, nobody believes another £400m will be available from banks to fund the new Anfield.

Despite what appears a stark warning from the auditors, KPMG, of "material uncertainty" casting "significant doubt" on Liverpool's ability to stay in business, the prospects are not in reality that dire. Hicks is confident the Royal Bank of Scotland will simply extend the £350m loan when it falls for renewal next month, and in the current climate a customer able to pay £36.5m in interest a year looks good business for any bank.

Insiders point out that the club did invest in players during the year to July 2008 covered by the accounts, notably buying Albert Riera, Andrea Dossena and £20m Robbie Keane, and Liverpool finished second in the Premier League last season which will make them significantly more money. Hicks and Gillett provided £58m funding to the club in 2007-08, and they are committed to providing Rafael Benítez with £20m to spend this summer, whether from the club's increased income, further borrowing, or more of their own funds.

So Liverpool are not facing imminent collapse, but they are in £313m debt, still at Anfield, and nowhere near where they are supposed to be, two years after Hicks and Gillett walked on to the Anfield pitch, with red scarves round their necks, and painted a rosy red picture of the benefactors they would be.

www.guardian.co.uk/football/blog/2009/jun/05/liverpool-tom-hicks-george-gillett

Constantly, in football, people disguise what they are, what they're doing, and what the outcome will be.

And even the more thoughtful critics like Conn still talk, at times, as if the fabrications and fantasies have actually more or less come true, it's just that they're a little more expensive than anyone thought.

The whole process is self-defeating. If the Clubs earn £5 million, they borrow £10 million because £5 million isn't enough. Ten years later they're earning £50 million, so they borrow £500 million because £50 million isn't enough.

If the 'investors' were borrowing the money themselves, they wouldn't do it. But it's free money they can throw around as they please, because it's the Club's. If the Club collapses, it's no skin off their nose, they've had the use of millions for years at no cost to themselves. Indeed, in many cases, they OWN these debts.

The pretence is that there's some magical point in the future at which it will all go into reverse in a constructive way. Suddenly, every Club will actually BE successful. They'll all be top, and stay top. Or some other equally artificial position. Like Charlton, permanently lodged in 8th place, the QPR of the modern era, back where QPR started from already. Just when they had that nice big stadium, too.

These Clubs envisage a world where earnings will always outstrip costs, not because earnings are increased, but because costs are. By spending more, they kid themselves, in that most stupid of assumptions, that spending will itself PRODUCE increased earnings.

So debts will simply pay themselves off. No pain. For the Clubs, the owners, or the supporters. It all gets easier and easier. And borrowing can go on, if they like, because they'll be earning so much, they'll be paying it all back before they've borrowed it.

United will still be top, they can hardly afford not to be. So will Chelsea, who seem to be on the slide already. And Arsenal, whose debt is the most frightening of all in some ways, as it was only just over £300 million a year or so ago, and they're still deluding themselves about how 'thrifty' and 'sensible' they are.

And successful.

They all live in a perfect world. They build properties and, amazingly, they will all sell, they will all sell at the highest price. They have the perfect manager. He will always win. Each good spell will be followed by a better one. Prices can only go up. Sponsors will fall over themselves to pay more and more.

And in no time, £300 million will be zero. Instead, it's £416 million.

And the people who pocket all the money, who will take themselves off somewhere else as soon as the going gets tough, they're urging more and more groundless optimism, and more and more 'investment'.

While the paper tigets at QPR have yet to summon up the nerve to publish the Accounts.