Post by QPR Report on Dec 12, 2009 7:39:39 GMT
The final paragraph of David Conn's article is the kicker "...Benítez now acknowledges this debt is a problem, and the need to reduce it has eaten into his transfer budget. The revelation simply states what has been horribly plain all along. These "leveraged buyouts" were not mystical, transatlantic, financial wizardry for which the clubs and their fans should be grateful. They were speculators' devices which smothered the clubs in mountainous, pointless debt."
David Conn/The Guardian
Rafael Benítez states the obvious: debt is damaging LiverpoolThe manager's remarks about Liverpool's finances may not be earth-shattering but at least someone senior is acknowledging the truth
Rafael Benítez says Liverpool are in debt: shock, astonishment, clear the back page. The manager says Liverpool must reduce this debt and so do not have millions of pounds to spend buying players: astonishing and extraordinary.
Benítez has shocked us, in truth, with a statement of the bleedin' obvious but it is noteworthy somebody in his position has finally come out and said it. Being taken over by two businessmen, who loaded on to the club the £174m they borrowed for their takeover, was not, after all, the most glorious event in the history of a great club.
When Tom Hicks and George Gillett arrived, they portrayed themselves as the friendly and benevolent Americans, smiling humans compared with the odd-seeming Glazers of Tampa Bay and Old Trafford. They were not going to "do" a Glazer and load debt on to the club; they would build the new stadium on Stanley Park, which would allow Liverpool truly to compete with United; they would honour and respect Liverpool's heritage.
Yet a skim-read of the official documents that accompanied their takeover blew away their claims to benevolence. They were in fact visiting the same awful trick on Liverpool as the Glazers did at Manchester United, just in a lower key.
The Glazers bought the world's richest and arguably most glory-drenched football club for £831m, of which £559m was borrowed, £275m of it from hedge funds at eye-watering interest rates. The club, which had Sir Alex Ferguson, his conveyor belt of talent, the resources to expand Old Trafford to a 76,000 capacity and cash in the bank, was loaded with the maddening responsibility to service repayment of those borrowings. In the three years to 2008 the club has incurred £263m in interest charges alone but the total debt has risen to £700m.
At Liverpool the debts are lower but the club can ill afford them because of Anfield's smaller capacity, not a brick of the new stadium having materialised almost three years after Hicks and Gillett arrived. Their latest figures showed the club had borrowed £313m, including the costs of the takeover, and last year paid out £36.5m to the banks in interest alone – that is Xabi Alonso plus £6.5m, gone. That helped push the club into a £42.6m loss at a time when vastly more wealth is flowing in than ever before.
Benítez now acknowledges this debt is a problem, and the need to reduce it has eaten into his transfer budget. The revelation simply states what has been horribly plain all along. These "leveraged buyouts" were not mystical, transatlantic, financial wizardry for which the clubs and their fans should be grateful. They were speculators' devices which smothered the clubs in mountainous, pointless debt.
www.guardian.co.uk/football/blog/2009/dec/12/rafael-benitez-liverpool
David Conn/The Guardian
Rafael Benítez states the obvious: debt is damaging LiverpoolThe manager's remarks about Liverpool's finances may not be earth-shattering but at least someone senior is acknowledging the truth
Rafael Benítez says Liverpool are in debt: shock, astonishment, clear the back page. The manager says Liverpool must reduce this debt and so do not have millions of pounds to spend buying players: astonishing and extraordinary.
Benítez has shocked us, in truth, with a statement of the bleedin' obvious but it is noteworthy somebody in his position has finally come out and said it. Being taken over by two businessmen, who loaded on to the club the £174m they borrowed for their takeover, was not, after all, the most glorious event in the history of a great club.
When Tom Hicks and George Gillett arrived, they portrayed themselves as the friendly and benevolent Americans, smiling humans compared with the odd-seeming Glazers of Tampa Bay and Old Trafford. They were not going to "do" a Glazer and load debt on to the club; they would build the new stadium on Stanley Park, which would allow Liverpool truly to compete with United; they would honour and respect Liverpool's heritage.
Yet a skim-read of the official documents that accompanied their takeover blew away their claims to benevolence. They were in fact visiting the same awful trick on Liverpool as the Glazers did at Manchester United, just in a lower key.
The Glazers bought the world's richest and arguably most glory-drenched football club for £831m, of which £559m was borrowed, £275m of it from hedge funds at eye-watering interest rates. The club, which had Sir Alex Ferguson, his conveyor belt of talent, the resources to expand Old Trafford to a 76,000 capacity and cash in the bank, was loaded with the maddening responsibility to service repayment of those borrowings. In the three years to 2008 the club has incurred £263m in interest charges alone but the total debt has risen to £700m.
At Liverpool the debts are lower but the club can ill afford them because of Anfield's smaller capacity, not a brick of the new stadium having materialised almost three years after Hicks and Gillett arrived. Their latest figures showed the club had borrowed £313m, including the costs of the takeover, and last year paid out £36.5m to the banks in interest alone – that is Xabi Alonso plus £6.5m, gone. That helped push the club into a £42.6m loss at a time when vastly more wealth is flowing in than ever before.
Benítez now acknowledges this debt is a problem, and the need to reduce it has eaten into his transfer budget. The revelation simply states what has been horribly plain all along. These "leveraged buyouts" were not mystical, transatlantic, financial wizardry for which the clubs and their fans should be grateful. They were speculators' devices which smothered the clubs in mountainous, pointless debt.
www.guardian.co.uk/football/blog/2009/dec/12/rafael-benitez-liverpool