Dubai International to make bid for Liverpool FC

[dawmdt]

2. The club are expected to find the reported £30m each year for these loans, profit wise LFC doesn't make that much and is not expected to until the new stadium is built (if it ever is) any clue as to what will be sacrificed to pay for this?

To be honest, even if G&H took out the loans in some other way than secured against LFC\Kop Holdings, I expect they still would have been seeking for interest to be paid for by the club one way or another. At least this way it's transparent

[MattB]

To be honest they should have done something similar to that rather than the bull**** they pulled with the player specific budgets initially. Giving a manager free reign within a constrained budget is sensible and under almost any owners would be what you would expect while paying for a new stadium surely?

The only case where it may be worth loking to change the budget would be if a highly marketable player became available at a reasonable price. That might change the economics of the deal and make it worth the owners altering their financial arrangements.

Somewhere along the line, £45m in working capital has been transformed into a £45m transfer kitty. I'm not convinced the two things are the same

[AFII]

with some limited guarentees from G&H, a figure of £30m each has been mentioned a number of times.

According to the Observer that money is secured against a future takeover so yet again they are not risking a single pound of their own money.

[MattB]

To be honest, even if G&H took out the loans in some other way than secured against LFC\Kop Holdings, I expect they still would have been seeking for interest to be paid for by the club one way or another. At least this way it's transparent

This is another PR trick - 'Give them the headline numbers'

The devil is in the detail as they say - and that is where any semblance of tranparency ends as far as their statements are concerned

[dww]

Somewhere along the line, £45m in working capital has been transformed into a £45m transfer kitty. I'm not convinced the two things are the same

That is a fair point.

[dww]

That is a fair point.

Although to be honest I bet we will spend £45m over the next two years which is the claim that was made.

[dawmdt]

Although to be honest I bet we will spend £45m over the next two years which is the claim that was made.

Is the general feel (or knowledge, for those in the know) that this is 45mm net or will money made from sales be put back into LFC for other reasons\paying off holding company interest\etc?

[AFII]

Although to be honest I bet we will spend £45m over the next two years which is the claim that was made.

I don't think we will spend £45m net the next two years if G&H stays. It will be a lot selling before buying.

[Guest]

I don't think we will spend £45m net the next two years if G&H stays. It will be a lot selling before buying.

But they know now that if they don't support the manager in the transfer market there will be more unrest mate.

They may cut the pie in two in the end.

[SRR]

The thing is though that this is a short term loan sorted out during a credit crunch. There is an argument that we may have much more favourable terms by the time we are looking to complete the more ambitious refinancing for the stadium.

To me it seems a high risk business strategy rather than necessarily a completely doomed one. Obviously I would be happier with someone with deeper pockets but I really suspect that waht we have will ahve to be the norm for clubs of our size when bought by non-sugar daddy types. I don't see DIC as a radically different proposition - although they might well have more money to invest upfront and their greater resources might result in better loan terms.

It's one thing to be in this situation when you have the means to service the debt but when you don't then that can not be a good position to be in.

Using UTD as an example, the loans against them were taken out when there was no credit crunch yet they are saddled with a reported £90m payment each year and there is no guarentee that 18months down the line the credit crunch will be over if not worse.

[dww]

Is the general feel (or knowledge, for those in the know) that this is 45mm net or will money made from sales be put back into LFC for other reasons\paying off holding company interest\etc?

No insider knowledge but I'd bet we will spend around £20m-£25m nett for the next two years including young players (who always inexplicably get taken out of the figures discussed for the summer). I think this is approximately a level of spending which G&H would have been happy gambling on short term as it is pretty much paid for by the TV deal and prize money for a CL finish in the league.

I think AFIIs fears may be valid in the long term but I think that in the next 18 months two years the G&H plan doesn't seem completely useless. After that is when I forsee real problems and their record so far does not speak of great long term planning.

It's one thing to be in this situation when you have the means to service the debt but when you don't then that can not be a good position to be in.

Using UTD as an example, the loans against them were taken out when there was no credit crunch yet they are saddled with a reported £90m payment each year and there is no guarentee that 18months down the line the credit crunch will be over if not worse.

I said it was a high risk strategy and I think we do or will have the means to service the debt. the worry is whether we can progress as a team and service the debt.

[AFII]

But they know now that if they don't support the manager in the transfer market there will be more unrest mate.

They may cut the pie in two in the end.

Do you really think Hicks care that much if it will be more unrest?

The ONLY thing he cares about is to make as big profit he can before he sell us. If the club goes down the drain at the same won't matter a little bit for him.

[MattB]

Do you really think Hicks care that much if it will be more unrest?

The ONLY thing he cares about is to make as big profit he can before he sell us. If the club goes down the drain at the same won't matter a little bit for him.

To be fair, it's in his interests for the club to not go down the drain - purely in terms of protecitng his investment.

As he himself has pointed out however, that is to do with brand loyalty more than it is to do with winning.

That's what worries me

[AFII]

To be fair, it's in his interests for the club to not go down the drain - purely in terms of protecitng his investment.

As he himself has pointed out however, that is to do with brand loyalty more than it is to do with winning.

That's what worries me

What I mean is that if his plan involves that the club will go down the drain to make as big profit as he can then he will follow that plan.

[dww]

Do you really think Hicks care that much if it will be more unrest?

The ONLY thing he cares about is to make as big profit he can before he sell us. If the club goes down the drain at the same won't matter a little bit for him.

The article posted earlier seemed to imply that the unrest amongst supporters had an impact on his negotiations with DIC. As such the unrest is directly related in his opinion to the possibility of him making money.

Added to the fact that making money relies on people keeping paying money through gate reciepts and merchandise which will reduce if the team and consequently fans go through a long term decline.

The asset striping scenario would come in to play if this spiral is allowed to get out of hand and it no longer is possible to pay the interest on our debts say without reducing costs or actively bringing money in through player sales. We are currently nowhere near that stage despite our poor form IMO. It is however possible that a failure to reach teh Cl this season would mean that next season was extremely dodgy.