The State of Liverpool FC – An Idiots Guide

[Roboklopp]

Just posted this elsewhere, but is at home here...

http://www.liverpoolecho.co.uk/liver...name_page.html

THis bit stood out:

The interest payments are quite startling - £110,000 a day is being squandered, which is a massive figure on its own.
“But to put it another way, as someone said to me, it is the price of a match ticket (£38) every 30 seconds. It shows the depths to which we have plunged.
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[johnly]

Just posted this elsewhere, but is at home here...

http://www.liverpoolecho.co.uk/liver...name_page.html

THis bit stood out:

The interest payments are quite startling - £110,000 a day is being squandered, which is a massive figure on its own.
“But to put it another way, as someone said to me, it is the price of a match ticket (£38) every 30 seconds. It shows the depths to which we have plunged.
__________________

Shocking, truly shocking. I've just been burned by a business who racked up near £100k worth of debts, went into liquidation and failed to pay me the £2k they owed me. Point being, I can see similarities here in the way things are being run. Surely George and Tom should have seen that things were not going the way they intended and instead of burying their heads in the sand and hoping that things will be ok, they should have sorted out putting the club on the market sooner. This financial situation should not have happened

[BillobShaisley]

G&H aren't going to be able to keep taking 10% 'from' the club if the club can't pay its other debts. G&H own liverpool so LFC paying Kop Cayman is just a mechanism for shifting money about tax free. 'Loaning' money is a great way to escape taxes as Mandleson. Every penny LFC 'lose' paying to kop reduces the value of LFC by the same amount, so don't get caught up on that part of it.

The club will have to be sold as those interest bills lfc is paying to RBS/Wachovia is coming straight out of the value of LFC which they own.

PS: There's absolutely nothing new in this thread, I find the surprise surprising

[Jack D Rips]

G&H aren't going to be able to keep taking 10% 'from' the club if the club can't pay its other debts. G&H own liverpool so LFC paying Kop Cayman is just a mechanism for shifting money about tax free. 'Loaning' money is a great way to escape taxes as Mandleson. Every penny LFC 'lose' paying to kop reduces the value of LFC by the same amount, so don't get caught up on that part of it.

The club will have to be sold as those interest bills lfc is paying to RBS/Wachovia is coming straight out of the value of LFC which they own.

PS: There's absolutely nothing new in this thread, I find the surprise surprising

So we dont owe £351M after all. Its back to the £237M to RBS. Woohoo

[Charly]

So we dont owe £351M after all. Its back to the £237M to RBS. Woohoo

I guess we do owe £351m. depending on which company is being sold. They could sell up the part owing £351m, and take the 10% interest in addition each year.

[kingfunk]

Saturday, May 15, 2010
Liverpool FC's debt: The lies, misinformation and exaggeration exposed

With the recent publication of the Liverpool FC’s club accounts for 2009, the hysteria, misinformation and blatant deception over the state of the club’s finances has mushroomed beyond all recognition. I did vow not to return to writing on the site until Rafa Benitez had left Liverpool, but with all the lies and deceit over debt recently, I feel compelled to try and bring a different perspective to the table.

Dirty tricks

Apparently, the club is crippled by debt; on the verge of administration; being forced to sell its star players to service the debt etc. If you believe everything you read, the apocalypse is nigh. Well, as I will illustrate, this overwrought doomsday scenario is laughably exaggerated and ignorantly wide of the mark. Fans are being (willingly) manipulated , and the orchestrators-in-chief are not the anti-LFC media, but - for the most part – supposed Liverpool fans.

A prime example of a Liverpool fan trying to deliberately create as bleak a picture as possible is Tony Barrett of ‘The Times’ – In his article on May 8th 2010, he claimed that the club was £473m in debt. Similar figures have been bandied about all over the place, and have only served to fuel the hysteria and sense of despair amongst fans. Mr Barrett’s figure is not only inaccurate, it is amazingly irresponsible journalism.

The implication in Mr Barrett’s article is that Liverpool FC has a debt burden of 473m. This is completely and utterly FALSE.

Mr Barrett focuses only on Kop Football (Holdings) Ltd (KFHL), the company set up by Tom Hicks and George Gillett.

He (deliberately) neglects to mention Liverpool Football Club and Athletic Grounds Ltd (LFCAGL), i.e. the actual club itself.

[From this point forward, when I refer to ‘The Club’, I mean Liverpool Football Club Athletic Grounds Ltd. When I refer to ‘H+G’ I mean Kop Football Holdings Ltd]

The typical trick pulled by Mr Barrett and others (as part of their anti-Owner agenda) is obvious:

1. Focus only on Kop Holdings Ltd. Sensationalise its debt levels.

2. Try and convince everyone (through omission/subtle implication) that the debt on Kop Holdings = debt on the club.

REAL Level of LFC's debt

The CLUB is not £473m in debt. The actual figure is £226m, which is found on page 23 of the accounts for LFCAGL (Look at the bottom of the 2009 column).

Not £473m. Not £351, £226m. That is the ACTUAL level of debt on LIVERPOOL FC. Of course, a figure of £226m is not as sensational as £473m, so the truth got pushed aside in favour of a nonsensical figure that would provoke shock, hysteria, and more anti-Owner sentiment.

On a related note: In November 2009, one of my sources at the club provided me with figures on the club's actual debt level at that time.

In that article, I stated:

1. The Owners have reduced the club's debt level to £200m (plus a £37m pound facility for stadium soft costs). [TOTAL DEBT in = £237m).

Since the new accounts were published, certain people have been trying to make out that what I reported was wrong. Well, much to the chagrin of my detractors, what my source told me was 100% correct. The proof of this is the current debt level of £226m.

Debt reported Nov 2009 = £237m
Debt reported in new club accounts = £226m

Note: my source did not stipulate what date he was using for the figures, so just because I reported it in November 2009 does not mean the figures are *from* Nov 2009.

Since my article, a further £11m has been shaved off the debt, which brings us to the current figure of £226m. [Note: I reported this news in Nov 2009; my source did not reveal the timeframe]

Money owed to H+G by the Club

So – Liverpool FC’s total debt is £226m. How much is actually owed to H+G’s company, KFHL? £351m? £400m?

NO.

The total amount owed by the CLUB to H+G is £100.8m, as revealed on page 23 of LFCAGL's latest accounts ('Amounts owed by Group Undertakings' column)

The 100.8m constitutes loans made by H+G to the Club. This is normal business practice. Charging interest on the loan is also normal business practice. The likes of Mr Barrett et al will try their hardest to convince you though that H+G are ‘stealing’ money from the club and lining their own pockets.

Obviously, that is a cretinous thought process.

The bottom line is this: H+G’s company has shouldered much of the debt burden. They could have taken out loans ON THE CLUB, and saddled the club itself with all the debt, but that has not happened. The extent of the club’s debt liability to H+G is £100.8m. The other £126m of debt on the club has nothing directly to do with H+G:

Bank Loans and Overdrafts = 36.5m
Trade creditors = £35.5m
Tax + Social Security = £13.8m
Other creditors = £10.8m
Deferred income = £28.2m

I suppose H+G are responsible for tax and social security debts too?!

Interest payments

And what about interest payments to H+G? The 'Payable to Group Undertakings' column on Page 16 of LFC's new accounts reveals that between July 2008 and July 2009, the club made £9.3m of interest payments only. Not £20m. Not £30m, and certainly not £40m, which is what Mr Barrett suggests in his article.

It is very important to make a distinction between Kop Football (Holdings) Ltd and Liverpool FC Athletic Grounds Ltd. They are NOT the same company; they are two distinct entities. The debt from one has no direct bearing on the other.

Debt level of Hicks and Gillett's company

KFHL’s current debt level is £347m. It's a large figure BUT The club is not affected by it. That is debt on H+G's company alone. It constitutes (mainly) money borrowed to buy the club in 2007, money that *only* affects KFHL. That debt will be paid when the club is sold. H+G cannot take money from the club to pay that debt; it is ridiculous to even suggest such a thing. I repeat: KFHL’s debt has absolutely NO BEARING on the club itself, and anyone who says otherwise is wrong, and/or clearly trying to spread misinformation.

The only thing H+G *can* do is take money from the club to pay off the £100.8m in loans, which was lent to the club by KFHL.

However…

Page 13 of the KFHL's accounts states: ‘Within the terms of the loan agreement, Kop Football Limited cannot demand repayment if to do so would cause the company to become insolvent’.

In other words, H+G can’t just demand repayment of the entire sum any time they want. In any event, to do so would not remotely be in their best interests. In what perverse reality do owners of a football club deliberately damage that club by making it financially weak and open to considerable financial penalties? It doesn’t happen, and again, anyone who suggests otherwise is lying.

It is in H+G best interests to keep the club as financially solvent and successful as possible. This is obvious.

Summary

1. Kop Football (Holdings) Ltd = H+G’s company
2. Liverpool Football and Athletic Grounds Ltd = Liverpool FC
3. Current debt level of the CLUB (i.e. LFCAGL) = £226m
5. Money owed by the club to H+G = £100.8m
6. Level of interest payments made by the club to H+G = £9.3m

These are the facts. These are the figures at which fans should be looking. Do not be fooled by the obvious anti-Owner agenda being perpetuated in the media by the likes of Mr. Barrett and Spirit of Shankly – they focus only on the figures for KFHL, which are irrelevant when it comes to assessing the financial health of the CLUB.

The only link between KFHL and Liverpool FC that is relevant is the level of money loaned to the club by H+G, which as I illustrate above, is currently 100.8m.

And let’s get one thing perfectly clear: I have no personal allegiance/connection to H+G; Like most other fans, I believe that the right thing for them to do is sell up and leave the club.

However, vitriol towards the owners should NOT result in lies and deceit over the figures just to achieve the goal of making them look bad.

This article is NOT a defence of H+G – it is a defence of the CLUB.

Many supposed Liverpool fans have painted an intensely bleak picture of the club in recent weeks, and they’ve used inaccurate financial figures to do it. And why? They’re so obsessed with making H+G look bad that they’re willing to sully the name of the club in the process. It’s textbook cutting off the nose to spite the face.

Debt is the rule in football, not the exception. Having debt is NORMAL. Liverpool had debt BEFORE H+G arrived. Just because a club has debt does NOT mean everything is in disarray. That's what the likes of SOS want you to think because it furthers their anti-Owner agenda. In an ideal, romanticised fantasy land, there would be no debt, but that is not reality.

All this misinformation and doom-mongering about finances does not affect H+G - it affects only the club. Fans who perpetuate the negative myths spun by the likes of SOS and the anti-Owner media mafia are complicit in placing the club in a negative light.

Liverpool FC will be fine: The club will get sold. New investment will be found. A new stadium will be built. The commercial side of the club will continue to improve.

STOP BEING SO EASILY MANIPULATED.

Read more: http://www.liverpool-kop.com/2010/05...#ixzz0o1LGLrZY

[Vermilion]

Anyone who say's they vowed not to write on a site till the manager has left has nothing to say that i want to hear...i stopped reading at that point, how self important can you get....i won't write anymore till Rafa is gone.

[BigChief]

That was a long confusing read. So if G&H want to sell the club they'll be looking for
(remembering £226 million debt which doesn't have to be paid, can be transferred):

£100.8 million + £347 million = £447.8 million on sale of club. Once the new owners have paid the best part of half a billion they need to keep the £226 million serviced. Is the author above a bit thick or something?

Or is the £100.8 million PART OF the £347 million they'll be looking for? Either way, new owners will just laugh and walk away. Which is probably part of the plan by the Evil twin.

[dww]

The question is does Kop Holdings have any other assets except those related to the football club? If not then how is it different to the holding company at Luton the debt of which was held against the club and when it went into administration the club went in too as far as I understand.

Taking profits might be normal business practice. However under investment in the team, remains under investment in the team and doing so at a critical time in team development is bad both for the team and the future profitability of the business.

[kingfunk]

The State of Liverpool FC – An Idiots Guide

That was a long confusing read. So if G&H want to sell the club they'll be looking for
(remembering £226 million debt which doesn't have to be paid, can be transferred):

£100.8 million + £347 million = £447.8 million on sale of club. Once the new owners have paid the best part of half a billion they need to keep the £226 million serviced. Is the author above a bit thick or something?

Or is the £100.8 million PART OF the £347 million they'll be looking for? Either way, new owners will just laugh and walk away. Which is probably part of the plan by the Evil twin.

Seems a bit thick alright and not sure what the article is trying to achieve, but it's just another view I suppose.

[dww]

Actually, I see, it is that bile filled gob****e Jaimie Kanwar that wrote it.

[barnes10]

The question is does Kop Holdings have any other assets except those related to the football club? If not then how is it different to the holding company at Luton the debt of which was held against the club and when it went into administration the club went in too as far as I understand.

Taking profits might be normal business practice. However under investment in the team, remains under investment in the team and doing so at a critical time in team development is bad both for the team and the future profitability of the business.

its different because the terms of the financing states that the club are not liable for kop holdings debts if it pushes the club into administration.

i.e. whatever the pair of cunts (H & G) not (M & P) do to us, they cannot force the club into administration through loans taken out by kop holdings

[Exiled_red]

The question is does Kop Holdings have any other assets except those related to the football club? If not then how is it different to the holding company at Luton the debt of which was held against the club and when it went into administration the club went in too as far as I understand.

Taking profits might be normal business practice. However under investment in the team, remains under investment in the team and doing so at a critical time in team development is bad both for the team and the future profitability of the business.

Kop Holdings only asset is the club, meaning the club is it's only source of income, meaning there are only two ways to pay off the loans, i) through taking money out of the club, ii) by H&G paying Kop Holdings debts off with their own money The situation is similar to that of Luton.

Also if the club aren't paying off the holding company's debts, why has the club made such a huge loss, give we've made money on transfers and had significant sums of money from increase merchandising, sponsorship deals, increase TV money for PL and CL. If we were only paying off interest on the loans to the holding company that would equate to ~£10m a year.

[Neil Young]

"A load of complete toss" seems about right.

[dww]

its different because the terms of the financing states that the club are not liable for kop holdings debts if it pushes the club into administration.

i.e. whatever the pair of cunts (H & G) not (M & P) do to us, they cannot force the club into administration through loans taken out by kop holdings

I'm not sure that is the point - if Kop Holdings holds a share of the football club not just the loan then I suspect the loan terms are irrelevant. If Kop Holdings can't finance their loan then it's only asset and source of income is LFC. So if they can't sell that to cover the debt then Kop Holding goes into administration - I'm pretty sure that the Luton ruling essentially said that in such circumstances, from the view of the league at least, that amounts to the club being in administration.