EXCLUSIVE
By David Bick, Chairman, Square1 Consulting
Once again, the accounts for the main operating company of Liverpool FC, namely Kop Football (Holdings) Limited, do not make attractive reading.
The net loss of £53m is up on the loss of £42m for 2008 and the bulk of this is accounted for by interest charges of £40m (actually £43m when capitalised interest is taken into account – which doesn’t get shown on the profit and loss account). Over two years, the company has racked up losses of £95m of which interest charges make up a whopping £76m. These substantial losses seem at odds with a recent statement by the club that profitability had been improved since 2007. The interest charges are a combination of those paid to RBS and those due to Kop Football (Cayman) Limited, a company controlled by George Gillett and Tom Hicks.
There is a negative net worth on the balance sheet of £128m, a further decline from a minus £75m in the previous year.
Net borrowings have climbed substantially and stood at £351m, up 17% on the previous year. Included in these outstanding debts is £144m owed to Kop Football (Cayman) Limited and this figure has climbed £86m in one year alone, although no explanation is given as to why.
The borrowing agreement with RBS was only renewed for 6 months last July through to 24 January this year and then, again for reasons not explained, for less than 6 weeks to 3 March. It is also not explained how and to when the borrowing facility has been extended since that date.
The auditors again write a going concern paragraph and make clear that the business is dependent on short term bank facility extensions.
If the interest charges are at similar levels for the year which will end this 31 July, and estimated operating profit turns out to be as has been reported, further losses are going to be difficult to avoid.
Within the stated income, it is not clarified how much was contributed from the participation in the European Champions League, which is income that will clearly be missing next season.
All in all, these numbers – and the auditor’s observations – speak for themselves.
Just waiting for Purslow to remind us how Liverpool are actually making ‘profit’ while he goes about signing players on behalf of the manager.
These accounts make for dismal reading and call into question the whole issue about the extent and term of the RBS, Wachovia and other loans.
Reading between the lines Liverpool FC has already effectively, though not formally, been in administration since March.
If the implication was that the 6 month extension was from March rather than July as everyone thought the club may find itself in formal administration from September if new buyers are not found.
I have to say that I have little confidence that new buyers are genuinely in contact with the club or are even on the horizon just yet.
In view of the figures contained in the accounts Broughton’s comments in his “interview” are considerably less than convincing.
IT doesnt take a finance expert to know liverpool have been a disaster from the moment they were bought out by the yanks. Its obvious if you earn 1000 a month and spent 2000 a month youre racking up debt and never will be paid off.
Liverpool are broke, end of story. The yanks bought the club to fund their life styles simple as that. Next year they will post around 70-100 loss if they are not sold and debts cleared up immediately. By that time liverpool will be no. Should be some cheap real estate when anfield is put up for auction. Man U probably buy for a training ground just to rub salt haha.
Hey Gaga, very funny…
In January this year:
Debts at the parent company of Manchester United have increased to £716.5m ($1.17bn), according to its latest accounts. Part of the reason was the 1.6M loan the Glasers made to each of their 6 kids, I joke you not.
I don’t think Man U could afford a season ticket let alone the ground.
Anybody got any ideas about what will happen if Martin Broughton is unable to find a satisfactory buyer for the club ?? Portsmouth and Leeds come to mind. Who is going to buy a club with this level of debt AND have to fund a new stadium ?
One things for sure none of HIcks and Gillett’s own money is at risk.
Poor old Tom ” Paid such a terrible price ! “
do you think they (t + g) know that they are not just ruining a football club, but people lives as well. It’s all so depressing.
IT doesnt take a finance expert to know liverpool have been a disaster from the moment they were bought out by the yanks. Its obvious if you earn 1000 a month and spent 2000 a month youre racking up debt and never will be paid off.
Liverpool are broke, end of story. The yanks bought the club to fund their life styles simple as that. Next year they will post around 70-100 loss if they are not sold and debts cleared up immediately. By that time liverpool will be no. Should be some cheap real estate when anfield is put up for auction. Man U probably buy for a training ground just to rub salt haha.
Hey Gaga, very funny…
In January this year:
Debts at the parent company of Manchester United have increased to £716.5m ($1.17bn), according to its latest accounts. Part of the reason was the 1.6M loan the Glasers made to each of their 6 kids, I joke you not.
I don’t think Man U could afford a season ticket let alone the ground.