just picked this up re red dippers from the times ( sorry unable to post on new thread ) which makes me smile......
The extent of the financial malaise affecting Liverpool has been disclosed after the publication of annual company accounts for their parent company, Kop Football Holdings, which revealed record losses of £54.9 million.
As of July 31, 2009, the group’s total debts were £472.5 million, causing interest payments to Royal Bank of Scotland (RBS) and Wachovia, their creditors, to rise to £40.1 million. Martin Broughton, Liverpool’s recently appointed chairman, has had to appear before the Premier League to offer assurances that the club will be able to fulfil their fixtures for next season.
Broughton ran Liverpool’s accounts by League officials before submitting them to Companies House in an effort to ensure that the club would be granted a Uefa licence for the 2010-11 season. His efforts were supported by RBS, which offered a non-binding assurance of cash to the League. The licence has been granted.
The accounts cover the 2008-09 season, in which Liverpool’s revenue was enhanced by finishing second in the Barclays Premier League and a run to the quarter-finals of the Champions League. This season they can finish no higher than sixth in the league and were eliminated from the Champions League in the group stages. Club coffers were swelled last year by a lucrative pre-season tour of the Far East. This year, the forthcoming World Cup has made a similar trip impractical.
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Club officials claim that these losses will at least be mitigated by the £81 million, four-year sponsorship deal with Standard Chartered that comes into effect this summer, but it is understood that there is a performance-related element to the contract that means it achieves its full potential only if the club are successful.
Despite the bleak financial picture painted by the figures, Broughton still expects Tom Hicks and George Gillett Jr, the owners, to sell the club within months for a price that has yet to be determined. The chairman claims that it is “business as usual” at Anfield despite the doubts over the future of Rafael Benítez, the manager, and a number of star players.
“I expect to be chairman until we sell, so a matter of months,” Broughton said. “There’s no fixed price, there’s no agreed price — it’s a willing buyer, willing seller trade. We have willing sellers and there are willing buyers out there — that will determine the price.”
The controversy that greeted the £3 million payoff to Rick Parry, the former chief executive, also disclosed in the accounts, initially distracted attention from the full extent of Liverpool’s financial situation, but with the club’s parent company having interest payments of £110,000 a day to meet debt obligations, the severity of their predicament is becoming more apparent.
Liverpool have now shelled out £85 million in interest payments on the debts incurred by Hicks and Gillett Jr upon takeover in February 2007 and their plight is now such that on two occasions this year they had to extend their short-term credit facility with RBS.
But the most telling indication of their difficulties was once again provided by KPMG, the auditors, who expressed a “material uncertainty” about Liverpool’s ability to continue as a going concern, the second successive year that they have issued such a warning.
Against the backdrop of such extreme uncertainty, it would seem unlikely that Benítez will be given the significant transfer funds he will demand should his top players leave.
•Benítez will name Jack Robinson as a substitute for Liverpool’s trip to Hull City tomorrow. Should the 16-year-old left back make his debut, he will be the youngest player to represent the club, beating the record held by Michael Owen.
Costly business
Liverpool’s debt keeps mounting. The 2009 accounts of the club’s parent company, Kop Football Holdings, show total debt soared by £51.5 million to £472.5 million in the year to July 2009.
Royal Bank of Scotland and Wachovia have been forcing Tom Hicks and George Gillett Jr to move Liverpool’s borrowings away from them and on to the Cayman Islands-listed parent company.
Last year, Liverpool reduced their bank loan from £350 million to £290 million, but only because their offshore parent company increased its loan to the club by £86.2 million to £144.4 million. That loan, on which Liverpool has to pay 10 per cent interest, is likely to have increased.
Reduced bank borrowings means the club are unlikely to go broke but because Liverpool have so much debt, Hicks and Gillett will resist cutting their asking price to the market valuation of £350 million.
