'Where's my credit card gone?'
Liverpool FC are in real financial trouble as the clubs holding company Kop Football Ltd posted a £42 million loss last year.
Kop Football Ltd was setup as the parent company of Liverpool FC who’s debt doubled to £82 million only last week.
When Liverpool owners bought the club from David Moores and the other shareholders they didn’t fund it with their own cash. They decided to take out a loan of £350 million split between the football club to clear debts and the rest in to Kop Football Holdings which was supposed to begin building a stadium. However, as we predicted, the interest payments would be crippling and far more than LFC could afford. £36 million in interest in one year alone is plunging the club in to more and more debt.
The clubs owners have effectively handed over £40 million a year for nothing. Out of their own desire to avoid investing a single cent in to the football club THEY were supposed to be buying.
KPMG, the accountancy firm has certain legal obligations so that lenders are aware of financing difficulties, and said:
The following is from Bloomberg:
Liverpool Football Club’s parent company had a full-year loss of 42.6 million pounds ($69 million) because of interest payments on loans taken out by American co-owners George Gillett and Tom Hicks.
Kop Football (Holdings) Ltd.’s loss in the year ending July 31, 2008, widened from 33.1 million pounds on interest charges of 36.5 million pounds, the company said in a Companies House filing. The owners have a July 24 deadline to refinance or pay off a 350 million-pound credit facility with Royal Bank of Scotland Plc and Wachovia Corp.
The interest payments wiped out the 8.37 million pounds of net income reported by the Premier League soccer club, which benefited from player trades and increased broadcast income. That compares with a 20.6 million-pound loss a year earlier, the club said in a separate filing. Sales rose 19 percent to 159.1 million pounds.
“Any company, never mind a sports company, which is not able to cover interest from operating activities has three options: refinance, get new equity investors, or sell it to somebody else who’s prepared to absorb the debt and start from scratch,” said Sean Hamil, a lecturer at the University of London’s Birkbeck Sport Business Centre.
With the debt issue unresolved there is the “existence of a material uncertainty which may cast significant doubt on the group’s and parent company’s ability to continue as a going concern,” the club’s accountant KPMG LLP wrote in the filing.
Even more worrying is the following:
Liverpool said it had been granted a license to play in next season’s Champions League, access to which is contingent on proving the business is a “going concern.”
The owners say they have no plans to walk away from the 18- time English champion. Instead, they have held talks with potential investors about acquiring an equity stake and are in discussions with their bankers to extend their loan.
On July 24th, £350 million must be paid back to RBS and Wachovia, the two banks.
Where that money is going to come from God alone knows.
Not only will UEFA kick clubs out of competition for financial impairments but the Premier League can impose significant points deductions.
We can’t compete with the best until there is a stadium that can hold 70,000 people!.This is what the Americans promised us but they’ve been unable to deliver partly due the financial crises combined with plain lies that they told us some years back.
These losses mean that we’re falling further behind to Man U,Barca,Real M,Man C and Chelsea who all don’t think hundred times before splashing the cash!.Either the Americans need to outrightly sell up or attract major investment but nothing seems to be happening.We’re just going round in circles!
They should sell the club to the fans(take a look at ‘shareliverpool.co.uk’)the pepole who would bleed for the club,any fan interested pays £5000 and buys a share which does not increase or decrease in value and can only be sold for £5000,it is non profit and pays no dividend.All that can,sign up and cement your place in LFC history!,it would be a profitable club with no depts or owners wanting to cream a profit,leaving all clear profit to buy players and finance larger stands at Anfield(who wants a new stadium when u can bulid more seats at Anfield,a stadium of such historic value?) YANKS OUT LFC FANS IN! Just think how proud Shankly would be? YNWA!
These 2 yankee doodles were wrong for the club from day one. Anyone that calls football “soccer” doesn’t know what it’s all about.
Now is the time the fans have to use “fanpower” to boot these ***holes out of our beloved club.
We need DIC to save us.
Let’s start the campaign right here!! Right now!!
They should hang them yanks from the shankly gates. They r ruining our club. After the year we had we r getting so close dethroning utd but if things keep going on the way they r then ina few seasons we will be fighting for a euro league spot. Liverpool fc is like 1 big family an these c**ts r gona f*** the whole ting up. F*** of bac to the states.
I love Liverpool FC, we all do, that is a fact BUT:
David Moores selling our club to 2 Yanks who had to take out a loan in the first place to buy it should have set the alarm bells ringing?
The huge debt coupled with the further £40m interest payments 2 years after the club was sold just adds fuel to the fire of concern for us as fans.
The false empty promises of the new stadium echo the shocking state we are in financially and it is embarrasing. We have been betrayed by Moores by his bad judgement and Hicks and Gillet for everything else since they took over.
To be in a position where they (H & G) must ‘refinance a loan’ (that statment alone tells you all you need to know?) is just simply unbeleivable! It doesn’t take a genius to work out that if you can’t afford it you shouldn’t have it!! Yanks but no thanks!
One thing that really sticks in my throat and forgive me if I’m wrong to think this, is the transfer money or lack of it. Yes we have made some
fantastic purchases in the likes of Torres, Yossi, Skrtel and potentially Lucas but also a few how to put it ‘quizzical’ signings probably due to the budget Rafa may have to work with. Selling to buy or buying with money we don’t have (ie £40m, Tevez + another for example) means we cannot compete with Man U or Chelsea in this field! It will always leave us chasing shadows where the big signings should be made and push us further into debt or am I wrong?
Rafa and his tacticul genius plus him signing his contract encouraged Gerrard, Kuyt, Torres and all who follow to help take the club in the direction we dream of, towards the ellusive 19th title but this brings me to my point – where does all the money come from? Gate receipts and merchandise? Or somewhere else? I can’t for a minute think think it’s the Yanks because if it is it leaves a bitter sweet taste in the mouth doesn’t it?
Or am I just being too cynical?!
I absoloutly live for seeing Liverpool FC playing amazing football and being successful but it saddens me to see the position we are in.
H & G have tarnished the name of Liverpool FC and for that reason alone they must go. We have been fed a pack of lies and it is an insult to the integrity of our club. We must make a concerted effort to see them go!
In Rafa and the Redmen we trust.
LIVERPOOL FC – Y.N.W.A – JFT96.
What a crap? I am a huge fan of Liverpool since i was a kid. You greedy Americans please stop gambling on our club. Sell the club to some one who can afford. Then just bounce. Liverpool belongs to legends NOT for gamblers’.
Come on people wake up lets fight them we will not let them to ruin our respected history.
YNWA
I’m loving it!! The city is all ours!! What a load of crap. Your club isn’t even yours. Blame Moores and Parry? Blame yourselves you idiots. You were all chirping up for Moores to sell when H&G were promising you the world.
Love it do you you Bluenose piece of trash? Wonder if you’ll love it when the I N E V I T A B L E happens and we’re bought out the MOMENT those 2 clowns are forced to surrender and JUST when clueless tw*ts like you are salivating at us losing players and it turns out our buyer is the biggest buyer/financial source in the English game.
And it WILL happen – just watch, we ALWAYS come out smelling of roses – even when we play your excuse for a ‘team’. Actually, no wonder you hate us – You’ll have even more reason to by the end of summer, just watch. Now fcuk off back to your blue hole and NEVER darken our board with your presence again!!! Bluenose W*nker!!!
i am liverpool’s fan more than 10 years and i don’s remember anyone who do this to our team.We need money no dreams and sh*ts
How can they let this continue to go on. refinancing means more debt! if this carrys on the yanks will make liverpool a mid table side after the banks have made them sell our best players to fulfill there repayments.
How long will rafa stay knowing his best are going to be sold and no money for new players?
not long! even this year if he is now given no money to spend, he is certainly going to have to delay his buys as h&g refinance theres. siva was nearlly a done deal,now he is going to madrid as rafa cant get the cash straight away!
moores should be ashamed as he sold the club to them knowing it was borrowed money but they offered him much more money personaly.
How many clubs are going to be floating around like vaultures now to pick us clean of torres, gerrard,alonso?
next season we could be a mid table side fighting relegation rather than fighting for champions league,cause forget the premiership now as yet again we get it all togeather on the field the two yanks send us spirrialing into uncertainty.
Total scaremongering and misrepresentation of a financial position; the situaiton is no different to all other major clubs in Europe… Real Madrid although report the highest revenue and wealthiest club etc… are spectacularly in debt, 100’s of millions of Euros… Man Utd parent holding struggling against bankruptcy; Chelsea, although having their debt underwritten by the Russian Mafia would cease to exist if he called it all in; and the hidden gem at the Emirates is just waiting to erupt…
Liverpool Football club have just announces an increase in revenue to about £160m and an increase in profit… to £10m I think… that is what UEFA consider ‘a going concern’.
Yes, it would’ve been better if Hicks and Gillett had ‘bank-rolled’ out of their own money but realistically that was never going to happen; Yes, maybe Moores should’ve sold to the Arabs but that didn’t happen. Just like Benitez is a world class manager but continues to get battered and beaten up in the press; Hicks and Gillett are world players in the business and financial arena… like it or not, they are more likely to pull though this current issue than not… and make funds available for additions in the summer…
All you doom and gloom merchants need to pull your necks including the writer of this article…
Have a good summer all, roll on August…
We were here before they(h&g) come and will be here when theyve gone .We must stand up to them.The club will servive and get new owners soon .
I fuckin hope so!!!!
My Home Town Team The Mighty Reds LFC
I do blame the cowboys we have but even more i blame parry and moores. They are the reason we in the sh*t i would be ashamed if i were them.
What should be inferred is:
1) H&G are probably guarantors (or through their related companies)
2)
I take exception to anyone who blames this on Hicks and Gillett.
The club and league is required to perform due dilligence on buyer before it sells, when H&G where being touted as potential buyers everyone knew they smelt of rotten fish and that was before the financial crisis.
It was the duty of the Club and the English FA to have blocked this takeover.
What i still don’t understand is . . . The yanks bought LFC by arranging a loan. Moores & Parry must have known they needed a loan and were not putting in their own money, so why sell to them?
Surely Moores with all his financial clout would have been better of arranging his own loan and staying in control of the club.
We haven’t heard a peep from Moores in months and Parry is effectively gone, so who’s looking after the clubs interests?
I don’t care what anyone says these 2 muppets have f**ked this club up I’m so angry at the moment they can both f**k off right now
My understanding of this is. The auditors have to issue a going concern notice in the financial reports if:
a) In the opinion of the auditors the company will not be able to continue over the next 12 months
b) The company has failed to meet it’s debt obligations.
It’s quite obvious from KPMG’s statement that it’s the latter B. We already knew Hicks and Gillett failed to make good on their repayment to the banks months ago – things are no different now then before. What they are saying is simply: “350m is a lot of money in debt. The club’s position in the champions league is contingent on it proving to UEFA it can finance it’s debts. H+G are trying to find ways to finance the debt.”
If it ever gets to the point H+G don’t think they can find a way to sell, rather than risking to lose it all.
This isn’t good news, but it’s nothing new.
yes and they are so greedy they won’t even sell the club to some who has more ressources!!
I cant believe what they have done to our Club. The club we always loved and respected. With all due respect Mr Morres and Mr rick parry should be ashamed of themselves. We are really in financial awe!!!! I hope some wake up and for the sake of this Club do something. We cant leave this situation going on, we will end up letting all the players go. I am really upset and sad, I have been supporting this team all my life and have always been loyal and supportive bu thtis crap cant seem to go any further.
Come on all the people wake up and if there is a sheikh reading this just for the sake of everyone do something….
YNWA
i just cant understand all this mess.why did the directors sell are club to two tossers that were not prepared to use there money.im just a normal working man like the rest of are true supporters and live lfc it does not take a rocket scientist to work out,will i sell this club to somebody that is borrowing millions and have to pay millions on interest or do i sell to a rich arab oil barron that uses 100 pound notes to wipe his hole with and uses his own money and doesnt need to pay 40 million on interest a year.its common sense,im a donut and i even know that no wonder parry is jumping ship he knew this for months.disgrace.i hope the americans cant get money cause they are only putting the obvious off till some time later.we need cash to stay at the top or benitez is gone and if that happens we are doomed who would take us.we need them muppets out.
Cally, you’re right. Maybe ‘bankruptcy’ was a bit harsh.
We’ll post that article in about 6 months time.
You say ‘full use of ‘our’ misery’. My misery too lad. Fair play to all the fans who have joined in protests against these two owning our club, and despair at those fans who don’t.
David Moores and Rick Parry should be ashamed of themselves.
Cally – you need to get back on this planet lad.
And RBS ‘might extend our loan’ so we can do what – carry on paying them £40 million interest for another year that we haven’t got.
Bear in mind these are financial results up until summer 2008. I’m fairly sure the situation has got far worse in the past 12 months as we paid ‘another’ £40 million.
It’s a f**king joke and these two cowboys will lead us in to bankruptcy. Mark my words.
Just reading some of H & Gs comments in relation to the accounts;
“The directors have a reasonable expectation that the group will secure adequate resources to enable [it] to continue in operational existence.”
“Operational existence” is simply not good enough. Financial prosperity is imperative under the current financial model, anything less will be to the detriment of LFC and they will go the way of Leeds United!
Time for change is long gone, time for H & G to go!
SOS DIC or basically anyone else that can get this club out of this grave sitaution!
Kinel, what a pathetic misleading headline. At least some of you are making full use of our misery, eh…
These 2 americans are destroying LFC