Tom Hicks and George Gillett Jnr placed the club in hundreds of millions of pounds of debt
Liverpool’s latest full yearly accounts, covering the period of August 2009 to July 2010 show the club recorded a £20M loss, almost entirely due to rising interest costs associated with the crippling debt the club was placed under.
- Club pocketed £23M in player sales that they did not reinvest in new players
- £18M spent on debt interest
- Overall loss of £20M
- Media revenue and overall revenue up slightly
- Increased costs due to termination of Rafa Benitez contract and Roy Hodgson appointment
Over this 12 month period payable interest had risen to almost £18M per year. This debt excluded the Cayman Island based loan – which eventually ended up costing Tom Hicks and George Gillett £70M each of their own money.
Liverpool were taken over in October by Fenway Sports Group who are said to have repaid £200M in debt, cutting interest payments from almost £20M down to £3M a year.
Liverpool’s set of figures for the previous year could have been much worse but for another factor.
Former managing director Christian Purslow often told us that all the money from transfer sales went back in to new players. Many fans at the time insisted that the figures didn’t add up. In the previous 12 months the reds made a transfer profit of £23M on players – effectively confirming the fans’ worst fears that the club was being asset-stripped to pay bank interest.
Administration expenses also increased by £20M, these are believed to include player wage increases, agent fees for players including £5M on Joe Cole, payments to sack Rafa Benitez and a signing on bonus for Roy Hodgson.
Revenue from media grew by around 7% – up £5M to £80M. Total club revenue grew to £184M – the figure does not include recent sponsorship deals – including the new kit sponsorship with Standard Chartered.
Club Managing Director, Ian Ayre added:
“This is a historical footnote in the history of the club.
“As much as we were well aware of the difficulties surrounding these accounts, everyone in the world is now aware of what has been achieved since.
“That sets the club up in lots of different ways.
“It has the ability to reinvest in the team, there is less debt and we can now continue to support the growth of the club.
“We have also had significant commercial growth since these accounts were published.
“The club is now in an excellent position to move forward.”
Next years results will represent a combination of the final 3 months of Hicks and Gillett’s ownership alongside the opening 9 months of the new owners.