Liverpool post £40m loss

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Liverpool post £40m loss Empty Liverpool post £40m loss

Post by Art Morte on Mon Mar 04, 2013 1:27 pm

Liverpool have reported a £21.8m increase in their debt – now £87.2m overall – and a loss of £40.5m in their annual accounts. A restructuring of their accounting period to align it with the football season means that the figures apply to the 10 months between 1 August 2011 to 31 May 2012.

They show that although commercial revenue increased, so did the club's overall liabilities. However, the club's managing director, Ian Ayre, played down the significance of a rise in debt levels. "It's definitely not something I believe anyone should be worried or concerned about. It is seasonal – our debt goes up and down," he told the Liverpool Echo. "We have money to pay out and money coming in, just like any business.

"The difference in football is some of the swings are significant, so if you look at player-trading, we may need to make investments as we do in the summer before our key revenues come in: big sponsorships cheques, big ticket revenues, all the media revenues etc."

"You come to Christmas when you maybe have less revenue coming in but you have got money that needs to go out, both on playing deals that you are doing at the time but also on historic player deals. Debt has increased but I think it's a factor of doing business in the time and place we are.

"We need to continue to improve our squad and what a lot of people won't relate to perhaps is that when you are improving your squad and making that investment, you have knock-on costs that will create debt in the short term. But hopefully in the long term we'll improve our position and we are very aware of that. We will continue to invest in the squad – I think that is what our fans would expect. But the most important thing is that we do it prudently and in a sustainable way that is affordable."

Other contributing factors to the increase in debt were player instalment payments plus exceptional payments of just over £9.5m – relating to matters such as the stadium project, general restructuring and pay-offs to senior employees who left the club.

"We see a big charge within the accounts for amortisation of players that have been disposed of within the period that perhaps came in on a higher cost," added Ayre. "We've made losses as a result of selling them but at the same time we've improved our longer-term position in terms of our wage bill by reducing the wages for those particular contracts. We've in the same period refinanced our lending facilities, which gives us ability for working capital to operate as a business."

Since the end of the accounts reporting period, the owner, Fenway Sports Group, has injected £46.8m into the club via a non-interest-bearing inter-company loan while credit facilities were also refinanced with three major banks, providing £120m of facilities for three years. The loss of £40.5m for the 10-month period was, however, less than the previous year's £49.3m.

So, not great financial news, but something that was to be more or less expected.

This is another year - or 10 months in this case - in a row when we've posted a £40m loss. Something that would be covered if we qualified for the CL, so just goes to stress its importance.

The improved Premier League TV deal is of course good news, but on the other hand it will aid other clubs as much as it will help us.

Debt at £87m seems a bit worrying to me and that it has grown by some £20m. Meaning FSG hasn't funded all our spending, but we've borrowed money. Not looking forward to paying millions of pounds in interest (again)...

All in all, in my opinion these new figures aren't too worrying, but if in a year's time we have posted another £40m loss and seen our debt increase, then it will get worrying all right. Here's hoping our management and owners know what they're doing.
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Post by Motogp69 on Tue Mar 05, 2013 12:03 am

Is this for real, or do they just have great accountants for tax purposes?

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Post by Red Alert on Tue Mar 05, 2013 6:35 am

This doesn't take into the account of all the sponsership deals and new TV deal that's going to be put in place. We're going to make atleast 40m from those two alone. The Warrior deal gives us 25m pounds each season.

We've also dropped the wage bill quite a bit and will continue to do so in the summer. Carragher is retiring, and Downing doesn't look like staying.
Kuyt, Bellamy, Carroll, Doni, Cole and Maxi have all been let go. Not including Doni, everyone I just mentioned were all reportedly getting over 70k a week in wages. That's nearly 18m saved on wages and we've improved the side.

Obviously we signed some players. Our net spending is near 45m under Rodgers though. So it's not all positives, but you make it sound terribly bad. The debt will gradually decrease before it gets anywhere serious.
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Post by Helmer on Tue Mar 05, 2013 1:36 pm

A restructuring of their accounting period to align it with the football season means that the figures apply to the 10 months between 1 August 2011 to 31 May 2012.
I also read the news, I guess these above lines are very important. Although it is a loss, but I guess nothing serious. As ynwa already explained, so including all those figures posted by him, it will be a much different picture when they will come out for this running season.

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