Liverpool made to pay £2m for owners personal expenses
-
*Rafa's title dream already looks over because of Liverpool's massive debts* Liverpool fans and manager Rafael Benitez fear their hopes of mounting another serious Premier League title challenge are fading because of the financial crisis threatening to engulf the club. While Benitez is resigned to watching transfer targets follow Gareth Barry and, in all likelihood, Glen Johnson into the clutches of rivals, some supporters are proposing direct action to force American owners Tom Hicks and George Gillett out of the club. Benitez seems unlikely to be able to make the one or two significant signings which captain Steven Gerrard believes the squad need, with the Americans struggling to make ends meet, let alone compete in the transfer market with the likes of Chelsea, Manchester City and Real Madrid. The publication of accounts for the club and their holding companies last week laid bare the danger of financial meltdown if Hicks and Gillett fail to refinance their £350million loan facility with Royal Bank of Scotland and Wachovia. But now the Spirit of Shankly fans’ group are urging RBS not to agree a new deal with the Americans so that their stakes can be seized and the club sold to new owners. They are urging fellow supporters to write to Richard Holliday, the RBS manager responsible for Liverpool, and to their Members of Parliament, since the bank is effectively owned by the Government after the multi-billion pound bail-out. Spokesman John Mackin said: ‘We urge the Royal Bank of Scotland, and our elected representatives, to consider the implications of refinancing Hicks’ and Gillett’s continued ownership of Liverpool Football Club. We will step up the action regarding the Royal Bank of Scotland if this request is not met.’ The Mail on Sunday can reveal that RBS have sought advice from police and other authorities about the prospect of Liverpool fans attacking branches if they did not re-finance the owners’ loans. But the threat of a boycott — or worse — if the banks do strike a deal puts them in an even more difficult position. In theory, the club have £30m left of the £350m loan facility, which Benitez could spend on players. But in reality, RBS and Wachovia will not allow cash to be spent on transfers when accountants KPMG are warning that the future of parent company Kop Football (Holdings) as a going concern is in doubt unless the existing borrowings are refinanced. Benitez has already missed out on Barry, Johnson seems to be Chelsea bound and targets like Valencia’s David Villa and David Silva are seemingly out of Liverpool’s reach. With Xabi Alonso weighing up a move to Real Madrid, there is the very real prospect of Benitez’s squad emerging from the transfer window weaker rather than stronger. Fernando Torres and Daniel Agger have yet to sign lucrative new contracts agreed in recent weeks. Neither player is thought to want to leave Anfield, but the suspicion is that the delay owes as much to financial concerns as to being unable to find the time to put pen to paper. By waiting until mid-July for Torres to sign, Liverpool would save £250,000 as until then they are paying their star striker his current £70,000-a-week rather than the improved rate of £110,000-a-week. Likewise, Agger’s new four-year deal represents a healthy increase in wages and the longer Liverpool can keep it from starting, the better for them. Agger revealed while on international duty with Denmark this week: ‘Nothing has been signed yet, but I expect to do so when the game against Sweden is over.’ Torres may have to wait longer before he can sign. After the current round of World Cup qualifiers, he is going to South Africa to play for Spain in the Confederations Cup and will not return to Liverpool until mid-July. Benitez has dismissed the idea of selling any key assets and intends to keep the spine of his team together said: "We still need to improve in some specific areas. We will be working very hard to do that over the summer. "You can try to move fast but if the other teams go as fast as you, you have to go faster. The only way is to try to sign the right players every time." Harris - who was involved in trying to sell Liverpool last year - warned: "Whatever happens, Benitez's transfer manoeuvres will be restricted."
-
Your decision will effect your business not only in the UK, but here in Singapore as well. I will cancel my 2 RBS cards for sure...Not a premium spender but if only 500 of Liverpool fans does that, they are f**ked!
-
Err... Are you unhappy they don't lend of are you unhappy if they lend? Cos there are 2 sides to it right now... The bank people are in a no win situation... Lend and those against the 2 Americans will be angry... Don't lend, they are afraid the other Liverpool supporters will attack their branches for letting the club go into administration... The bank have to look after themselves I guess... *[RBS have sought advice from police and other authorities about the prospect of Liverpool fans attacking branches if they did not re-finance the owners’ loans. But the threat of a boycott — or worse — if the banks do strike a deal puts them in an even more difficult position.]*
-
chapter 11 for liverpool too???
v -
making a loss for the year does not mean the need to file for chapter 11.
man u are also in massive debt of £700m and their profits at the football club level are wiped out by the need to service rising levels of debt. red tootball ltd and red football joint venture, parent company of man u recorded a total loss of £66.2 for the year.
isnt that more of a going concern of the entity.
arsenal are in debt too, and even chelsea are making losses. dont make a mountain out of a molehill.
-
Aiyo , a club with a reputation like L'pool FC will not go down to bankrutcy so easily .
Ever since Rick Parry left the club , all sort of rumours kept flying out of the pigeon holes .
-
[making a loss for the year does not mean the need to file for chapter 11. man u are also in massive debt of £700m and their profits at the football club level are wiped out by the need to service rising levels of debt. red tootball ltd and red football joint venture, parent company of man u recorded a total loss of £66.2 for the year. isnt that more of a going concern of the entity. arsenal are in debt too, and even chelsea are making losses. dont make a mountain out of a molehill.] *Not really... You will need to look at the viability of the clubs rather than just the debt numbers...* Man United are in debts of $510m taken against the football club... The overall debt figure for United and its associated companies under Red football is £649.4million... Amount needed to service their yearly interest is $45m... Profit for last financial year was $80m... The amount certainly seem a lot but on closer look, its not necessary any worst than Liverpool's... Actually I would say its in a much much more healthier position than Liverpool's currently... Mainly because, contrary to what you have said, its not totally wiped out... There are still millions in profits left after servicing their interest from their loans... Liverpool's on the other hand... lack of a strong marketing arm and success has difficulties attracting more sponsors as well... And If their accountants are to be believed, which i see no reason not to, they have come out and issue a statement there is ‘significant doubt’ whether the company Kop Football (Holdings) can ‘continue as a going concern. Their very own club’s accountants, KPMG, are doubtful of them... That can't be good right? Their most recent accounts showed a profit of only £10.2million, their parent company lost £42.6m, mainly due to interest payments of £36.5m… I don't know long can they go on losing that amount every year… They have also said their credit facilities amounting to £350m, will expire on 24 July 2009... Even if they do get it refinanced, its just prolonging the problem only... Some Liverpool fans are even hoping the bank don't refinance the club so the 2 owners will have to sell... even if at a loss. In April the Hicks Sports Group defaulted on repaying loans totalling £354m for his other sports ventures in the States as well. Don't even compare to Chelsea, cos they are in a different league... Nobody would even doubt them even if they were 1 billion in debts with Roman around... Arsenal you say... Well, Arsenal is also in debts of around the same figure like Pool, $300+ million... But the huge different is, not only do they don't need to build a new stadium, they have a full house on match day and their tickets are the highest priced in the Premiership too... So they are enjoying the huge extra income with every match played there... And they have 2 very rich shareholders fighting to own the club as well... Liverpool at present, are $300 over million in debts, will have to borrow another $300 to $400 million to build their new stadium... So you can imagine their debt could reach United's as well... But United also don't need to build another stadium... And in terms of club value, its better too with their strong global reach... Just shirt sponsor alone, their new sponsors will pay them $20m a year... Compare to Pool's $8m a year from that beer company... So, its really not a molehill as you would like to think if these 2 fellows stay back and in charge for the long term... Pool could become an average club by the time they leave... Best option is they sell and leave early, or they will drag the club down with average players arriving for the next 3 to 5 years... Thats enough to see Pool end up as a mid table club...
-
*Liverpool pay US owners millions in expenses* . • Tom Hicks and George Gillett claim nearly £2m in 18 months • Supporters angry as club pays for travel and legal costs . . . *Liverpool are being made to pay almost £2m to cover the travel, legal and other personal expenses of the club's owners, Tom Hicks and George Gillett. The accounts published for the owners' holding company, Kop Football, for the year to 31 July 2008, show that Hicks charged £192,000 for "third party consulting, travel and other expenses," while Gillett charged £129,000 for "reimbursable travel, legal, personnel and other expenses".* The two men charged significant amounts of money for the same expenses, incurred by themselves personally "and affiliated companies", during the previous seven-month accounting period, which ran from 18 December 2006 to 31 July 2007, too. Hicks charged Kop £198,000, while Gillett charged £375,000. The pair also claimed almost £1m for what are described in the accounts as "transaction-related expenses". Hicks and affiliated companies charged Kop £133,000 in this category, while Gillett's figure was much higher: £823,000. The total charged to Kop in expenses, for the owners and their affiliated companies, in 18 months from their takeover in early February 2007 to the accounts' end date of 31 July 2008, was £1.85m. The accounts do not explain in further detail what "consulting, travel, legal, personnel and other expenses" were, or which were regarded as "reimbursable", and Hicks and Gillett were not available to respond with details yesterday. Nor was there any explanation of what constituted "transaction-related expenses". However, the only substantial transaction from December 2006 to July 2007 was the pair's takeover of the club itself. They borrowed £185m from the Royal Bank of Scotland to buy Liverpool in February 2007, and the club has been made responsible for paying the interest on that loan. Now it seems the club has also been made to pay for the pair's costs of doing the deal. The accounts, published last week, showed that Kop owed a total of £313m to the Royal Bank of Scotland and ÂWachovia in January this year, and that £36.8m was payable in interest last year. Kop's only asset is Liverpool Football Club so the interest, and the reimbursement of expenses, have to come from the club's income, made from television, supporters paying to watch matches, and other commercial earnings. Hicks and Gillett did loan Kop £58.2m from their holding company in the Cayman Islands last year. Not all the expenses claimed had been paid by July 2008. The accounts state that of the £523,000 charged by Hicks and his affiliates, £188,000 was still owed, which meant he had been paid £335,000 by Liverpool. Of the £1.327m Gillett claimed for his expenses, £255,000 was outstanding, so Liverpool had paid him £1.072m. The revelation about the expenses has further incensed supporters' groups who have campaigned for Hicks and Gillett to sell up and leave. The groups accuse the pair of breaking their promise not to make the club pay for their own borrowings to take it over, as the Glazer family did at Manchester United. Liverpool was sold because the previous chairman, David Moores, and chief executive, Rick Parry, believed the club needed wealthy backers to build the long-planned new stadium on Stanley Park, yet the North American pair have not found the finance. James McKenna, spokesman for the Spirit of Shankly fans' group, said: "Hicks and Gillett were the multimillionaires who promised not to do a Glazer and that work would start on the new stadium within 60 days. Yet now we find, as fans, not only are we paying for their takeover, but we are also paying for their costs of having done it, and, for coming over to visit the football club. They were supposed to bring investment to take the club forward, but it turns out we're even paying their travel costs."
-
I have to agree that u will need to look at the viability of the clubs rather than just the debt numbers. if u were to take a closer look at the fundamentals, u would realise that:
man u's overall debts stand at £649.4m (1.85 times more than liverpool - £649.4m) and incurred interest payment of £68.8m (£36.5m) with both clubs paying approximately the same interest rate. red football joint venture - who ultimately own the club - made a pre-tax loss of £44.8m in the year to June 2008 despite the club winning the champions league and achieving a record turnover of £256m (liverpool's turnover £159.1m).
it is kpmg's duties to express a warning in their notes in the filed accounts since the debts are due in the foreseeable future (after balance sheet date in this case) and being prudent with the treatment of liabilities. they have the responsibilities to express their opinion in a true and fair manner. (they also want to protect themselves against any legal liabilities should it arise)
in terms of fundamentals, both clubs are at the same level. however the glazers' strategy is based on high leverage such that the potential positive or negative outcome is magnified and may lead to catastrophic failure should the team fail to sustain their success on the pitch.
i am not comparing chelsea to any of the clubs, merely pointing out that they too, are making losses. chelsea and man city are in a different league of their own in terms of financial backing.
and now u know why liverpool are holding back on plans on a new stadium. and i personally feel that these two americans have done their part and should make way for investors who are genuine fan of lfc, to take lfc to the next level.
-
actually chelsea only in debts of 300 million
cause roman decided to abandon half amount of the loan
-
I am glad you agree that we have to look at the viability of the clubs... Its not about having a lesser sum or a lower percentage of debts... Its about the ability of the entity to repay it. In terms of fundamentals, both clubs are definitely not at the same level... While United consistently have a $200 over million turnover, Liverpool doesn't... Even Arsenal had a record $201m turnover last season due mainly to having a new and larger stadium... Liverpool doesn't have that, cos the 2 owners currently can't afford it... and it will continue to hurt the club the longer they drag it... And to their present problems, we have to remember that its not the Press that is saying it... Its the club’s self engaged accounting firm (who have knowledge to all their books) that is saying it… You are indeed correct that they are protecting themselves against any legal liabilities should it arises... The fact they even see the need to issue an independent statement of ‘significant doubt’ whether the company Kop Football (Holdings) can ‘continue as a going concern.' must be troubling for many... cos with a profit of only £10.2million, their parent company losing £42.6m, mainly due to interest payments of £36.5m… I don't think they are earning enough to cover their loans... United on the other hand do have debts of their own which is already well known... But we don't see their accounting firm of Red Football Limited or Red Football Joint Venture coming our with a warning despite having a bigger debt do we? And we should not confuse Red Football Limited with Red Football Joint Venture... Technically, they owned the club... But the club is directly owned by Red Football Limited, a company setup in the UK. Red Football Joint Venture could be a US company that has other Glazers commitments... Just like i said earlier, Hicks Sports Group defaulted on repaying loans totalling £354m for his other sports ventures in the States as well. And contrary to your "strategy is based on high leverage such that the potential positive or negative and may lead to catastrophic failure should the team fail to sustain their success on the pitch" I think they have their profits spread out fairly well... Out of the $256m in turnover, the champions league actually only made up of about 13% to their total income... So even if they were to made it to the Q-finals or S-finals, it should probably see them earning about $20m already... So it won't be a major problem even if they don't win it every year... Just qualifying is also good enough, thats why everyone is fighting for that minimum 4th place... including Liverpool... Here is a rough breakdown of United's income... *£90m For United from prize money and TV income alone.* Premier League title = £52.3m in prize-money and TV income Champions League final = £33.7m Carling Cup final and FA Cup semi-finals = £4m. Matchday gate collections = £101.5 million, While commercial income — which takes in merchandising, sponsorship and licensing agreements - rose by 14 per cent to £64million. You don't see Arsenal winning anything much but they remain more profitable than Liverpool, you get what I mean? United, like Arsenal or most of the top clubs, have a more or less guaranteed matchday gate collections... On top of that, they have a nice commercial income as well... Premier league status and Tv income will also continue... The rest is just extras... Where United differs from Liverpool by $100m is mainly, matchday gate collections and their commercial income... These are the 2 main areas where Pool are lacking far behind... And it continue to show with their recent $80m, 4 yrs shirt sponsorship deal. Why Pool are holding back on plans to a bigger stadium is because these 2 owners can't afford it presently... When they first arrived, they disclosed a super size stadium, but no sooner have they done so, they down sized it, follow by down grading the interior to cut cost... We can see they want to build a bigger stadium badly... and they need it to keep the club on top... But it will be another $300 to $400 million of loans on top of their present $350m or so... You can only imagine the total sum if these 2 guys get their way... The current 2 Pool owners don't look like they would leave... The best pool fans could hope for is they get another investor in as what is reported they are trying to do... Cos with the new TV deals reported to be more in 2010/2011, and these 2 guys will be looking forward to extra money like with all other EPL clubs... So I doubt they would give up easily unless someone comes in with a super big offer they cannot refuse...
-
otang money also became a big news ....
news bigger and bigger ...
2 bosses claimed 2m expenses also news ?
-
Benitez happy with war-chest
Rafa Benitez has rebuffed media reports by insisting he is happy with the amount he has to spend this summer.
Liverpool parent company Kop Holdings Ltd revealed severe debts last week, despite the club itself recording multi-million pound profit.
As a knock-on effect, it was reported Benitez would have a mere £15 million to spend this summer, scuppering plans to sign the likes of David Silva and Ezequiel Lavezzi.
Benitez has laughed off the issue though, insisting he himself is going nowhere, and that Liverpool will be able to sign their two main targets.
“We knew it could be difficult because there is a crisis all around the world,” he told the Liverpool Echo.
“Clearly we don’t have too much to spend but I think we have enough money to add the one or two players that we need.
“I’m very happy with the squad we’ve got. This season has been really good and we’ve competed on all fronts.
“If we can sign one or two players then I’m really positive that we can improve.”