Shrek

Swarbs.
You are the one that is unlearned,especially after you made a comment that Man United made a £42 million profit even though they made an £108.9 million loss.I reckon Slurgie is going to raid his money box for signings in the summer.He'll be raiding the portugese 3rd division or the portugese soup kitchens for signings.Expect signings of the quality of Bebe.

 

KPR; I'm pretty sure swarbs is talking about Man United operating profits. I can believe they make a huge profit from revenue - player fees to be honest. But I think all this talk of debts and owners putting debt on the club is probably payback for the years of abuse Liverpool fans got for what Hicks and Gillette were doing to us. Your time will come eventually - that debt has to be paid at some point and unless the Glazers begin to make more profit from their holdings than the interest payments require then that is when either:
1, The club will be sold... or
2, It will go into administration.

More than likely it'll be 1, but considering your debts are running closer and closer to 1bn, and the glazers will want to make some sort of profit on their investment - I can't see anybody paying more than 1.2bn; which will be a disappointment to the Glazers.

 

Swarbs earlierv made comments about Liverpool not making money.But what he forgot to mention was the interest repayments that Liverpool previously had....they don't.This was what prevented them from making a profit.He also failed to mention that Liverpool from January 2009 when it comes to transfers are in the black to the tune of £41 million.They recouped £158 million and reinvested £117 million.It was recouped £102 million reinvested £59 million up until January 2011.Swarbs also claimed Liverpool had a debt known as an ''overdraft facility''.Yes they did.Hicks and Gillett had one to the tune of £60 million.It was never tapped into.You can only pay interest on an overdraft when you use the facility.Liverpool have never used the overdraft.Anyway all clubs have an overdraft facility.He will not admit that Liverpool are now effectively debt free.

 

I thought you were supposed to have studied business? Surely you then know the difference between operating profit, profit on ongoing footballing business, company profit and group profit?

Not quite. The operating profits were £100.8 million, the profits on ongoing footballing business (which are the ones the FFP rules are concerned with) were about £42 million, the club's losses including one off costs and goodwill amortisation were £83.6 million and the group losses, which include the PIK interest, were £108.9 million.

They already are making more cash flow than the interest payments require - United bought back £24 million worth of the bonds this year from its own cashflow, thus driving the debt down. And the PIKs have been paid off, so that's a third of the debt gone.

I've never denied Liverpool were effectively debt free. But being debt free doesn't necessarily mean you are profitable. Chelsea and City are debt free, but still make massive losses. And remember than in the 2008/09 financial year Liverpool made a loss of £53 million, of which the debt costs were only £42 million. Implying you still made a loss of £11 million before the debt interest was even considered, and in a season when you finished second in the league and got to the CL quarter finals.

 

Swarbs that was Liverpools holding company KOP Holdings,Liverpool FC made a operating profit in 2009 of £10 million.Why is it with United,that their holding company and themselves are two seperate entities but in the case of Liverpool they weren't.The fact is holding companies and clubs are two seperate entities and the fact is that owners issue losses as a tax dodge.Man City and Chelsea make losses because their wages and their player purchases exceed what they make across the board,and not just in competitions,but commercially too.Neither make the money Liverpool do commercially.

 

Hahahaha,

This appears to have turned into a KPR v Swarbs thread again. You two should get married.

I'm sure it was about Shrek originally. Anyone see Russell Howard taking the piss out of Shrek?

 

The main difference is that cash was taken out of Liverpool to pay the debt on Kop Holdings, but not out of United to pay the PIKs. You're right about the holding companies generally just been used for tax purposes, but the cash flow is the most important factor for a football club. Regardless of what the debts and accounting profit figures say, United still throws off lots more cash than Liverpool even after the interest is paid - our 2009 operating profit was around £100 million.

True, but then Liverpool makes nowhere near the money Chelsea makes from ticket sales, and both City and Chelsea are putting just as much effort into developing their commercial revenue as Liverpool - City doubled their commercial revenue last year. Regardless of what happens with commercial revenue, you need the new stadium if you're going to be both spending big and financing yourself.

 

Lol, well he does love to bring up our profit figure!

I didn't see the Russell Howard one - got a link?

 

Yes you are right.However that was Hicks and Gillett that were taking money out of Liverpool for money they and not Liverpool owed.If anyone says Liverpool owed the money.Since when did a club borrow money to buy themselves?
Secondly Swarbs.How is that you haven't mentioned the money that they Glazers pay themselves which is reported to be £20 million a year and this is without the consultancy fees that they also pay themselves.

 

That's not quite correct - by that same rationale, does United not owe any money, as all their debt was used to fund the purchase? Ultimately, if you borrow money to buy an asset you often expect the asset to make enough money to pay the cost of the debt. H&G fell down cos they couldn't increase revenue enough to cover the debt and make investments. Had FSG and others not been willing to buy Liverpool, the banks could still have made Liverpool bankrupt over the debt, just like the bondholders could do with United if the club doesn't pay the interest.

And who reported the fees as £20 million a year? The only reported figure I've seen is £23 million over five years:

http://www.guardian.co.uk/football/blog/2011/feb/25/mancheste-united-qatar-glazers
"While the Glazer takeover has cost Manchester United over £300m in interest payments, losses on derivatives contracts and banking fees, the family have taken only £23m in "consultancy fees" and loans in the past five and half years."

I have no problem with that, given that we paid £33 million in dividends to shareholders over the five years prior to the Glazers taking over.

 

You can catch it on iPlayer. It's 11 minutes in.

http://www.bbc.co.uk/iplayer/episode/b0109m59/Russell_Howards_Good_News_Extra_Series_4_Episode_3/

 

Swarbs.
You're getting confused.
Hicks and Gillett used Liverpool as security against the loan they took out.Like a mortgage.They as owners took money out of the club to pay back a loan they and not the club took out.The Glazers used Man United as security.If they cannot pay back what they owe by 2017,the bank will take control of the asset.They will do exactly what RBS did to Liverpool,they will sell Man United for the amount they are owed.All this stuff about Man United being worth £1.5 Billion.They will be if someone pays it.Hicks and Gillett wanted £800 million for Liverpool.RBS got impatient when the re-finance deal was running out and forced the Liverpool sale for a little over what they were owed.The same happens with defaulted mortgages.If a house is worth say £400k and the mortgage holder defaults on its mortgage of say £230k over 20 years.The bank will sell the house for a close to £230k if they sell it for more than £230k the mortgage holder get the remainder,if its less,the mortgage holder loses their house and still has to pay the short-fall.
Supposing someone offers in 2017 £450 million for Man United ,The Glazers will have to pay out of their own pocket for the short-fall.

 

That's not strictly true. Henry/Werner are currently looking at all the available options. These also include redeveloping Anfield which may or may not be possible. We won't know until the feasibility study has been completed and results published. I did read somewhere though, that the Anfield option was the one with more problems associated with it as it would take approx 2 years to complete. This would mean reducing the current capacity by a sizeable amount until the work is completed.

 

Two years.Not necessarily true.
Didn't Man United increase capacity on their stands and have the work completed within a couple of months in 1995.
This is the report I read,if any part of Anfield is redeveloped its most likely to be the Anfield road end and the Main Stand.It should take a couple of months to redevelop both.Cut capacity on the main stand if done during the season and just not have away supporters for a few months.Man United did it in 1995.We had no supporters there for Cantona's comeback.
It could be started and completed next summer.They demolished the old KOP and built a replacement within 3 months,all they would be doing is extending existing stands.They would be building up, not out.

 

Have a look at this site. Not sure how genuine it is though.

http://www.sports-stadia.co.uk/#1145008/Redeveloped-Anfield

For redeveloped Anfield (keep the Kop, rebuild the rest) with up to 60000 capacity:

Pros

• Remain on Anfield;
• 3 stands would conform to Uefa regulations for distances, sightlines, concourse areas etc;
• Highest capacity and hospitality provisions on current site.

Cons

• Major disruption for min. 3 seasons during phased reconstruction, affecting atmosphere and revenue;
• Compulsory purchase orders required for new Main Stand;
• Compulsory transport infrastructure investment likely;
• No planning precedent.

For an expanded Anfield (adding tiers to Main Stand, and Anfield Road End), 50000 capacity:

Pros

• Retains most of current Anfield atmosphere;
• Removes all restricted viewing;
• Seating capacity and corporate box provisions increase.

Cons

• Disruption for min 2 seasons during construction, affecting atmosphere and revenue;
• No stand would conform to Uefa regulations for distances, concourse areas etc;
• Minimal additional hospitality accommodation;
• No planning precedent;
• No further expansion possible.

If the best we can do is an absolute maximum of 60000 seats staying where we are then maybe a new stadium is what is required. There are a couple of advantages over and above the ones listed here.

• Increased capacity to 60-70,000 depending on the design - but with a capability to expand in future if needed;
• No disruption to the current ground during the season, so no loss of revenue;
• Naming rights for new stadium - increasing revenue.

 

Bollox, I'm not in the UK. Will have a look on Youtube. Knowing Russell Howard it'll be another classic.

"Wayne Rooney shagged a whore, we all thought he couldn't score. Coleens gonna take him to the bank, next time Rooney have a ****."

That one's from MTW

I'm not confused at all. Both loans were secured on the club and both were funded by cashflow from the club. No matter what the corporate structure, that's the bottom line for both club.

However you seem to have confused the recent bond issue. We don't owe any bank loans any more - the bonds have been bought by a range of investors. There is no single bank like RBS who could close down the club or force it to be sold to another investor like happened with Liverpool. If United defaulted on the bonds, the individual investors would have to take the club to court and make them bankrupt in order to get their money back, they couldn't exert the same level of power as RBS did. That's one of the reasons we issued the bond - to avoid the bank restrictions.

Also, a new buyer can buy the club without needing to pay off the bonds. If someone offered £450 million they could buy the club and the bonds would stay in place - the bonds have been sold by United not the Glazers. The new owners would then need to either pay off the bonds separately or keep them in place - the "Red Knights" were going to keep them if they bought the club.

Sorry, I should have been clearer. You either need a new stadium or to expand Anfield. You currently make around £43 million in matchday revenue per season. Chelsea make £67 million, Arsenal make £93 million and United make £100 million. You need to find some way to close that gap, particularly if Spurs build their new 60,000 seater stadium - that could get their matchday revenue over £60 million.

No. The North Stand took 11 months to expand by around 12,000 seats, the West and East stands took around seven months each, and the quadrants took 12 months between them, but they needed to be integrated into the existing structure. Tho' Liverpool may be able to do it quicker as they don't have the same bowl effect to the stadium, so stands can be planned individually.

 

From my post ^^^^ I would probably agree with you that the best option would be to build a completely new stadium. If we redevelop Anfield to it's maximum we will still only be able to have 60,000 seats. IMO this is not enough to compete with MU. Arsenal and Ckelsea charge more for their tickets because they are London, but up here those prices would cause uproar (and lower attendances). So in order to achieve the most revenue from the ground we need a larger capacity - therefore a new stadium would be my preferred option with a capacity of up to 70,000.

Whether we would fill it week in week out is another question, but there are ways of "enticing" fans to come to every game by offering incentives etc...

 

And the new stadium will allow you to keep using the old one at full capacity whilst it's built. You'll probably also be able to plan it better to get more of the vital executive boxes and suites that make up much of the revenue - I think they make up something like 30-50% of United and Arsenal's matchday revenue and United and Arsenal have around four times as many executive seats as Liverpool.

 

Compete with Chelsea?
Stamford Bridge has a maximum of 41,000 capacity.Liverpools capacity is 45,500.
Yes Liverpool make less than chelsea on their stadium revenue,but you forgot to mention that sponsorship wise Liverpool blow chelsea out of the water.The new adidas deal that kicks in this summer is worth £40 million more than Chelsea's existing deal.Chelsea HAD the largest sponsorship deal(on kits alone) at £110 million over 10 years.Liverpools is £150 million on kits over the same period which will make Liverpool the biggest.This is without the rest of Liverpools line.This was incorporated into a separate deal with the same maker.Add got knows how much onto what Liverpool will make on the rest of their line and you are looking at a decent sum.

 

Dunno about blow out of the water. Chelsea make £15m per year on shirt sponsorship and £11m per year on kits. Liverpool make £20m per year on shirts and £15m per year on kits. So the differences is only £9m per year, which isn't huge in the context of Chelsea's extra £24m per year in matchday revenue.

And don't forget that Chelsea have had their ticket prices frozen over four of the last five years, so they have much more scope to boost prices in future - being in London makes it much easier to set higher prices and fill more executive seats even with a smaller stadium. So even if Liverpool see faster commercial revenue growth, Chelsea's matchday revenue will probably grow faster if Liverpool don't get a larger ground.