Liverpool FC officially for sale

[FrankJH]

That's not true. Liverpool without the debt the Yanks put us in are more than capable of being self-sufficient without making a loss.

The football club's last set of accounts showed a ~£10m profit and that includes the club directly paying a % of the interest on the debt. That will also not include all the increased commercial deals we've signed in the last 18-24 months (an increase in ~£15m on our shirt sponsor alone + several new deals).

I guess looking at the future, the amount of income staying at the current level (or improving) is drastically changed by this OFCOM / Sky discussion forcing the satellite broadcaster to charge less

(its obviously not just for Liverpool to care about, or even just the teams) but maybe this could be a huge factor in any future club negotiations - if the officials somehow force Sky to make themselves cheaper

 

[JohnnyG]

I made a thread the other day because SSN were claiming it was already up for sale, it's still on page 1

Sory mate, didn't see it

 

[Owenb]

That's not true. Liverpool without the debt the Yanks put us in are more than capable of being self-sufficient without making a loss.

The football club's last set of accounts showed a ~£10m profit and that includes the club directly paying a % of the interest on the debt. That will also not include all the increased commercial deals we've signed in the last 18-24 months (an increase in ~£15m on our shirt sponsor alone + several new deals).

That's just how business works. 'The yanks' bought a company and used the company as security- that's normal. If Liverpool FC can't generate the profit's to pay for itself then it's not worth what they paid for it-which is the big problem- football clubs are hugely overpriced.

 

[BaZ87]

That's just how business works. 'The yanks' bought a company and used the company as security- that's normal. If Liverpool FC can't generate the profit's to pay for itself then it's not worth what they paid for it-which is the big problem- football clubs are hugely overpriced.

For a start, I've never questioned the concept of leveraged buyouts in business, whether they're workable in football is another matter though.

Secondly if you load £350m worth of debt onto a ~£220m purchase then of course it won't be able to pay for itself (unless it was massively undervalued to begin with). With the debt now at ~£240m and the increased revenues the club is capable of paying for itself, however it's restricting the football club from moving forwards.

Anyway, none of this was your original point, you claimed Liverpool need a sugar-daddy but they don't. Had Moores not sold to the Americans and instead just fired Parry and employed somebody with an ounce of competence to run the club then right now we'd be generating a significant profit and easily capable of financing our new stadium.

As for whether football clubs are overpriced, that's open for huge debate. The amount of investors that are buying into football clubs and the desperate attemtps of some investors to hang onto some sort of stake in clubs surely shows that they see potential in football clubs to make serious money.

 

[Owenb]

Anyway, none of this was your original point, you claimed Liverpool need a sugar-daddy but they don't. Had Moores not sold to the Americans and instead just fired Parry and employed somebody with an ounce of competence to run the club then right now we'd be generating a significant profit and easily capable of financing our new stadium.

Might be true, but I doubt it. Even if it was, that was then and this is now. A non 'sugar-daddy' owner will need to finance at least £400m worth of debt for the club and £300m for the new stadium as well as some pocket money for new players. If sense prevails Liverpool will share a stadium with Everton which would help ease financial problems, especially if CL football isn't a cert going forward.

 

[BaZ87]

Why would any new owner need to finance £400m worth of debt?

For a start there's little indication as to how much the club will be sold for so it's a bit early to make statements over how much debt is going to be put on the club. However you'd have to assume that any takeover will have an amount of debt involved but by the sounds of it, it won't have anything like that amount (not even half that amount).

As for the £300m for the stadium; the stadium will pay for itself as well as leave a sizable amount of money left over, but most importantly it will massively increase the value of the club. This is what would attract an investor to the club even without a significant profit pre-stadium.

 

[elmuzzy66.]

Where have all the rich arabs gone?

 

[dannyjo22]

Why would any new owner need to finance £400m worth of debt?

For a start there's little indication as to how much the club will be sold for so it's a bit early to make statements over how much debt is going to be put on the club. However you'd have to assume that any takeover will have an amount of debt involved but by the sounds of it, it won't have anything like that amount (not even half that amount)..

You don't think the club will be sold for a token figure £1 and all the debt taken on? I see that as much more likely than paying 200 million to the yanks and then expect them to put that into the debt.

I'm also interested to hear how a 300 million stadium pays for itself and over how many years.

 

[MikeTimbers]

Stadiums aren't that hard to finance. Anfield holds around 44000 on a really good day. With a ticket costing around £30-£35, increasing the size of the stadium by 10000 adds £325000 per home game in tickets alone. 20000 extra seats adds £650K.

30 home games per season = extra £20 million per year.

Of course, the argument for building a 75000 seater in Liverpool to be shared by Everton and LFC is even stronger and given the relatively friendly relations between the two teams (unlike in other cities) sharing shouldn't be all that problematic. Turning the area around Stanley Park into a single ground with parkland where the two grounds are now seems like a good regeneration project to me.

 

[BaZ87]

You don't think the club will be sold for a token figure £1 and all the debt taken on? I see that as much more likely than paying 200 million to the yanks and then expect them to put that into the debt.

I'm also interested to hear how a 300 million stadium pays for itself and over how many years.

Any offer for the club will take into account the current debt. Just like when the Yanks bought us, the value of the deal was ~£220m however they paid £170-180m for the shares and the rest went towards paying off the existing debt on the club. It's no different from when you sell a mortgaged house; the money owed to the mortgage company will paid back and whatever's left over goes to you.

As for the stadium; the increased revenue from extra ticket sales, the massively increased coporate hospitality and no doubt the sale of naming rights will more than cover the repayments on any loan used to finance the build.

 

[dannyjo22]

That would pay for itself in that respect over 20 years with interest, but it wouldn't give you more money to pay for players and not end up increasing the debt.

You really don't believe someone is going to come in and pay off that debt, like you put with a mortgage and then not end up with just another loan for the debt.

 

[BaZ87]

Of course the new stadium would provide the club with additional funds after meeting the loan repayments for stadium. A very rough example; £300m over 25 years at 8% (which is what the club is paying on the current debt) would work out at £28m per year in repayments. It's being reported that in match day income alone, a new stadium would bring in somewhere in the region of an extra £1.5-2m per game. Basing it on £1.5m and 25 home games per season, that's an additional £37.5m per year. You've then got the naming rights, which are already being negotiated and reportedly going to bring in a further £10m+ per season.

As for your second point; I'd be shocked if any new owner didn't have an amount of debt involved. I was just replying to what you said about a new owner paying the Yanks and then expecting them to pay off the debt. How any new owner finances any purchase will remain to be seen but the fact that RBS (and I'd imagine most other banks too (as the yanks would have gone else where if they could)) want the club's debt paid down by a further £100m before they'd extend the loan would suggest that a massive amount of debt won't be able to be put on the club. It's very possible it could be done in an indirect way; personally secure the loans but take money out of the club to service it.

 

[dannyjo22]

Of course the new stadium would provide the club with additional funds after meeting the loan repayments for stadium. A very rough example; £300m over 25 years at 8% (which is what the club is paying on the current debt) would work out at £28m per year in repayments. It's being reported that in match day income alone, a new stadium would bring in somewhere in the region of an extra £1.5-2m per game. Basing it on £1.5m and 25 home games per season, that's an additional £37.5m per year. You've then got the naming rights, which are already being negotiated and reportedly going to bring in a further £10m+ per season.

Interesting, so just by having a new stadium where is the EXTRA 1.5-2 million per game coming from? I don't see you adding and filling another 30,000 seats at £40 a seat, match in match out do you? If you added another 30,000 seats that might bring in 1.2 million but even at your figures it would still be a huge debt to give the club just building the ground. Yes it would pay for itself in the end but that money would have to go towards paying for the ground in the first place, not buying new players.

Even using your figures that would free up maybe 10 million a year for players extra, not including what you already owe.

 

[guyfawkes5]

Seems to me the only viable financial option is ground-sharing with a certain blue neighbour.

 

[BaZ87]

Interesting, so just by having a new stadium where is the EXTRA 1.5-2 million per game coming from? I don't see you adding and filling another 30,000 seats at £40 a seat, match in match out do you? If you added another 30,000 seats that might bring in 1.2 million but even at your figures it would still be a huge debt to give the club just building the ground. Yes it would pay for itself in the end but that money would have to go towards paying for the ground in the first place, not buying new players.

How much a ticket costs and how much a supporter spends on average at the ground are different things. The £1.5-2m figure will take into account all the coporate hospitality (which is massively limited at Anfield), food & drink sales, programs etc.

Even using your figures that would free up maybe 10 million a year for players extra, not including what you already owe.

How do you work that out?

On the very rough figures I gave, there's ~£20m left over once the repayments are made.

And also, the money we already owe has no relevance to the stadium projects finances. Whether we build the stadium or not, that has to be paid. Anyway, how much we'll owe will depend on however the next owners finance the purchase.

 

[Mr_White]

Anyone seen the latest report?

http://www.telegraph.co.uk/sport/fo...om-Hicks-wants-800-million-for-Liverpool.html

So apparently they expect a new buyer to pay £600-800m, I imagine take on the debt, and have to build a new stadium themselves

Even if the £800m figure is bad journalism, it still doesn't bode well if they expect a big money buyout with the new buyer taking on the debt as well, it looks like their minimum valuation is £600m at least.

Are we ever going to get rid of these ****s

 

[BaZ87]

No offer of anything close to those figures will be plus debt. They'll be lucky if they get an offer valuing the club at ~£500m (shares and debt combined).

The quotes from Hicks about making 4x his investment are just him being a loud mouthed ****, as usual.

 

[FrankJH]

H & G are living on another planet even if they expect to get £600m

Seems to me they would be exceedingly lucky to get in the range of £300-400m (and with the debt of £240m or so, actually get cash to split of upto £160m) and that is without considering the worldwide financial loss thats still in place - markets are stilll nowhere near where they were 18 months - 2 years ago.

 

[dannyjo22]

How do you work that out?

On the very rough figures I gave, there's ~£20m left over once the repayments are made. .

I'm sorry you have confused me, first you said the ground repayments by your rough workings would be 28 million per year and the additonal revenue it would bring would be 37.5m by my maths thats only an extra 9.5million per year to spend on players. Of course without the extra carlsberg these fans would buy.

 

[Owenb]

How much a ticket costs and how much a supporter spends on average at the ground are different things. The £1.5-2m figure will take into account all the coporate hospitality (which is massively limited at Anfield), food & drink sales, programs etc.

It is true that, compared to teams like Arsenal, Liverpool are missing out on a lot of revenue in the corporate sector, but I also suspect that Liverpool would struggle to generate anything like what Arsenal do from that sector based on location. Also revenue is just sales, you also have to factor in the extra expenses in providing the services.