Will Liverpool go into administration this Summer?

[Mr.Pink]

As the title...Will Liverpool go into administration this Summer?

As the lazy journalists and ignorant fans concentrate and why the current predicement of the club is obviously solved by replacing Rafa, the wiser and more informed people have dug deeper and looked at the much bigger problem that currently exists.

The current debt is now over £350 million.
Liverpool have to pay over £110 thousand pounds per day to service the debt.
Hicks and Gillette set up an offshore company (that LFC are liable for) and loaned the club £140 million and charged the club 10% interest on the loan.

THe banks want the money, the club is up for sale. It is surely not a worthwhile investment to any buyer, since it has such huge debts, and H&G have valued the club high, and still make money on the loan whist it is unsold. They are happy for this to drag on.

This is becoming a familiar scenario in the premiership. No-one imagined Leeds could deterioate so quickly and Newcastle highlighted how vunerable bigger clubs have become. Man Utd will be able to cope with the next season or two, but they have a massive £700million problem facing them.

Portsmouth are surely a casualty that should never have been allowed to happen.

Richard Scudamore, Chief of Prem League is supposed to 'regulate' any financial transactions especially when new buyers come in to take ownership of clubs. They are supposed to run a fit and proper persons test, but surely this is a joke when you look at some of the people they have endorsed.

 

[Mr.Pink]

The risk comes from not having CL football, having less money, lower sponsorship money, less game winning money, less league money, less money pouring in from other countries effecting their profits and thier ability to pay off those interest payments. At that stage it becomes about the deep pockets of the owners and if they can keep up the repayments, if at any stage they can't, Liverpool are suddenly plunged into HUGE problems.

..And the highest wage bill in their history isn't helping.

As much as i hate to admit it, i see key players leaving this year.

It really is a catch 22 situation. We need to keep the better players so we can keep challanging for european places, and we need the better players to be a more viable asset to prospective buyers.

But, keeping the better players will be hard. Our wage structure will now be too high, and key players will definately be uncomfortable with the off-field climate, and lack of progression & CL this year.

As for any influential new signings under the current ownership, i just dont see it. To go from a debt of £40 million in 2007, to £380 million in 2010, without any stadium development says it all.

 

[Mr.Pink]

Poppycock.

Of course they wont. They would be sold off long before it happened.

Why are people so convinced there will be no CL football for many seasons to come? Look at Spurs last season, then look at this season.

Just because they have had a wonky season does not mean next season will be the same.

Woosh!

 

[Mr.Pink]

i think benitez should stay, hes doing a cracking job

Not sure whether you are being sarcastic, but if not, i agree. Given the farce that is happening off the field he is doing as well as any good mananger could do.

Most of the focus seems to be about team performance and who to blame. The far bigger problem is that even taking part in the CL last season, even though the club is gernerating more income than ever before, they are at a loss of about £50 million a year, with a current debt of around £400 million, with that figure due to be increased when someone makes sense of this season figures. Next season without the CL financial rewards make force the banks hands.

Martin Broughton, the newly appointed chairman has already been forced to meet with the FA and UEFA to prove he can meet the strict financial regulations for meeting the forthcoming seasons requirements.

That assurance must be paper thin. Banks cannot/will not loan any more to the club, and it would only take RBS to demand repayment, and i im agine it would all come tumbling down like a pack of cards.

But a lot of fair-weather fans will only skim the surface. We didn't qualify for CL, -Get rid of Rafa. Mention the names Purslow, Broughton, Hicks or Gillett and they don't have a clue who your talking about.

 

[Mr.Pink]

you can hardly absolve him from all blame though.

There are team perfomance issues, and then there are the financial/business model issues. I don't hold rafa accountable for the finacial problems.

He may not have bought 'ideal' players, but he certainly hasn't been a drain on the financial resources that some would have you believe.

The managerial issues are far less worrying than the financial health of the club.

 

[Mr.Pink]

An even bigger question is whether he'd even get a sniff at the cash or whether it would go on the debt.

Spot on. And the same goes for any potential new manager. A huge percentage of an revenue generated would have to be used to offset any debt. Sell your best players,- and you don't look such an attractive proposition for any new buyers. Tough times ahead.

Its niave to think we could attract any manager we like given the current financial difficulty. Not sure how sacking rafa and giving him a £12-£15 million payoff makes any financial sense at the moment, regardless of peoples managerial views.

 

[Mr.Pink]

... we're a far bigger club so there will always be a buyer waiting to takeover and most importantly our owners stand to lose massive amounts of money.

.

Yeah, new buyers are queing up. Who wouldn't want to invest in a club that even with Champions League money (estimated at an extra £50 million a year) are still hemorrhaging £110 thousand pounds a day on interest to debts.

 

[Mr.Pink]

How will Champions League money affect the interest payments?

.

Sorry i didn't phrase that very well. It wouldn't effect the interest payments or the debt, they would still exist, but the potential to manage these debts would be greater.

 

[Mr.Pink]

Short and too the point.

Snip.

Thats one ill-informed post. I can see why your previous one was so short.

Fans couldn't have stopped the takeover.

Secondly, i could understand your post if the yanks had been pumping money into the club to buy new players / finance the new stadium. Neither of which have happened.

I want to pick up on the 'Big Club' and i agree that i find this a bit cringeworthy. What defines a big club, perfomances in the 70's & 80's? ..Financial worth?...Fanbase?... Attendance?... Recent successes?.....

I prefer not to use the term especially when trying to use it as an example of why we would be exempt from financial disasters.

I might be on my own here as a LFC fan, but i can't wait for Leeds & Newcastle to rejoin the premiership. Both great teams, and i think the premiership is a lesser league without their presence. There were some fantastic games when Keegan was in charge, and i still remember the stick i got from my Leeds pal after the Tony Yeboah wondergoal back in 95.
I see Leeds and Newcastle as to great teams