LFC accounts for 2011/12

[SCOUSE TAPAS]

THE pain of missing out on European football last season is starkly evident in Liverpool FC's latest set of accounts.

Despite growing its commercial revenues the club’s debts rose to stand at over £87m and an annual loss of £40.5m – though down on the previous year’s figure of £49.3m – was recorded.

Champions League football can be worth up to £30m a season for a club. But not only were the Reds without it last season – as they have again been this season - they were also without less lucrative Europa League football, having finished sixth in the previous campaign.

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The full Liverpool FC account document is at the end of this story

Tottenham plus League Cup winners Birmingham, FA Cup finalists Stoke and fair play qualifiers Fulham all took the Europa League spots.

But domestic success under then manager Kenny Dalglish in winning the Carling Cup last season and reaching the FA Cup final did help offset the picture.

Said Liverpool managing director Ian Ayre: “That’s an important factor.

“Liverpool were placed ninth in the Deloitte league table recently. Of the top ten we’d be the only club not playing in the Champions League.

“But in these particular accounts we wouldn’t be playing any European Football so it shows that we have a very strong and growing business that sits behind the football club.

“And as we approach things like Financial Fair Play and that type of environment, that puts us in a very strong position.

“What we have to do - and we have always said this - is match our football performance with our business performance.

“Everybody throughout the club is working towards that; creating the right sustainable business performance to feed the football business and then the football business can deliver on its side.

“In some years, as in this year, we didn’t have European football to play but the business performance supported the football, as did our domestic cup performance. We had a fantastic performance in the Carling Cup and in the FA Cup.

“But we have to find that balance and have to get them in kilter and that is where you find real success.

“If you have got a successfully performing team and you have got an infrastructure which we now have and the business ability to deliver revenue, then both of them coming together would be a fantastic solution for the football club all round."

 

 

Added Ayre: “We see a big charge within the accounts for amortisation (depreciation in value) of players that have been disposed of within the period that perhaps came in on a higher cost.

“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. We’ve taken an interest free loan from FSG which has paid down our stadium debt."

Ayre was referring to debts associated with two failed stadium projects in the last decade plus costs associated with the ongoing plans to re-develop Anfield.

He said: “We continue going forward to invest in the squad.

“These accounts show investment in the squad - players like Jose Enrique and Sebastian Coates - and as we have seen in accounts that flow from that - we will continue to invest in the squad both for improved playing performance but also a far better structure in deals that we have with players.

“So we are fortunate in some sense in that we know we are improving in this year and we are continuing to improve.

“I take comfort in the fact that the work we have done, some of which costs us a lot of money in this period and beyond, looks pretty painful at the time.

“But as long as you invest in it and manage it in the right way, then hopefully it bears fruit as we go forward and gives us a better platform to exist on in a different environment and in a world where we are expected to break even.

“And where financial fair play will take part.

“All of it leads towards the future and I think puts us in a pretty good position. So I am happy on that front yet as I say you never take comfort from any business that makes a loss. But I am pleased that we’re making the progress we are making.”

 

 

Read more: Liverpool Echo http://www.liverpoolecho.co.uk/liverpool-fc/liverpool-fc-news/2013/03/04/liverpool-fc-accounts-lfc-cup-success-helped-offset-lack-of-european-football-100252-32916837/2/#ixzz2MZJSGwVW

[The Woolster]

The owners have put in £47m in I see. I wonder if that is also part of the agreement from when they bought us.

[Trumo]

One thing to bear in mind is that the accounts only cover a 10-month period because the club changed the year end from 31st July to 31st May. A June-to-May year end makes much more sense because it ties in with the football season.

 

That doesn't really change the fact that we need to redevelop Anfield in order to boost matchday and corporate revenues, and that our continued absence from the Champions League is still a massive burden.

[Skidfingers McGonical]

We need to sack our Admin girls, they are clearly costing us too much money.

[Bobby Hundreds]

Why is the admin so high Jesus that's insane, what does it include.

[The Woolster]

What is the deadline for season ticket payments?

[The Woolster]

Why is the admin so high Jesus that's insane, what does it include.

 

Wages

[Guest San Don]

What is the deadline for season ticket payments?

 

Usually around 28 June each year.

[SCOUSE TAPAS]

The owners have put in £47m in I see. I wonder if that is also part of the agreement from when they bought us.

 

David Conn ‏@david_conn

Liverpool net debt at May 31 2012 was up to £87m. On top of that, in August, FSG loaned another £47m. US owners now lent around £71m to LFC

[piscinin]

The owners have put in £47m in I see. I wonder if that is also part of the agreement from when they bought us.

 

37m of that was to pay off debt for the H&G stadium flush fund which you would imagine was part of the original agreement.

[xerxes]

THE“But in these particular accounts we wouldn’t be playing any European Football so it shows that we have a very strong and growing business that sits behind the football club.

 

“And as we approach things like Financial Fair Play and that type of environment, that puts us in a very strong position.

 

“We’ve in the same period refinanced our lending facilities, which gives us ability for working capital to operate as a business. We’ve taken an interest free loan from FSG which has paid down our stadium debt."

Ayre was referring to debts associated with two failed stadium projects in the last decade plus costs associated with the ongoing plans to re-develop Anfield.

 

The first para tells only part of the story. Ayre has done very well to improve commercial revenues, but that has been against a backdrop of historic Euro success. Businesses and individuals will not keep backing a club without a CL presence to the tune they have to date. Kids in Sierra Leone and malaysia are just as happy buying a PSG shirt if it is they that are in the CL quarter finals.

 

FFP helps those investing in stadia. FSG's refusal to finance a new stadium puts us at a disadvantage against those who have already addressed their stadium issues.We are in a weak- not strong, position.

 

On the third para, why have FSG had to make money by lending us cash? Because we have been losing money. Why have we been losing money?Because we are not in the CL and our stadium revenues are wholly underperforming against potential.

 

Borrowing money to pay down a stadium debt on a stadium which has not been built, when £50m was provided for exactly that, is grotesque parody.

[Scott_M]

We should disband.

[piscinin]

Why is the admin so high Jesus that's insane, what does it include.

 

110m Wage bill (which went up marginally despite all the spin),

35m Depreciation of players transfer values

10m Write-off of player's contract values (Jovanich era stuff I think).

 

The rest is leases and random accounting shit.

 

It doesn't include our Annual 10m payment to replace coaching staff etc.

[The Woolster]

David Conn ‏@david_conn

Liverpool net debt at May 31 2012 was up to £87m. On top of that, in August, FSG loaned another £47m. US owners now lent around £71m to LFC

 

He's usually 'on top' of things like this, but thats not quite right as the lending from the owners, which can be considered as equity, was used to pay off some of that net debt, so it is not "On top of".

[kalasoma]

Wages

 

It also includes signing on fees as well as the cost of coaching changes and Comolli. I'm half way through the report and still don't understand what all constitutes the Administrative expenses. If anyone else has time, here's the link to the report

Scribd

 

Interesting that one of our non-financial targets for 2012 was' continued qualification for the Champions League' among other things. I can't tell if we should be worried about these numbers or what it will look like for the next financial year.

[The Woolster]

Usually around 28 June each year.

 

I'm gonna guess that the majority of season tickets are paid for in June, so that could have bought the Net debt figure down considerably after the accounting year end.

[xerxes]

37m of that was to pay off debt for the H&G stadium flush fund which you would imagine was part of the original agreement.

 

We were told by FSG that there was a £50m provision for our (stadium), ie that it was already in the accounts.

 

So why would we need to borrow money against a provision?

 

If it has been spent, by whom, when, on what?

[The Woolster]

37m of that was to pay off debt for the H&G stadium flush fund which you would imagine was part of the original agreement.

 

It was a rhetorical question, as I've been arguing that the shareholder loan was a cash investment from FSG. This payment will not have been part of any agreement when they purchased the club.

 

If we assume the debt had an interest rate of 5%, that would save us a couple of million each year in interest payments as well.

[The Woolster]

 

On the third para, why have FSG had to make money by lending us cash? Because we have been losing money. Why have we been losing money?Because we are not in the CL and our stadium revenues are wholly underperforming against potential.

 

Borrowing money to pay down a stadium debt on a stadium which has not been built, when £50m was provided for exactly that, is grotesque parody.

 

Its an interest free loan.

[xerxes]

It was a rhetorical question, as I've been arguing that the shareholder loan was a cash investment from FSG. This payment will not have been part of any agreement when they purchased the club.

 

If we assume the debt had an interest rate of 5%, that would save us a couple of million each year in interest payments as well.

 

This appears to be the detail:

 

"Since the end of the financial period, the club has contracted for the purchase and sale of various players and extended some existing player contracts. The net amount payable resulting from this activity is 38.7 million. This activity willl be accounted for in the year ending 31 May 2012. The cumulative effect on the profit and loss account since the period end in relation to the gains on sales of players is 8.4 million loss.

 

On 3 August 2012, UKSV Holdings Company Limited injected 46.8 million in to the company via a non interest bearing intercompany loan. This was used to fully repay the 37.8 million outstanding amount on the stadium loan facility with the remaining 9 million being used to repay part of the revolving credit facility. The 120 million total facility is now available for general corporate purposes."

[piscinin]

We were told by FSG that there was a £50m provision for our (stadium), ie that it was already in the accounts.

 

So why would we need to borrow money against a provision?

 

If it has been spent, by whom, when, on what?

 

Last year we wrote off the asset. The drawings.

 

This year we paid back the 37m loan to create the drawings.

 

Who, what, where, when are all H&G era issues. Speak to them if you want those answers. There is no benefit to FSG raking over all that. FSG have now eliminated that blight and have managed to get us access to 120m of working capital to be invested in things that will (used properly) actually enhance the club's revenues and performances.

 

This, in short, is what they have done, tarring them with H&G's mistakes is just nonsensical.

[TheHitman]

Ayre praising the domestic cup runs for the money it generated, bit of irony there.

 

According to Swiss ramble the Warrior money isn't included extra (12 million) plus the extra premier league money from 13/14 and is 30-40 million extra dependent on where you finish in the top 8. So money is there throw in the cost of sacking people 10 million and buying Brendan and there should be plenty of money to spend.

 

Saying that no European run and no Europe next season! no domestic runs this season might hit the wallet, the cost of a rookie manager slightly.

[piscinin]

I'm gonna guess that the majority of season tickets are paid for in June, so that could have bought the Net debt figure down considerably after the accounting year end.

 

Season ticket revenue is recognized in the month in which the games are played. Hence, it would have made no difference. All games are covered in the reporting period. The report states the change in accounting period affects only commercial revenue. Match day and media are fully accounted for.

[The Woolster]

We were told by FSG that there was a £50m provision for our (stadium), ie that it was already in the accounts.

 

So why would we need to borrow money against a provision?

 

If it has been spent, by whom, when, on what?

 

From memory, the loan has been on the books since the H&G era, so I don't think we will ever find out.

 

When it was borrowed, they probably then created an asset, with a bit of 'value added' to get the £50m that FSG have written that asst off in the last accounts, and paid off the loan in this accounting period.

[kalasoma]

H&G isn't an issue now since FSG has already resolved the legal dispute. Their biggest issue is the loss on player purchases. I assume they want to avoid huge losses on player transfers again for the next financial year as well as meeting the target of Champions League football.