LFC Accounts 2013/14

[ratcatcher]

No expert but looks like decent figures, especially given thats a season with no Europe and hardly any home cup games so good stuff. I think these owners are excellent, far from perfect but we could and have done much much worse.

 

Also remember that these are figures for the year ended 31 May 2014. So the club is well into its financial years ending May 2015. We should expect to see further growth and improvement in the finances.

[ratcatcher]

By my reckoning, it looks like we sold Suarez for £60-65m, as Barca said, rather than £75m clause that we said we got.

 

The Suarez sale isnt included in these figures. They are for year end 31 May 2014. The club has also signed new sponsorship deals after the accounting period so I think any presumption that the Suarez money is reflected is not correct as the money from those deals would drive down his 'fee.'

 

Obviously, next season's accounts will clarify this.

[Cij]

The Suarez figure is 'sort of' included in that there is a reference to events after the cut off date for the accounts which provides an insight into the net position on transfers. £60-65m upfront looks about right based on the accounts. However, contingency payments are not included until the trigger conditions are met so there is a possibility of further add ons for winning the league / European Cup which are hardly pie in the sky ambitions for Barcelona. £60-65m up front with possibly another £5-10m in potential add ons? Loved Suarez and was devastated to lose him but it made quite a bit of financial sense and gives us a lot of wriggle room this summer if we make the Champions League. 

[Dr Nowt]

[JagSquared]

Note 27 gives us post balance sheet event details. It tells us that the effect on the profit and loss account since the end of the period is a profit of £52m. I think Suarez' book value was somewhere around £12m, so if we made a profit of £52m, that would mean we sold him for £64m.

 

However we would have made a profit on the sales of Coady, Kelly and Robinson, and possibly also on Reina and Agger, bringing the sale price down towareds £60m.

Does that assume barca would have paid the fee upfront? Or is it likely spread out with add on's?

 

What's the rule on when you declare that income? Is it at the point of sale? Or as you receive it?

[ratcatcher]

Does that assume barca would have paid the fee upfront? Or is it likely spread out with add on's?

 

What's the rule on when you declare that income? Is it at the point of sale? Or as you receive it?

 

If the sale is agreed in the accounting period, in this case, on or before 31 May 2014, but not yet received, the money is usually shown as owed by debtors, amounts falling due (or they do in my accounts!).

 

The deal with barcelona could very well be paid via installments over a specific period with further performance add ons.

[The Woolster]

The Suarez figure is 'sort of' included in that there is a reference to events after the cut off date for the accounts which provides an insight into the net position on transfers. £60-65m upfront looks about right based on the accounts. However, contingency payments are not included until the trigger conditions are met so there is a possibility of further add ons for winning the league / European Cup which are hardly pie in the sky ambitions for Barcelona. £60-65m up front with possibly another £5-10m in potential add ons? Loved Suarez and was devastated to lose him but it made quite a bit of financial sense and gives us a lot of wriggle room this summer if we make the Champions League. 

 

Good point on the add-ons, hopefully Barca do the double!

[mattyq]

Ah, ok, so it's entirely plausible that Barca paid us 60-65 mill in 1 instalment with add-ons for, say, playing 100 games, winning the league etc to be counted at a later date?

So the total cost could well be 75 mill spread over 3 or 4 years

[The Woolster]

Yes, although I'm not an accountant and football accounts tend to not be very clear on many things, so wouldn't say I'm certain.

 

However I do seem to remember it being said from our side that the £75m clause was met with no add ons, because if it is less than the clause without the add ons, then the clause hasn't actually been met. So another explanation is that Barca spent £75m on him, but £10m went to the agents

[Trumo]

I highly doubt that Barca have paid the full amount of whatever sum was actually agreed between the clubs for Suarez. The vast majority of transfers are paid in instalments though sometimes clubs will agreed a lower than expected fee if the buying club pays a larger proportion of the fee upfront than would be the case at the higher transfer fee. If getting more upfront helps the selling club to close deals for their own targets much sooner, then they'll do it.

[ratcatcher]

Yes, although I'm not an accountant and football accounts tend to not be very clear on many things, so wouldn't say I'm certain.

 

However I do seem to remember it being said from our side that the £75m clause was met with no add ons, because if it is less than the clause without the add ons, then the clause hasn't actually been met. So another explanation is that Barca spent £75m on him, but £10m went to the agents

 

I think we'll have to wait until this time next year when the accounts from 1 June 14 are available. barcelona claim they didnt pay £75m and I doubt they paid what they did pay up front, all in one go. Could be wrong though!

 

Anyway, I think everyone's agreed the accounts are healthier under these owners than the 2 cowboys.

[The Woolster]

Because we are talking profit in the P&L, it doesn't matter whether paid in installments or all upfront, the profit from the sale would be the same as it all gets booked at the time of sale regardless.

 

It would be different for add ons as they are contingent on certain things being achieved, so the profit gets booked when those things happen. There should be an entry in the balance sheet to show this though i think, if there is a big jump in next years accounts, it'll give us an idea

[Kevin D]

There's something that keeps me coming back to these football finance threads, you think the latest one can't possibly be beaten for thrills and then zzzzzzzzzzzzzzzzzzzzzzZZZzzzzzz

This post is a disgrace.

[The Woolster]

Swiss Ramble has posted his review of the acocunts

 

http://swissramble.blogspot.co.uk/2015/03/liverpool-show-of-strength.html

[ratcatcher]

Swiss Ramble has posted his review of the acocunts

 

http://swissramble.blogspot.co.uk/2015/03/liverpool-show-of-strength.html

 

I'll have a read. He's useually clued on on this matter.

[Dr Nowt]

UEFA permits some good costs to be excluded from FFP, including "goodwill amortisation".

 

Sounds a promising loophole, given the fees we generally let players leave for.

[ratcatcher]

A good read which shows improvements made and need to continue to be made.

 

The total debt under the two cowboys of £400m surely nails this myth that FSG got the club 'on the cheap.'

[mattyq]

UEFA permits some good costs to be excluded from FFP, including "goodwill amortisation".

 

Sounds a promising loophole, given the fees we generally let players leave for.

 

Good name for an African president

[xerxes]

I thought the figure required to purchase the club, was the figure required to clear off the G&H debt and leave us debt free? I'm sure I can remember quotes from around that time discussing our debt-freeness.

As I understood it, we were bought for around £220m (which went straight to RBS), with around £100m of debt taken on by the then NESV, totalling around £320m.

 

Swiss Ramble estimates net debt now at around £126m, made up of bank loans at around £68m ( so around £32m down on the original £100m),owner loans at £69m, and an internal obligation to FC,tv ltd of £20m ( what that is aout I don't know).

 

Incredibly the cost of the unbuilt stadium is now estimated at round £61m.

 

Overall the picture is strong, and stronger than most of our rivals, a combination of common sense business practise and huge windfall TV uplifts.

[ratcatcher]

Swiss Rambler states "Although debt has been steadily increasing since 2011, it is still nowhere near the shocking levels reported under the previous hated regime. While there was “only” £123 million net debt in the football club, the full picture was revealed in the holding company where borrowings had grown to nearly £400 million. Fortunately, this debt was largely eliminated following the change in ownership."

[xerxes]

Swiss Rambler states "Although debt has been steadily increasing since 2011, it is still nowhere near the shocking levels reported under the previous hated regime. While there was “only” £123 million net debt in the football club, the full picture was revealed in the holding company where borrowings had grown to nearly £400 million. Fortunately, this debt was largely eliminated following the change in ownership."

"largely eliminated" equalled a £65m net debt, comprising £38 million bank loans and £30 million owed to UKSV Holdings less £3 million cash.

http://swissramble.blogspot.co.uk/2012/05/liverpool-keep-car-running.html

plus a facility, which was used that season of up to £100m. The reason for that is that by the time NESV had arrived, the ST monies had been spent.

[Trumo]

All clubs have to carry some debt into the season because cash flow doesn't tick over as regularly as it would for, say, a supermarket. They get their main revenues in chunks at various points during the season and in the summer, but their cost obligations are much more frequent.

 

Apart from fan apathy, I think it's another reason why Everton do half-season tickets. They might get different people taking up a half-season ticket so potentially new people to spend money at the stadium and on merchandise. Plus the small uplift in cash around Christmas time from however many they sell mean they might have to borrow less from the banks (or directors) to cover shortfalls in cash.

 

Arsenal, with well over £100m in the bank, are not facing any immediate liquidity issues. Most clubs don't have anywhere near that amount sitting in the bank though.

[Nightcat]

Creative accounting at its worst.

 

All this is presented in a form and a scope to show that (a) FSG are indeed LFC's saviours, ( b ) that FSG make no profits from LFC, © that there is plenty of "hard work" to balance further the "books" and therefore (d) there is no money to spend to strengthen the team, while (e) on the contrary to rumours and substantial evidence Ayre has an average size penis, not an incredibly tiny one. All bullshit. The reality is for two consecutive winter transfer windows, the Hedge Fund controlling LFC shares has loaded cash on their boat, instead of strengthening the team, while they prepare for the big payoff with the new TV rights deal.

[Dr Nowt]

Swiss Ramble eat your heart out.

[Chairman Meow]

Henry must spend a fortune on deck shoes and quells, he's never off that fucking boat.