Saudi Investor buy 25% liverpool stock

[sh#t waffle]

I don't understand this about LBO of such expensive firms. Us and the mancs are leveraged up to the hilt, at barely manageable debt levels. I keep reading that the LBO speciality is to take an underperforming firm, make it perform within as short a space of time as possible, and leave having made a quick profit. But no-one is now going to come in and take on our debt with their own money, and hope to make a profit - therefore they would surely load us with even more debt, taking it beyond manageable levels. It just seems to me that, unfortunately, the only way of them selling up is going to be to an uber rich person that makes no designs on wanting to make a profit. Otherwise, who in their right mind would buy us or the mancs?

[Mathewbet1]

I think the saudis are trying to use the debt as a negotiating tool. They won't expect for the entire debt to be wiped out they'll want the yanks' to meet them half way. Basically wipe out half of the debt would bring the debt down to more manageble levels.

 

So if G+H value the club at 500m , we half the current debt of 250m and making the debt 125m take this away from the estimated 500m asking price, leaves the adjusted full purachse price of 350m. So if the saudis want 50pc they'd be looking at an 175m investement.

[Gordon Hodgson]

G&H need to include the debt in the price they obtain for the club. So, if they are after £500M, then it should be £500M with the debt paid off. We should never lose sight of the fact that they loaded us with the debt. Just because they appear to have increased revenue streams (and to be honest, it would have been difficult not to, given the continuing prominence of the game and the incompetence of Moores and Parry), it should never be forgotten that they loaded us with all this debt, bar a small amount they inherited from Moores.

 

£250M for the whole club, and the new owner takes on the £245M debt. Or £500M and the debt is wiped clean. That sort of level seems about right, if a little high, given the stadium still needs to be built.

 

It seems G&H want something like £500M AND they want the new man to take on the £245M debt. That is ridiculous.

 

Excellent summary.

 

One point from the article:

 

“The Americans need to pay back loans to the Royal Bank of Scotland and Wachovia by next summer …...”

 

Is this correct?

[Delmar]

Excellent summary.

 

One point from the article:

 

“The Americans need to pay back loans to the Royal Bank of Scotland and Wachovia by next summer …...”

 

Is this correct?

 

I do not think anyone, including the banks, expect the full repayment of the loans by next summer. The new financial arrangements have a time limit, and there will be another round of negotiations, costly to the club, outcome depending on what happens this winter.

[Lucky Pierre]

Excellent summary.

 

One point from the article:

 

“The Americans need to pay back loans to the Royal Bank of Scotland and Wachovia by next summer …...”

 

Is this correct?

I'd put money on it being refinanced again if it got to that point.

[Carra_is_legend]

I don't understand this about LBO of such expensive firms. Us and the mancs are leveraged up to the hilt, at barely manageable debt levels. I keep reading that the LBO speciality is to take an underperforming firm, make it perform within as short a space of time as possible, and leave having made a quick profit. But no-one is now going to come in and take on our debt with their own money, and hope to make a profit - therefore they would surely load us with even more debt, taking it beyond manageable levels. It just seems to me that, unfortunately, the only way of them selling up is going to be to an uber rich person that makes no designs on wanting to make a profit. Otherwise, who in their right mind would buy us or the mancs?

 

I posted a similar thing not too long ago. Debt or no debt, the current asking price (£400m+) is way too much for our club. If there is a huge debt, it just makes it doubly difficult to make profit. Even if there is no debt, £400m+ for LFC is NOT a good investment.

 

You are perfectly right - we have reached a point where we can only be saved by a rich sugar daddy. However sad that sounds.

[Catch22]

I don't understand this about LBO of such expensive firms. Us and the mancs are leveraged up to the hilt, at barely manageable debt levels. I keep reading that the LBO speciality is to take an underperforming firm, make it perform within as short a space of time as possible, and leave having made a quick profit. But no-one is now going to come in and take on our debt with their own money, and hope to make a profit - therefore they would surely load us with even more debt, taking it beyond manageable levels. It just seems to me that, unfortunately, the only way of them selling up is going to be to an uber rich person that makes no designs on wanting to make a profit. Otherwise, who in their right mind would buy us or the mancs?

 

 

The other idea for LBO's is when a mature,lo growth company generates lots of cash but is not highly regarded by a stock market which is in a phase of rewarding growth.

You buy it & stack lots of debt on it.

The free cash-flow just covers the repayments but you get tax relief on the interest which you don't get on dividends.

Eventually, it is all paid off & you have the asset for free.

 

There is no way any of that applies to Lfc either.

 

Football clubs only make money when successful & are only successful when spending money.

 

The key problem is that they are also a vanity asset.

 

So, once a few others use them in that context, the "run to budget" clubs are in an impossible position.

 

They cant match the vanity spenders or they are not run to budget.

Therefore they ultimately will lose out in the war for talent.

 

Ourselves,Arse & the Mancs lost some of our best players this summer to vanity clubs who purely & simply smashed thru our wage budgets.

 

Already it has gone far enough for the 1st 2 of those to essentially have 0 chance of coming top of the pile.

The only saving grace for Lfc fans is that if the Chavs & City keep vanity spending, it will be the same for the Mancs as well.

So 18 all whilst oil fights natural gas to eventually overtake.

 

The NFL understood all this years ago, which is why they imposed a salary cap & Paul Allen or Daniel Synder haven't won the SuperBowl.

[stringvest]

The other idea for LBO's is when a mature,lo growth company generates lots of cash but is not highly regarded by a stock market which is in a phase of rewarding growth.

You buy it & stack lots of debt on it.

The free cash-flow just covers the repayments but you get tax relief on the interest which you don't get on dividends.

Eventually, it is all paid off & you have the asset for free.

 

There is no way any of that applies to Lfc either.

 

Football clubs only make money when successful & are only successful when spending money.

 

The key problem is that they are also a vanity asset.

 

So, once a few others use them in that context, the "run to budget" clubs are in an impossible position.

 

They cant match the vanity spenders or they are not run to budget.

Therefore they ultimately will lose out in the war for talent.

 

Ourselves,Arse & the Mancs lost some of our best players this summer to vanity clubs who purely & simply smashed thru our wage budgets.

 

Already it has gone far enough for the 1st 2 of those to essentially have 0 chance of coming top of the pile.

The only saving grace for Lfc fans is that if the Chavs & City keep vanity spending, it will be the same for the Mancs as well.

So 18 all whilst oil fights natural gas to eventually overtake.

 

The NFL understood all this years ago, which is why they imposed a salary cap & Paul Allen or Daniel Synder haven't won the SuperBowl.

 

You've captured it in a nutshell - good post.

[Carra_is_legend]

The other idea for LBO's is when a mature,lo growth company generates lots of cash but is not highly regarded by a stock market which is in a phase of rewarding growth.

You buy it & stack lots of debt on it.

The free cash-flow just covers the repayments but you get tax relief on the interest which you don't get on dividends.

Eventually, it is all paid off & you have the asset for free.

 

There is no way any of that applies to Lfc either.

 

Football clubs only make money when successful & are only successful when spending money.

 

The key problem is that they are also a vanity asset.

 

So, once a few others use them in that context, the "run to budget" clubs are in an impossible position.

 

They cant match the vanity spenders or they are not run to budget.

Therefore they ultimately will lose out in the war for talent.

 

Ourselves,Arse & the Mancs lost some of our best players this summer to vanity clubs who purely & simply smashed thru our wage budgets.

 

Already it has gone far enough for the 1st 2 of those to essentially have 0 chance of coming top of the pile.

The only saving grace for Lfc fans is that if the Chavs & City keep vanity spending, it will be the same for the Mancs as well.

So 18 all whilst oil fights natural gas to eventually overtake.

 

The NFL understood all this years ago, which is why they imposed a salary cap & Paul Allen or Daniel Synder haven't won the SuperBowl.

 

Bang on the money.

 

Kraft said clearly that he wasn't interested in LFC mainly due to the lack of wage cap in the premiership.

 

Wages would be one major issue for us, mancs and Arsenal. And that is one thing any investor would want to seriously think about. We could easily be forced to increase our wage budget by £20m/year within the next 5 years and that is a big big ask. Of course we can refuse to do it but we can't expect to attract a Torres or Mascherano which will most likely mean we finish outside the CL places and won't have the £20m the year after anyway!

 

Without a salary cap, football is going to get even worse. And if you put all the issues together, I don't think any businessman will touch us with a barge pole at the current asking price. A rich sugar daddy might but then the guy who bought City thought we were "expensive".

[silverlining]

 

Ourselves,Arse & the Mancs lost some of our best players this summer to vanity clubs who purely & simply smashed thru our wage budgets.

 

 

Yeah, Alonso and Ronaldo only went to REAL. FUCKING. MADRID for the wages.

[Carra_is_legend]

Yeah, Alonso and Ronaldo only went to REAL. FUCKING. MADRID for the wages.

 

I think you are misunderstanding him.

 

Catch is obsessed with wages, I agree, but what he said above is a perfectly valid reason why we face a almighty struggle to find new owners.

 

Even going to your argument, Ronaldo was on mega wages with the Mancs but that didn't stop Real Madrid from giving him even more money.

[Delmar]

Yeah, Alonso and Ronaldo only went to REAL. FUCKING. MADRID for the wages.

 

According to the Guardian at the time of the transfer, Xabi was supposed to get roughly 73'000 pounds per week after tax at RM. We can possibly afford salaries like that to the very highest earners, like Torres and Gerrard, but that's it. Alonso is nowhere close to being the top earner in RM, he may not even be in the top 5...

 

The reasons for transfers are many and varied, and thoroughly speculated before. Money is always one of the imortant issues for any professionals, regardless of their area of expertise.

[navbasi]

According to the Guardian at the time of the transfer, Xabi was supposed to get roughly 73'000 pounds per week after tax at RM. We can possibly afford salaries like that to the very highest earners, like Torres and Gerrard, but that's it. Alonso is nowhere close to being the top earner in RM, he may not even be in the top 5...

 

The reasons for transfers are many and varied, and thoroughly speculated before. Money is always one of the imortant issues for any professionals, regardless of their area of expertise.

 

Maybe, but I'd be very surprised if Xabi moved for the money, just as I don't think that Ronaldo moved to Real for the money (it was his childhood dream to play for them, the fact that he is getting shitloads is a bonus..)

[Delmar]

Maybe, but I'd be very surprised if Xabi moved for the money, just as I don't think that Ronaldo moved to Real for the money (it was his childhood dream to play for them, the fact that he is getting shitloads is a bonus..)

 

Yeah, I was generalizing as I have no facts (even the Guardian figure is an estimate). Alonso's reasons are his own to know, that's enough for me.

[old skool tom]

That's what struck me, as well, there are quite a few generations involved.

 

from what i can gather? i think its a ........

 

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i didnt know they were so shite live! haha

[Carra_is_legend]

Maybe, but I'd be very surprised if Xabi moved for the money, just as I don't think that Ronaldo moved to Real for the money (it was his childhood dream to play for them, the fact that he is getting shitloads is a bonus..)

 

Xabi or even Ronaldo may not have moved for money but it is a nice sweetener though. Especially if its an extra 2 or 3 million every year. It is certainly a big enough figure to make the players sit up and take notice. God knows what will happen to Mascherano's head next year. And even Pepe. If they get a chance to play for Barcelona for more money, they get two birds with one stone.

 

Adebayor, Toure, Lescott, Barry, Robinho and possibly even Tevez all moved to City purely for money.

[Ted]

Definitely Tevez.

[Carra_is_legend]

Definitely Tevez.

 

May be you are right but I have my doubts. I think he went to City because he wanted to leave the mancs but at the same time didn't want to move out of the area.

 

No doubt he is getting paid more than he was at Utd but I think this is just a bonus.

[Ted]

Money, mate. That's all it was.

[Carra_is_legend]

Actually, yeah, I have changed my mind. You are right - it is all about fucking money. Fucking greedy cunts.

[Catch22]

Xabi or even Ronaldo may not have moved for money but it is a nice sweetener though. Especially if its an extra 2 or 3 million every year. It is certainly a big enough figure to make the players sit up and take notice. God knows what will happen to Mascherano's head next year. And even Pepe. If they get a chance to play for Barcelona for more money, they get two birds with one stone.

 

Adebayor, Toure, Lescott, Barry, Robinho and possibly even Tevez all moved to City purely for money.

 

 

Whilst, i am sure noone wants to rehash the old arguments about why he went , it is still amazing that after all the debate, people underestimate the amounts involved so.

 

Xabi was on £80k/wk in the UK.

When he signed for RM, he received the equivalent of that after tax in EUR.

Since then EUR/GBP has moved another 10% so it is now equivalent to £88k/wk.

On an effective tax rate of about 55%, we would have had to pay him £195k/wk to match it.

 

So his raise was £115k/wk or about £6m/year.

 

The owners are lying cunts but they are not lying when they say that they have spent the same this summer as normal.

It has gone on a vast inflation in salaries (Rafa,Gerrard & Torres's new deals have an upfront value close to £100m!!) as we have to match the effects of City & RM playing with monoploy money.

 

That occured at Arse & the Mancs as well.

 

The point is that as long as vanity clubs like RM,Chavs or City can spend non-earnt money driving up salaries, we will never be able to be successful (which means matching their salaries) & profitable.

 

That is why the ownership mess is now so bad as I find the idea of being a resource billionaires plaything completely uninteresting.

[Ted]

I like how you have access to all their contract details.

[Catch22]

I like how you have access to all their contract details.

 

 

The information is there if you look hard enough.

 

And if you do look hard enough, the rewards you get from gambling on that infomation more than pays for the effort involved.

[Ted]

Where?

[Delmar]

Since then EUR/GBP has moved another 10% so it is now equivalent to £88k/wk.

 

I agree with everything else except the above. A business that has the majority of its income and expenses in a certain currency cannot budget based on short term currency fluctuations. GBP/EUR exchange rate will change again, at some stage. LFC cannot base their salaries on possible fluctuations in the future.

 

Equally, a player who lives in the UK, should have most of his expenses in GBP (at least in theory). What he does with his investments, is his business. Of course it is possible, in theory, to link salaries to different currencies, but that would be extremely short sighted and risky for the club and the player.