Rhone group in talks over 100mil takeover.

[coop]

What happened to that £60m Kop Cayman loan?

 

Did that get paid or is that still hanging over the club whoever were to try and buy it.

 

I know at one point there was rumours about thats why the Kuwait deal fell through when they found out they were responsible for paying that as well.

[Rocky Sullivan]

Government's plan to fix football: give clubs back to fans | Football | The Guardian

 

The government is to unveil radical proposals that would give football fans first option to buy their clubs when they were put up for sale and require clubs to hand over a stake of up to 25% to supporters' groups.

 

The ideas, due to be included in the Labour manifesto with a promise of action in the first year of a new government, are designed to give fans a far greater say in how their football clubs are run and overhaul the way the game is governed.

 

It is believed that No 10, which has been working secretly on the plans for weeks, has resolved to deliver concrete proposals to tackle growing public disquiet at the level of debt carried by some clubs, the ownership model of others and the dysfunctional structure of the Football Association.

 

• Conservatives call government plans 'a gimmick'

• In detail: Brown's blueprint for reforming football

• David Conn: A vote-winner by the government?

• Football's debt, dysfunction and dissent

 

The plans include:

 

• Requiring clubs to hand a stake of up to 25% to fans in recognition of their links with their local community.

 

• Implementing a change-of-control clause that would allow fans a window to put together a takeover of their club if it was up for sale or went into administration.

 

• Giving the football authorities a deadline to reform the FA and remove "vested interests" from the board, and streamline decision making.

 

• Introducing a unified system of governance that co-ordinates issues such as club ownership and youth development.

 

• Allowing professional leagues and the FA additional oversight of club takeovers.

 

The plans are likely to put Gordon Brown on a collision course with the Premier League, which has vigorously defended its free-market model in recent years, but he will claim that the proposals are for the good of the game.

 

Two policy ideas have emerged as frontrunners to improve supporter representation around the boardroom table, both of which would see fans taking a meaningful ownership stake in clubs.

 

Portsmouth's financial collapse, the outpouring of anger in response to the leveraged buyouts at Manchester United and Liverpool that loaded the clubs with combined debts of more than £1bn, and last week's shock resignation of the FA chief executive, Ian Watmore, in protest at the "vested interests" on the board are all understood to have persuaded the prime minister to act.

 

Reflecting the view that they will succeed in democratising ownership only if there is stronger leadership from the top, it will also set football a deadline of up to a year to overhaul its governance system.

 

Under the scheme to give fans a stake, supporters' trusts with elected representatives, audited accounts and Financial Services Authority recognition would be responsible for maintaining the link between clubs and their community and ensuring fans are not priced out of the game.

 

The government could, however, face legal challenges from existing owners over the dilution of their shares. It has echoes of the model proposed by the so-called Red Knights attempting to buy Manchester United. Wealthy fans will contribute 74.9% of the overall purchase price, but supporters will hold a "golden share" of just over 25%, giving them a blocking stake on any change of ownership and an influential boardroom voice.

 

Legal advice is being sought on the idea of a change of ownership at a club triggering a mandatory window for fans to take the opportunity to shape the ownership structure and buy the club at a price set by an external, independent auditor.

 

Under the proposals, fans would be free to set up their co-operative style model, shareholding trust or other structure that enabled them to have a say in the club.

 

While the government will reiterate that it has no desire to regulate football directly, the prime minister believes the democratisation of football club ownership taps into wider themes about the "mutualisation" of public services and the need for regulatory reform.

 

 

Interesting consequences for us if it ever happens....

[Kopite Pete]

Are we a risk though ?

 

The new World Global TV rights deal will give clubs an extra 25m next season, effectivley giving us the same money as a good Cl run. Therefore our books will continue to balance and the loan be repaid, even if we miss out on europe, next season or a few seasons.

 

The fact is the owners and the banks know that only relegation or a collapse of the TV rights money would see the loan repayments in any jeopardy. In which case we can even carry on with minimal or zero squad investment 17th would become the new 4th.

 

If RBS decide to call in the whole loan or the 100m Hicks will just go elsewhere to get the 100m and probably at a higher interest rate which the club will end up paying for anyway. Or he'll just do what he did at Corinthians, with his mate Muse and sell the best players.

 

Unless someone gives him some money, I dont think he'll go anytime soon.

 

Thia is exactly my thoughts, but hasnt Hicks already tried various places to get teh money together and no one will touch him.

[Wezza]

Whatever agenda people may think Purslow has or hasn't got as it currently stands he is our best bet in getting rid of the owners.

Was there anymore to the rumour/story that he was trying to put his own consortium together to buy the club?

[Dougie Do'ins]

What happened to that £60m Kop Cayman loan?

 

Did that get paid or is that still hanging over the club whoever were to try and buy it.

 

I know at one point there was rumours about thats why the Kuwait deal fell through when they found out they were responsible for paying that as well.

Was that the loan that was supposed to get the ground started ? I'm pretty certain there was money paid back to the bank about a year ago.

 

Liverpool owners agree to repay £40m of debt as part of refinancing package - Telegraph

[coop]

Was that the loan that was supposed to get the ground started ? I'm pretty certain there was money paid back to the bank about a year ago.

 

Liverpool owners agree to repay £40m of debt as part of refinancing package - Telegraph

 

Not sure Mick, think it had something to do with the transfers though.

[Royal Family]

Government's plan to fix football: give clubs back to fans | Football | The Guardian

 

The government is to unveil radical proposals that would give football fans first option to buy their clubs when they were put up for sale and require clubs to hand over a stake of up to 25% to supporters' groups.

 

 

Interesting consequences for us if it ever happens....

 

Cheap electioneering promise. They have had 13 years to take action should they have so desired, but in that time they have overseen the unregulated boom in football finances and have violently resisted every attempt at European level to sort it out. Look at their silence on our - or the Mancs - ownership problems when, actually, a quiet word to RBS last summer would have forced the Yanks out. RBS sought guidance from the Government and were told it was nothing to do with them. So don't believe false promises made on the election campaign!

[HJohal]

But you have to take into account there was a one(of two)-off 120m cash requirement to de-leverage. That'll strain any company. Look at the ongoing business operations and the picture is very different which is why RBS wants to continue the partnership and wants to share in the profits it knows are coming from the stadium.

 

I think we all agree that Liverpool F.C in its own right is a good business operation - however if you tie £350M of debt around its neck it becomes insolvent over the longer term. So when the debt is reduced to 137M like RBS are demanding then we are in good shape for the long term where we should be in a position to support the build of the new stadium and manage debt via existing revenues + organic growth.

[Dougie Do'ins]

Not sure Mick, think it had something to do with the transfers though.

It was the same loan/money. Part of it was supposed to be used to kick start the stadium build and part of it was for transfers. The link I posted previously, that referred to the repaid money was linked to this below. Basically they never started to build the stadium so the bank asked for the money back.

 

Hicks and Gillett's grip of Anfield under threat - Telegraph

 

Having put on hold plans to borrow £300 million to finish the new 70,000-seater stadium at Stanley Park, Hicks and Gillett are trying to borrow £350 million to refinance a one-year loan with RBS which paid for their £220 million takeover last February. They also want another £60 million to provide working capital to get the new stadium at Stanley Park under way and £20 million to refinance loans used to purchase players in the summer.

[coop]

Is this the same loan as if mentioned here in the Echo a while since.

 

Liverpool Echo.co.uk - News - Liverpool Local News - Full scale of Americans’ debt on Liverpool FC revealed

 

In total Kop and Liverpool FC Limited paid £40.1m in servicing debt and overdrafts in the year to July 31, 2008.

 

Kop’s debts have increased by £77.5m to £359.7m, due to spending on players and design work on the new stadium.

 

The new stadium design plans are working on a 73,000 capacity and suggest Anfield has a working life of just five more years

 

Kop has also been saddled with a new £58.2m debt, which is owed to its own parent company Kop Football (Cayman) Limited, also owned by Hicks and Gillett. The money is payable on demand, but not if doing so would make the company (Kop Holdings) insolvent.

[Carra_is_legend]

I think we all agree that Liverpool F.C in its own right is a good business operation - however if you tie £350M of debt around its neck it becomes insolvent over the longer term. So when the debt is reduced to 137M like RBS are demanding then we are in good shape for the long term where we should be in a position to support the build of the new stadium and manage debt via existing revenues + organic growth.

 

Very good point about the new stadium.

 

If the new stadium cost like £300m and takes 3 years to build, the extra revenue will only come in after 3 years. In the mean time, the club should be able to pay the interest - even if we only borrow £100m in the 1st year, another £100m in the 2nd year and £100m in the 3rd year.

 

If we don't reduce the debt now and if we start the new stadium, we will have £337m debt in the 1st year, £437m in the 2nd year and £537m at the start of 3rd year.

 

£337m debt will probably mean about £35m interest/year.

£437m debt = £45m/year interest

£537m debt = £55m/year interest

 

Total interest for 3 years = 135m (avg of £45m/year)

 

When you look at it like that, I'm not sure the club will be able to afford that even with new TV money and CL money (if we are still in it of course).

[coop]

Very good point about the new stadium.

 

If the new stadium cost like £300m and takes 3 years to build, the extra revenue will only come in after 3 years. In the mean time, the club should be able to pay the interest - even if we only borrow £100m in the 1st year, another £100m in the 2nd year and £100m in the 3rd year.

 

If we don't reduce the debt now and if we start the new stadium, we will have £337m debt in the 1st year, £447m in the 2nd year and £547m at the start of 3rd year.

 

£337m debt will probably mean about £35m interest/year.

£447m debt = £45m/year interest

£547m debt = £55m/year interest

 

Total interest for 3 years = 135m (avg of £45m/year)

 

When you look at it like that, I'm not sure the club will be able to afford that even with new TV money and CL money (if we are still in it of course).

 

Don't forget the naming rights as well.

[Carra_is_legend]

Don't forget the naming rights as well.

 

I didn't but would we get to see the first pennies before the stadium is open though?

[Kennys_spell]

Is the right answer!

 

We are not a risk at all! Especially if we qualify for CL next season, it wouldn't make any business sense for the banks to not lend us money.

 

The only way Hicks will fuck off is when someone pays him a tidy profit.

 

Of course we are a risk (Even if we qualify for next seasons CL) - perhaps not as much of a risk as some of the tabloid hacks are trying to portray us but we are definately a risk. At the moment we are risk (in terms of the loan) that the RBS due to their position have decided they want us to reduce the effects of so they have demanded that we lower the debt, which again is understandable given that RBS are a government owned entity and effectively are using taxpayers money to run.

[coop]

I didn't but would we get to see the first pennies before the stadium is open though?

 

Without a doubt but its still money there.

 

Imagine we secured a deal with Carlsberg for £150m naming rights then its almost like borrowing on future profits because not only can you produce your business plan as regards the extra fan/corporate seating you can also then say you are guaranteed £150m over x amount of years the naming rights is for.

 

Another way is to try and secure the stadium funding over a long term loan much like you would a mortage which should in theory bring the interest payments down to a more manageable amount.

[Kennys_spell]

We are not a risk Steve infact we are good business for the bank with the interest we pay each year plus the refinance costs.

 

If we are such bad business why have RBS said that they will refinance the loan again for a further 3-4 years if we can drop it by £100m.

 

We are a risk - an acceptable risk but a risk nevertheless.

 

All banks on all loans big or small have risk.

[Kennys_spell]

Without a doubt but its still money there.

 

Imagine we secured a deal with Carlsberg for £150m naming rights then its almost like borrowing on future profits because not only can you produce your business plan as regards the extra fan/corporate seating you can also then say you are guaranteed £150m over x amount of years the naming rights is for.

 

Another way is to try and secure the stadium funding over a long term loan much like you would a mortage which should in theory bring the interest payments down to a more manageable amount.

 

I understand what you're saying about declaring extra expectations but really it's NOTHING like borrowing on future profits.

[piscinin]

I think we all agree that Liverpool F.C in its own right is a good business operation - however if you tie £350M of debt around its neck it becomes insolvent over the longer term. So when the debt is reduced to 137M like RBS are demanding then we are in good shape for the long term where we should be in a position to support the build of the new stadium and manage debt via existing revenues + organic growth.

 

Agree, seems like we see it much the same way. An initial capital structure with no room for error and a subsequent melt-down completely invalidating it. The new capital structure they are moving too seems to be in everyone's interest, except those wanting H&G out, which is why I can't understand the painting of RBS in some kind of confrontational relationship with the club. They'll make as much out of it as the Rhone group in all likelihood.

 

In some ways H&G are doing them a favour by retaining them given the inflexibility of the terms they are able to offer at the moment (due to LTV, asset write-downs etc). They could do a bond issue for very similar capital costs if they were pushed.

 

If as seems to be the case that the RBS loans are secured personally by H&G and not on the club then TBH they're really pretty toothless as well aren't they? They have a claim on a bunch of second homes, yachts and holdings in dubious companies. I don't see them as significant force for change, do you?

[coop]

I understand what you're saying about declaring extra expectations but really it's NOTHING like borrowing on future profits.

 

Agree 'future profits' was a wrong term but the point i was trying to get across is that stadium funding should not be 'pie in the sky' and i wouldn't be surprised if RBS themselves will loan the money once the initial £100m has been paid.

[aws]

Don't forget the naming rights as well.

 

And there's lots of other ways to raise cash up front from future ticket sales. As soon as the stadium is nearing completion they'll be selling the corporate boxes in five year/ten year packages which will raise tens of millions. And they could also offer "debenture" sales alongside the extra season tickets e.g. 5,000 debentures for 20 years at £10,000 = £50m up front and they haven't affected the future income as a debenture holder still has to pay for his tickets.

 

The long term debt for the stadium may well be less than £200m.

[piscinin]

I didn't but would we get to see the first pennies before the stadium is open though?

 

Arsenal did they used naming rights money to fund the construction. The guy who did that deal is our CFO now.

[piscinin]

Agree 'future profits' was a wrong term but the point i was trying to get across is that stadium funding should not be 'pie in the sky' and i wouldn't be surprised if RBS themselves will loan the money once the initial £100m has been paid.

 

Didn't Purslow allude to that in his meeting with SOS? They'd be daft not to be in that trough.

[Kennys_spell]

Agree 'future profits' was a wrong term but the point i was trying to get across is that stadium funding should not be 'pie in the sky' and i wouldn't be surprised if RBS themselves will loan the money once the initial £100m has been paid.

 

Agreed.

[piscinin]

And there's lots of other ways to raise cash up front from future ticket sales. As soon as the stadium is nearing completion they'll be selling the corporate boxes in five year/ten year packages which will raise tens of millions. And they could also offer "debenture" sales alongside the extra season tickets e.g. 5,000 debentures for 20 years at £10,000 = £50m up front and they haven't affected the future income as a debenture holder still has to pay for his tickets.

 

The long term debt for the stadium may well be less than £200m.

 

What are these debenture sale things? I've never heard of them before.

 

BTW Has the stadium been re-priced yet? Concrete and steel are all way down from their highs are they not? Doesn't someone on here oversee large capital projects like that (JohnnyH? Have any insight into cost movements over the last couple of years?)

[Kennys_spell]

Didn't Purslow allude to that in his meeting with SOS? They'd be daft not to be in that trough.

 

That's very true - in fact at this point in time there's a better business case for the stadium than there is for the club at the moment. The stadium is a blank canvas of "investment opportunity" with the boundries being set by the imagination of the Chief Exec - although sitting in the "McDonalds sponsored KOP enclosure" will be hard to take that's the way we're heading!