Good article by Maddock

[TopMod 0]

Can't remember if Maddock is a Benitez or Purslow stooge, but it's a pretty good read, if a bit long.

 

 

 

Since Rafael Benitez’s famous outburst – commonly termed ‘Rafa’s Rant’ for ease of reference - Liverpool has been a club inexorably linked with the notion of “facts”.

 

It is ironic then, that no other English football club seems as darkly impenetrable when it comes to discovering the truth over those fundamental issues that affect the heart and soul of the club.

 

In that sense, Liverpool are a very modern club. They are ‘owned’ in the loosest sense by corporate raiders, steeped in the murky spin of leveraged buy-outs, but governed, essentially, by two global banks, with their thoroughly 21st century approach to morals.

 

They are run by financial experts, who can navigate their way around the politics of business and its related balance sheet like Jenson Button does Monza. And they are managed by the most modern of coaches, who is as equally talented in the art of self-preservation as he is in the intricacies of tactics.

 

Perhaps it is no wonder then, that when it really comes to it, with the club apparently in a perpetual state of crisis, we have so much opinion but so few facts about every facet of turbulent life at Anfield.

 

It is an entertaining show, which offers scope for the media to fill the gaps with information and speculation in equal measure, as the major players woo their supporters and fight their enemies with a passion that would be admirable, were it directed towards the day job of making Liverpool Football Club great again.

 

Ultimately though, most of it is a sideshow, particularly the increasingly hysterical politics that surround the tenure of the manager and the senior players he has (or hasn’t, depending on who you believe) fallen out with.

 

Of course, whether Benitez remains in charge at Anfield is important. Whether Fernando Torres and Steven Gerrard stay at Anfield is of huge interest to the fans, and probably to the short-term business aims of the club.

 

But it is still a sideshow, because the fundamental issue facing every person who holds this special, and sometimes special needs, football club to their heart is its financial future.

 

For several years now, a relatively small section of fans has worked that one out. Most don’t really give a monkey’s who owns Liverpool and how much debt they have, so long as they have stars like Torres and Gerrard taking them towards trophies.

 

But some have realised that the way Liverpool is owned stinks. They realise that the manner in which Tom Hicks and George Gillett bought the club is a major barrier – indeed almost impossible obstacle - to long-term health at Anfield, never mind success.

 

I’m going to have to talk money here for a minute, but try to stick with it, even if that prospect makes your eyes glaze over. Because the accounts displayed by Companies House last week relating to Liverpool Football Club and its connected companies make important reading.

 

It was claimed in some circles that that the Americans would not use Liverpool’s money to buy the club, that they would not place one penny of debt upon the club. But the takeover debt has grown from around £80m when they took over three and a half years ago, to a basic level now of £238million.

 

It gets worse. Much worse. The accounts seem to show that the money Hicks and Gillett were forced to put in to reduce debt – or more accurately to stop it escalating even further – came actually in the form of a loan from their offshore company in the Cayman Islands… a tax haven, of course. And, as with all loans or mortgages, Liverpool are paying the interest on that too.

 

Currently, the debt to Kop Cayman stands at £145million and counting, because it had almost doubled in 12 months. Which means, if looked at coldly, debts on the club in the form of net borrowings (and there is a distinction here between gross and net) now effectively stand at more than £350million. Liverpool are paying the interest on that total amount.

 

In fact, interest payment for the years 2007-2009 now stand at £78million. No doubt that figure will be much higher at the end of the current financial year, which runs until June.

 

The accounts show that Liverpool have – in theory – a negative net worth of £128million, and are only operating as a going concern because of the support of the banks.

 

What does that mean to you, as a fan? It means that your football club isn’t really owned by the Americans at all. It is actually owned by a bank – the RBS. The Yanks have the title deeds, and when the club is sold, if there is any money left after settling the debts, they will get a nice big cheque, because that is the nature of a leveraged buy-out, but in a moral sense, the bank is the owner.

 

It means that last year, before any money could go on signing players or increasing wages to top players, more than £40million was spent on interest payments. It means that between £3million-£4.3million was spent on paying off a chief executive. It means another £3million was spent on getting rid of staff the manager didn’t want.

 

It means that Liverpool can’t build a stadium because they have too much debt piled on the club to raise any more funds to start the dig (even though upwards of £43million seems to have been spent on stadium development costs in the past two years).

 

It means that Liverpool are crippled under the current ownership. If you didn’t quite realise that before, then you know now. Incontrovertibly. I’ll run those figures by you one more time - £95million losses in two years, £78million interest payments in two years, and a negative net worth of £128million (which presumably means they’d have to pay me to take it off their hands!).

 

Hicks and Gillett won’t put any more money in. So debts will continue to rise until they go. If they are here for another five years under those conditions, debts could conceivably be around the £700million mark, if not considerably beyond.

 

The irony of it all, is that it remains a good business. The financial team of Ian Ayre and Philip Nash and more latterly Christian Purslow have quietly repositioned Liverpool as equal to Manchester United in terms of sponsorship levels and global brand, and they are now in the top four or five clubs in the world, in the sense of commercial potential, if not performance.

 

But no amount of record-breaking sponsorship deals can make up for interest payments that will go beyond £50million a year, and debts that will inevitably go beyond the £500million mark, given there is not sufficient stadium revenue to make up the deficit.

 

If all that is alarmist, then of course there is a solution. The answer is to get new owners. Even the Americans have conceded that must happen, and the question now simply is, how much profit do they want before they go?

 

If they don’t want any at all, then a deal could probably be done next week. But this is the real world, the ruthless modern world, and that will not happen. No amount of protests and ridicule will turn them away from the pursuit of profit. In their world, remember, greed is good.

 

It’s like that programme with the wide-boy from Stoke and the chunky blond bird that students watch, where people buy a house cheaply at auction, tart it up a bit with a pair of dodgy curtains and cash in and make a tidy profit when the market allows. Only on a bigger scale. Liverpool are Homes Under the Hammer. With very dodgy curtains.

 

There was a time when Liverpool could have handled interest payments and debts, and still made enough profits to buy players and pay top wages and compete at the top, just as Manchester United are doing despite their staggering level of debt. But the accounts show that is not the case any more.

 

So what can fans do, and what can the club itself do, those competent people like Ayre and Nash who will be left when the Yanks and the bankers clear off?

 

The only solution is to make Liverpool as attractive as possible to prospective new owners, and ensure at the same time they are fit and proper people to own the club.

 

This is the hard part, because what I am about to say will come as anathema to the fans who quite rightly feel betrayed by Liverpool Football Club, feel betrayed by the people they entrusted to run their club – and it is THEIR club in the end.

 

The effect of all the financial dealings of recent months is that Hicks and Gillett have effectively handed over running of the club to the RBS, or strictly more accurately to the RBS and Barclays Capital.

 

It is a complicated deal, but essentially, the Americans discovered that no-one wanted to buy the club from them and now realise they must shut up and go away and let Broughton and Barclays get on with selling a world-class brand… and wait for the cheque they want at the end of it.

 

If you don’t want them to profit, then the only solution is to agitate and destabilise to ensure a buyer can’t be found, and eventually the banks will pull the plug, the Yanks will go bankrupt and there will be a fire sale. But that could take years and years, and there could be little left of Liverpool as we know it at the end.

 

So even though it stinks, the only realistic option is to find a buyer willing to pay a decent sum for Liverpool. And that means doing everything possible to present an image of a club WORTH buying.

 

That sticks in the throat, because it means the Americans will trip off after four years or so with a big fat cheque, after bringing Anfield to its knees. But that is the way it is, it is the way it has always been – the speculators make the money off the rest of us.

 

The fact is, not one true fan wants Liverpool Football Club to go under, to go out of business, to cease to exist. So clenching the teeth and presenting a united front to find new owners who can take the club forward is the only way.

 

It is the only way for the financial men, who must set aside the daily politics of their spin to present only an image of a stable institution that actually has impressive figures in terms of global brand. It is the only way for the supporters of the manager who seem to think that destroying the image and reputation of the club is the best way to ensure he stays.

 

The hysterical in-fighting of recent weeks has served only to suggest Liverpool is a basket case that shouldn’t be touched with a bargepole, and even those with a pathological need for power and control must realise it has to stop.

 

It is the only way for the fans who have been strong enough to fight the Americans from the start, and expose their greed. It is the only way because they love the club and at heart want it to thrive, no matter what has happened.

 

When it is done, the fans of the club – all of them, not just small, isolated, easily manipulated groups - must stand up and ensure that this situation never happens again. They must ensure that owners, directors, executives, managers and staff are all working for the long-term success of the club, and not the short term gain of themselves.

 

It is a utopian vision, but somehow, they have to ensure those people know who really owns this club.

[Lopez Ufarte 0]

Jesus Christ, can it get any more depressing. Our only salvation is that it seems the bank will make the final call on an offer, but bearing in mind that all they will want to see is there money back, will they care who it is from? £-128m net worth!!!

[zigackly 621]

Where's Maddock getting the shut up and smile line from? I expect I know the answer, especially with the bum licking of the clubs "financial team".

[Guest Ulysses Everett McGill]

When it is done, the fans of the club – all of them, not just small, isolated, easily manipulated groups - must stand up and ensure that this situation never happens again. They must ensure that owners, directors, executives, managers and staff are all working for the long-term success of the club, and not the short term gain of themselves.

 

Not so easily manipulated that they (SOS) couldn't see through your bullshit though, eh Christy?

[Delmar 51]

I disagree with Maddock. There is no need to give the owners a profit. It's just a matter of who blinks first here, in case of bankruptcy the owners are the ones who will lose the most. If there's anyone interested in buying the club, this is a classic case of making a offer you can't refuse. A lot rides on Broughton, in fact, he has to be the one to deliver this offer, whoever it comes from, and convince the owners.

 

Otherwise just same old same old, possibly a little bit more cleverly worded spin this time to make it sound reasonable. But Maddock has well understood the message he is supposed to deliver.

[Kennys_spell 0]

Can't remember if Maddock is a Benitez or Purslow stooge, but it's a pretty good read, if a bit long.

 

 

 

 

It means that Liverpool are crippled under the current ownership. If you didn’t quite realise that before, then you know now. Incontrovertibly. I’ll run those figures by you one more time - £95million losses in two years, £78million interest payments in two years, and a negative net worth of £128million (which presumably means they’d have to pay me to take it off their hands!).

 

This is just mindboggling - David moore's hang you head in shame - Right there is the money that surely would have won us the premiership. £95 Mill loss over two years - interst paymens of £78 Mill. That's a difference of £13 Mill. Had we not had to pay the £78 Mill interest payments THAT WOULD MEAN THAT THERE WOULD HAVE BEEN AT LEAST £65 MILL PLUS PLAYER SALES TO TAKE THAT NEXT STEP!!!!!!!

 

 

If after reading that ANYONE is in any doubt at all that the major problem at our club is the Leeches then they are not only fooling themselves but helping the Yanks to get away with it.

[Original202 361]

If after reading that ANYONE is in any doubt at all that the major problem at our club is the Leeches then they are not only fooling themselves but helping the Yanks to get away with it.

 

Who has ever denied that they're the major problem?

 

It still doesn't excuse the poor management of on the pitch matters.

[Kennys_spell 0]

I disagree with Maddock. There is no need to give the owners a profit. It's just a matter of who blinks first here, in case of bankruptcy the owners are the ones who will lose the most. If there's anyone interested in buying the club, this is a classic case of making a offer you can't refuse. A lot rides on Broughton, in fact, he has to be the one to deliver this offer, whoever it comes from, and convince the owners.

 

Otherwise just same old same old, possibly a little bit more cleverly worded spin this time to make it sound reasonable. But Maddock has well understood the message he is supposed to deliver.

 

 

I can see what your saying but I think Maddock outlines in his piece that before the Leeches Blink there will be a fire sale and all the Assets will be flogged off. The other side of the coin is that the sale is made, they get their wedge and fuck off.

 

As much as I hate it the last option would be my preference - we'd get rid of the Leeches and hopefully get back the club.

[King Emlyn 1,274]

Jesus Christ, can it get any more depressing. Our only salvation is that it seems the bank will make the final call on an offer, but bearing in mind that all they will want to see is there money back, will they care who it is from? £-128m net worth!!!

It can and will get worse, vile owners crippling the club, useless manager we can't afford to sack, split fans at each others throats. The only was is er.....down.

[Paco 1,214]

I was gonna post something about how helpless I feel watching all the politics and carry on being played out in the press and what can I do as an individual to stop it. You know when you get stopped by anti war petitioners on the street and you sign the form knowing it won't make a blind bit of difference, that's how I feel about Liverpool at the minute.

 

I thought that boycotting the shirt was a good idea but the numbers who would actually do that will number hundreds and not tens of thousands and I'd bet that every person who does boycott it frequents online forums like TLW. Most people fans don't go on these sites and they're already out there buying the new kit. Brian Read reported the other day that shirt sales were going well and now Maddock is basically saying we should tow the line.

 

There is nothing any ordinary Liverpool fan can do about what's going on except watch and hope for the best.

[Kennys_spell 0]

Who has ever denied that they're the major problem?

 

It still doesn't excuse the poor management of on the pitch matters.

 

Look through the threads - there are those that are saying we need to change the manager first then the Leeches. I've said it thousands of times, changing the manager will not make an ounce of difference with the Leeches still here.

 

Two Years - £78 Mill in interest payments. Yet you still want the Manager to land the title?

 

Crazy stuff.

[shaunstrudwick 0]

If after reading that ANYONE is in any doubt at all that the major problem at our club is the Leeches then they are not only fooling themselves but helping the Yanks to get away with it.

 

there are 2 problems with this club:

 

the owners

 

and the manager

[Original202 361]

 

Two Years - £78 Mill in interest payments. Yet you still want the Manager to land the title?

 

Crazy stuff.

 

No. I expect him to get the best out of what he's got.

[shaunstrudwick 0]

This is just mindboggling - David moore's hang you head in shame - Right there is the money that surely would have won us the premiership. £95 Mill loss over two years - interst paymens of £78 Mill. That's a difference of £13 Mill. Had we not had to pay the £78 Mill interest payments THAT WOULD MEAN THAT THERE WOULD HAVE BEEN AT LEAST £65 MILL PLUS PLAYER SALES TO TAKE THAT NEXT STEP!!!!!!!

 

erm if we had spent that money on transfers we'd be in the same amount of debt that we are now...

 

granted we might have won the league mind

[Kennys_spell 0]

there are 2 problems with this club:

 

the owners

 

and the manager

 

The management of the football side of the club is a SYMPTOM of the Ownership policy.

 

Two years - £78 Mill interest payments. Yet you still want the manager to land the title!

[Kennys_spell 0]

erm if we had spent that money on transfers we'd be in the same amount of debt that we are now...

 

granted we might have won the league mind

 

so in that case, let's just let the Leeches carry on pocketing the money.

 

This is the type of fucking stupid, crazy shite that allows the Leeches to hang on. GET A GRIP will you.

[Kennys_spell 0]

No. I expect him to get the best out of what he's got.

 

7th Place IS THE BEST out of a team that has N'Gog, Babel, El Zhar, Derby, etc etc etc as the immediate replacements for the first team players.

 

Two years - £78 Mill interest payments. Yet you still want the manager to land the title!

[Carra_is_legend 1,055]

erm if we had spent that money on transfers we'd be in the same amount of debt that we are now...

 

Stupid fucking thing to say. Don't ever compare the debts the two cunts have accumulated with anything else. You will just sound stupid.

[Carra_is_legend 1,055]

7th Place IS THE BEST out of a team that has N'Gog, Babel, El Zhar, Derby, etc etc etc as the immediate replacements for the first team players.

 

Stupid fucking thing to say.

 

Make a point about the interest payments and the debts we have etc but to say 7th place is the best with the squad we have is.....errr...pretty fucking stupid.

[zigackly 621]

Look through the threads - there are those that are saying we need to change the manager first then the Leeches.

 

You're fond of evidence, so I am confident you will be able to provide an example of this.

[Original202 361]

Two years - £78 Mill interest payments. Yet you still want the manager to land the title!

 

Negged for repeating this tedious shite and missing the point.

[Delmar 51]

I can see what your saying but I think Maddock outlines in his piece that before the Leeches Blink there will be a fire sale and all the Assets will be flogged off. The other side of the coin is that the sale is made, they get their wedge and fuck off.

 

As much as I hate it the last option would be my preference - we'd get rid of the Leeches and hopefully get back the club.

 

That is the message that senior sources want us to hear. That does not mean that the message is correct, though. What the real situation is depends a lot on what Broughton really has an authority to do.

[Dicko 722]

Why not just write the article yourself Christian?

 

Oh wait you did.

[Dicko 722]

You're fond of evidence, so I am confident you will be able to provide an example of this.

 

Zig I think anyone who wanted to sack the manager at the end of the season or before could be used as evidence for that.

 

Given that there was no way the owners would or could be gone by then.

[Kennys_spell 0]

Stupid fucking thing to say.

 

Make a point about the interest payments and the debts we have etc but to say 7th place is the best with the squad we have is.....errr...pretty fucking stupid.

 

So make your mind up - are N'Gog, El Zhar, Derby, Babel etc ready for the Prem yet or not.

 

What does seem a little stupid to me is people using players like this as a tool to beat Benitez with and then claiming we should be higher up the table with players like these.

 

The Squad we have IS NO BETTER THAN 7th PLACE. That's the truth of the matter - no amount of hoping, wishing, willing it to be different will make it so. The Squad we have is PURELY DOWN TO THE LEECHES SPENDING POLICY since they have been here.