Tony Evans

[johnmerrick]

It has been reported that the Yossi money is to pay off Fulham. Think it covered something else too but I forget what - maybe paying Rafa? Depends how much stock you put in what Bascombe says I suppose, but its not exactly without precedent.

 

it went to paying off Rafa.

[WaltonRed]

I dont believe a word Bascombe says.

[hamstrung]

it went to paying off Rafa.

 

of the £5.5m received from Yossi Benayoun's switch to Chelsea. That money has been put aside to help pay off ex-boss Rafa Benitez and meet the £2m compensation bill to Fulham to recruit Hodgson.

 

Can't read the full article as work block NOTW but that's what comes up on google.

 

Like I said, depends if you choose to believe the source.

 

edit: Not comfortable linking NOTW. Google "Fulham Bascombe Hodgson Benayoun" if you're fussed.

[jackofdk]

Asset Stripping doesn't make financial sense

 

I think it does.

 

1. Debt now some 250m

2. Sell Torres+Gerrard: debt around 150m

3. Borrow money to finance the stadium

4. Build stadium

5. Get rich

[hamstrung]

I think it does.

 

1. Debt now some 250m

2. Sell Torres+Gerrard: debt around 150m

3. Borrow money to finance the stadium

4. Build stadium

5. Get rich

 

You forgot step 6

 

6. Stare at empty seats during Liverpool Vs Grimsby

[jackofdk]

Not necessarily, they'd expect the manager to perform well on a tight (non-existent) budget.

[Whelan]

Get a fucking grip.

 

5.5m to pay Fulham for a manager on a one-year roling contract?

 

The thing is simple: If a big money offer for Torres and Gerrard came in, the club may have to consider it but that is about it.

 

So, say you are right! The Yossi money is part of the 'pot', that makes it 17 million, Torres and Gerrard are on record as saying we need three or four world class players added!

 

You do the maths.

 

And don't bother with the 'We are Liverpool, if they don't want to play for us they can fuck off' bollocks, it is as tiresome as it is pointless. They are our best players, you don't sell your best players in one go, and then tell everyone you have ambitions.

[Kennys_spell]

In all likelihood we'd get more for Torres and Gerrard now than we would if Rafa had still been here. ;)

 

Based on what?

[Albertini]

I think it does.

 

1. Debt now some 250m

2. Sell Torres+Gerrard: debt around 150m

3. Borrow money to finance the stadium

4. Build stadium

5. Get rich

 

Point 2:

 

2. Sell Torres+Gerrard: debt around 150m

 

Debt around £150 million but what about the value of the club then? No Gerrard or Torres who not only are the leading performers on the pitch but they drive revenue off the pitch.

 

Their shirt sales are the largest and their names help attract commercial revenues to the club.

 

On the pitch we become a mid table side, don't qualify for the Cl or even Europa so the bonuses from the Chartered Deal (and others) don't kick in, TV revenue goes through the floor as does match attendance revenue. Suddenly our turnover drops down to that of a mid table team.

 

You can lop what, at a guess, £80 million a year off the turnover under those circumstances?

 

So now our wages are 90% - 100% of our turnover and the club makes a massive loss year on year.

 

Who would then pay £300 million for the club? No one. the club is worth no more than what City was when it was sold. £80-£100 million.

 

But they will still owe £150 million to the banks.

 

So actually the situation then is far worse than it is now.

 

Point 3:

 

3. Borrow money to finance the stadium

4. Build stadium

 

Given the above who will lend that much money to a club unable to finance existing operations and current interest payments let alone interest on a new stadium loan until it is built?

 

The couldn't borrow the money when the club finished second in the league and was in the CL what makes you think someone will lend a mid table side with no European money and reduced commercial deals?

 

Point 5:

 

5. Get rich

 

Lose massive amounts of money as they aren't able to cover the operational loss of the club and its interest payments. The Club goes into administration, is sold for no more than £100 million all of which goes to RBS with their first charge and they are left out of pocket on their personal loans of £150 million (plus the interest, at 10%, from now until this scenario unfolds) and they have to stump up on their guarantees from the shortfall of their loan with RBS and what the bank realised at the point of sale.

 

They could feasibly lose £200 million under that scenario.

[diego]

The other thing to bear in mind is that any prospective buyer will do a lot of work to understand the state of the club and its potential before making any bid. This will necessitate access to a significant set of company confidential data, independent assessment and due diligence (for both sides). This doesn't happen in one month, and probably not two. And that's before a bid is made.

 

So you have to assume that if bids are made in the next month, some or most of the activity I've described must have already happened.

 

Despite your usual attempts to appear ITK you have no idea if there are any serious bidders and who they might be and when the process might begin and end. Nor do you understand the process. You seem to have gotten it back to front.

 

If any bids will be made they will be made on the basis of the prospectus already in circulation together with updates and verbal clarifications offered by RBS to serious enquirers. If any written bids are forthcoming they will almost certainly be conditional on the bidder's detailed examination of the books and all material matters. If and when the board selects a bidder it will give the bidder preferred status for a limited time and allow it full access to the books in exchange for a confidentaility agreement.

 

If the chosen bidder does not complete due diligence in the specified time or make a formal offer the board can withdraw its preferred status and turn to other bidders, if there are any.

 

The process could be short or long. DIC, for example dragged it out for months and lost their preferred status. G &H moved very fast and completed the deal in a couple of weeks.

[jackofdk]

Point 2:

 

2. Sell Torres+Gerrard: debt around 150m

 

Debt around £150 million but what about the value of the club then? No Gerrard or Torres who not only are the leading performers on the pitch but they drive revenue off the pitch.

 

Their shirt sales are the largest and their names help attract commercial revenues to the club.

 

On the pitch we become a mid table side, don't qualify for the Cl or even Europa so the bonuses from the Chartered Deal (and others) don't kick in, TV revenue goes through the floor as does match attendance revenue. Suddenly our turnover drops down to that of a mid table team.

 

You can lop what, at a guess, £80 million a year off the turnover under those circumstances?

 

So now our wages are 90% - 100% of our turnover and the club makes a massive loss year on year.

 

Who would then pay £300 million for the club? No one. the club is worth no more than what City was when it was sold. £80-£100 million.

 

But they will still owe £150 million to the banks.

 

So actually the situation then is far worse than it is now.

 

Point 3:

 

3. Borrow money to finance the stadium

4. Build stadium

 

Given the above who will lend that much money to a club unable to finance existing operations and current interest payments let alone interest on a new stadium loan until it is built?

 

The couldn't borrow the money when the club finished second in the league and was in the CL what makes you think someone will lend a mid table side with no European money and reduced commercial deals?

 

Point 5:

 

5. Get rich

 

Lose massive amounts of money as they aren't able to cover the operational loss of the club and its interest payments. The Club goes into administration, is sold for no more than £100 million all of which goes to RBS with their first charge and they are left out of pocket on their personal loans of £150 million (plus the interest, at 10%, from now until this scenario unfolds) and they have to stump up on their guarantees from the shortfall of their loan with RBS and what the bank realised at the point of sale.

 

They could feasibly lose £200 million under that scenario.

 

You could argue that even without Gerrard and Torres, Liverpool still had 12 players at the World Cup. More than enough to stay in the fight for european spots. And if money from a Mascherano sale was use wisely, we should be able to finish above the likes of Everton and Aston Villa.

 

As for lending money, it has nothing to do with league table but everything to do with financial strength.

 

Now I am not saying that this will happen or even that it is the most likely scenario. I just think it would be unwise to say that it is an impossible scenario as the yanks just don't give a fuck about anything but their bank accounts.

[diego]

The other thing to bear in mind is that any prospective buyer will do a lot of work to understand the state of the club and its potential before making any bid. This will necessitate access to a significant set of company confidential data, independent assessment and due diligence (for both sides). This doesn't happen in one month, and probably not two. And that's before a bid is made.

 

So you have to assume that if bids are made in the next month, some or most of the activity I've described must have already happened.

 

Despite your usual attempts to appear ITK you have no idea if there are any serious bidders and who they might be and when the process might begin and end. Nor do you understand the process. You seem to have gotten it back to front.

 

If any bids will be made they will be made on the basis of the prospectus already in circulation together with updates and verbal clarifications offered by RBS to serious enquirers. If any written bids are forthcoming they will almost certainly be conditional on the bidder's detailed examination of the books and all material matters. If and when the board selects a bidder it will give the bidder preferred status for a limited time and allow it full access to the books in exchange for a confidentaility agreement.

 

If the chosen bidder does not complete due diligence in the specified time or make a formal offer the board can withdraw its preferred status and turn to other bidders, if there are any.

 

The process could be short or long. DIC, for example dragged it out for months and lost their preferred status. G &H moved very fast and completed the deal in a couple of weeks.

[Kopite Pete]

Point 2:

 

2. Sell Torres+Gerrard: debt around 150m

 

Debt around £150 million but what about the value of the club then? No Gerrard or Torres who not only are the leading performers on the pitch but they drive revenue off the pitch.

 

Their shirt sales are the largest and their names help attract commercial revenues to the club.

 

 

Torres and Gerrard wont be around forever, what happens if Gerrard retires next summer, will the club be worth £20m less? Reducing the debt helps them in the short term, then they can rebuild the club up. Broughton said it will take 3 years to rebuild the club, we also have Hodgson on a 3 year contract now. So reduce the debt, refinance the debt over 4 years, then rebuild the club with the stadium build. Then the Yanks walk away with more of a profit.

[Liverbnz]

You could argue that even without Gerrard and Torres, Liverpool still had 12 players at the World Cup. More than enough to stay in the fight for european spots. And if money from a Mascherano sale was use wisely, we should be able to finish above the likes of Everton and Aston Villa.

 

As for lending money, it has nothing to do with league table but everything to do with financial strength.

 

Now I am not saying that this will happen or even that it is the most likely scenario. I just think it would be unwise to say that it is an impossible scenario as the yanks just don't give a fuck about anything but their bank accounts.

 

 

It's not impossible but it is a ridiculous scenario. The Yanks have been hawking the world looking for loans the last 3 years. Banks will not touch them with a bargepole. If they could loan money they would have done it a long time ago and the club would not be for sale. Selling valuable assets and reducing debt will not increase the chances of getting any more loans. The only feasible way to reduce debt is to seek investment, hence Purslow, but he failed.

[Antynwa]

A club with Gerrard and Torres is worth more than a club without them.

 

Even if we do sell Gerrard and Torres we wouldn't get £100 Million for them, and it wouldn't be beyond the realms of possibility that we only get enough to cover the interest.

[Liverbnz]

Torres and Gerrard wont be around forever, what happens if Gerrard retires next summer, will the club be worth £20m less?

No Gerrard would have been valued at the beginning of his contract and depreciated over the the period of that contract.

 

 

Reducing the debt helps them in the short term, then they can rebuild the club up. Broughton said it will take 3 years to rebuild the club, we also have Hodgson on a 3 year contract now. So reduce the debt, refinance the debt over 4 years, then rebuild the club with the stadium build. Then the Yanks walk away with more of a profit.

 

Reducing the debt helps if it doesn't have a detrimental effect on how the team performs. Selling our 2 top players clearly will have an effect. Less shirt sales, less attractive to investors, new players and less performance on the pitch meaning less prize money, gate receipts, and on and on. Furthermore, no one wants to lend these pair of clowns any money.

[Kopite Pete]

A club with Gerrard and Torres is worth more than a club without them.

 

Even if we do sell Gerrard and Torres we wouldn't get £100 Million for them, and it wouldn't be beyond the realms of possibility that we only get enough to cover the interest.

 

Throw Masch in I think £100m is possible.

[shaunstrudwick]

Throw Masch in I think £100m is possible.

 

this ^

 

'looking forward to' isn't the right phrase but i am very curious to hear how Broughton and Purslow will spin it when Gerrard and Torres are sold for circa £70m this summer

[aws]

If serious asset stripping was the preferred money-making option for the yanks it would already have happened by now (over and above the squeeze on assets we've seen over the last two years). So far it has suited them to hang on to the RBS debt, pay the fees and interest and wait for the big pay-off they think their patience will bring.

 

But if we ever get to the situation that they're heading into a sale they don't want (and that could feasibly be this summer) then every option is on the table.

[Gary Mac Legend]

I believe, that giving Hodgson a 3 year contract was a big statement of intent by the board, that many of you aren't taking into account. Make of that, what you will

[stringvest]

Don't agree with that assessment.

 

I beleive that the club have appointed independent auditors (probably one of the big 4, PwC, E&Y, Deloitte, KPMG) to perform one set of due diligence.

 

That will then get farmed out to bidders as part of the memorandum of information (hence the delay from when Broughton was appointed to bids expected this month) for them to come back with questions and requests for more information.

 

It is not practical to have each bidder's accountants running through the books all at the same time.

 

but I think you'll find it has already happened in more than one case.

[Kennys_spell]

People are saying that this is a forced sale and RBS hold all the cards but what I don't understand is why didn't G&H accept the investment offer if the only other option was a forced sale. I cant help but feel that G&H are happy to be where we are now. Still 100% owning us and calling the shots. Plus I wouldn't rule out them raising £100m this summer by selling assets.

 

It was clear why they didn't accept the offer - the offer was £110 Mill for 40% of the club. That, effectively would have put the Rhone group as the major shareholder in the club for a fee thought to be approx 25% of the valuation. Bit of a Steve Morgan cheeky bid in reality.

[Kennys_spell]

it went to paying off Rafa.

 

Figures still don't add up:

 

If it was just to pay off the Hodgson money to Fulham that would have been approx £3 Mill left over.

If it was to Pay off Benitez it would have been approx £3 Mill short.

[dennis tooth]

Figures still don't add up:

 

If it was just to pay off the Hodgson money to Fulham that would have been approx £3 Mill left over.

If it was to Pay off Benitez it would have been approx £3 Mill short.

 

Every little helps though.

[Albertini]

You could argue that even without Gerrard and Torres, Liverpool still had 12 players at the World Cup. More than enough to stay in the fight for european spots. And if money from a Mascherano sale was use wisely, we should be able to finish above the likes of Everton and Aston Villa.

 

As for lending money, it has nothing to do with league table but everything to do with financial strength.

 

Now I am not saying that this will happen or even that it is the most likely scenario. I just think it would be unwise to say that it is an impossible scenario as the yanks just don't give a fuck about anything but their bank accounts.

 

But not of sufficient quality to finish higher than 7th. Take Gerrard & Torres out and that could quite easily go to 10 or 12th.

 

It is precisely because of financial strength and the lack of it under the scenario you depict which would prevent this scenario from playing out for the reasons i gave. The numbers don't add up.

 

Which is why their desire for money should help make the sale a reality. Sell now and earn a little or asset strip and lose a shit load later.

 

Torres and Gerrard wont be around forever, what happens if Gerrard retires next summer, will the club be worth £20m less? Reducing the debt helps them in the short term, then they can rebuild the club up. Broughton said it will take 3 years to rebuild the club, we also have Hodgson on a 3 year contract now. So reduce the debt, refinance the debt over 4 years, then rebuild the club with the stadium build. Then the Yanks walk away with more of a profit.

 

In the normal course of events a player of Gerrard's stature would be replaced by an equal if the team was successful and competing at the highest level.

 

In the doomsday scenario there can be no replacements because the money isn't there.

 

You also pre-suppose that they can pay down debt and continue on with the loan.

 

It has been speculated that comments made by Purslow to SOS about a requirement to pay down £100 million by Easter - which was missed - has resulted in the loan moving into termination and collect out.

 

Whilst no one knows for certain that fits in with what has happened since with a chairman brought in to oversee a sale, all his comments, BarCap's appointment, and the email from RBS, despite the insistence from Hicks before Easter that he was not interested in selling the club.

 

Something changed after the Rhone deal fell through. If it wasn't a default / forced sale what has made Hicks change his mind?

 

RBS seem keen to stress that the club will be sold. They don't seem keen to continue on with the loan under the present owners.