Henry Speaks about Chelsea, fair play etc....

[Horus]

Not slagging them off, but it seems we'll only invest what we make, which means forgetting about a big spree to bring us up to standard in summer. Still, I guess we'll all have to wait and see.

 

 

Exclusive interviewJohn W Henry: Newcastle made a hell of a deal. We felt the same wayLiverpool's owner questions Chelsea's commitment to financial fair-play rules and explains his desire to self-generate funds

 

 

Share315 David Conn guardian.co.uk, Friday 4 February 2011 17.31 GMT Article history

John W Henry believes clubs such as Chelsea may be planning to 'evade' Uefa's financial fair-play rules. Photograph: Michael Regan/Getty Images

 

Liverpool's American owner, John Henry, has criticised Chelsea for their extravagant transfer window spending, questioning the commitment of Roman Abramovich's club to Uefa's financial fair-play rules. In an exclusive interview with the Guardian, Henry suggested Chelsea may be planning to "evade" the rules and called on the governing body to ensure they are strictly followed by all clubs. The fair-play rules, which require clubs to spend only the income they make and not rely on subsidies from owners, come into effect from next season to 2014.

 

"I was surprised Monday morning to receive an offer [from Chelsea for Fernando Torres] in that amount [£50m] at the same time they were announcing such large losses [£71m for 2009-10]," Henry said. "The big question is just how effective the financial fair-play rules are going to be. Perhaps some clubs support the concept in order to limit the spending of other clubs, while implementing activities specifically designed to evade the rules they publicly support. We can only hope that Uefa has the ability and determination to enforce what they have proposed."

 

Chelsea have insisted since signing Torres and David Luiz that they firmly intend to comply with financial fair play and that the £71m outlay was within overall progress towards cutting costs.

 

Henry, setting out his thoughts on Liverpool's direction almost four months since his Fenway Sports Group bought the club by paying off the £200m debts Tom Hicks's and George Gillett's "leveraged" takeover had loaded on to Liverpool, said he is committed to the club living within its income. "We've always spent money we've generated rather than deficit-spending and that will be the case in Liverpool," he said, referring to the group's ownership of the Boston Red Sox baseball team. "It's up to us to generate enough revenue to be successful over the long term. We have not and will not deviate from that."

 

That commitment to sound financial management was followed, not breached, Henry asserted, in the £35m Liverpool paid Newcastle United for Andy Carroll, a fee that astonished English football. Henry said the £35m made financial sense because Liverpool were only paying to Newcastle what they were to receive from Chelsea by selling Torres, whom they allowed to leave because he had become too evidently unhappy at Anfield.

 

"The fee for Torres was dependent on what Newcastle asked for Carroll," Henry said, explaining that Liverpool wanted Carroll, plus £15m, to replace Torres. Together with the £6m sale of Ryan Babel to Hoffenheim, that effectively financed Liverpool's £22.8m signing of Luis Suárez, meaning the club bought two strikers but net, spent almost nothing. "The negotiation for us was simply the difference in prices paid by Chelsea and to Newcastle," Henry said. "Those prices could have been £35m [from Chelsea for Torres] and £20m [to Newcastle for Carroll], 40 and 25 or 50 and 35. It was ultimately up to Newcastle how much this was all going to cost. They [Newcastle] made a hell of a deal. We felt the same way."

 

Saying Kenny Dalglish has "exceeded our expectations" as the club's caretaker manager, Henry explained that Liverpool retain ambitions to qualify for European competition this season, so insisted they had to sign a replacement striker, preferably Carroll, if Torres was to go. "We weren't going to write off Champions League and Europa League for the sake of someone's happiness," Henry said of Torres. "The striker position had to be filled, by someone who made sense for the long term. With about 24 hours remaining, the possibility of Andy, who was No1 on our list of possibilities for the summer, emerged."

 

Henry explained how Carroll, even at £35m, fits into FSG's philosophy, which famously learns from the strategy honed by Billy Beane, the general manager at baseball's Oakland Athletics. As described in the book Moneyball, by Michael Lewis, players are assessed from performance statistics, not solely by scouts rating how good they look. Henry, however, said this did not mean they were not prepared to spend big fees on the right players, as the group has done when turning the Red Sox into a World Series-winning baseball team again.

 

"The Moneyball approach is about poor decision-making in baseball, based on anecdotal evidence [about players' qualities] as opposed to hard, statistical evidence. If the Red Sox are a Moneyball team it has to be noted that we are second in spending over the last decade within Major League Baseball. We have been successful through spending and through securing and developing young players."

 

That, he said, will be Liverpool's two-pronged approach to rebuilding the squad, which will be financed only out of its income; he and his fellow investors in Fenway will not be pouring cash in. "We intend to get younger, deeper and play positive football. Adding two top players [Carroll and Suárez] who have just turned 22 and 24 is a good first step."

 

Henry lavished praise on Dalglish, although he declined to say whether Dalglish is likely to be offered the job permanently. "We didn't know Kenny well prior to him coming aboard as manager," Henry said. "But he has exceeded our expectations on all fronts. It would be inappropriate to comment publicly on what happens beyond the end of this season."

 

FSG is, Henry confirmed, studying the possibility of expanding Anfield rather than building the long-mooted new stadium on Stanley Park, a plan which he criticised. "It's not a coincidence that the last two ownership groups could not get a new stadium built," he argued pointedly. "What they proposed or hoped for just didn't make any economic sense or they would have been built. A lot of time and effort is being put into study and creatively looking at all options."

 

With his first, extraordinary, transfer window done, in which Liverpool managed to part with English football's most astonishing fee ever while spending nothing overall, Henry argued the new American owners' strategy, to refashion Liverpool as a major club, is on course. "Our goal in Liverpool is to create the kind of stability that the Red Sox enjoy," he said. "We are committed to building for the long term."

[llego]

I love ever word.

 

As for spending in the summer, we should have about 20-30 mill + sales.

[Guest San Don]

I really dont have a problem with this approach. They have paid off the debt that 2 twats loaded on us, 300m quid wasnt it?

 

We splashed the cash we got for babbel and another player and brought 2 very good players with that money.

 

I dont want FSG to turn us into a poor man's version of chelshit or citeh. We simply wouldnt be able to compete on that level.

 

The FFP rules level the playing field. UEFA have got to enforce the rules it brings in.

[Liquid football]

Yeah, we'll definitely spend this summer before the new rules come into play. I just hope that they can be enforced.

[G Richards]

"We can only hope that UEFA had the ability and determination to enforce what they have proposed."

 

Eloquent and gets right to the heart of the issue.

 

As for our spending prospects, we should be more than fine. My guess will be 30M pounds plus player sales. I don't think it is too far fetched to say we should therefore be looking to spend something like 50M in the summer, which should be more than enough to get this team challenging, especially under a man like Dalglish.

[Red_or_Dead]

This man talks sense. We offloaded two strikers and arguably got better ones in return for an outlay of about £2m. I think the wages we'll be paying Suarez and Carroll will probably equal to those of Babel and our former number 9.

[Jonny83]

"Only spend what we make" - correct me if I'm wrong but isn't that basically the law now (if you want to play in Europe)?

 

With the cancers gone we should be turning a profit which can be channelled into the team - I doubt he meant we'll only spend what we bring in from sales.

[ChicagoRed]

Living within our means - without debt - means more money for players. Rebuilding Anfield will cost less and yield a better cash flow than a new stadium - also means more money for players.

 

The best new arrivals this season - FSG and King Kenny!

[AmerScouse]

"Only spend what we make" - correct me if I'm wrong but isn't that basically the law now (if you want to play in Europe)?

 

With the cancers gone we should be turning a profit which can be channelled into the team - I doubt he meant we'll only spend what we bring in from sales.

 

Sort of, i believe there are 3 loopholes in it. first i think you can have like a 5-10 million euro loss over the 3 year period.

 

2nd loophole is a 45 million euro loss of some sort but i forget the reason

 

and then there are loopholes for one time cash injections that can come from the owners that are limited to certain amounts. but they can't be interest free loans, they have to be equity based or something like that.

 

lastly, any debt incurred to upgrade facilities, or build stadiums and shit like that is excluded.

 

i can already see some loopholes for that, kind of what real madrid did a few years ago.

[the walsh]

im still trying to get my head around the new finance rules can you only spend what you generate. as for the owners they will spend big when they think the player is worth it

[Moe Town]

I like this approach of only spending what the Club generates, and they've deffo stepped up to the plate in the transfer window. However, what do the owners get out if it? They must get something or they wouldn't be here.

[Barrington Womble]

there'll be a million and one ways to drive trucks through the new rules. governments have been drafting tax legislation for centuries and still millionaires walk away without owing anything in tax. do you really think some badly thought out uefa rule will be water tight? do you really think if push comes to shove someone won't push it to the european courts for restraint of trade or something similar? it's a load of old shite and henry is virtually saying so there. plenty of clubs will operate outside the rules and nothing will be done to stop them.

[Barrington Womble]

I like this approach of only spending what the Club generates, and they've deffo stepped up to the plate in the transfer window. However, what do the owners get out if it? They must get something or they wouldn't be here.

 

their intention is to increase the value of the club. that's where the profit is. buy for 200m (this 300m talk is nonsense, RBS have issued the figures) and get it valued round where the mancs are.

[The Dude Abides]

Was never expecting them to spend Chelsea or City money. And hopefully this piece will open peoples eyes to that. There seems to be this buzz that we've spent big and that the owners mean business, when they've spent nigh on nothing thus far. But they'll need to invest something in the Summer. As it's imperative that we're back in the CL, otherwise the clubs that are in it, are going to start pulling away with the extra TV money they're raking in. That's the part I don't like about these new rules. Just going to make it harder for any of the clubs around the top four to ever break in.

[Bobby Hundreds]

Clubs will find loopholes to this. They are saying Man city are going to build a theme park and all kinds of shit and put it under the man city earning umbrella. The same for Chelsea Roman will open company's and businesses all made out to look like its revenue made under the clubs name. I can't see how they are going to regulate this. Isn't what you can earn limiting smaller clubs too, how are they ever going to make the step up even if they get wealthy owners.

[Liquid football]

there'll be a million and one ways to drive trucks through the new rules. governments have been drafting tax legislation for centuries and still millionaires walk away without owing anything in tax. do you really think some badly thought out uefa rule will be water tight? do you really think if push comes to shove someone won't push it to the european courts for restraint of trade or something similar? it's a load of old shite and henry is virtually saying so there. plenty of clubs will operate outside the rules and nothing will be done to stop them.

 

Actually Barry, i think you are probably right but the good thing is that hopefully it will keep them all in check well enough. If they stretch the law, we can compete with that. The way i see it is that clubs wont be able to take the piss because it will be too blatant so anything like the spending that the likes of Chelsea + Man City have done in recent years wont be allowed to happen. Maybe it will just end up with all clubs bending the rules to a small degree?

[sir roger]

This man talks sense. We offloaded two strikers and arguably got better ones in return for an outlay of about £2m. I think the wages we'll be paying Suarez and Carroll will probably equal to those of Babel and our former number 9.

 

According to an article I read , Torres was on £130k pw & Carroll is on £80k pw, so unless Luis is on £50k a week more than Ryan was, we should be better off.

 

I think in summer the likes of Cole & Jovanovic will come under scrutiny due to their 'free' transfers costing a bomb in wages.

[Guest San Don]

Sort of, i believe there are 3 loopholes in it. first i think you can have like a 5-10 million euro loss over the 3 year period.

 

2nd loophole is a 45 million euro loss of some sort but i forget the reason

 

and then there are loopholes for one time cash injections that can come from the owners that are limited to certain amounts. but they can't be interest free loans, they have to be equity based or something like that.

 

lastly, any debt incurred to upgrade facilities, or build stadiums and shit like that is excluded.

 

i can already see some loopholes for that, kind of what real madrid did a few years ago.

 

 

Sorry but these arent loop holes and the figures arent even accurate.

 

UEFA know many clubs wouldnt meet the FFP rules if implemented to the full extent straight away. So, for the first 3 years there will be easements followed by further tightening of the FFP rules the following 3 years.

 

Owners cannot inject any amount of cash they like, neither can they sponsor the club for an over inflated price.

 

Yes, stadium upgrades or re builds etc are exempt but, clubs wont be able to hide spending on players under these guises.

 

Deals like what Real did a few years ago most certainly would fail the FFP rules so its a bit daft to suggest clubs could do this and be OK.

 

People seem to be forgetting clubs have to provide certified accounts to trade in this country and others I guess). So, they cannot give players free cars and free houses without including it as a BIK in the accounts.

 

Failure to do these simple things will have HMRC down on them like a ton of bricks.

[Trucker Paddy]

We were trying to buy Adam and Suarez before the rat done what he done, so I don't think we'll be just spending what we earn. Kenny even said the owners where dissapointed we didn't sign more players.

I'd say well spend £60m this summer, we'll take in money for Konchesky Poulsen Jovanivic Aqualani insua Cole, possibly even Johnson if we get a top leftback in.

One thing though I hope we try tie up signings by early July at latest, the Suarez thing dragged out a bit, we need 4/5 players, I hope Cammoli has already started working on deals

[The Dude Abides]

We're going to find it much harder to negotiate with clubs too now after that £35m ejaculation on Carroll.

[18-5]

We're going to find it much harder to negotiate with clubs too now after that £35m ejaculation on Carroll.

 

We will find it harder, especially for attacking players; but we showed that we will not pay extortionate amounts of money for players by not meeting Blackpool's asking price for Adam.

 

With FFP coming in, hopefully the prices will come down a bit. We have barely invested in January so the profits and the Aquilani money could go into the transfer market - which should give us a about 45 million. If the owners decide to back us with some money then it could raise further. Hopefully Comolli will work hard to get players for smaller transfer fees.

[18-5]

their intention is to increase the value of the club. that's where the profit is. buy for 200m (this 300m talk is nonsense, RBS have issued the figures) and get it valued round where the mancs are.

 

It says on the club website that the take over was valued at 300 million pounds and that NESV cleared all acquisition debt (should be around 200-227 million). Sometimes when distressed companies are taken over, debt is cleared and extra cash is injected in the form of equity. If NESV injected extra cash then the valuation could rise to 300 million pounds. It is normally done to allow companies to handle cash shortages or for other investments but I am not sure whether NESV will use that for transfers.

[seven of eleven]

I like this approach of only spending what the Club generates, and they've deffo stepped up to the plate in the transfer window. However, what do the owners get out if it? They must get something or they wouldn't be here.

 

They look at LFC as an assist IE if they reinvest the money into the stadium and playing staff it will incress the value of the club and thus make a profit in long run.

 

This is what they meen by the long game.Long term investment with the club gaining more value they got so much money they don't need to be bleeding money out of club as long as it is assest strong its all in the back pocket for their kids.

 

Also I really feel these guys just love the buzz of winning and imo is one of best aspects of this ownership. YNWA !:yes:

[Unrighteous]

We're going to find it much harder to negotiate with clubs too now after that £35m ejaculation on Carroll.

 

I don't think so. I think it'll be the same as always. We've spent 56m or so and we earned 56m.

 

Balanced spending so far... We haven't done a City/Chelsea and spunked 100m on three players out of the blue.

[barney]

Fair play me arse Roman will just get one of his companies to sponsor chelsea for lets say 100 million each year and they'll say this is incoming revenue and they'll use this money for buying players. there will be ways around this fair play rule wait and see!!!!!