Untold Arsenal: Arsenal News. Supporting the Lord Wenger in all he does » 2010 » June » 14
By Tony Attwood
Well, I guess if we had not won the league for 20 consecutive years you would feel a bit like… a Liverpool fan I suppose.
This summer that’s the figure you would have to cope with, as well as dealing with the 25th anniversary of the Heysel Stadium riot. Not a good time.
You would probably think, as Liverpool fan, “come on, 20 years is enough, let’s start pulling this together now,” and then remember that you came seventh in the EPL last time around and your two best players are openly being touted for moves to other parts of Europe, and you have just spent £6m paying off your manager…
You might also be expecting the owners to be keeping their heads down, what with the lynch mob and hub-cap throwers being out to get them, but that is not the way they do it in Liverpool.
Instead the owners have just announced their ticket prices for next season. They did it very late – much later than that in fact – which probably has something to do with the fact that they announced a seven percent increase all round. I suppose it is in part to compensate for the complete lack of Champs League football next season.
A big part of the problem, as we all know, is Tom Hicks and George Gillett who are like mini-Glazers having kindly given the club £350m debt. What they also did was take the bank money that was to be used to build a new stadium (what was it they said – the work would start within a month) and spent on themselves.
Liverpool also have a cash flow problem. They are the third highest paying club for player wages in the EPL up 18% in 2008/9, according to various stats. Here’s what seems to be one generally agreed list of figures for salaries in the Premier League for 2008/9 with 2007/8 in brackets.
- Chelsea – £167m (£172m)
- Man Utd – £123m (£121m)
- Liverpool – £107m (£90m)
- Arsenal – £104m (£101m)
- Man City – £83m (£54m)
Manchester Prefab have undoubtedly gone up a lot since then (having decided to pay Adebayor about £10m a year), but the Liverpool issue is the key one in that list. Chelsea can pay salaries because they have as much cash as they want. Man U just increase their debt. Arsenal make a profit. Man City increase their debt. But Liverpool have a bank that won’t give them any more money. So how do people get paid any more?
Indeed we can open the question out further: what happens now for poor little Liverpool?
Hicks and Gillett have appointed an agent to sell the club, and their bankers (who now effectively have control of the club since the auditor made his report to the effect that there was severe doubt over the club’s ability to continue trading) have appointed an independent chairman to ensure that the sale happens. He is also there to make sure that money is spent in no way other than on repaying the bank debt – on which the club defaulted earlier this year.
The chairman (actually non-exec chairman to be precise) is a Chelsea fan (how amusing) who keeps missing events at Liverpool because he is off watching Chelsea Prefab.
Meanwhile Rhone Group put in a £100m offer for 40% of the club but the deal was not accepted, and it all fell apart – the problem being for many buyers that such a deal would leave the Americans in charge, and would simply give money straight to the bank. RBS is owed £237m and they demanded £100m of that back a couple of months ago. It wasn’t paid and it is said that a six month extension on the payment was then given.
If that is so, then Liverpool are alive only until the end of this year.
But Hicks and Gillet will not walk out without money. The money in question is the £300m they borrowed to buy the club, plus their additional spending of another £30m after that.
There was an effort made to cut the debt down last year, and it probably now stands at £237m. But that doesn’t reduce the price the owners want, because the money they put in was their own money, and it was put it to shut the bank up.
Thus the question is – if you would like to buy a club that has not won the league for 20 years how much should you pay? £400m would get rid of the £237m bank debt, and pay back the £130m that it seems as if the Americans have put in of their own money (in total) to keep the club afloat, which means they could walk out with £33m profit between them.
The trouble is it looks as if the Americans would not settle for such a mere little teenzy profit.
The problem is, the only solution overall for Liverpool is to become the Arsenal of the North. They need a new super stadium that makes them big profits, they need a completely refurbished Academy (which as we have seen at Arsenal can take up to ten years before it starts producing results on a regular scale) and you need a board that will wait and take any victories en route as a bonus.
But Liverpool have entered a full period of decline, and no one much, apart may be from Untold (clever us eh?) was actually talking about a serious collapse of the club two years ago.
And it is not just £400 (even if the Americans accepted just a little bit of money each). Let’s say they hold out for £450m. Then there is another £300 to build a ground (allowing that some local hub cap company would buy the naming rights). They you need money to buy a new squad, and money to start building up the Academy structure. You might want a bit of world-wide scouting too.
So £450 for the club, £300 for the ground, £100 to cover other debts that pile up meanwhile, and all those nasty banker fees – and all without Champs League (not just because they are seventh in the league, but because of the new Financial Doping regs, which would prohibit entry into the Champs League during the refinancing period.)
£850m anyone?
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