Absolutely. I don’t even remember the story/news clearly. Apparently in Thailand you have to pay the military and government official big bucks to own/operate big projects and in return they sort of help you to operate smoothly to recoup that money.
Even with small businesses, projects you can be expected to too.
I think the owner was close to Thaksin, but also to other governments.
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We hoi poloi won’t get to see the details of the accounts until probably this weekend, but what alarms me most from James Pearce’s report in the Athletic is that the level of our external debt had risen from £50 million to £198 million.
We don’t yet know the scale or scope of the new facility agreed with Nat West in January 2020, but if £198 million of our availability had already been used by the end of May 2020, there will be precious little left over for new player acquisitions come this summer.
Overall, the pre-tax loss is a lot higher than I was anticipating/predicted, however I had not factored in an increase in player wages of £32 million which presumably / predominantly relates to bonuses paid for winning the Champion’s League just after the end of the 2018/19 accounting period. It is unlikely that wages will fall much if at all in 2020/21 either as any bonuses paid for winning the Premier League will be reflected in this years accounts.
Obviously the deferred TV payments and improved commercial revenues due in the current financial period will dull the pain, but given the complete absence of Matchday revenue, the projections for this season’s financial results are looking less than encouraging.
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Yeah that debt figure is disconcerting. We didn’t take any loans for our operations. What was the debt for? The AXA Center! The stadium expansion plan!
Debt will be for the training ground won’t it?
The final payment for the training facility is widely reported to be £25 million, so some of the increased borrowing might have been for that, however that still leaves another £123 million to account for.
As the stadium expansion plans are on hold I doubt much would have gone in that direction.
Consequently I suspect a good deal of the borrowing will have been to cover day to day operating expenses.
No doubt all will be revealed when the accounts become available this (?) weekend.
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I wouldn’t have expected that. Construction started half way through the financial year before and didn’t finish till halfway through the financial year after. It’d be strange if it was nearly all paid before this set of accounts, especially as they end 6 months before the Construction finished.
Could we just have borrowed so we had the cash ready to deal with the fall out of covid…
It’s been reference a few times that the investment by Red Bird was to cover the covid losses, could they simply help FSG “cancel” the loan?>
OK, two questions
- I thought the borrowing for the training facility was internal, I could be wrong though.
- We heard about the borrowings by Spurs etc. why didn’t we hear about ours?
Spurs borrowed money from the UK government, looks like we used our existing credit facility or an inter-company loan from FSG.
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The accounts are yet to be available on the Companies House website, but according to James Pearce and reports in the Echo, £25 million was spent on the training ground. Based upon the previous accounts (2018/19 Note 10 Tangible Fixed Assets - Assets under construction) this would roughly equate to the final stage payment for the facility.
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I doubt it. The previous revolver facility with the bank made the money available to draw down as and when required; so there really would be no point drawing the money until it was actually required.
It could be, but we won’t know until this season’s accounts are published next year.
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Up to 2018/19 all the money for the new training facility had been generated out of Liverpool’s turnover. There was no increase in the inter-company loan used to cover the Main Stand development.
Spurs borrowed money from the Government; I don’t believe we availed ourselves of that facility.
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The accounts are terrible… let’s have some more protests, only this time, to reconvene the ESL!
On a more serious note, the whole football world is affected by covid, but I expect us to fare better than most, relatively speaking. The debt is concerning, and I would imagine the bulk of it will have been to pay day to day running costs, because a massive covid shaped hole has opened up in our finances. Yes, training ground too, and maybe some Anny Road costs in the pre-stages of that project.
The issue for us is going to be how oil clubs manage to navigate covid, because if winning the Prem and the CL again is the target, that’s who we are going to have to compete with.
I live in hope that we can still sign players to refresh and strengthen. Kabak, Konate, Bissouma and Sancho would be ideal, as Mascot suggested the other day. Put me down for that too. But I fear we might be a long way short, financially speaking.
I actually feel that it’s times like this that the owners will actually double down to protect the asset.
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I hope so. That’s the sort of thing several have been saying over the last month or so. Not reckless spending that would jeopardize things, but brave spending to make sure we have every chance to stay in and around the top.
The way I see it is that the greater risk is in being too cautious at this time, rather than in finding a way to loosen the purse strings enough to refresh the team and squad meaningfully.
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Yeah I think we are in a dangerous spot. The league is more competitive than ever, there’s no easy way back into the CL. We either fix issues so we can do it or we slowly build back up to it again. This season could set us back another two (three in total including this one). By the time we are competing for top honours again Klopp could be approaching the end of his time here. Most of the squad will have either moved on or be winding down too meaning a lot of bodies to have replaced or needing replacing by that stage.
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Exactly, timing is important in all this. If we are resigned to building it slowly again, it may never come around, or at least it could take a long time, as taking that last step is the hardest.
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And cost us in the end anyway. All the cautiousness shouldn’t hide that stepping up and paying world record fees for defenders and goalkeepers is actually probably one of the more important factors in getting us over the line.
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Accounts are here
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