They still 100% own us but have been invested into by Redbird Capital looking for a foothold into a top football side to the tune of over £530m (plus smaller stakes like LeBron James):
So despite owning us 100% and not selling any portion of us they’ve made a profit on their money they used to purchase us, we’ve ran at a profit during the time they’ve owned us and they’ve hardly financed the increase in valuation of LFC at all. They’ve managed us incredibly well and we should be relieved they are good owners but it is for their own benefit.
On declaring a loss for FFP purposes a lot doesn’t have to be taken into account, particularly infrastructure costs which we’ve had a lot of with the training ground and stadium. FFP reporting period in question I’ve seen estimates of us needing to have declared a loss of as much as £200m this year before we would have got into any issues with FFP. Certainly well within the first years costs for buying that CB that Klopp asked for and got rejected on (and no Kabak on loan and a speculative punt on a Championship player are not what Klopp was after before more posters make wise cracks over my memory).
To who? I’m not sure cashflow is king when you are talking hundreds of millions in valuation but our cashflow isn’t that bad. We’ve got a £200m cash facility to use when needed and not anywhere near that limit.
What? I can’t even understand what you’ve written? Our valuation is hundreds of millions but our cashflow isn’t that bad? What does that even mean?
Having studied finance and run a business I can assure you that cash is king. Paper profits and losses are only useful in manipulating when you pay ttaxes, now or later.
And what is this 200m “cash facility”? Do you mean an overdraft? Do you know what overdrafts are for and what the premiums on interest rates are for those?
EDIT: (1) and before you say “then why do companies prepare a P&L”, it’s because it allows you to view what happened to the company’s position the previous year to this year. Balance sheets show a fixed point of time while P&L statements show a period and go into the retained earnings of a Balance sheet.
(2) the idea that John w. Henry who created algorithmic models for trading in the eighties knows less about financial management and buainess management than a punter on an internet forum is laughable. He may not know as much about football but certainly wipes the floor with any of us in financial understanding.
He does. And he seems to care about profit and loss hence LFC having to try to “live within its means” by not declaring losses despite what the cash situation is.
Our profit and loss is what guides what we can do as that’s how FSG and FFP have decided that we need to run.
But we have absolutely no issue on that front:
We have £232m available cash, should we need it, as per accounts;
No that’s not what living within our means is at all. It’s about ability to match cash outflows with inflows. You can’t simply point to a reputable source, misunderstand what they’re saying based on your rudimentary knowledge of a subject and announce they agree with you.
Also the 200m is a banking facility for working capital purposes!!! Do you understand what those things are? You legally cannot use a working capital facility for other purposes. And short term facilities like working capital loans attract much higher interest rates than term loans for capital investments unless there’s something wonky about the business’ credit profile.
I advocate scrutiny of the Owners, we can never rest on our laurels, but this is not fair scrutiny. It’s criticism because they were not willing to mortgage the club during uncertain times because they either weren’t nostradamus or lucky gamblers; in circumstances where their decision not to do so has been vindicated.
This still doesn’t explain why we couldn’t have just posted a higher loss. Or why we couldn’t use the cash reserve we had. If you’re so fixated on cash. We were in a good position to win trophies that season even up till the end of January. We also certainly put the next years financial CL income amounts at risk by not acting too. But personally I would have welcomed us paying our debts (existing or otherwise) slower in exchange for a chance to have added silverware last year, particularly the chance to retain the league, we were top when we got to January. Even if it meant paying more in interest or declaring a bigger loss.
How would they have had to mortgage the club? Why do people keep on having to take it to this extreme to dismiss my points?
Certainly by January if they weren’t aware what the financial picture would be they really aren’t the great businessmen we know they are.
And what vindication? Finishing 3rd? On New Years day that year still in CL and FA cup and sitting top of the league is that really what you’d have been willing to accept? We barely scraped the absolute bare minimum that season due to favourable outside circumstances that were outside our control. But we could have still won a major honour.
I don’t get what you’re saying. Are you saying why didn’t we post a higher paper loss? What does that have to do with anything? Or are you saying why didn’t we spend more cash on players? If it’s the latter then it has been explained many times before to you, there was no way for the club to guess how the pandemic would turn out in 2020/2021. Nor how well the vaccines and economic stimulus would pan out. It would have been incredibly rash to spend a lot of cash when there were doubts about the viability of the business.
I’ve already tried to explain to you that our so called cash reserves includes working capital facilities which cannot be used for player purchases.
Also as someone else pointed out we did bring Ozzie Kabak in Jan 2021 window. The club wasn’t workin with blinders on.
This isnt Football Manager or FIFA where you can simply buy or sell players with a click of a button. This is real life and these are real human beings. You need to find the right person and that takes months and years of scouting and assessment. Jan 2021 was clearly not the right time to go all in so the club took the cautious step of bringing in a loan player.
You seem to assume that winning every year is the normal state of affairs and anything other than that is a failure. That’s simply not true nor realistic. You need to enjoy other things about football and the club otherwise you’re ij for a torrid time.
Imagine your meltdown when Klopp inevitably leaves in 2 seasons and we spend a few seasons struggling to make it into the CL. This is a given, its the circle of life and football.
The £200m cash reserve you mention is a credit facility, which we’ve already dipped into.
Blimey. They ought to have been able to predict Beta Covid, Delta Covid, Omicron Covid and exactly how effective vaccines would be? How soon spectators would be allowed back and in what capacities? If not they “aren’t the great businessman we know they are”?!
That would place them as not only great businessmen but also the world’s greatest (/most prescient) immunologists and epidemiologists.
You must lower your expectations, they are thoroughly unreasonable. If you don’t you will always be disappointed.
Yes we could have, well within FFP and for FSG to still be standing at a profit for their ownership period. Why save for a rainy day and not then be able to use it. We stand at a £50m loss for the two COVID years but £200m profit for the previous 3 years. Why could we have not declared a larger loss?
Even for an absolutely top end CB we’d be talking less than £20m outlay in that first financial year in wages (which had gone down) and any initial payments.
By the start of that financial year they should have been able to sit down and work out what deals would still be paid to us in full, if any were lower due to no live crowds, what we made from fans attending games etc. All of this would have been known and an accurate financial prediction should have been available to them by then even with fans not attending any games. Certainly by January more than half way through the financial year they should be aware where they stood.
The vaccines and variants are moot, during the financial year in question they’d have known the cost of not having fans in the stadium for that financial year and what that meant financially to our club and their business as a whole (keeping in mind our club is actually treated as a separate entity from their other concerns).
They don’t have to be. Unless you go for the option of keeping all the rest of the accounts 100% as they were and specifically trying to then pay for that player from those funds. We know that isn’t how it works.
That’ll be the Ozan Kabak we wouldn’t buy, wouldn’t loan if it was an obligation to buy instead of option and wouldn’t trigger that option? The one sitting on the bench at Norwich? I’m not sure why people think that was giving Klopp what he wanted/needed?
Nobody knows the work our club are doing in the background. As we ended up making bids that January (once Matip joined the injury list) we obviously did have deals ready to go. It’s not ridiculous to think at least one of those deals could have been completed if we’d started trying to sort it earlier.
Theres no assumptions BUT people keep saying we were ok that year because we finished 3rd. Start of January, in fact even the end of January, we were still in a strong position to challenge for retaining the league. It wasn’t a given that we had to end the season without any silverware. We have no god given right to trophies but we ARE one of the best sides in the world with a world class manager. When we are in a strong position and the manager, who has been incredibly thrifty, asks for reinforcements as Shanks said they need to sign the cheques. When the reason given not to is our finances, then they turn out not to be the clusterfuck made out questions should be asked.
We’ll struggle with this operating model without Klopp yes thats the sad thing. Being a club with some incredibly high revenues and low debts, with wage bill well in hand, that shouldn’t be the case though.
