Topic: FSG - are they living up to their own billing?

[Reds and Revs]

I'm Boston born and a Liverpool fan since 1977 when they started showing one cutdown First Division game a week on public television.


I'm satisfied so far. FSG has bought a lot of goodwill from me for their dealings with the Red Sox.


I think Henry et al will be evaluating the last transfer decisions, and how they were made.

I think they are probably slowly coming along to a better understanding of the game, and will probably have their own ideas over what fox in the box would have meant for us this year., what Lucas or Gerrard have meant to add another level of analysis to that "value regression chart". I think they are looking to marry science with the art of understanding the game including what statistics might mean crap.

The stadium is the real question. What comes first, the CL or the stadium? After H&G, I'm willing to wait out a measured plan and plowing revenue into class on the field first. If Liverpool wins, I'm confident FSG will leverage global revenues, and the stadium will come.




 

[Abrak]

A few points.

1. Transparency is a difficult issue for the owners for a number of reasons.
a) Take the stadium for instance. We do not want false promises, need to know the stat of on-going negotiations that might fall through. We only really want to know once the owners have something acceptable workable viable in place.
b) We are simply not interested in their views on Adam's long ball passing abilities.
c) Clearly we expect them to express their views on the manager and management
d) Finally I have no problem with 'it will be a disappointment if we dont reaach CL'. It clearly indicates they sat down with DC, KD etc before the beginning of the season and asked them what they needed in terms of resources to reach that goal and that they provided them. Obviously there might be some disappointment that we did not get as much value for money as expected at the same time I expect there was some surprise that Spurs achieved so much success with so little investment.

2) I believe the issue of DC and KD providing two different 'voices' for the club has largely been resolved. DC was much higher profile in the earlier days. However, he quickly learnt that KD was far more experienced, astute, coherent and likeable at handling the press and has basically left the job up to him. There is the occasional small low volume background noise coming from Comolli but it is generally harmless and supportive.

3) I do believe in the 4 square model that Henry talks about. What we learnt with H&G is that if you have 'bad' owners who run the club in their own self interests, they do not benefit, they merely destroy the club. The same applies to supporters if they run the club in their own self interests at the expense of the owners, they will merely destroy the club as it will go bust.

That is why the German model works so well the supporters are the owners so the owners and supporters work in each others mutual mutual best interests. And when that happens they find in Germany that the owners dont have to finance the club because it finances itself. The supporters dont have to pay full price for their tickets because they dont have to finance the stadium because the business is largely financed by the sponsors.

So I agree 100% we need to analyze the accounts in the future. Off pitch performance has let us down badly in the past. But there is a word of warning. Our next set of results are going to look truly horrible. This will be down to a large number of one-off exceptional costs. I suspect they will be such a mess that it will be difficult to see our true underlying financial picture within them. And when you consider that H&G left the club with a reasonable number of longer term liabilities in terms of older players on long term contracts it will take 2 to 3 years to get the club into reasonable financial shape again.

[new-red]

It is really all about this summer for me at this point. To strengthen the squad with the right 2 or possibly 3 players then they are gonna have to spend around 60m. And that is without selling any key players. The likes of maxi might go but the squad largely has to stay intact.

If we get the right players then I'm very confident we will get top 4 next year and that will go a long way to getting us back into title contention for the forseeable future.

[Hij]

I hate to be simplistic, but if they don't sack Kenny and they fund him again for another summer I will be happy personally. I remember them promising a net spend based on what we made, regardless of where we finished (obviously a CL finish would be more) so if we keep our expectations at the right level and they meet them, I'd be hard pressed to fault them thus far.

It certainly makes a change from expecting to sell a couple of our best players. I'm personally not that bothered with last summer (and January), we didn't sign any world beaters apart from Suarez, but we have a squad I think that is worth a lot when it comes to the sum of their parts, and with a couple of very very good additions, we aren't too far behind.  The worst pessimist would be hard pressed to say that we haven't performed well at parts, but the best optimist would be hard pressed to say we have scored enough. If we can find the players to help us convert possession into goals, we are not far away at all. No need for massive shake ups.

I can't lie, I've had too much to drink to read the entire first post as it was quite long but I will do tomorrow after my lecture, but just based on instinct, we seem to have owners who want us to win. I'd rather have owners that want us to win, than owners who want us to pay £30m interest on loans they used to buy the club. And while we can't have the new owners take us for mugs, we have to keep expectations realistic compared with where we were, and I think we are much better off to be honest.

They need to be held to account, as owners after the last they must expect that, we can't be taken for fools again. But they must not be unduly pressured for mistakes they haven't made yet. A net spend was made in summer regardless. A cup has been won, a quarter final is on Sunday. We are not challenging for the league, but the squad is on the way to being a very adept squad, let's not forget that. I'm quietly confident with how we are going even though I feel on my own most times. Let's move a couple players on like Joe Cole and Aquilani and we'll save a lot on wages, then maybe Maxi or Kuyt and plus a decent net spend we could have a team that looks so much better simply with a pacy, tricky right winger and another striker.

If 4th was the target and Kenny Dalglish is sacked having only had a year and a half, then I'd be more worried if we were transforming into a short term Chelsea. I think I am on my own, but I am more happy with progress, which many of you dispute, but a first season of the team playing well but falling just short in terms of goals, a trophy, and a quarter final and possibly more, is better than finishing 7th after climbing from 17th, with fuck all to show for it.

We sing about climbing a hill, but are we willing to climb it?

[Abrak]

Well there's many ways to run businesses well and it's not exactly unheard of for people to invest in businesses in order to build their value.

I'm absolutely fine with us living within our means and having no outside money but if that's whats happening from day 1 with FSG then there's a disconnect between a) the perception of what they've invested/spent and b) the expectations on the pitch

When they came in we were in horrible shape on the pitch and in decline.
There needs to be some realism of what we can achieve if this is the business model its going to take several years to close the gap on the top 2 or 3 clubs - which is probably the way it has to be but they need to make it clear this is their expectation. It won't do to not invest and then expect massive improvement or the CL in a single bound

Jack,

A very good and interesting point you raised there.

Perhaps I could put it another way. If FSG are serious about us potentially winning the Premiership within 5 years and building a new stadium, we realistically need say around 200m of new equity investment. The exact amount is debatable but the chances of doing it with 0 is very small. You really need 100m for the new stadium so that when it opens the additional cahs flows can feed through into financing an improved team rather than paying down short term debt like the Emirates. And realistically the team needs considerably more spend.

And when I talk about 200m of equity, I am not talking about sponsorship deals on the new stadium.

The question is can FSG come up with that sort of money and how? I believe they can and quite simply.

What they need to do is build value by making our financial model more efficient. It doesnt have to make money, it just has to be self-financing. They obviously need to maximize our commercial revenues (actually we are doing a pretty good job here). We have a long way to go on restructuring the wage base. Obviously you dont have Carraghers on the bench at 90k a week, subsidize Cole 60k a week to play for another team etc.

Once the business is self-financing and at breakeven it will be worth 600-1000m - Arsenal is worth 1100m and they lost 15m before player sales last year.

Now the simple 'trick' to win the League is that rather than finance everything from your annual cashflow of say 30m (which might go into buying new players to build a team) or in (Arsenal's case to paying down short term debt that financed their stadium) you accelerate the process by issuing new shares to a new investor. Say the business is worth 800m you issue 30% more new shares for 240m. Now the club is worth 1040m but it is simply the same 800m club but with 240m of cash. FSG now own 70% of 1040m club which is still worth 800m but it is a club that can now win the PL.

So I think it is almost a statement of the bleeding obvious that we cannot self generate enough cashflows from our current impoverished state to stand a realistic chance of competing at the highest level. I am sure Henry can see that. I dont think he thinks he is a magician. Henry is a hedge fund manager and what do hedge fund managers do? They create value and make more value by leveraging that value.

And look the plan is that FSG doesnt put in the money, the supporters dont put in the money and you use other peoples money to pay for everything. Just like Germany. It would seem like a good plan to me.

[Abrak]

If 4th was the target and Kenny Dalglish is sacked having only had a year and a half, then I'd be more worried if we were transforming into a short term Chelsea. I think I am on my own, but I am more happy with progress, which many of you dispute, but a first season of the team playing well but falling just short in terms of goals, a trophy, and a quarter final and possibly more, is better than finishing 7th after climbing from 17th, with fuck all to show for it.

We sing about climbing a hill, but are we willing to climb it?

Let me reassure you about Kenny's position. Here is a famous quote from John Henry.

It’s important to have a plan, remain disciplined in executing that plan, and pay attention to what is actually happening rather than what you expect to happen. We try to be as objective as possible in our analyses… It’s not always easy for people who are involved every day to stay with a plan when misfortune occurs for a time. You always encounter the unexpected and this can push discipline right out of the way in the name of prudence. But prudence almost always dictates staying with the approach that has made you successful. I see that as one of my primary roles. I often encourage everyone during difficult days to remain patient. I don’t blame people for the unexpected.
John W. Henry

[DanA]

FSG did their investment when they paid down the debt. That's a gift that keeps on giving to the tune of 30m a year. We've signed much improved sponsorship deals in Warrior and Standard Charter which you'd think would lead to significant investment at some stage.

The above quote about Henry's role I think is fantastic. Put in context to the Liverpool situation he won't accept Hodgson mediocrity but he will accept that Kenny's team is playing well but not banging in the goals despite the quality of play as this is unexpected.

It also means that he won't make knee jerk reactions on our signings. I'd expect us to continue down the path of reducing the age of our squad rather than replacing those already replaced.

[Abrak]

I hate to be simplistic, but if they don't sack Kenny and they fund him again for another summer I will be happy personally. I remember them promising a net spend based on what we made, regardless of where we finished (obviously a CL finish would be more) so if we keep our expectations at the right level and they meet them, I'd be hard pressed to fault them thus far.

It certainly makes a change from expecting to sell a couple of our best players.

One area I do believe could be contentious with our new owners is their attitude to selling some of our players.

I do believe we will get funding this summer but it wont be from our cash flow because their wont be any. But they will have planned for that. But I suspect it wont be a lot - say 25m.

Now I have a feeling that it is 'possible' that we might sell Johnson in the summer. I say possible because you can think of a rationale. A lot of people will disagree and the timing might not be right. But it is worth thinking about.

You see the reason you can justify selling Johnson is that we have an embarrassment of riches at right back. We have Kelly, a potential future England international and Flanagan, who has been called up for U21s, and impressed when he has played in the full team. Johnson is coming up to 28, which is a good age to sell and Kelly is just 21. If Kelly is good enough to replace Johnson and Flanagan good enough to back up Kelly, we dont really need Johnson that much and we could put the proceeds from his sale to better use.

War chest 25m

Maxi leaves - free - 50k wages
Kuyt leaves - 5m  - 80k wages
Cole leaves - free - 60k subsidy
Aquilani leaves - whatever owed - 30k subsidy

Total 30m to spend - 220k wage savings

Johnson sold - 15m - 90k wages

Total 45m to spend - 310k wage savings

So ok you have weakened your right back position a bit but you have a young pairing there that will set you up for the next 5 years. You also have some serious money to spend on replacements for Maxi and Kuyt as well as additional wages to renew contracts possibly for Suarez to stay. It doesnt really make sense to wait until Kelly is better than Johnson before relegating 90k a week Johnson to the bench.

[Abrak]

FSG did their investment when they paid down the debt. That's a gift that keeps on giving to the tune of 30m a year. We've signed much improved sponsorship deals in Warrior and Standard Charter which you'd think would lead to significant investment at some stage.

The above quote about Henry's role I think is fantastic. Put in context to the Liverpool situation he won't accept Hodgson mediocrity but he will accept that Kenny's team is playing well but not banging in the goals despite the quality of play as this is unexpected.

It also means that he won't make knee jerk reactions on our signings. I'd expect us to continue down the path of reducing the age of our squad rather than replacing those already replaced.

I think you will find the situation with Hodgson was rather simpler than that.

You as Henry says - you have to have a plan. Now in order to execute a plan you have to a management team in place. Once the owner of a team appoints a manager it is the owners responsibility to back that manager.

Now when FSG took over LFC they had no management in place whatsoever. They could have appointed a manager and told him to damage control while they put a team in place and then they would start investing (not great) or they could throw some money at him and hope it went well (not what is called much of a plan).

So Hodgson served a very useful purpose because they did not appoint him. Their stock phrase was something along the lines about not knowing enough about football to have a view on him (while I'll bet they had a view on him before they entered the building.) He was an 'interim manager'. Noone expected or wanted them to back him with their money. That gave them the breathing space to appoint the DOF, Ian Ayre etc. I am sure they would have liked a bit more time but things spiralled rapidly downhill. They appointed Kenny and immediately backed his appointed with funding.

But you are absolutely right about the age thing. If your main goal is to come 4th why would you go around paying premium prices for 21 year olds?

[ThisIsMickey]

Let me reassure you about Kenny's position. Here is a famous quote from John Henry.

It’s important to have a plan, remain disciplined in executing that plan, and pay attention to what is actually happening rather than what you expect to happen. We try to be as objective as possible in our analyses… It’s not always easy for people who are involved every day to stay with a plan when misfortune occurs for a time. You always encounter the unexpected and this can push discipline right out of the way in the name of prudence. But prudence almost always dictates staying with the approach that has made you successful. I see that as one of my primary roles. I often encourage everyone during difficult days to remain patient. I don’t blame people for the unexpected.
John W. Henry

Fantastic quote that

[amoh]

One point I'd just like to quickly highlight - without it turning into a Local v OOT debate:

How can the club justify increasing ticket prices in the midst of the economic climate, in a predominantly working class city?

FSG say that they understand the ethos and culture of the club - rising ticket prices will do nothing but freeze out the more traditional support.  Is that really displaying an understanding?

Ticketing is as big an issue as any new stadium or redevelopment.  At some point, genuine discussions have to take place between supporters and those at the club who consistently skirt the issue.

[No666]

...

The business about Johnson is an interesting point. At what point does so-called Soccernomics *wince* dictate what happens? You could have a situation in which Dalglish wants to keep Johnson, but the business management believes it is the optimum time to sell: who has the final word? Despite all the talk of transparency, we have no idea. And although Kenny is their ideal manager in that he will keep quiet and always subsume his own reputation/ego to the benefit of the club, he is the one who would carry the can for the lack of an experienced right-back.

[royhendo]

As if on cue from Ian Ayre: http://www.liverpoolecho.co.uk/liverpool-news/local-news/2012/03/16/liverpool-fc-and-everton-fc-chiefs-ian-ayre-and-robert-elstone-reveal-thoughts-on-future-of-both-clubs-100252-30548720/

[Everton's Robert] Elstone ruled out redeveloping Goodison Park as unaffordable and Mr Ayre said the Reds were looking for a responsible way to add 20,000 extra seats to their gate receipt. Everton is currently searching for a new home and Liverpool is mulling over whether to build a new ground in Stanley Park or redevelop Anfield.

...Ian Ayre believes Anfield represents one of the best stadium atmospheres.

“People are more interested in what happens on the pitch. It’s not to say that the other things are not important.

“It is about finding the right solution that keep the great heritage experience and atmosphere and finding the right thing for the future. It’s not so easy a challenge.

“We have to have the right economic model.

“Our sweet spot is around 60,000 to 65,000, because we don’t want empty seats.

“We already have 46,000 seats, and those extra 20,000 seats are not going to generate hundreds of millions.

“If it meant we were writing cheques for that rather than the team people will ask why.

“We have got to do it in a responsible way. If you don’t do that you can get yourselves in all kinds of trouble.

“The board are very focused on it but conscious of the fact it has to be the right economic model.”

Robert Elstone said: “I agree with what Ian said, the most important thing is the atmosphere and the experience, so maybe we have got the recipe for a share.

“Chelsea FC recently did some work about the challenge of redeveloping and staying at Stamford Bridge, and it said their capacity would go down.”

He said the London club had been told it would be hugely complex and also cost £600m.

“There are similar problems to rebuilding Goodison.

“The only sensible option is land acquisition. I genuinely believe that the redevelopment of Goodison is not a realistic option.”

He said ideas to redevelop the Park End would still leave the other three sides of the stadium in desperate need of updating.

“We have to look for a new site and use the Kirkby funding model which involved 40% to 45% of the capital cost coming from retail uplift subsidy.

“I don’t think there are a shortage of sites, I believe there is a shortage of funding.

“I think our optimum capacity is around 50,000, which generates an extra £5m [a year]. That means its tight, it needs a great naming rights deal or subsidy, or probably both.”

To say that article's interesting is an understatement.

[Dr. Beaker]

To say that article's interesting is an understatement.

Looks to me like we'll be staying as we are for the foreseeable future - no criticism implied there, this is a devilishly difficult and sensitive problem with no simple 'please everyone' solution.

Couldn't make sense of the Chelsea bit though - can anyone explain.

[Zeb]

Couldn't make sense of the Chelsea bit though - can anyone explain.

Scale of the redevelopment required there meant that their board reckon that increasing capacity to 55k wouldn't actually cover the cost of doing it. The other option was to bulldoze and do a new build but their board reckon that it would cost in the region of £600m and need them to find a temporary home for 3 years. So neither option was suitable in their board's opinion. Was done as a presentation to try and persuade the Chelsea Pitch Owners to sell the land Stamford Bridge is built on back to the club so they can use it to help fund a new build on a new site.

[It's Jimmy Corkhill]

Already replied over on TAW, but that Ayre article seems to suggest that FSG have ran out of ideas in terms of the stadium. Worrying considering that, in my opinion, the success or failure of FSG here is dependent on us getting more seats, as they are unwilling to inject their own funds, meaning we are reliant on generating our own funds.

Worrying.

[Manila Vanilla]

Couldn't make sense of the Chelsea bit though - can anyone explain.

I think it's Everton saying, "You may be looking at redeveloping Anfield but it may be more expensive and complicated than you think. How's about a groundshare?"

People are now realising that a new stadium build is hugely risky and isn't a licence to print money. That's probably what put David Moores off. People get fixated on the extra revenue it would generate, looking at United and Arsenal, but it may possibly just about pay for itself over twenty-five years. If all goes well....

You're not going to be able to charge London prices. The stadium capacity would be less than United's average and you won't fill it for Carling Cup, midweek against Wigan or Europa League. United are advertising in the local press and dropping circulars through letter boxes now.

The most lucrative financial model is just to keep adding 15% a year to ticket prices until supply and demand match. If you can get some of the season tickets out and  more hospitality in, all the better... It would be an interesting display of transparency if they brought these issues to the fore!

Good opening post, Roy.

So far, they've done as well as could be expected. They've kept in the background and only intervened when real PR damage was being done (meaning a possible problem with sponsors). They haven't broken any promises.

We can't really be sure of their stewardship until we hit a problem. I've always believed that football clubs are lousy investments and can't believe that sensible men would sink in £300M that could be lost. G&H transferred the interest payments but John Henry doesn't even seem to be doing that. It would be interesting to know how they intend to cover themselves should the investment fail.

[TipTopKop]

I don't think it's unreasonable to expect them to get started on the stadium (relocate, or renovate whatever).

It's definitely a difficult issue, but football is a business, one that moves at a million miles an hour; what is worth £1 today is worth £100 next month, and a £1000 next year.

This club has been guilty of dithering in the face of decisions, and historically has sat on it's arse when it came to evolving or making decisions -we didn't get frozen in time by accident.

FSG has been here long enough to have made a study case of each option and should at least be gearing themselves to choose something, bear in mind whatever decision is made today means we'll be a good 2 to 3 (more ?) years 'till we see it completed, so all the continued ermmm and errr on the topic by them is -to me- unnecessary at this stage. Yes, it's a tough decision, we get it, but you have to choose one, so let's get on with it, and if this counts as a criticism on my part, then sure, count it as one.

With regards to the commercial aspect, and other business, FSG are doing relatively well, nothing amazing, but nothing bad either, as montysmum said this summer we would hope to see some activity, but on the whole they have been good.

It's needless to compare them to G&H because these idiots were not fit and proper to own the club in the first place, but it is important for FSG not to fall into the David Moores' habit of constant inertia as a means of showing 'stability', and instead to look across the league (and personally to me, across Europe in general), and it is critical to make a decision (any decision) on the stadium and go with it.

Thoughtful and informative OP by the way, Roy.

[cgahan]

Can't really grumble as to their track record to date. But I'm cautious. They got the club for peanuts. So throwing money at players in an initial splurge is really not that big a deal. It's like getting a new Porsche 911 for £10k and spending £1k on new wheels. I think the acid test will be this summer's transfer window. Do they have the money to invest in the level of player we need to get into the top 4? Do they have reservations about giving KD and DC more money? Will they look to offload before they spend? Also, can we attract the standard of player we need?

Not sure where to start on the stadium...we're still going round in circles

Commercially, I think it's obvious we're improving

[Abrak]

The business about Johnson is an interesting point. At what point does so-called Soccernomics *wince* dictate what happens? You could have a situation in which Dalglish wants to keep Johnson, but the business management believes it is the optimum time to sell: who has the final word? Despite all the talk of transparency, we have no idea. And although Kenny is their ideal manager in that he will keep quiet and always subsume his own reputation/ego to the benefit of the club, he is the one who would carry the can for the lack of an experienced right-back.

Actually if you plan things right, the decisions should all be footballing ones in reality. It does however need a dose of economic logic and perhaps a little less emotion thrown into the equation. You have to realize that if you end up with your full back on the bench for two seasons earning 90k a week you have got yourself in a position that you shouldnt have been in, in the first place and was , incidentally entirely predictable.

And the entire point about Johnson is not that 28 is the optimum age to sell a player (although statistically it happens to be) because it doesnt matter at all because you dont know if it is a good sale until you have got a replacement. Now we have a replacement in Johnson which is Kelly and we have back up in Kelly with Flanagan. But selling Johnson is going to come at a cost to the quality of our right back position in footballing terms. And it is only Kenny who can really say how much that is. He may say wait another year. He may say, if we get a really good offer. He may say no way. And he also knows well whether the extra money could be put to good use or not.

There is no such concept as an 'optimum time to sell'. If you sell a goalkeeper at an optimum time and you dont have a decent replacement any gain you make by selling at the 'optimum time' will be lost by having a shitty goal keeper. So it is all about the best footballing decision being the most efficient business decision.

[royhendo]

BTW, Zeb, Abrak and co, thanks - some thought-provoking posts.

[Manila Vanilla]

They got the club for peanuts.

This is another myth. It would support the "epic swindle" argument.
Gillett and Hicks got the club for the same price and, by making the investment pay for itself, took us to the verge of bankruptcy.

Any investment should pay for itself. Would you put all of your pension fund into an asset which only broke even when it was performing well (regular Champions League, etc) and never paid a dividend? The argument seems to be that, if it doesn't work out, you just sell it on to an even bigger fool at a higher price.

The main financial argument seems to be that horrible "leveraging" word used by Tom Werner. As part of a portfolio a football club can attract publicity for the other profitable businesses. Werner talked of leveraging the brands and, as I understood it, trying to persuade loads of Asians to become as obese as us by eating Dunkin' Donuts...

[No666]

Already replied over on TAW, but that Ayre article seems to suggest that FSG have ran out of ideas in terms of the stadium. Worrying considering that, in my opinion, the success or failure of FSG here is dependent on us getting more seats, as they are unwilling to inject their own funds, meaning we are reliant on generating our own funds.

Worrying.

I didn't read it as running out of ideas so much as that they would prefer to redevelop Anfield and are continuing to drip this truth upon the stone that is our council.

[cornelius]

Now I have a feeling that it is 'possible' that we might sell Johnson in the summer.

There's been plenty of speculation lately that we will and your points really back it up. Maxi is a goner and I think you might be right about Kuyt too. Really good post that.

[west_london_red]

Can't really grumble as to their track record to date. But I'm cautious. They got the club for peanuts. So throwing money at players in an initial splurge is really not that big a deal. It's like getting a new Porsche 911 for £10k and spending £1k on new wheels. I think the acid test will be this summer's transfer window. Do they have the money to invest in the level of player we need to get into the top 4? Do they have reservations about giving KD and DC more money? Will they look to offload before they spend? Also, can we attract the standard of player we need?

Not sure where to start on the stadium...we're still going round in circles

Commercially, I think it's obvious we're improving

Thing is once people know your willing to spend money, it becomes very hard to lose that reputation. Im reasonably confident that if say Stoke or Wigan had come in for Downing, Carrol and Henderson the asking price would have been lower. Problem is after last years splurge we might already have that reputation.

[hugoboss]

Why would we sell Johnson for 15M when we would need at least half that to replace him, makes no sense at all. Aquilani and Kuyt alone can raise about 10M and you'd expect us to have more than 25M to spend. We made 40M last year and the EL helped, this year no EL but we have the Warrior deal. I fully expect us to have upwards of 30M.

A 40M budget if used properly can get us the two top attacking players we need and hopefully we can make do with the CM next season or look for someone on a free.

[Uhoh AureliOs]

Very long and thorough assessment Roy, lots of intriguing thoughts in this thread. It's good to be scrutinising these sorts of things, we can't afford to let our guard down, having a look through last years accounts, the stadium issue and the way we go about things this summer will have a big influence on the way I see FSG at the start of next season.

[Abrak]

I don't think it's unreasonable to expect them to get started on the stadium (relocate, or renovate whatever).

It's definitely a difficult issue, but football is a business, one that moves at a million miles an hour; what is worth £1 today is worth £100 next month, and a £1000 next year.

Please dont live in a world of fantasy.

Spurs, which is one of only 4 profitable football clubs in the PL, share price has fallen 70% over the last 5 years and was valued at 76m when it was delisted a couple of months ago despite being 3rd in the League.

Liverpool were almost bankrupt 18 months ago.

The 20 PL clubs lost a combined total of 500m last year. Generally speaking the way to end up with a small fortune is to start with a large fortune and own a football club. You might successfully polish off the balance by funding a stadium.

[AKABillyGee]

Already replied over on TAW, but that Ayre article seems to suggest that FSG have ran out of ideas in terms of the stadium. Worrying considering that, in my opinion, the success or failure of FSG here is dependent on us getting more seats, as they are unwilling to inject their own funds, meaning we are reliant on generating our own funds.

Worrying.

The reason David Moores gave for selling the club to Dumb & Dumber was his inability to fund a new stadium and for that move to provide the income to take LFC to the next level. If we now have new owners that are unable to fund a new stadium then that implies we are in a no better financial situation than we were when Moore & Parry were at the helm.

Some new kit deals and sponsorship but basically no better off.

[eirwen]

One area I do believe could be contentious with our new owners is their attitude to selling some of our players.

I do believe we will get funding this summer but it wont be from our cash flow because their wont be any. But they will have planned for that. But I suspect it wont be a lot - say 25m.

Now I have a feeling that it is 'possible' that we might sell Johnson in the summer. I say possible because you can think of a rationale. A lot of people will disagree and the timing might not be right. But it is worth thinking about.

You see the reason you can justify selling Johnson is that we have an embarrassment of riches at right back. We have Kelly, a potential future England international and Flanagan, who has been called up for U21s, and impressed when he has played in the full team. Johnson is coming up to 28, which is a good age to sell and Kelly is just 21. If Kelly is good enough to replace Johnson and Flanagan good enough to back up Kelly, we dont really need Johnson that much and we could put the proceeds from his sale to better use.

War chest 25m

Maxi leaves - free - 50k wages
Kuyt leaves - 5m  - 80k wages
Cole leaves - free - 60k subsidy
Aquilani leaves - whatever owed - 30k subsidy

Total 30m to spend - 220k wage savings

Johnson sold - 15m - 90k wages

Total 45m to spend - 310k wage savings

So ok you have weakened your right back position a bit but you have a young pairing there that will set you up for the next 5 years. You also have some serious money to spend on replacements for Maxi and Kuyt as well as additional wages to renew contracts possibly for Suarez to stay. It doesnt really make sense to wait until Kelly is better than Johnson before relegating 90k a week Johnson to the bench.

See I don't like that line of thinking. Johnson is doing great here and there is no reason to sell other than to save money on wages. Sure Kelly might be a good enough replacement but he might also get injured and then we would be in trouble. If Kelly suffers a serious injury like Lucas, would you be confident with Flanagan for the whole season? Having two good RBs is not too much.
I sincerely hope we don't have to go down the route of selling good players to fund transfers again.

[hugoboss]

The business about Johnson is an interesting point. At what point does so-called Soccernomics *wince* dictate what happens? You could have a situation in which Dalglish wants to keep Johnson, but the business management believes it is the optimum time to sell: who has the final word? Despite all the talk of transparency, we have no idea. And although Kenny is their ideal manager in that he will keep quiet and always subsume his own reputation/ego to the benefit of the club, he is the one who would carry the can for the lack of an experienced right-back.

I think the fact that we have Bellamy here at his age shows there is room for compromise, it would probably depend on a lot of things like wages etc. If we have Johnson at Kelly as number 1 and 2 for the RB. I think if at 30 Johnson is still performing at a high level but cannot play every week and Kenny feels he is still valuable we can keep him so long as the number two is the one covering for him. Now if Kelly wasn't good enough and Kenny decided to sign another RB for the number 1 spot then that would probably be an issue (Hopefully I haven't confused you).

I think people get too carried away with the age thing, I'm sure everyone realizes experience is necessary in a squad and aren't necessarily a selling team always looking out for profits. I think we'll keep our best players no matter their age, while looking out for young talent to add to the squad.

I think when we bought Henderson we intended to play him on the right but we had Raul and Kuyt in that position and one had to go. Raul drew the short straw because Kuyt can also cover CF where we were short

[hugoboss]

See I don't like that line of thinking. Johnson is doing great here and there is no reason to sell other than to save money on wages. Sure Kelly might be a good enough replacement but he might also get injured and then we would be in trouble. If Kelly suffers a serious injury like Lucas, would you be confident with Flanagan for the whole season? Having two good RBs is not too much.
I sincerely hope we don't have to go down the route of selling good players to fund transfers again.

No way we will sell Johnson, he is first choice RB and second choice LB and a top player. You may well start asking if we will sell Gerrard.

The beauty of what FSG are doing is we can spend what we make as a club + what we get from player sales if we have a 40M kitty this summer we can get the two match winners we need in attack. I know our CM can be improved but I keep citing United and their not so good CM but their quality attack and now they are above City.

[Abrak]

Why would we sell Johnson for 15M when we would need at least half that to replace him, makes no sense at all. Aquilani and Kuyt alone can raise about 10M and you'd expect us to have more than 25M to spend. We made 40M last year and the EL helped, this year no EL but we have the Warrior deal. I fully expect us to have upwards of 30M.

A 40M budget if used properly can get us the two top attacking players we need and hopefully we can make do with the CM next season or look for someone on a free.

You clearly did not read my original post which was based on selling Johnson based on the premise that his position would be replaced by Kelly with Flanagan as back up.

[eirwen]

You clearly did not read my original post which was based on selling Johnson based on the premise that his position would be replaced by Kelly with Flanagan as back up.

Kelly with Flanagan as backup is not good enough.

[hugoboss]

You clearly did not read my original post which was based on selling Johnson based on the premise that his position would be replaced by Kelly with Flanagan as back up.

I read it and it really doesn't make any sense seeing as we will have two young players who are not of the required quality

[stevensr123]

Kenny has done shit in the  league this season, the owners give him 100 fucking million to spend, I don't give a shit what anyone says. they did what they are suppose to do and give us the money liverpool generates. If we are not doing as good as people as expected blame kenny, not anyone else.

[cgahan]

This is another myth. It would support the "epic swindle" argument.
Gillett and Hicks got the club for the same price and, by making the investment pay for itself, took us to the verge of bankruptcy.

Any investment should pay for itself. Would you put all of your pension fund into an asset which only broke even when it was performing well (regular Champions League, etc) and never paid a dividend? The argument seems to be that, if it doesn't work out, you just sell it on to an even bigger fool at a higher price.

The main financial argument seems to be that horrible "leveraging" word used by Tom Werner. As part of a portfolio a football club can attract publicity for the other profitable businesses. Werner talked of leveraging the brands and, as I understood it, trying to persuade loads of Asians to become as obese as us by eating Dunkin' Donuts...

It's not though is it? They paid £300m for the debt of the club, which, by any metric is a steal. Even Forbes valued us at more than that, despite being at the lowest ebb, football wise, for a few years. It doesn't matter what h&g think it is or was worth. They lost their claim on the control of the club the moment they missed their repayments to RBS.

Comparing a football club to a pension fund makes no sense. They aren't buying it for a consistent steady return are they? If that's what they wanted then there are plenty of consistent funds they could stick their 300m into, and have it managed for them. They're buying it because, despite all over the uncertainty surrounding football, if they get it right then they'll be getting back multiples of their investment. Our brand is one of the biggest in football. And if they can sell it into Asia on the scale that clubs are looking for, then it will make our current fanbase look irrelevant.

[royhendo]

Steven, did you read the opening post? Please do. It's not about blame, it's about honest, balanced assessment. (Hopefully based on fact.)

[royhendo]

Cgahan mate - did they really pay £300m though? Nobody really knows yet.

[west_london_red]

Kelly with Flanagan as backup is not good enough.

Thats debatale, but assuming you accept Kelly is at least a good RB, lets say we sell Johnson and get £15m which we use to buy a top quality finisher (yes we might have to top up whatever we could get for Johnson) would it not then be worthwhile? A slight downgrade at RB for a much stronger improvement in another area?