Topic: Anfield Road Extension - Construction work resumed on 12th September 2023.

[TepidT2O]

How so?

I can't see a situation where stadiums remain closed for a couple of seasons, even if so football wouldn't be cancelled and clubs should regain all their income minus from selling tickets.

If we don’t finish this season?  Might cost each club £25m in TV revenue.

Then the shirt deal.. shops are closed, there’s a recession, so short sales drop, that could cost £25m from Nike alone.

Then ticket sales... we’ve lost a few games this season?  More off next season too? 

A huge huge risk right now....  no one will be making any big signings this summer I suspect, there’s huge uncertainty.

[CraigDS]

If we don’t finish this season?  Might cost each club £25m in TV revenue.

Then the shirt deal.. shops are closed, there’s a recession, so short sales drop, that could cost £25m from Nike alone.

Then ticket sales... we’ve lost a few games this season?  More off next season too? 

A huge huge risk right now....  no one will be making any big signings this summer I suspect, there’s huge uncertainty.

I don't doubt this season, but you said hundreds of millions over the next couple. Think you're up to about £40m over the next few months 

New shirts will be sold online, I imagine most buy them online anyway.

[fowlermagic]

You would think any plans including our own personal plans will have to be shelved for a wee bit to see where everything is once the dust settles. It could be an ideal time to build with lower costs but again that wont happen overnight so no matter what we do things will have to reviewed. Future signings will be affected and hopefully in a good way as the market has gone crazy. When cart horses like Maguire cost you 80m the world needs a do over. Hopefully the market prices will take a 30% hit and so should their wages.

[WhereAngelsPlay]

We could lose hundreds of millions of pounds over the next couple of seasons..... there’s a huge risk even for a club of our size...

Not literally though eh,hoping for the best.

Building materials will be at their lowest for year.

[Alan_X]

How so?

I can't see a situation where stadiums remain closed for a couple of seasons, even if so football wouldn't be cancelled and clubs should regain all their income minus from selling tickets.

I've stayed out of the job retention nonsense but one of the big mistakes in it is the focus on income. I know from personal experience, albeit on a smaller scale that it's not the drop in income that kills you, it's the continuing outgoings. In 2008 after the financial crash we had a great team of people, three or four big building projects, cash in the bank and everything looked great. Within months once the work stopped we were haemorraging cash and had to make a load of people redundant. I almost lost the business and my house. Anyone in business knws that it's all about cash flow.

Last LFC accounts showed a pre tax profit of £42 million on income of £533 million. Imprssive but simple subtraction shows that the clubs monthly costs are £491 million or about £40 million each month. Without any income, that 'massive' profit equals just four weeks outgoings.

If a twelve month football calendar is extended by three or four months the income will be the same (or less with competitions being cancelled and closed-doors fixtures) but the costs will increase pro-rata. Say this season's income is £510 million (no Champions League win this year) and costs are for 15 months that creates a loss of £105 million: £510m - £615m (15 x £41m). Some talk is of the season running until September which could take losses up to £150 million.

And who knows what next season will be like?

[CraigDS]

Last LFC accounts showed a pre tax profit of £42 million on income of £533 million. Imprssive but simple subtraction shows that the clubs monthly costs are £491 million or about £40 million each month. Without any income, that 'massive' profit equals just four weeks outgoings.

You can't do simple subtraction with accounts like that though, it includes loads of stuff like player amortisation, depreciation, etc. Swiss Ramble had these non cash flow expenses at around £123m.

I imagine some of the expenses will not occur during the shutdown too, and which do then occur I imagine depends on just how the season finishes.

[Alan_X]

You can't do simple subtraction with accounts like that though, it includes loads of stuff like player amortisation, depreciation, etc. Swiss Ramble had these non cash flow expenses at around £123m.

I imagine some of the expenses will not occur during the shutdown too, and which do then occur I imagine depends on just how the season finishes.

It's an illustration. You have to include player amortisation and depreciation because they represent real outgoings spread over time. If we pay for players in stages over the length of their contracts then the amortisation is the same as the cash outgoing. You can't just dismiss cost of buying players because of accounting methodology.

And it's a bit unfair to criticise my figures when you ignored outgoings and the extended timeframe for those costs completely.

[CraigDS]

It's an illustration. You have to include player amortisation and depreciation because they represent real outgoings spread over time. If we pay for players in stages over the length of their contracts then the amortisation is the same as the cash outgoing. You can't just dismiss cost of buying players because of accounting methodology.

What you on about?

Ammortisation is the cost of the player spread over the course of their entire contract, extended if they renew. If we buy a player then it could be spread over a few payments, but certainly not 5 years.

You really cannot compare the two, even for an illustration.

Same goes for goodwill, player impairment, and depreciation, all of which are non-cash flow costs which are in there.

And it's a bit unfair to criticise my figures when you ignored outgoings and the extended timeframe for those costs completely.

I didn't ignore anything, I made none of my own assumptions with regards to costs other than that some costs won't occur if the club is in shutdown as it is.

[TepidT2O]

Dom King is saying we’re due to lose out on £102.6m this year alone...

That’s a phenomenal amount...

I assume that’s a worst case scenario. But...wow.

[Peabee]

How so?

I can't see a situation where stadiums remain closed for a couple of seasons, even if so football wouldn't be cancelled and clubs should regain all their income minus from selling tickets.

Attendances may be down if this becomes a depression rather than recession?

[CraigDS]

Dom King is saying we’re due to lose out on £102.6m this year alone...

That’s a phenomenal amount...

I assume that’s a worst case scenario. But...wow.

Have you got the breakdown for that mate? Be interesting to see how he figures that number out.

[Lush is the best medicine...]

Dom King is saying we’re due to lose out on £102.6m this year alone...

That’s a phenomenal amount...

I assume that’s a worst case scenario. But...wow.

thats the bit in mail which I don’t think would be accurate on stuff like commercial, have noticed there is a big sale on the new balance gear, probably an advance clear out pre Nike tho

[Alan_X]

What you on about?

Ammortisation is the cost of the player spread over the course of their entire contract, extended if they renew. If we buy a player then it could be spread over a few payments, but certainly not 5 years.

You really cannot compare the two, even for an illustration.

Same goes for goodwill, player impairment, and depreciation, all of which are non-cash flow costs which are in there.

I didn't ignore anything, I made none of my own assumptions with regards to costs other than that some costs won't occur if the club is in shutdown as it is.

And if the actual payments for a player is over a few installments rather than equally spread over the contract then the cash flow is higher. Pay £50 million in two installmemts for a player with a five year contract. Cash going out over the first two years is £25m a year. Amortisation in the accounts is £10 m a year. So for that player the impact on cash flow is far higher in the early years. Over time it might balance out but the installments for player purchases are real and a significant part of a club's costs.

As we don't have the payment details for individual players the best approximation is the amortisation cost for the squad as a whole.

Might be worth reading today's Athletic article by Matt Slater.

[LiamG]

Dom King is saying we’re due to lose out on £102.6m this year alone...

That’s a phenomenal amount...

I assume that’s a worst case scenario. But...wow.

Everyone will be in the same boat though

[TepidT2O]

Everyone will be in the same boat though

Quite...

But that doesn’t mean we will have the cash flow to pay for it.  It just means no one else will either. 

Hopefully just delayed a wee bit.

[Machae]

Dom King is saying we’re due to lose out on £102.6m this year alone...

That’s a phenomenal amount...

I assume that’s a worst case scenario. But...wow.

Isnt that based on the season not ending and clubs having to forfeit TV income (or part of it) + prize money?

Without figures, it's a meaningless stat

[TepidT2O]

Isnt that based on the season not ending and clubs having to forfeit TV income (or part of it) + prize money?

Without figures, it's a meaningless stat

Do the maths... the numbers could be huge..

[Machae]

Do the maths... the numbers could be huge..

I dont doubt that but the operative word is could.

Did he base that on the season not being played out. I guess as a worst case scenario, he probably was

[BaZ87]

What you on about?

Ammortisation is the cost of the player spread over the course of their entire contract, extended if they renew. If we buy a player then it could be spread over a few payments, but certainly not 5 years.

You really cannot compare the two, even for an illustration.

Same goes for goodwill, player impairment, and depreciation, all of which are non-cash flow costs which are in there.


I didn't ignore anything, I made none of my own assumptions with regards to costs other than that some costs won't occur if the club is in shutdown as it is.

And if the actual payments for a player is over a few installments rather than equally spread over the contract then the cash flow is higher. Pay £50 million in two installmemts for a player with a five year contract. Cash going out over the first two years is £25m a year. Amortisation in the accounts is £10 m a year. So for that player the impact on cash flow is far higher in the early years. Over time it might balance out but the installments for player purchases are real and a significant part of a club's costs.

As we don't have the payment details for individual players the best approximation is the amortisation cost for the squad as a whole.

Might be worth reading today's Athletic article by Matt Slater.

A bit late to the party but this tweet from SwissRamble is a good starting point on the cashflow debate:

https://twitter.com/SwissRamble/status/1235842698973593600

For the 18/19 season we had a cash inflow of £27m after all activities. Using those figures as a starting point and looking towards this season:

1. I'd expect the club were on course for a modest increase on the £131m cash they generated from operating activities last season.
2. I'd imagine that capital expenditure would be at least the same with the work on the training ground and the ramping up of work on Annie Rd.
3. How much we paid out (and received) on historical transfers is a little bit harder to guess however Alan's assumption regarding amortisation isn't a fair one as it doesn't take into account money received on historical transfers. As of the last set of accounts, if I remember correctly, what we owed was roughly the same as what other clubs owed us which would which would suggest a very small net outflow, if at all. Once you factor in transfers that happened this season (approx £10m spent and £30m received in fees) it's possible that transfer dealings have resulted in a net inflow as opposed to near £60m out last season.
4. Repayments on intercompany loans have historically been very flexible and you'd hope that FSG wouldn't be demanding repayments in these circumstances but who knows.

Very rough guestimates based on the above, the club could probably take the top end estimate of a £100m hit on this seasons revenue without much of a loss (if one at all) from a cash flow point of view.

[Peabee]

I dont doubt that but the operative word is could.

Did he base that on the season not being played out. I guess as a worst case scenario, he probably was

Nick Harris came up with the figures. DK just reported them.

[macca007]

Anyone seen the figures on season tickets and what clubs would have to pay back? We have the lowest percentage of season tickets to capacity in the league. Which doesnt surprise me as I've been on the waiting list since 2004.

[macca007]

Here it is

[meady1981]

I’d take sitting at the back of the lower tier, surrounded by a coach party of Merchandiesed-up day trippers, all watching their iPads, whilst booing Henderson sideways passes for the rest of my life right now.

[davidsteventon]

If games are to be behind closed doors, be a good time to crack on, as seems construction might be one of the industries to get going first...

(Appreciate there's a lot more involved).

[redgriffin73]

Here it is

I'd never realised before how much bigger pretty much every other clubs' ST proportions are compared with ours.

[macca007]

I'd never realised before how much bigger pretty much every other clubs' ST proportions are compared with ours.

Makes me wonder why we have the lowest proportion. Do the club make more money off having membership and day trippers more likely to get tickets? Want to know why they are only saying a few thousand towards season tickets out of the non hospitality increase in the anny instead of the full whack

[Macred]

I dont see any extensions being done for a long time as we could (sorry will) be in the worse recession of our lives.

So cheap materials and cheap labour then

[Ray K]

Why Liverpool have delayed Anfield’s redevelopment for a full year - James Pearce

Liverpool have decided to delay the £60 million redevelopment of the Anfield Road stand by 12 months as a result of the coronavirus pandemic.

Anfield officials had intended to submit a full planning application to Liverpool City Council this month with construction work due to start in December and be completed in the summer of 2022.

However, follow further discussions, that timescale was no longer deemed to be realistic given the impact of the lockdown on both the planning process and the construction industry.

Now the hope is that the ambitious project, which will add around 7,000 extra seats to increase Anfield’s capacity to 61,000, will get under way in December 2021 and be finished in time for the start of the 2023-24 season.

Why has the redevelopment been put back a full year?
Under the plans drawn up by London-based architects KSS, the building work will span 18 months with the new structure initially built behind and above the existing stand.

Like the Main Stand project, it needs to start late in a calendar year so it can be completed between seasons in order to minimise the impact on Anfield’s capacity. For example, the plan was that in the off-season in 2022 the current upper tier would be dismantled and the new structure connected to the existing lower tier. As a result a three-month or six-month delay simply was not feasible. Once it became clear that starting in December 2020 looked increasingly unlikely, putting it back a full year was the only option.

“We have experienced a number of delays to the planned project as a direct result of the COVID-19 lockdown,” says Liverpool FC’s chief operating officer Andy Hughes. “Given the challenges that many sectors are facing right now, including the construction, procurement and public sectors, we are taking a responsible approach to pause the project for at least 12 months.”

Is there a financial element to the decision?
Liverpool are adamant this is about time scales and practicalities rather than cash. That is backed up by the fact that the finance for the project is already in place. Unlike the new Main Stand, which was completed in 2016 thanks to a £110 million inter-company loan from owners Fenway Sports Group, the club are using their own credit facility to pay for the redevelopment of the Anfield Road stand. Of the 7,000 extra seats, some 5,200 will be general admission with the other 1,800 offering lounge and sports bar hospitality.

Is there a danger that the redevelopment will be shelved further down the line?
That’s highly unlikely. FSG is still fully committed to expanding Anfield. The new Main Stand has proved to be a huge success — generating the club around £15 million extra per season. Manager Jurgen Klopp has credited the bigger, more imposing stadium as an important factor in his side’s stunning form with Liverpool unbeaten at home in the Premier League since April 2017.

Financially, redeveloping the Anfield Road stand is a no-brainer give the extraordinary demand for tickets. Some 23,000 supporters are on the club’s season ticket waiting list which has been closed to new applications since 2011.

Liverpool have already invested a huge amount of time and effort into the project with an extensive public consultation programme. They revised their plans in the wake of feedback from local residents to re-rout a section of Anfield Road around the footprint of the redeveloped stand rather than close it. Hughes revealed back in February that the club had received “93 per cent positive support for the overall scheme”.

What happens now?
Putting the project on hold for a year certainly eases the pressure for the club given the issues they have encountered since the lockdown.
“Given the planning application is no longer time critical, it is our intention to submit our planning application at some stage during the next 12 months,” adds Hughes.

“We will use this period to review and consider options. When the football calendar and the wider delays to the construction and supply chain industries begin to plateau, we will provide further updates.

“We understand this is disappointing for many as it is for us but would like to thank all our key stakeholders including local neighbours in Anfield, our supporters, the city council and others for their great co-operation in the pre-planning stages.”

And what about the club’s new £50 million training ground at Kirkby?
Building work has been on hold since the government brought in social distancing measures in late March. Klopp’s squad were due to move into the new complex in early July for the start of pre-season training but that won’t be happening.

Liverpool have the option to extend their stay at Melwood and they will remain at their West Derby base for the rest of this delayed season. They will only make the switch to Kirkby prior to the 2020-21 campaign. Prior to the shutdown, the project had been on schedule with most of the external work complete.

[LFCEmpire]

Disappointed but this was to be expected.

[Son of Spion]

^
^
No surprises in there, given the current circumstances.

Many things in life are going to be on hold for a year or so, so I was expecting this announcement.

[Indomitable_Carp]

A year long delay is a pretty good outcome all things considered.

[TepidT2O]

A year long delay is a pretty good outcome all things considered.

At least.... a year.

[CraigDS]

At least.... a year.

Be stupid to put a solid time frame on it when we've no clue how things are going to go with corona.

[TepidT2O]

Be stupid to put a solid time frame on it when we've no clue how things are going to go with corona.

Yep.

Told you it would be delayed don’t I?

[CraigDS]

Yep.

Told you it would be delayed don’t I?

TBF the whole timing thing with regards to when they can take the roof off, etc. isn't something I had really considered.

[Mighty_Red]

It's to be expected but I think the key is the fact that the application hasn't been submitted. They know that approval would be delayed meaning we probably wouldn't be able to start work in December even if we had everything ready to go.

I'm guessing we haven't put a date on when we will submit the application simply to not get any adverse publicity.

[CraigDS]

Delaying this by only a year seems optimistic.

I think Liverpool will be harder hit financially by this crisis than many other clubs because of the nature of the kit deal we just signed with Nike. A lot of that is based on sales and with everyone fucking skint for the foreseeable future, who can afford to spend £60 on a Liverpool shirt?

I think you’d be surprised. Plus in the grand scheme of things the royalties from shirt sales aren’t exactly massive amounts.

[Welshred]

What have shirt sales got to do with the Annie Road Extension?

[CraigDS]

What have shirt sales got to do with the Annie Road Extension?

Apparently we’re not gonna sell any so won’t get money from Nike so can’t build it. Apparently.

[Welshred]

So nothing then. Can we keep this about updates on the extension and not on shirt sales? I'd rather not have to wade through off topic shite when this gets bumped every time.