Topic: Moneyball, Soccernomics and Liverpool's transfer policy

[steveeastend]

Oh and if he does thow it away after a couple of years I would worry. He is certainly betting on making on 10x his money over the next 15 years. So if he sells he will be cutting his losses.

But without FFP he might be right. Look with without FFP we need a Country Financial Asset to back us if there has to be financial discipline we need the most efficient owner. If it is simply a maximum capital play you need an owner with the maximum capital if it is a play on the efficient use of capital you need the smartest player. So yes if the player with the most amount of capital wins it implies the 'richest and most stupid' or if it is the most efficient it implies 'the smartest'. I seriously cant expect the person who want to win the smartest game show to want to take part in the most stupid gameshow.

I think the most flexible in terms of pure football thinking wins. My point is that I don´t think this has anything to do with being smart in general or successful in different business or sport branch. I think it´s a combination of experience and knowledge on football in general. You can make up a portion with instinct and being super smart overall, I think that´s what Henry can offer, but I am still worried on his lack of experience/education in football.

[DanA]

I think the most flexible in terms of pure football thinking wins. My point is that I don´t think this has anything to do with being smart in general or successful in different business or sport branch. I think it´s a combination of experience and knowledge on football in general. You can make up a portion with instinct and being super smart overall, I think that´s what Henry can offer, but I am still worried on his lack of experience/education in football.

But Henry isn't making football decisions.

[steveeastend]

But Henry isn't making football decisions.

That´s exactly the point. He depends on people doing this for him which raises a couple of questions on his leadership. Will he be flexible enough to know when to redo decision going the wrong way? Will he be able to recognize it? How quick will he able to replace people causing damage? Will he be willing to pay the price for a wrong decision and start over again investing the same amount of money?

So far he hesitated to sack Hodgson which denied us a serious race for 4th last season. This season he fully trusted Comolli and Kenny or whoever was in charge for our transfers that people like Carroll and Downing will be firing us to 4th. Cause that´s was the goal called out by himself.

Valid questions I think..

Don´t get me wrong, I am happy as everyone to know people like Purslow being no where near our club anymore, the damage they´ve done was remarkable and our owners are the best what could have happened to us considering the cirumstances back then.

[Giono]

Look that is total bullshit. If the club was so cheap why did nobody else buy it. You tell me that after the next set of results? This club is a financial nightmare which is why nobody bought it apart from Henry who thinks he he is a financial genius. Look if this club was a steal there would be people queuing up to buy it. When you see the next set of results you will realize why people were not buying it. And I can guarantee that whatever you think is a steal, I will steal before you have seen the light of day.

Your tone is not so dry now?

Sometimes you sound like an automobile journalist who uses terms like horsepower and rpm and then sums up a car's value by saying it gives him a rush. Financial nightmare?

C'mon. It was messy, but not for someone who is used to the financial and sporting ups and downs like Henry is.

FSG were chosen to be the owners. They were not the only takers.

[DanA]

That´s exactly the point. He depends on people doing this for him which raises a couple of questions on his leadership. Will he be flexible enough to know when to redo decision going the wrong way? Will he be able to recognize it? How quick will he able to replace people causing damage? Will he be willing to pay the price for a wrong decision and start over again investing the same amount of money?

So far he hesitated to sack Hodgson which denied us a serious race for 4th last season. This season he fully trusted Comolli and Kenny or whoever was in charge for our transfers that people like Carroll and Downing will be firing us to 4th. Cause that´s was the goal called out by himself.

Valid questions I think..

Don´t get me wrong, I am happy as everyone to know people like Purslow being no where near our club anymore, the damage they´ve done was remarkable and our owners are the best what could have happened to us considering the cirumstances back then.

Again is that Henry's decision or the CEO's?

[Giono]

Again is that Henry's decision or the CEO's?

Agree. Henry is a professional investor and as such he tries to hire talent to run the thing for him. I don`t think he wants to get involved in the day to day. He signs the cheques.

[scatman]

The way Man City have adjusted things and arranged all those long term deals with, umm themselves in the Emerati suggest they do take FFP seriously. I reckon the big clubs will all play ball with FFP eventually, in the long term it is there interest: the bigger your fanbase and potential revenue the bigger your advantage over smaller teams; nothing will ever change there.

The sides who are well and truly fucked in terms of their approach are Real Madrid - is this the end of the £60 million transfer?


Re: Carroll / Aguero: it has been well said time and time again, a) Aguero is on MASSIVE wages b) his signing on fee would be HUGE c) how do you know he would have joined us at this point in time


The comparison to Andy Carroll because of similar sounding transfer fees just doesn't hold water.

Read the past 5 pages of this thread, it's been brilliant to be honest.

Just wanted to comment on this

There is a comparison to be made between Andy Carroll and Sergio Aguero.

They cost the same transfer fee.
Aguero earns twice as much as Andy Carroll? Yes?
Who has actually been worth their transfer fee and wages? Sergio Aguero
Why? Just look at the league table.

The difference in wages is the difference between Man City finishing top and us finishing where we are now.
The difference in performance? Aguero has scored 19 goals this season, 15 in 24 in the league. 15 goals that would all in probability have us sitting pretty on top of the league.

Would his wages have been worth the risk? Absolutely.

[Baz Smythe]

Read the past 5 pages of this thread, it's been brilliant to be honest.

Just wanted to comment on this

There is a comparison to be made between Andy Carroll and Sergio Aguero.

They cost the same transfer fee.
Aguero earns twice as much as Andy Carroll? Yes?
Who has actually been worth their transfer fee and wages? Sergio Aguero
Why? Just look at the league table.

The difference in wages is the difference between Man City finishing top and us finishing where we are now.
The difference in performance? Aguero has scored 19 goals this season, 15 in 24 in the league. 15 goals that would all in probability have us sitting pretty on top of the league.

Would his wages have been worth the risk? Absolutely.

He's on a reported £250,000 per week. If you up his then Suarez, Gerrard etc are all going to want to match it or be within the ballpark area. Then your talking that one signing not only costing us 35 mil but also half a million a week minimum for adjustment of wages all round, compared to the 70,000 of Andy Carroll. Altogether it cost you 24 million per year, and then theres the what if he snaps his leg against Balckburn and out for the season argument, then we end up outside 4th.

[Abrak]

Either way I am curious as to why you think my argument is so stupid.

DanA it is as simple as this. If you have a choice to between two owners - one who can afford 25 players and one who can afford 24 you choose the owner who can afford 25.

By that I mean we expect our owners at Liverpool to finance a full squad of players. We only have 22 players because we dont have enough English players doesnt really cut it. We dont have  a goalkeeper because goalkeepers are too expensive doesnt really cut it. Although we are allowed 25 players we can only afford 20 doesnt really cut it. We only have 17 players because we can buy back players cheaper next year doesnt cut it.

Look DanA your argument is that although you allowed 25 players in your squad you can have less than 25 players. Now if you have less than 25 players - ie 24 - you must be stupid to believe you will do better than having 25 players (in that from a supporters point of the marginal contribution of  a player cannot be less than zero.)

So if you have a squad of 24 players and you do not realize that if you add one player you must make the squad better than worse - you should realize that you are not only stupid but you are perhaps a little worst than that.

Now honestly DanA you might genuinely believe that we can have a 22 squad that is better than a 25 squad. You might think that is logical. But you dont understand logic. All it actually says is that you cant afford a to own a squad in the first place. Get it? Owning 24 players when you can own 25 might be the most efficient thing you to do but it just means you dont have enough money in the first place.

 I would point out that you dont actually need a goalkeeper but as LFC supporter we would prefer to have one. So if you dont get that not having a goalkeeper is a stupid argument you are a little obtuse. And if you think that the owner of our club can get away with 22 players because he dosent need 25 and I dont think your stupid you also cannot count.

Essentially any owner who cannot afford a full squad of players cant afford to own a club in the first place.

[bleedsred1978]

Look that is total bullshit. If the club was so cheap why did nobody else buy it. You tell me that after the next set of results? This club is a financial nightmare which is why nobody bought it apart from Henry who thinks he he is a financial genius. Look if this club was a steal there would be people queuing up to buy it. When you see the next set of results you will realize why people were not buying it. And I can guarantee that whatever you think is a steal, I will steal before you have seen the light of day.

Can I just say Abrak as a long time lurker of this thread and others you have contributed to that while i admire your knowledge on the subject of economics your attitude to people with a little less know how than yourself or even have differing opinions is quite frankly appalling.

No need for the high horse shite.

[Eeyore]

Look that is total bullshit. If the club was so cheap why did nobody else buy it. You tell me that after the next set of results? This club is a financial nightmare which is why nobody bought it apart from Henry who thinks he he is a financial genius. Look if this club was a steal there would be people queuing up to buy it. When you see the next set of results you will realize why people were not buying it. And I can guarantee that whatever you think is a steal, I will steal before you have seen the light of day.

For a start Henry wasn't the only one who wanted to buy the Club at that price we had another very similar bid from Peter Lim.  Indeed Lim was fully prepared to up his bid when he lost.

Those bids were against the backdrop of having to fulfill the onerous conditions of the BarCap process as well having to be prepared to face the prospect of a legal wrangle with Hicks and Gillett.

You also need to remember what Broughton said about the biggest bid not necessarily being the best bid.

I would imagine a lot of buyers would of been put of by having to open themselves up to the scrutiny of the BarCap process, the resultant publicity and the loss of face of losing if your bid was not successful. Add in the fact that the sale happened during a World financial crisis and it is hard not to come to the conclusion that the club was unlikely to sell for its true value.

As for seeing the next set of results you are beginning to sound more and more like a FSG insider by the day.

[Dr Manhattan]

you are beginning to sound more and more like a FSG insider by the day.

Sounds more like a gobshite who needs to calm down to me.

[Sangria]

He's on a reported £250,000 per week. If you up his then Suarez, Gerrard etc are all going to want to match it or be within the ballpark area. Then your talking that one signing not only costing us 35 mil but also half a million a week minimum for adjustment of wages all round, compared to the 70,000 of Andy Carroll. Altogether it cost you 24 million per year, and then theres the what if he snaps his leg against Balckburn and out for the season argument, then we end up outside 4th.

Compare with my suggestion last season of a target man as a plan B to Torres's plan A. Grant Holt would have been signable for 1-2m from then Championship club Norwich, while the currently PL Norwich reportedly have a salary cap of < 20K.

[Abrak]

Your tone is not so dry now?

Sometimes you sound like an automobile journalist who uses terms like horsepower and rpm and then sums up a car's value by saying it gives him a rush. Financial nightmare?

C'mon. It was messy, but not for someone who is used to the financial and sporting ups and downs like Henry is.

FSG were chosen to be the owners. They were not the only takers.

Do you honestly believe that? Is it actually true? Were there a queue of people waiting to buy up Liverpool?

You might be right. But it is not something I have heard.

Yes. we all heard of a lot of a people doing a lot of stuff with a lot of interest in Liverpool. But how many real buyers.

Just wait for the next results. I can add even if you cant.

Is there any evidence that there was any competent buyer apart from FSG. I am not fucking you around . I dont know why FSG bought the club it was so fucked. So do not tell me there was a queue of buyers. And stop pretending that Liverpool  was an asset waiting for a buyer rather than a liability looking for a benefactor.

Anyway those who think there are bargains in the business can buy Rangers and reimburse the HRMC.

[bleedsred1978]

Do you honestly believe that? Is it actually true? Were there a queue of people waiting to buy up Liverpool?

You might be right. But it is not something I have heard.

Yes. we all heard of a lot of a people doing a lot of stuff with a lot of interest in Liverpool. But how many real buyers.

Just wait for the next results. I can add even if you cant.

Is there any evidence that there was any competent buyer apart from FSG. I am not fucking you around . I dont know why FSG bought the club it was so fucked. So do not tell me there was a queue of buyers. And stop pretending that Liverpool  was an asset waiting for a buyer rather than a liability looking for a benefactor.

Anyway those who think there are bargains in the business can buy Rangers and reimburse the HRMC.

Charity case were we? Get a fucking grip.

[newterp]

What a spaz.

[red_til_i_die]

What's the problem peeps? Does it really matter how many people wanted to buy us and whether we were toxic or not?

The club has no debt, We've increased our sponsorship deals and income, we've got people at the club who know how to market properly and globally, we've had investment in the team and we're in one cup final, a potential second final and we're fighting it out with three other clubs for the forth CL spot.

What's the problem? It's all about making the club self sufficient, which now the debt has gone it should be able to do for when the financial fair play rules come in so we can compete in Europe. City and Chelsea are still making losses due to there massive wages that there paying players and it's going to seriously take the shine off winning titles if they aren't financially solid enough to meet the fair play rules and can't compete in Europe.

As long as the owners keep investing the money the club makes into the playing staff then that's all good by me.

[Abrak]

Can I just say Abrak as a long time lurker of this thread and others you have contributed to that while i admire your knowledge on the subject of economics your attitude to people with a little less know how than yourself or even have differing opinions is quite frankly appalling.

No need for the high horse shite.

Fair point.

Can I just say in my defense that I am most objectionable to the people who's  arguments I most respect on the basis that I wish to have a response. If you irritate someone enough you generally get a reply. So I genuniely if I actually thought someone was stupid or his reply was stupid I would not respond. I would only tell someone his response was stupid if I felt he was  intelligent.

And I am not a troll. I genuinely like to create a debate. And look some things people believe here are wrong and I will not say anything else, Because what you assume and what is reality  is not the the same. And I will not say anything different until someone shows me otherwise.

[Eeyore]

Do you honestly believe that? Is it actually true? Were there a queue of people waiting to buy up Liverpool?

You might be right. But it is not something I have heard.

Yes. we all heard of a lot of a people doing a lot of stuff with a lot of interest in Liverpool. But how many real buyers.

Just wait for the next results. I can add even if you cant.

Is there any evidence that there was any competent buyer apart from FSG. I am not fucking you around . I dont know why FSG bought the club it was so fucked. So do not tell me there was a queue of buyers. And stop pretending that Liverpool  was an asset waiting for a buyer rather than a liability looking for a benefactor.

Anyway those who think there are bargains in the business can buy Rangers and reimburse the HRMC.

In that case may I suggest Mr Henry enters into negotiations with SOS and Share Liverpool and offloads his liability.

[bleedsred1978]

Fair point.

Can I just say in my defense that I am most objectionable to the people who's  arguments I most respect on the basis that I wish to have a response. If you irritate someone enough you generally get a reply. So I genuniely if I actually thought someone was stupid or his reply was stupid I would not respond. I would only tell someone his response was stupid if I felt he was  intelligent.

And I am not a troll. I genuinely like to create a debate. And look some things people believe here are wrong and I will not say anything else, Because what you assume and what is reality  is not the the same. And I will not say anything different until someone shows me otherwise.

Well that's fair enough mate, and thanks for responding.

All i'm saying is that the human touch and the art of persuasion is a big part in anybody getting their point across, even when right, more so in fact.

You know what your on about and i for one respect that.

Please remember though that some people may misinterpret you calling them stupid with oh i dont know, the fact that you think they are stupid, as opposed to the fact that you in fact are giving them the pleasure of your response and that they should take from that that you think they are in fact intelligent as you don't respond to stupid people in the first place. 

 

[Dmode101]

think Abrak not so balanced.

not long ago the dubai consortium with wealth far exceeding FSG shadow group bidded for us. that alone says alot about our value. it was moores greed and lack of principle that caused royalty suitors to flee. more importantly that episode showed that we have become a whoring asset looking for a sugar daddy.

From H&G, to the bank owning us and now FSG. We are no longer a club owned by a private wealthy man who loves the club. its no longer the same. If you think FSG, like H&G or the banks wouldnt have a two pronged strategy of "maintaining" us just only and at the same time still looking for the next dubai should think harder.

Our financial outlay now vs the man city and chelsea has a huge gap. this gap proves that there is other more capable owners out there who for reasons perhaps the barcap or banks wanted too much and then had to settle for a FSG who could, and i am just speculating, be an intermediate entity holding on to us, until the true bidder comes along. The sale to FSG had to happen as our fans were already up in arms but the banks wouldnt be that STUPID to let go at a loss. NEVER. not because we were in debt but becasue our value is much higher than that.

Until there is a global branding report on how many liverpool fans are there. the age, income group are known. we will never know its true value. its all speculation at this point. but my guess is that Dubai ain't stupid.

[Abrak]

think Abrak not so balanced.

not long ago the dubai consortium with wealth far exceeding FSG shadow group bidded for us. that alone says alot about our value. it was moores greed and lack of principle that caused royalty suitors to flee. more importantly that episode showed that we have become a whoring asset looking for a sugar daddy.

From H&G, to the bank owning us and now FSG. We are no longer a club owned by a private wealthy man who loves the club. its no longer the same. If you think FSG, like H&G or the banks wouldnt have a two pronged strategy of "maintaining" us just only and at the same time still looking for the next dubai should think harder.

Our financial outlay now vs the man city and chelsea has a huge gap. this gap proves that there is other more capable owners out there who for reasons perhaps the barcap or banks wanted too much and then had to settle for a FSG who could, and i am just speculating, be an intermediate entity holding on to us, until the true bidder comes along. The sale to FSG had to happen as our fans were already up in arms but the banks wouldnt be that STUPID to let go at a loss. NEVER. not because we were in debt but becasue our value is much higher than that.

Until there is a global branding report on how many liverpool fans are there. the age, income group are known. we will never know its true value. its all speculation at this point. but my guess is that Dubai ain't stupid.

I am not quite sure I get your response.

But I have little value to say re Dubai because they have to pay for us and then create value, It is far easier to create value when you pay nothing for a product. As in City think Mansour has been brilliant by buying City for little and then losing a lot. He gets much more credit than buying LFC for a lot and losing a lot less. Everyone just says you bought a good business with LFC.

You will see when the results come out how disastrous our financial position is. Dubai stuff I have no idea about. We are clearly a brand they might be interested in their sovereign wealth fund. You have to look at FSG far more like Spurs. We have far better fundamentals and revenues and in 5 years time we can be as efficient. Levy is pretty brilliant but Spurs cannot compete with either Henry or ourselves. (Just hope a sovereign wealth fund doesnt take them over.)

Our problem is that we need a huge injection of cash to finance a new stadium and continue to build the squad. What FSG need to do is build value in the business so they can sell a minority  interest to finance the expansion. That is very difficult.

Edit. to the extent that Chelsea and City consider football a business it is simply on two principles. 1. Winning the PL is simply a factor of who spends the most money and 2. your benefit from winning the PL is the enhancement to your reputation which covers the underlying losses. So essentially it is PR spend.

[Vulmea]

My first preference is to be fan owned

barring that I'm more than happy to be run as a business rather than a rich man's play thing - its abhorent to me that some of our supporters would want to be in the same situation as City or Chelsea

the question remains though can you be run 'as a business' and still spend more than you earn because of potential future earnings?

speculate to accumulate - the united example seems to me to be a troubled one as the financial situation for them and for us are so markedly different - they gambled at  a time when in terms of financial compeition there wasn't any - for us we would have 3 clubs able to outpend anything we did and a couple of others that could match us - in that environment success would be so much harder, the risk therefore so much greater

as I've said earlier I think United are stretched and vulnerable - I acknowledge I'm not financial wizard but I can't really see any other explanation for their poor team this year, for not investing in centre mid and for trying to pick up the best youngsters rather than proven talent - for me their position in the league is false and without the extra ££ success brings they will be unable to invest again - and even if they do invest there is no longer a guarantee of success.

I do think clever player selection in the transfer market can mean a premier league title is possible provided there is a reasonable spend - maintaining that success requires becomes the trick then though but I'd be happy to have that problem

[Dmode101]

I am not quite sure I get your response.

But I have little value to say re Dubai because they have to pay for us and then create value, It is far easier to create value when you pay nothing for a product. As in City think Mansour has been brilliant by buying City for little and then losing a lot. He gets much more credit than buying LFC for a lot and losing a lot less. Everyone just says you bought a good business with LFC.

You will see when the results come out how disastrous our financial position is. Dubai stuff I have no idea about. We are clearly a brand they might be interested in their sovereign wealth fund. You have to look at FSG far more like Spurs. We have far better fundamentals and revenues and in 5 years time we can be as efficient. Levy is pretty brilliant but Spurs cannot compete with either Henry or ourselves. (Just hope a sovereign wealth fund doesnt take them over.)

Our problem is that we need a huge injection of cash to finance a new stadium and continue to build the squad. What FSG need to do is build value in the business so they can sell a minority  interest to finance the expansion. That is very difficult.

Edit. to the extent that Chelsea and City consider football a business it is simply on two principles. 1. Winning the PL is simply a factor of who spends the most money and 2. your benefit from winning the PL is the enhancement to your reputation which covers the underlying losses. So essentially it is PR spend.

i am not at the level of financial strategy vs value vs returns. To me liverpool already have global value this can be seen, firstly, the number of fans when the reds go for their summer tours vs those of man city and chelsea. the latter two would probably be catching up on the numbers game by converting those 12-20 age group if they continue to buy exciting attacking players and winning or at least competing very close at the top and CL.

What this means is that they will reap in merchandise and shirt sales and also sponsors coming in for the club brand and individual players.

Now, what i do notice about FSG is that they are very very quiet now on some fronts, two clear indication are PR and merchandise. where they can be more proactive irregardless if they dont have MAn city wealth.

 ie no PR head CEO expenditure on the suarez issue. This in return alienate current fans AND future younger fans who see us a racist. Dont think a PR department will cost as much as a 30mil player. 

merchandise sluggish movement - their sold out items on .tv remains sold out for a long periods, no pre-empting or proactive in driving sales figures. They dont listen to what fans want or what really sells. Example - most of the retro reissue designs common sizes are sold out and their collection still remains small, although it shows that fans may love 80's retro design and not just becasue we won things with those kits. If they reissue all the 80's jerseys right now. I will buy all of them when I have the cash. What this means is there is no marketing strategy to expand sales. very strange dont you think? For the casual apparels, they clearly hire tom, dick, and harry ed hardish niche designs. Why are they not paying top dollar for top designers who can design nice clean designs that covers more of the masses? why are they shooting themselves in the foot?

these are just some facts I dont understand and indicate that they dont listen. dont you think so? 

[Abrak]

My first preference is to be fan owned

barring that I'm more than happy to be run as a business rather than a rich man's play thing - its abhorent to me that some of our supporters would want to be in the same situation as City or Chelsea

the question remains though can you be run 'as a business' and still spend more than you earn because of potential future earnings?

speculate to accumulate - the united example seems to me to be a troubled one as the financial situation for them and for us are so markedly different - they gambled at  a time when in terms of financial compeition there wasn't any - for us we would have 3 clubs able to outpend anything we did and a couple of others that could match us - in that environment success would be so much harder, the risk therefore so much greater

as I've said earlier I think United are stretched and vulnerable - I acknowledge I'm not financial wizard but I can't really see any other explanation for their poor team this year, for not investing in centre mid and for trying to pick up the best youngsters rather than proven talent - for me their position in the league is false and without the extra ££ success brings they will be unable to invest again - and even if they do invest there is no longer a guarantee of success.

I do think clever player selection in the transfer market can mean a premier league title is possible provided there is a reasonable spend - maintaining that success requires becomes the trick then though but I'd be happy to have that problem

Vulmea, I promise you this business should not be fan owned. Actually let me correct that - that some clubs should be fan owned  and others not. Many owners have made huge financial sacrifices to keep their clubs in business - Fulham, Bolton, Wigan , Aston Villa - payments of which they will never see a return. 16 out of 20 premier league clubs lost money least year. Certainly the likes of Bolton could not have survived through fan ownership.

And honestly while Henry might be prepared to put money into Liverpool would we as supporters. The club needs 150m of equity which is 3x what is match day revenues. And if supporters owned the business and didnt reduce prices why? As some one else put it earlier in this thread basically your owner is a supporter with a big bank balance. You know if you were owned by supporters = like listed on the exchange - you would have to pay dividends. And the last club to pay dividends was Spurs in 2008. So this is not a business you want to own. Just be happy that Henry thinks he is so clever he will make money out of it when noone else can.

[B0151?]

Would he have come to us? No, in all likelihood, probably not.

Was us driving Torres' price up determined on how much Newcastle would sell Carroll to us for? From all accounts, yes.

@Abrak, I don't know if you've noticed fella, but as of late nobody really wants to buy football clubs. Unless they're billionaires with nothing better to spend it on and are doing it moreas an expensive hobby than a business. People, like you say, can't see where the money is going to come from & the return from investment. This is a widespread problem, not just on us at all.

[Eeyore]

My first preference is to be fan owned

barring that I'm more than happy to be run as a business rather than a rich man's play thing - its abhorent to me that some of our supporters would want to be in the same situation as City or Chelsea

the question remains though can you be run 'as a business' and still spend more than you earn because of potential future earnings?

Fan ownership or a partnership between the fans and big business the way Bayern are run would be ideal for me.

I agree wholeheartedly about not being a Rich man's plaything.

As for spending more than you earn in pursuit of future earnings isn't that exactly how all businesses start off, the same with all products that are launched there is always going to be an initial period in which you spend more than you earn.

speculate to accumulate - the united example seems to me to be a troubled one as the financial situation for them and for us are so markedly different - they gambled at  a time when in terms of financial compeition there wasn't any - for us we would have 3 clubs able to outpend anything we did and a couple of others that could match us - in that environment success would be so much harder, the risk therefore so much greater

United gambled in the mid eighties when there was plenty of financial competition the likes of ourselves, Everton and Arsenal were all big Clubs who were paying big wages and big transfer fees. United saw the potential of marketing themselves and the potential of investing in their infrastructure and their playing squad.

as I've said earlier I think United are stretched and vulnerable - I acknowledge I'm not financial wizard but I can't really see any other explanation for their poor team this year, for not investing in centre mid and for trying to pick up the best youngsters rather than proven talent - for me their position in the league is false and without the extra ££ success brings they will be unable to invest again - and even if they do invest there is no longer a guarantee of success.

I do think clever player selection in the transfer market can mean a premier league title is possible provided there is a reasonable spend - maintaining that success requires becomes the trick then though but I'd be happy to have that problem

To be fair the only reason that United have been stretched is because the Glazers dumped £600m of toxic debt on them. It is testimony to their financial muscle that they have managed to cope and are on the verge of breaking free from that financial millstone. Again it is possible to compete for the Title on a shoestring by generating extra income but as Benitez proved if you do it that way then you have to be almost perfect in the transfer market. Whilst United shrugged of the likes of a Veron because he was an addition to the squad and not a replacement mistakes like Aquilani and Keane absolutely kill you because instead of being additions they are replacements.

That for me will be the difference between spending what we earn and having a buffer that allows you to make additions instead of replacements all the time. When you have a financial buffer you can allow a Ronaldo a season or two alongside a Beckham before you cash in on Beckham. That short term loss of a season or two can really pay dividends and stops new recruits having to come in and hit the ground running. United have been able to do what we did years ago bring in players and bed them in before they become absolutely crucial to whether you succeed.

That little extra funding would allow us to plan in a long term way instead of being forced to make snap decisions all the time.

[Abrak]

Would he have come to us? No, in all likelihood, probably not.

Was us driving Torres' price up determined on how much Newcastle would sell Carroll to us for? From all accounts, yes.

@Abrak, I don't know if you've noticed fella, but as of late nobody really wants to buy football clubs. Unless they're billionaires with nothing better to spend it on and are doing it moreas an expensive hobby than a business. People, like you say, can't see where the money is going to come from & the return from investment. This is a widespread problem, not just on us at all.

No very good point.

Look just how rich the owners of these clubs are....

http://en.wikipedia.org/wiki/List_of_English_football_club_owners

I mean we are not talking rich. We are talking incredibly rich.

I think the 3rd poorest owner in the EPL is worth 65m. Fans do not want to become shareholders. Look Everton fans are revolting because their shareholder isnt rich enough.

[B0151?]

I mean you are right and rich people are very much at the helm of Premiership football clubs, but I think you'll find most of them are treating it in a similar way. No vast expense. They're not really looking to spend much of their personal wealth on it, very much treating it as a business similar to the ones they have made that wealth from. I mean even Abramovich is owed vast amounts by Chelsea (interest free admittedly - so it is still a big investment like) for the money he's put into it and he's looking to slow expense down. I'm not really sure what I'm arguing about as I just jumped on one of your posts and haven't been following what's being sad at all so my apologies if I'm chatting shit haha.

[Abrak]

as I've said earlier I think United are stretched and vulnerable - I acknowledge I'm not financial wizard but I can't really see any other explanation for their poor team this year, for not investing in centre mid and for trying to pick up the best youngsters rather than proven talent - for me their position in the league is false and without the extra ££ success brings they will be unable to invest again - and even if they do invest there is no longer a guarantee of success.

Honestly totally not true.

They have revenues in 6 months that we have in a year.

They have debt of 450m but they are paying it down quite rapidly. They are generating at least 50m a year of cash this is after management fees to the Glazier's etc. And they are currently planning a US$1bn capital raising via a Singapore float. My guess is that the reason they dont spend huge amounts of money more is that it all it would do is  make City spend even more. So they might as well give them their moment in the suin like Chelsea,

[Bobinhood]

Just be happy that Henry thinks he is so clever he will make money out of it when noone else can.

For a self styled financial genius you sure have a knack of missing the forest for the trees.

The time honored method of achieving a fiscal gain in sports ownership comes in the appreciation in the value of the club and its assets over time.

Step1 a is buy an asset with a huge following, preferably undervalued (for example the reds being flogged by a bank to recover a debt). Step 2 is to try and add value and revenue anywhere you can( kit sales, worldwide income, marketing deals, stadia, expanding asian television markets, whatever, wherever) while (importantly) operating in and around break even point over the long term. A small loss or gain is quite acceptable and quite beside the point as long as you are not bleeding huge sums each year.

Step 3 is to wait 20 years or so or whatever it takes for your infrastructure investments to pay for themselves. Step 4 is reap huge windfall profits on the sale your appreciated asset.

Your lost in year one bitching that this isn't working. Ask George Stienbrenners sons if they have a problem with what he paid for the Yankees versus what they are worth today.

Nothing to do with Texas wasnt kidding when he was talking about making a billion dollars.

[Baz Smythe]

Don't forget as well tv rights, dunno what the crack is with sky at the moment but imagine every Liverpool game shown in the US/South America and Asia on ppv would bring in millions of pounds a match.

[Gainsbarre]

What Abrak is underestimating is the potential that Liverpool have... Huge huge worldwide fanbase..especially in Asia! Henry knows well that and when the club is made sucessful on the pitch it will be a much more valuable investment. A well developped Liverpool can match United revenues ..of course with a new stadium and 20K+ new matchgoers.. Compare it to Rangers is bulshit...

[steveeastend]

Again is that Henry's decision or the CEO's?

You don´t get my point, the theory is irrelavant. IF things go wrong, is he able to step in?

It´s something which is extremely important in football unless you are willing to invest money to no end in order to make up for the possible mistakes which do happen in football. It´s within the nature of the game..

[Abrak]

For a self styled financial genius you sure have a knack of missing the forest for the trees.

The time honored method of achieving a fiscal gain in sports ownership comes in the appreciation in the value of the club and its assets over time.

Step1 a is buy an asset with a huge following, preferably undervalued (for example the reds being flogged by a bank to recover a debt). Step 2 is to try and add value and revenue anywhere you can( kit sales, worldwide income, marketing deals, stadia, expanding asian television markets, whatever, wherever) while (importantly) operating in and around break even point over the long term. A small loss or gain is quite acceptable and quite beside the point as long as you are not bleeding huge sums each year.

Step 3 is to wait 20 years or so or whatever it takes for your infrastructure investments to pay for themselves. Step 4 is reap huge windfall profits on the sale your appreciated asset.

Your lost in year one bitching that this isn't working. Ask George Stienbrenners sons if they have a problem with what he paid for the Yankees versus what they are worth today.

Nothing to do with Texas wasnt kidding when he was talking about making a billion dollars.

Actually I understand his concept.

The problem I have is this.

Liverpool are competing against two clubs with infinite capital (Chelsea and City). And two Clubs with better underlying fundamentals (i.e. far more inherent revenues) (Man U and Arsenal) and each year you have to compete against them for CL. This being Liverpool's inherent philosophy.

So given that you have a massive competitive disadvantage against 4 players competing for 4 positions why would you choose to compete against them?

The problem he faces is that he can never turn the business cash flow positive? And given this the inherent value is negative. Ultimately all he has bought is a poison chalice. Because he has to invest every year in something he cant really achieve.

So if you can explain to me why you would buy a business that must compete each year to come top against 4 companies that have inherently better fundamentals I will understand. I know he probably bought what he thought was an undervalued asset but as he is going destroy value each year it is only a question of time that the asset ends being a liability. Of course he could stop competing and cut costs but then he would be crucified. Lets see how cash flow negative the business is. Then you will realize that he is not adding value every year but losing money every.

P.S. I do agree he can make money by financing a new stadium through debt and getting supporters to pay for it. That is clearly a massive enhancement of shareholder value. It is, however, long term and quite speculative at the moment. But I do see the shareholder value enhancement.

P.S.2 I dont totally disagree with you.  I own shares in now what is a private company - Spurs - which I bought when they were worth 80m ( and are now worth considerably less) on the basis that valuations would increase. So I do not think it was a bad investment - I just think he has a big obligation.

[farawayred]

Liverpool are competing against two clubs with infinite capital (Chelsea and City).

You both are making interesting points, but this snippet from what you said holds the key for me - the footballing side of the equation. When Abramovich bought Chelsea, he made them an instant success winning titles and Cups. So appear to be the case with City. But neither team are winners. Look at where Chelsea are now with all their "infinite capital" - (practically) out of all competitions and fighting for fourth place. City - in the Europa League (I'm sure they are as happy with that as United!) and possibly with a chance of winning the league for the first time since they were bought. Maybe, maybe not. Because they are up against the one team in the league, and I dare say the only one, in which the true winners' mentality flows through the team.

Here is the caveat - we are the other team that has a past history of being a winner team, except we've forgot how to do in the last couple of decades. You must agree that on the merit of our performance in the PL and other competitions we've done average at best per our standards in that time. But look at the fans forums, the official site, anywhere, we speak as if the title was just snapped out of our hands. Even Ferguson speaks of us as one of the two great clubs in England. Based on our recent showing? I don't think so. Based on our history.

I do believe that this explains why Henry bought the Club, and I do believe that we are a sleeping giant. There is no other team with that reputation and capability to awaken. Chelsea are a momentary thing; when Roman gets bored with not winning the CL after 10-20 years, he'll be off to buy a F1 team. When the oil money dry up in 20 years time, the City tap will stop pouring and start dripping. But we will still be around.

[Bobinhood]

Actually I understand his concept.

The problem I have is this.

Liverpool are competing against two clubs with infinite capital (Chelsea and City). And two Clubs with better underlying fundamentals (i.e. far more inherent revenues) (Man U and Arsenal) and each year you have to compete against them for CL. This being Liverpool's inherent philosophy.

So given that you have a massive competitive disadvantage against 4 players competing for 4 positions why would you choose to compete against them?

The problem he faces is that he can never turn the business cash flow positive? And given this the inherent value is negative. Ultimately all he has bought is a poison chalice.

The premis is wrong. He doesnt actually need to ever turn an operating profit because in theory in 20 years time he could sell to the next obramovitch or oil shiek that happens along, or, more much likely, to an international conglomeration of media interest who need "synergies" ie programming hours to fill television and tablet eyes. MLSE in toronto owns the Leafs, Raptors and Toronto FC and was just sold from a pension fund ownership (who wanted 10% annual returns they were having trouble reaching even though the hockey team is a cash cow) to a partnership of otherwise bitter rivals media Bell and Rogers, who between them control the phone,  internet and cable markets in cnada. They paid over a Billion usd and the reason is they want the programming hours...leafs tv raptors tv, tfc tv,web sites etc etc. So the Profit to be madde on appreciation is not based directly on the team actually turning an day to day operating profit.

Secondly, We can compete becouse the financial fair play rules are set to come into effect and even if they are loosly enforced we have just about the biggest world wide fan base in existence becouse.....

 " Aaaaaaaaaaaaaalllll the way from Vladimir Smicer, and thats! more ! like it from is-tan-bull!....

Sorry i just like to say that for no reason whatever every once in a while.   

what i mean to say  is we have a history you cant buy and only Real, Barca and those poufs down the road some are operating with the same scale of world wide support, and that can be leveraged into profits and tv eyeballs going forward. Once the new stadium is built, we will be easily able to compete with anyone in a small world, new media environment. If truthfully you can only put what you make back in to the team, we will be locked into the top 5 revenue producers world-wide more or less forever...a perfect scenario that greatly enhances the value of the club. top 10, anyway without a doubt.

So break even operations or cl qualification in year 2 not a deal breaker imo.

[steveeastend]

Actually I understand his concept.

The problem I have is this.

Liverpool are competing against two clubs with infinite capital (Chelsea and City). And two Clubs with better underlying fundamentals (i.e. far more inherent revenues) (Man U and Arsenal) and each year you have to compete against them for CL. This being Liverpool's inherent philosophy.

So given that you have a massive competitive disadvantage against 4 players competing for 4 positions why would you choose to compete against them?

The problem he faces is that he can never turn the business cash flow positive? And given this the inherent value is negative. Ultimately all he has bought is a poison chalice. Because he has to invest every year in something he cant really achieve.

So if you can explain to me why you would buy a business that must compete each year to come top against 4 companies that have inherently better fundamentals I will understand. I know he probably bought what he thought was an undervalued asset but as he is going destroy value each year it is only a question of time that the asset ends being a liability. Of course he could stop competing and cut costs but then he would be crucified. Lets see how cash flow negative the business is. Then you will realize that he is not adding value every year but losing money every.

P.S. I do agree he can make money by financing a new stadium through debt and getting supporters to pay for it. That is clearly a massive enhancement of shareholder value. It is, however, long term and quite speculative at the moment. But I do see the shareholder value enhancement.

P.S.2 I dont totally disagree with you.  I own shares in now what is a private company - Spurs - which I bought when they were worth 80m ( and are now worth considerably less) on the basis that valuations would increase. So I do not think it was a bad investment - I just think he has a big obligation.

The thing is though Abrak, there may be a long term issue but football in general is short term foremost. And it´s possible, of course, to outsmart clubs with an financial advanatage by putting as much effort as possible into the short term, and making progress by doing so step by step.

Knowing when exactly to spend the right amount of money on the right bunch of top quality player in order to keep the balance between "borrowed" success and long term stability is the key for being successful in football.

[Vulmea]

Vulmea, I promise you this business should not be fan owned. Actually let me correct that - that some clubs should be fan owned  and others not. Many owners have made huge financial sacrifices to keep their clubs in business - Fulham, Bolton, Wigan , Aston Villa - payments of which they will never see a return. 16 out of 20 premier league clubs lost money least year. Certainly the likes of Bolton could not have survived through fan ownership.

And honestly while Henry might be prepared to put money into Liverpool would we as supporters. The club needs 150m of equity which is 3x what is match day revenues. And if supporters owned the business and didnt reduce prices why? As some one else put it earlier in this thread basically your owner is a supporter with a big bank balance. You know if you were owned by supporters = like listed on the exchange - you would have to pay dividends. And the last club to pay dividends was Spurs in 2008. So this is not a business you want to own. Just be happy that Henry thinks he is so clever he will make money out of it when noone else can.

The term knowing the cost of everything and the value of nothing leaps out from this - as it does in so many things in this thread.

How does a young 21 year old striker feel when he's valued at 35m instead of 15m? Does he understand the distinction between the differentials when the press ram it down his throat every day that he cost 35m or the opposition fans hurl what a waste of money in his face on match days? He is not a commodity except when everything is simply a number and not an individual.

I would hope that somehow we combine the two and if Henry genuinely is as smart as he thinks he learns lessons from the Carroll deal in terms of footballers not being inert commodities.

The concept of fan ownership is not new - nor is it unique - Real Madrid, Barcelona, every club in Germany - all operating in the real world, all fan owned. If I had my way fan ownership would be a legal requirement - the fact very few can be bothered to understand it does not mean it is not viable - Al555 is right for me in the current climate it would need to be more of the Bayern model than the Spanish. Clubs are community assets - they provide social value to that community - it should never have been allowed to become the travesty it is today. That does  not mean I dont understand the situation in which we find ourselves now I'm just stating my personal preference the fact the world may have to tilt on its axis to make it happen is just an inconvenience. Much like Barcelona if any club should be fan owned it is this one.

Make the clubs fan owned, constrain them to spend what they earn and the current plutocracy becomes a meritocracy or at least more like one than the nonsense we have now. There would still be big clubs, United and Liverpool would do very well from such an arrangement but I hope I'd feel the same way even if I supported Southend United.

Its one reason why I find Wigan and Fulham  just as offensive as City or Chelsea they are propped up by individual wealth not their respective communities.

@Al555 - I understand your view but I'm sure Leeds thought much the same way and Rangers. There are also the rising urban areas in Russia and Turkey to consider - if money brings success then those clubs are going to have an increasing say. I see it as a gamble however big the potential fan base. We either join in or lead the sport in a different direction. I'd like to see us lead teh sport away from the plastic flag ideal or the contrived blue moon marketing. If City and Chelsea are allowed to dictate the whole wage structue of the sport then the ideas upon  which the game were founded are lost - there will not be fair competition - your idea of a european league becomes inevitable - the franchise model from the states becomes the norm and supporters engagement in the whole game becomes  merely that of a consumer - brand loyalty will fluctuate with the wind - its not an ideal I can get behind and not one that interests me - I fully appreciate that makes me a dinosaur and I can live with that.

[Giono]

Do you honestly believe that? Is it actually true? Were there a queue of people waiting to buy up Liverpool?

You might be right. But it is not something I have heard.

Yes. we all heard of a lot of a people doing a lot of stuff with a lot of interest in Liverpool. But how many real buyers.

Just wait for the next results. I can add even if you cant.

Is there any evidence that there was any competent buyer apart from FSG. I am not fucking you around . I dont know why FSG bought the club it was so fucked. So do not tell me there was a queue of buyers. And stop pretending that Liverpool  was an asset waiting for a buyer rather than a liability looking for a benefactor.

Anyway those who think there are bargains in the business can buy Rangers and reimburse the HRMC.

Abrak, your vocabulary betrays that you have some knowledge of economics. I find your posts an interesting read whether I agree or not because of your vantage point. But the clarity you claim to have on this and other matters is like listening to Hemingway.

Barcap was out to find the right buyer. It wasn't a transparent and open auction. None of us know exactly what went on, but I give Broughton some credit that he wanted to find someone with the cash, knowledge and testicular fortitude to take on the challenge of LFC in those dark days. Henry ticks those boxes.

I work in the investment industry. Money looks for value, we were a value but there were a few variables that would dissuade many who didn't want that spotlight or didn't want that scrutiny in the British press. Also, we had just (successfully!) fought a publicity campaign to chase away any potential supporters of Hicks. It wasn't just about financial risks to investors.

There is a great term in the bond market for corporate debt of companies that have become distressed: Fallen Angels.