Topic: The John W Henry Interview - Part One

[RedMango]

I really like the fact that NESV are so much more, how shall I say it, "quiet". It's a quality that many take for granted. It shows a lot that they listen so much.

Brilliant interview.

[gerrardspetal]

Brilliant

[reniformis]

Am I wrong to assume

There are two ways to 'make money' from our club.

The first is the H&G model which is to leverage the club up to the eyeballs until it eventually pays off the acquisition debt and you end up owning a £300m mid-table stagnant club for nothing. Then sell. £300m profit.

The second is to buy the club 'with cash' for £300m, allowing the clubs income to be invested in the playing squad (ie the £40m per season no longer diverted to interest payments as JWH said). Lend the club £300m for the new stadium, to be paid back with the increased matchday revenues. After 5-10 years the stadium has paid for itself. Then, with the revenues of new stadium fully available and after having 10 years of an annual £40m transfer kitty invested into the squad to keep it competitive at the top end, the club would surely be worth the £600m+ that the c*nts were looking for. £300m profit.

The first leaves us in the shit. The second leaves us in a very healthy position. So far JWH seems to be going for option 2. Fine by me, exactly how we should do things.

[hoonin]

Am I wrong to assume

There are two ways to 'make money' from our club.

The first is the H&G model which is to leverage the club up to the eyeballs until it eventually pays off the acquisition debt and you end up owning a £300m mid-table stagnant club for nothing. Then sell. £300m profit.

Who'd buy a mid-table club for £300M when Blackburn are being touted to a rotisserie chicken specialist for ~£50M.

[GeneticRed]

There needs to be much more about the immediate local community. Much Much more. Anfield is fucked as an area.

[reniformis]

Who'd buy a mid-table club for £300M when Blackburn are being touted to a rotisserie chicken specialist for ~£50M.

True, but I suppose you could cite our history and potential. And hasn't JWH just paid exactly that for a club in the bottom 3 that will struggle to even get into the European places, never mind top 4?

[Ramon]

Great job getting these questions to JWH VdM. Good to see that he is truly making an effort to be transparent with the fans.  A step in the right direction.

[shanklyboy]

The first aim of NESV is to get the club in a position to be serious challengers for the games top prizes. They are winners first and foremost and that is where their focus lies....that is their motivation. To oversee Liverpool FC climbing on top of the perch again.
We all know that this requires investment and given the new rules governing  Financial Fair play, it has to be done prudently.

These rules start in 2012 but even before the takeovwe the general concensus would that we would 'probably' fulfill the requiremnts. As we are relatively debt free at the moment it gives us an opportunity to grow the business/merchandising side of the club and increase our income substantially. Making us able to compete in a sensible transfer market while maintaining an adherance to the Financial Fair Play rules. This will no doubt be subsidised by player transfers.

Part of that happened overnight but the rest will take time.....it isn't a short term plan, so there is no reason to think NESV are here for anything other than the long term.

[Redwhiteandnotblue]

The next batch are all about your plans for the club now that you have your feet under the desk...

8.  All of the questions I would want answered are to do with things he really needs to reflect on awhile. I'd be interested at this stage however, to know what his five key milestones for the next three years would be.
We are focused on getting the club positioned to win trophies within the Financial Fair Play rules that are being imposed next year.  That means off the field we are intent on increasing LFC revenues worldwide.  On the field we have to be smarter.  Arsenal and Man U have depth that is young and capable.  We do not.  We have a lot of work to do there.  A lot of work.  And we will, but we have to be smart about it.

Copyright:  RAWK and SaveLFC 2010

This quote regarding the age of our squad and the capability of our youth is by far the most interesting thing he said. It's certainly rather damning of our recent transfer and contract renewal policy and is critical of the abilities of many of the younger players we'd like to see given a chance to perform for the first team.

I wonder why it's been ignored so far?

[Kahuna{=}Berger]

Just wanted to say thanks for this to all who were involved.
So far I'm very optimistic, with a hint of cynicism learnt from the past. I can't wait until that leaves me!

Can only echo this and say well done to all. If taken at face value, this is monumental in terms of fan power and (in our case anyway), opening up public channels of communication with the Clubs owners.

It breeds incredible confidence and trust, empowerment through dialogue, and faith in the direction in which the Club can/will be taken. It also shows that if Mr. Henry (and NESV) is willing to address supporter concerns through a fans forum, then I'm sure the concerns of an organised supporter's Union will also be given the gravitas it deserves.

Seriously, well done to VdM, S.A. and SB, and cheers Mr. Henry!

[jaygraham]

A very interesting read. Thank you RAWK and Save Liverpool - and of course, John W Henry. I'm looking forward to the next exciting installement!

[manifest]

4.  How have NESV funded the £300m acquisition?


We have some very successful partners – some of whom are big EPL fans – and we are well-financed internally.  But NESV has always had debt from the first day we purchased the Red Sox.  We have some partners who look at   Internal Rate of Return and almost demand that we have debt as a consequence.  Debt increases IRR.

In nine years of operation our partnership has yet to make a profit distribution.  We’ve only made tax distributions. 

Copyright:  RAWK and SaveLFC 2010

two questions if anyone cares to answer: what is IRR? and how does it potentially affect us? and what is tax distribution as opposed to a profit distribution?

great work and thanks to vdm and savelfc and john henry.

[shanklyboy]

This quote regarding the age of our squad and the capability of our youth is by far the most interesting thing he said. It's certainly rather damning of our recent transfer and contract renewal policy and is critical of the abilities of many of the younger players we'd like to see given a chance to perform for the first team.

I wonder why it's been ignored so far?

It's an interesting take on club affairs.
That opinion of our youth system may or may not change in the future.

[Phil M]

I'm hugely impressed with Mr.Henry's openness and willingness to communicate with the fans so soon after the takeover.

Thanks a lot Kev and Andy for your hard work on this, looking forward to reading his thoughts on the other questions asked.

[please, I have my reasons for it but...]

A big thank you to Mr John W Henry for taking some time to answer these questions and engage with the Liverpool fans, also the likes of VdM, SaveLFC and all the others who did this magnificent effort and contributed to these deserve their credit as well.

One question though and I'd be happy if the mods didn't mind passing this question (if not asked before) to Mr Henry is since NESV recently said that they didn't have footballing experience but have experience in running sports franchises, the idea when NESV bought this club was raising its brand off the field while making the team winning on the field, something similar to what they have done with the Red Sox. For the task of raising the brand off the field we don't have any doubts about their ideas since it is somehow similar to that of the Red Sox's, making the team win on the field is quite different since football is run in a different way than baseball.

I'd love to know how they intened to run footballing sides of the club, whether they'll apoint someone with footballing knowledge on the board, maybe a Director of Football, or an independent commitee filled with football brains that run the footballing side independente of the board, who have ideas about running the academy, evaluate the manager's job, set future transfer targets, etc.

The least we want is what happened with the former regime publicly stating that they are negotiating with another manager while the then manager was still in charge or a rush footballing desicion about sacking a manager or selling a player from a board that doesn't know much about football.

Thanks.

[Something Awful]

I'm amazed he's actually answering questions. Top man so far.

[Ambrosia]

It seems NESV succeeding in taking Liverpool back to the top, is completely dependant on the Financial Fair Play rules. How sure can they and anyone else be that there aren't any loopholes in the rules or that UEFA will actually apply and punish clubs accordingly?

But kudos to Mr Henry for answering the questions honestly. He/NESV clearly value the fans, so they really can't go too wrong if they continue with that attitude.

[mytemporallobes]

two questions if anyone cares to answer: what is IRR? and how does it potentially affect us? and what is tax distribution as opposed to a profit distribution?

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

I remember in my finance class when we were dealing with capital structures, you need some amount of debt to be more "efficient".  Go to the local library and borrow a financial management text book and look under "Capital Structure".  It should be no more than 50 pages.  Sorry, it's been a long time so I can't explain it well anymore! 

So it is not about no debt, but it is about some (low) debt.  Think that is what he meant by leaving a little bit of debt behind.  Talk to anyone from Finance 101 or Accountancy 101 or anyone doing project management kind of work.

I don't understand tax / profit distribution - so waiting for other experts to deal with this.

[L7S]

two questions if anyone cares to answer: what is IRR? and how does it potentially affect us? and what is tax distribution as opposed to a profit distribution?

great work and thanks to vdm and savelfc and john henry.

IRR = Internal Rate of Return, you will have to do some calculations to see why IRR increases with debt. IRR is basically a way to measure an investment.

I think profit distribution means dividends, which I read somewhere they have not have dividend distribution for some time.
Tax distribution should be tax savings from expenses deduction etc. I could be wrong on the tax part.

[GeneticRed]

Lets cut to the chase. Basically we've got the right owners now. We need to get the right manager. Most of us know and wish for Rafa to come back one day and be that right manager. Everything else is just bullshit. Come on, you know it's true.

[Shankly!Shankly!]

little bit worried with the business like answers. hope that can live up to the hpye! all most of us can do is keep supporting team and management!!

[Raz]

Thanks to all involved. Great work and really impressive from Henry to be engaging with the fans like this.

Clearly asking about Hodgson isn't quite appropriate within this context but it's good to see the media comment being one of the main ones passed onto him. If he listens to them too much (which is more likely in comparison to baseball which he's a fan and got a knowledge of) there's a big danger he'll allow Roy to stay longer.

Great work everyone!

[redforlife]

I like this guy.  Given time he'll do his best to make sure we have the best possible options in every department, on and off the pitch.

[SMD]

Thanks to everyone involved in this.

6.  How does NESV intend to extract money to make a profit on this transaction?
That’s a good question.  With the club struggling, money I can’t foresee any profits being “extracted.”  Hopefully someday LFC will be worth more than it is today.

8.  All of the questions I would want answered are to do with things he really needs to reflect on awhile. I'd be interested at this stage however, to know what his five key milestones for the next three years would be.
We are focused on getting the club positioned to win trophies within the Financial Fair Play rules that are being imposed next year.  That means off the field we are intent on increasing LFC revenues worldwide.  On the field we have to be smarter.  Arsenal and ManU have depth that is young and capable.  We do not.  We have a lot of work to do there.  A lot of work.  And we will, but we have to be smart about it.

I find these two points interesting. First, his description of us 'struggling' is quite damning but also says a lot about their current expectations. It's good to see that we're not getting any bullshit like 'disappointing' and 'frustrating'.

Second, his response to question 8 reads a lot like how Rafa was talking for the past few years. It's promising that he recognises the amount of work involved, as well as saying 'we' have a lot of work to do. That it's not going to be just left to the manager to deal with.
Not sure about his use of Manchester United as an example, given their financial woes but that's not really worrying. I just hope that whatever long term plan they're working on gets implemented soon, because with the Financial Fair Play rules coming in we have a lot of ground to make up and not much time to do it in.

[Jagged Princess]

When it was first announced that we were getting more American owners (no disrespect to nationality) I and countless others thought oh no here we go again and I myself thought we would just be making a change in owner name only. 

I know John Henry is seen to be the figurehead of NESV but for me, since they have taken over,  I will remain ‘cautious’ (maybe not the right word here) and wait a while before I can fully trust anyone to have the best interests of LFC at heart.

That John Henry has taken the time to respond to these questions  and their actions throughout the court cases and press interviews about keeping our best players etc. they are doing a good job so far and have shown that they respect our opinions and don’t just see us as ‘the noisy ones’

I’m hopeful now that we have found the right owners who will move us both forwards in footballing terms and backwards as in the way this club used to be run.

For now Mr Henry you have my trust, please don’t let me down.

Thanks VDM and SA for this, I’m looking forward to the next instalment.

[Legendary]

Wow, after having such a terrible relationship with our previous owners, having Mr Henry being willing to sit down with the fans and answer our questions is remarkable.

[Dmode101]

i think its a good think our new american owners are giving important answers at this stage. great not to be given the "spade in 60 days" sales pitch.  However, i think in any walks of life be it a successful capitalist or simpleton, trust must be earned by actions and less words. In true Elvis fashion....

Until then we can only be hopeful and see this first few months on how things pan out. in particular the appointments to be made and crucially the jan transfer window. If we were in mid table now I wouldnt be worried but because of the incompetence of roy so far, we are in dire need to replace most of the sub par players bought recently and the last rafa season. 

[HiTs]

Seems like a decent level headed bloke.

[Lofty Ambitions]

Seems like a decent level headed bloke.

Agreed

[Helsinki Red]

Seems like a decent level headed bloke.

[Veinticinco de Mayo]

There needs to be much more about the immediate local community. Much Much more. Anfield is fucked as an area.

There is a specific question on that in the 14 questions that remain.  I can't guarantee that we'll get an answer though as it tied into the stadium situation and he has made it very clear that they are not going to rush into a stadium decision as they want to get it right.

[Shanks1965]

I dont think we were in a position to make too many demands about debt transfer were we? Although I do to an extent share the  concerns and would have asked the same question. I am though happy with the response because naieve as it may sound I do trust these people. Dont know why, just do. It's clear they are here for the long term which is what we need. As well as being custodians of the club they see us as a vehicle for the achievement of other objectives which is fine by me. These people are professional sports business men and women. The likes of which we havent seen before. They understand that fundamental to all of their off pitch goals is success (and goals) on it.

Good work and thanks.

[Boitol]

The manager concerns aside it would be good to get an idea of:

1. The board structure - how many footballing men on the board?

2. The noises  coming from the club appears to suggest that the scouting will be a collective effort and not just down to the manager given carte blance - this is great news - how will this work at LFC?

3. Our new CEO - will he be a corporate guy like Gary Cooke at Man City or a guy who has a background in football?

4. Groundshare - this is a serious issues - what are his thoughts on that?

[Oscarmac]

i think its great to see an owner who listens, and offers considered opinions.
does john henry have a similar relationship with the redsox fans?
it seems that a link between fans and owner is being formed, is this going to be an ongoing idea or just a once off?

[AnyGivenSunday]

Thanks to all involved in this.  It's great that the owners are embracing open and direct communication with supporters.  As many have said, I'm still cautious, but they seem to be making all the right noises.

[J-Mc-]

Well in to all involved for this, Mr Henry comes across as a very well spoken man IMO, seems calm, quiet and looks like he just wants to get on with turning us into a power or Europe again.

So far, he's been a perfect owner and he's definitely saying and doing all the right things atm, talking to the fans, addressing the concerns at board room level, keeping debts reduced, looking at all stadium options.

I know its a bit early to be branding him, but I have a strong feeling that he's going to be the perfect owner, now we just need to football people on the board, Kenny is a must, wouldn't mind seeing Rushy or Thommo put on the board either though but it won't happen.

[Clacky]

Whilst we should continue to not be blinded by the very good PR, I do get the impression they are genuine. For me, it's more of the manner they are going about things rather than what they are actually saying. I'm pretty sure what they are doing now; conversing with the fans, not shooting their mouths of with promises, not trying to be 'Billy big b@llocks', is pretty much what all of us wanted, and would do if we were in their shoes.

Very encouraging so far.

[majestic_11]

The first aim of NESV is to get the club in a position to be serious challengers for the games top prizes. They are winners first and foremost and that is where their focus lies....that is their motivation. To oversee Liverpool FC climbing on top of the perch again.
We all know that this requires investment and given the new rules governing  Financial Fair play, it has to be done prudently.

These rules start in 2012 but even before the takeovwe the general concensus would that we would 'probably' fulfill the requiremnts. As we are relatively debt free at the moment it gives us an opportunity to grow the business/merchandising side of the club and increase our income substantially. Making us able to compete in a sensible transfer market while maintaining an adherance to the Financial Fair Play rules. This will no doubt be subsidised by player transfers.

Part of that happened overnight but the rest will take time.....it isn't a short term plan, so there is no reason to think NESV are here for anything other than the long term.

Top post shanks!I wonder if they have give it any thought on how they will exit the club.For all his flaws David Moores was a european cup winning chairmen, yet because of how he exited the club he will forever been known as the man who sold out!

I have no idea how these things work and i am glad there is ppl on here that do, but if it is possible i am hoping they have a plan on making a slow exit whilst selling bits of the club back to the fans over a long term period.

If we are to be a succesful on and off the field and we get a ground capacity that this football club deserves, then my biggest fear will be that the football club will be to big for any single invester or group to pay cash for the club. Which only means one thing...........

Other then that fear i agree 100% with your post and i am very optimistic  for the clubs medium term future.

[ronnnie yates]

the only way im trusting this fella /NESV , is simple its ........ time , weve been fucked over by one lot ,and we dont want to be going down the same road , having said that he comes across as a genuine smart fella , dont they all !!, so think we will just carry on being guarded ,vigiliant, and see where we are at different stages , mine is the end of the season , where hopefully anfield will be looking at getting redone , hodgson will be gone , and weve at least qualified for the europa league , that would be a cracking start for me .

[PaLee]

Honest and open answer. Thank you very much. Prove by your action especially in transfers.