David Prentice: SOS warning which all Liverpool FC fans should heed.
DEBT. Lies. Cowboys. Whichever statement you analyse, The Spirit of Shankly posters which have sprung up around town this week ring uncomfortably true.
Cowboys? Well it was Texan Tom Hicks himself who proudly showed off his club crested cowboy boots.
Lies? It was pardner George who suggested: “We intend to have a shovel in the ground in 60 days” or claimed “This is not a takeover like the Glazer deal at Manchester United. There is no debt involved.”
Then there’s the biggest four letter word of the lot. Debt.
Liverpool are in alarming hock.
An official UEFA report published this week, The European Club Footballing Landscape, revealed that Premier League clubs owed more than the rest of Europe put together – and Liverpool and Manchester United make up more than 50 per cent of that debt.
That’s a serious, club breaking, Leeds United style debt mountain.
The Spirit of Shankly group is sometimes accused of being zealous, old-style Militants who’d start a fight in an empty room.
But their poster campaign is not just well intentioned, it’s justified, because it highlights a very real threat to the future well-being of Liverpool Football Club. And it’s time everyone took heed.
In 2004, 2005 and 2006 Liverpool’s end of year accounts showed debts of £14m, £15m and £26m.
In the first accounts posted after the American takeover, those debts instantly rocketed into ‘Oh my God’ territory. In 2007 Liverpool Football Club and parent company Kop Holdings owed £288m.
In 2008 it soared £385m into the red.
That startling figure reminded me of a conversation I’d had with that outstanding Anfield administrator Peter Robinson in what seemed like a quainter era, way back in 1988.
After a fixture foul-up left the Reds without a home game for a month, he told me: “We’ve had to approach our bank for an overdraft for the first time I can remember. It’s left us with cash flow problems and we’re in the red.”
That was an era when Liverpool’s financial results were of no real interest.
The club made money, gave it to the manager to spend and they won things.
But that was the good old days.
The way in which Tom Hicks and George Gillet bought Liverpool – “a leveraged buy-out” – means that the club now generates cash to pay off the loans they took to buy LFC.
The Americans have dramatically increased turnover at Anfield since they took over – since the Champions League win in 2005, turnover has increased by around 70per cent.
That’s a stunning improvement, but the major beneficiaries will not be Liverpool – but their owners.
The huge debt on the club means that annual interest payments, from a modest £2m in 2006, are now in the region of £44m.
Compare that figure to rivals for the Champions League spot Spurs, or neighbours Everton, who paid interest of roughly £4m in 2008.
It’s why qualification for the cash generator which is the Champions League is imperative.
If Liverpool don’t finish fourth, the Americans will simply have to sell up to a new owner, or start hawking off the family silver.
No doubt some Reds fans will read this article as scaremongering, accuse me of being a bitter Blue seeking to unsettle a proud football club.
Well sometimes the truth hurts.
Liverpool are in trouble – and the Spirit of Shankly poster campaign is trying to drive that message home.
http://www.liverpoolecho.co.uk/liverpool-fc/liverpool-fc-columnists/david-prentice-column/2010/03/05/david-prentice-sos-warning-which-all-liverpool-fc-fans-should-heed-100252-25966103/