Topic: Collating headline financial numbers from the club's Annual Accounts

[royhendo]

Hi all - as you may or may not know a few of us writers are collating articles and infographics at the moment with a view to:

1. educating apathetic fans or those who've just had no access to the facts
2. educating the media to promote the ownership issue in their agenda for the coming season.

We've had some early success, but now we need to build on it with hard facts illustrated in nice accessible ways - ideally funny ways via infographics.

Now - can we collate the headline stats from the published annual accounts in here? And if there are any incorrect stats listed, can we correct them?

For example. Based on the 2009 accounts, we're paying in the region of £110,000 a week in debt interest alone.

Is that correct? What's that fact based on?

What's the total debt and what's the trend been?

How much exactly has been spent on them coming back and forth to JLA on private jets?

How much exactly has been spent on the stadium plans?

How much exactly has been spent on this 'enabling work'?

And so forth. Can we start collating it?

[beardsley4ever]

I thought that it was £110k per day, which is £25m per year (assuming "per day" is business day).  As someone said on here at the time, it's the equivalent of all of us collectively buying a Ferrari every day and lighting it on fire.  Every single day.

Or if you struggle to visualise that, then imagine all of us 40,000 season ticket holders putting £3 in a jar, every single day.  And tomorrow.  And the day after.  That's £60 a month.  £700 per year.  Just for the interest on our loan.

Sick yet?

[jason42]

Best bet would be to speak to Tim (ttnbd) - he is the resident whiz.

[incredibleL4ever]

I will do some work on this for you over the next day, but off the top of my head the interest charge is 110k per day, but we are not actually paying the interest on the Kop Cayman loan but it is being rolled up.

I only have the 2009 accounts currently, if someone has the last 5 year of both Kop and Lfc I would appreciate a pm, otherwise I will buy from Companies House.

[royhendo]

Top man mate - thanks for that. Helter Skelter was working with these numbers, for example.

Thanks Royhendo
Most important thing should be to compare the right figures. I thought of something like that:


Debt H&G wanted to put on the club: 0           Debt 2007: 44m            Debt 2008: 350m           Debt 2009: 472.5m(237.410m owed to RBS)          Debt 2010: ?



Interest payment per day: 110.000             week:  770.000                  month: 335.000                  year:  40.1m                       compared to how much we pay the squad per day etc(anyone knows how much that is?)



H&G brought the club for: 220m              Loaned: 298m            Personal Investment: about 20m (is that correct?)          Want to sell the club for: 800m
(how much profit would each make? 400m?)



Interest from 2007 to 2010: 85m            Blueprint for the unbuilt stadium: 50-55m           Planned Stadium in 2002 with a capacity of 60.000: 60-70m

Stadium income per game:                      1.3m            last season (with 27 home games): 35.1m
with a 60.000 seater aprox per game:    2.2m           season with 27 games: 59.4m
manu's stadium income per game:          3.1m           a season with 27 games: 83,7m



Players brought in 2009: 36.6m          Sold in 2009: 44.75m           Profit: 8.15m               aprox. transfer budget in 2010:      ?


The misery they put us in:    a potential buyer would need about 600-800m to buy the club, further 400m to build a stadium and at least 100m to get new players in (would he also need to pay the debt of at least 370m?) So this adds up to 1.1 - 1.7bn to get the club fully back on track.


All of this in a visual way of cause, its just the blueprint
Any other ideas and/or more figures?

[incredibleL4ever]

Just a quick look during lunchtime.....

Group (Kop Football (Holdings) ltd.
Year to 31 July 2009.
Total interest cost - 42.941m  or 117.6k per day.
2.8m relates to loan for the invisible stadium which are capitalised (so thats not a real cost yet!!!)
The interest on the Profit & loss account is 40.1m. (110k per day)
The intestest  actually paid was 29.8m (81.6k per day) the balance was not paid by added to the debt. 

The interest charged and paid in the year prior to the take over (31/7/06) was 1.7m.  We are now being charged that amount of interest every fortnight.

Total interest charge since the take over -
Feb 07 - July 09   £89.423m.    Imagine for a moment that these funds had been put into the first team. 


More anon....

If anyone has specific areas of the accounts they want me to look at leave a message!  I now have Liverpool accounts 2005 - 2009 and Kop from its start to 2009

[incredibleL4ever]

Net Debt (total bank loans minus cash at bank)
2006 (before take over) 25.6m
2007 (Kop) 244.3m
2008 (Kop) 299.8m
2009 (Kop) 351.4m

[AKABillyGee]

The cost of every single season ticket (in excess of £700) renewal goes to cover the cost of daily interest payments of £110,000 on the accumulated debt. Season tickets sales therefore generate no income for the club.

[HelterSkelter3]

Wow incredibleL4ever thanks for all that info!

Does it say anything about the personal investment of Hicks and Gillett?
And are there infos about the squad cost, contracts of some players or something similar?

Will do an infograph with your numbers soon

[incredibleL4ever]

I will get back to this in the morning and look at revenue increases and transfer expenditure.

Maybe there is some simple slogan or poster or p.r. line we can get out there about what we could be getting if we did not have H&G based on Jack's comments.
Like "Look what £90m can buy you, If you are Real Madrid Kaka and Alonso, If you are Liverpool 2 years loan interest, Thanks Tom.

Something that make people understand the real effect of what is going on.

[the_prodigal_s0n]

But the total interest payable, including the sums falling due to Kop Cayman, will probably be higher.

Does anyone know whether the rate of interest payable is increasing or decreasing (or staying roughly the same)?

[incredibleL4ever]

The RBS facility

Does anyone know whether the rate of interest payable is increasing or decreasing (or staying roughly the same)?

The RBS facility is on LIBOR +4.5%.
For the year to July 2009 this would have averaged about 6%.
For the year to July 2010 it will be about 5%.

Additionally we seem to be paying "Loan Arrangement Fees" annually to RBS and others.  These could add up to 2.4m to the bill.

The Kop Cayman loan is at 10% fixed.

[incredibleL4ever]

Anyone got any ideas why there is a difference between the players registration figures in LFC&AG and Kop?
e.g. in 2008 the disposals in LFC were 40,009, but in Kop's accounts for the same period the figure is 26,609.

[incredibleL4ever]

Transfers-
Total since they took over up to and including January 2010.
Acquistions 183.4m
Disposals 134.7m
Net 48.7m
Average 16.23 per season.

The interesting thing is the trend -
To July 07         34m
To July 08         30m
To July 09         -6m
To Jan 10         -9m

[incredibleL4ever]

Stadium
Costs to date -
Original design (Parry & Moores)£7.1m
New Design (Hicks & Gillett)     £45.5m
Benefit of above                       £  0.0m

These costs levels are of course ridiculous.  It is likely that any expenditure that might in any way related to the stadium is being Capitalised in order to make the overall loss smaller.  For example if Hicks flys a private jet in Liverpool for board meetings which include a discussion on the stadium the cost of the flights, hotels, expense account, security! etc could be kept out of the profit and loss calculation.  I really dont know how the auditors put up with this as there is no likelyhood that this stadium will actually be build.  Maybe a new investor will build a stadium but it might not be this one.
Maybe we need a few letters to them also.

Looks at these figures

Lfc operating profit if stadium costs are written off as they occur -
2006          20m  (20-0)
2007            4m  (8-4)
2008         11m  (30-19)
2009        11m   (31-22)

So for Hicks arguement that Liverpool is performing much better than before he took over the truth is any extra profits were ploughed into a non-existant stadium.

[incredibleL4ever]

Revenue & Operating Profit

Hicks claims to be doing a great job and Liverpool is done much better now under his control.

Truth is of course that the only reason the operating profits are increasing is due to improved TV deals negotiated by the Premier League and UEFA.  As the changes in media income attract no direct cost improvements go directly to the bottom line.
Operating profit is before transfer dealings, interest and tax.

Year    Operating Profit  Media income
2005           23                     51
2006           20                     50
2007             8                     52
2008           30                     68
2009           31                     75
The take over was midway through 2007.

Media income has increased by 25m since the take over.  Operating profit by 11m.

[ttnbd]

the player registration costs are different due to fair value accounting on purchase of the club. Additions should be the same throughout the group

[simonchamp]

the player registration costs are different due to fair value accounting on purchase of the club. Additions should be the same throughout the group

Tim, do you know how the players are valued?  Will some be linked to the transfer fee paid or are they are all set independently at year end?

[incredibleL4ever]

Tim, do you know how the players are valued?  Will some be linked to the transfer fee paid or are they are all set independently at year end?

The transfer fee is written off over the contract lenght.
The issue with the take over was in Kops accounts (the group) an estimate of asset value was applied on taking over the assets rather than the book value at that date. so the figures in Liverpool FC's accounts are different for the players that were there in Feb 2007 and are still around.

[simonchamp]

The transfer fee is written off over the contract lenght.
The issue with the take over was in Kops accounts (the group) an estimate of asset value was applied on taking over the assets rather than the book value at that date. so the figures in Liverpool FC's accounts are different for the players that were there in Feb 2007 and are still around.

Sure, but they must have a value for home-grown players who were not transferred in?  Also, say with Torres whose value started at £21m but is still under contract for 3 or 4 years, I wondered what his asset value in the accounts is likely to be?

[incredibleL4ever]

Sure, but they must have a value for home-grown players who were not transferred in?  Also, say with Torres whose value started at £21m but is still under contract for 3 or 4 years, I wondered what his asset value in the accounts is likely to be?

No.  Players are not upwardly revalued and "home grown" players have no book value.  Similarly a players who is shite does not have his value written down unless he is sold.

See notes 1.6 and 1.7 of the accounts.  Sorry I cant paste from a .pdf

Torres was signed for 21m for 6 years, three of which has expired. I dont think his contract was extended though he got a pay rise.  So his book value is 10.5m.  If he is sold for 70m a profit of 59.5m will be made on paper.

[simonchamp]

No.  Players are not upwardly revalued and "home grown" players have no book value.  Similarly a players who is shite does not have his value written down unless he is sold.

See notes 1.6 and 1.7 of the accounts.  Sorry I cant paste from a .pdf

Torres was signed for 21m for 6 years, three of which has expired. I dont think his contract was extended though he got a pay rise.  So his book value is 10.5m.  If he is sold for 70m a profit of 59.5m will be made on paper.

Damn that is what I feared and posted a while ago.  My fear was that if Torres asset value is, say, £10M and he is sold for £70M then, assuming the majority of that money stays in the club, is reinvested in players or pays down club debt then the club is hypothetically more valuable.  Anyone sensible would see it as a negative but Hicks will see it as a positive.

[HelterSkelter3]

Does anyone know how much of their own money H&G actually invested in the club? Some people say its about 20m, is that correct?

[TepidT2O]

IncredibleL4ever. So what you are saying is that the reason we have spent nothing on players is that we are paying for an invisible stadium that we can't afford to actually build???

[Timbo's Goals]

Does anyone know how much of their own money H&G actually invested in the club? Some people say its about 20m, is that correct?

According To Timbo no. Far from it. They've actually taken out about £120 million but £60 million of that they've had to pay back to RBS. But don't take my word for it. No other fucker does. Christ knows why like.

 

[HelterSkelter3]

According To Timbo no. Far from it. They've actually taken out about £120 million but £60 million of that they've had to pay back to RBS. But don't take my word for it. No other fucker does. Christ knows why like.

 

Haha alright mate, thanks   

[incredibleL4ever]

IncredibleL4ever. So what you are saying is that the reason we have spent nothing on players is that we are paying for an invisible stadium that we can't afford to actually build???

Yes and because of the interest payments on our loans.

[incredibleL4ever]

Does anyone know how much of their own money H&G actually invested in the club? Some people say its about 20m, is that correct?

Because of the structure of the group including a parent in the Caymens which does not have to file accounts its is impossible to be conclusive (That is why they go to the Caymens anyway).  However what we can say is there has been no new capital put into Liverpool FC.  They did lend the club about 80m, which is now 100m+ with interest roll-up.  This was most likely borrowed by Kop Caymen and what was used to secure it is no known.  A further approx 35m rolled up to 44m was lent to Kop Football.

Did they put their hands into their pockets? I doubt it.

[ttnbd]

Transfers-
Total since they took over up to and including January 2010.
Acquistions 183.4m
Disposals 134.7m
Net 48.7m
Average 16.23 per season.

The interesting thing is the trend -
To July 07         34m
To July 08         30m
To July 09         -6m
To Jan 10         -9m

Not sure where those are from, I get some significantly higher net figures from the accounts (except maybe the 6 months to Jan 10). 

[Timbo's Goals]

Because of the structure of the group including a parent in the Caymens which does not have to file accounts its is impossible to be conclusive (That is why they go to the Caymens anyway).  However what we can say is there has been no new capital put into Liverpool FC.  They did lend the club about 80m, which is now 100m+ with interest roll-up.  This was most likely borrowed by Kop Caymen and what was used to secure it is no known.  A further approx 35m rolled up to 44m was lent to Kop Football.

Did they put their hands into their pockets? I doubt it.

I said I'd stop flogging the point in the other thread. That doesn't mean I can't chime in here.

I think you - and every other financially genned up person in these threads - massively underestimate how much money G&H have taken out of the club.

I have no accounting insight whatsoever but I can apply logical thought quite well. And the financial logic of what has transpired since the sale tells me that the money borrowed [even using Jack S's figures] plus the extra over increased revenues [£165 million] has significantly exceeded the extra over costs [including interest payments and additional wages etc] during the same period.

In my ham fisted approach I get this to around £60 million.

But - I'm not interested in precision. I'm just intersted in the principles governing - determining if you like - the actions of G& particularly H.

I think the figures are configurated to confuse you all no matter how good you all might be in interpreting accounts. I remain convinced there is no break even here but rather a significant amount that has been taken out. If you discount the accounts interpretation and think purely about the logic of it, I think all of you will be forced to agree.

Neither JS nor Manila nor Xerxes 1 nor Titch nor your goodself nor in his fleeting posts TTNBD have come remotely close to dispelling my 'logic based' conviction on this with their attempts at interpreting figures which do not tell them the full story.

I ask - once you have accounted for interst payments and additional wages - where has the rest of the money borrowed and earned since they arrived gone?   

[incredibleL4ever]

I said I'd stop flogging the point in the other thread. That doesn't mean I can't chime in here.

I think you - and every other financially genned up person in these threads - massively underestimate how much money G&H have taken out of the club.

I have no accounting insight whatsoever but I can apply logical thought quite well. And the financial logic of what has transpired since the sale tells me that the money borrowed [even using Jack S's figures] plus the extra over increased revenues [£165 million] has significantly exceeded the extra over costs [including interest payments and additional wages etc] during the same period.

In my ham fisted approach I get this to around £60 million.

But - I'm not interested in precision. I'm just intersted in the principles governing - determining if you like - the actions of G& particularly H.

I think the figures are configurated to confuse you all no matter how good you all might be in interpreting accounts. I remain convinced there is no break even here but rather a significant amount that has been taken out. If you discount the accounts interpretation and think purely about the logic of it, I think all of you will be forced to agree.

Neither JS nor Manila nor Xerxes 1 nor Titch nor your goodself nor in his fleeting posts TTNBD have come remotely close to dispelling my 'logic based' conviction on this with their attempts at interpreting figures which do not tell them the full story.

I ask - once you have accounted for interst payments and additional wages - where has the rest of the money borrowed and earned since they arrived gone?   

I dont know if this helps but here goes....

                            2006      2008   2009
                        Pre take over   Post take over   
                       £m      £m   £m
Revenue                       121      164   185

CostSales                        13      17   19
Wages                        69      90   103
Others                        18      30   31

Funds from business     21      27   28
+ Debt increase            9      55   52
            
Total funds raised          30      82   80
            
Used to            
Pay interest            2      34   30
Transfers (net cash)          28      28   22
Stadium                            0      18   23
Investments (LFCtv??)     0      0   5

Total funds used          30      80   80


These are rounded a bit.

[incredibleL4ever]

Not sure where those are from, I get some significantly higher net figures from the accounts (except maybe the 6 months to Jan 10). 

Checked my figures.  You are correct. 

I now make it as follows -
Year   07    08     09     10
            
Purchs    54.4     70.0     38.8     20.4

Sales   21.5   20.7   26.0   29.7
            
Net   32.9   49.3   12.8   -9.3

[Timbo's Goals]

I dont know if this helps but here goes....

                            2006      2008   2009
                        Pre take over   Post take over   
                       £m      £m   £m
Revenue                       121      164   185

CostSales                        13      17   19
Wages                        69      90   103
Others                        18      30   31

Funds from business     21      27   28
+ Debt increase            9      55   52
            
Total funds raised          30      82   80
            
Used to            
Pay interest            2      34   30
Transfers (net cash)          28      28   22
Stadium                            0      18   23
Investments (LFCtv??)     0      0   5

Total funds used          30      80   80


These are rounded a bit.

Bullshit baffles brains i guess.

 

Seriously IncredibleL$, no it doesn't help me since I'm dyslexic when it comes to understanding accounting presentation. Always have been. I'm not thick by any means - though some might disagree - but your figures mean Jack S. to me - and I don't mean Jack Slater.

 

I'm not being facetious but I would genuinely welcome you interpreting them for me in simple english. But please reveal what out of the figures is trustworthy and what could disguise the true picture of what has happened. Because if the figures merely repeat what the other fine accounting chaps on here have already told me repeatedly in the other thread then I'm afraid it still doesn't dispel the logic which to me remains that H&G have taken out quite big money.

[Vulmea]

Timbo I'm not sure what you are looking for:-

If H&G have taken money out they haven't done so under the accountancy heading 'money stolen through the back door' - they have done so under headings like:

loan arangement fee's
stadium enabling works
architects fee's
expenses

The figures they have declared may have been grossly overstated - but if the income has gone up 165m over 3 years their expenditure has risen by 30-50m on player wages over the same period, by 85 - 115 m on interest over the same period and  by 50 mil on a stadium that doesn't exist - all things which we were not paying for before. Those increases more than pay for the increased turnover.

Given these stats I dont see why you need to think there is another pile of money they've pocketed?

[incredibleL4ever]

Timbo, in as plain english as I can,
I think your question is of our revenue has gone up so much and we are borrowing so much where has the money gone.

Since the takeover (say comparing 2009 to 2006) our Revenue has grown from 121m to 185m per annum which is 64m.  However our wages have grown by 34m and other costs by 19m in the same time, together 53m.  So overall we are up 11m (64 minus 53).   It will surprise most people that costs are rising at the same rate as revenue is going up.

Ok, so were are up 11m ,but we then gave Parry over 3 m so that means we are up 8m.
Then there is the borrowings - we borrowed a mere 53m in 2009.

Next part of the question is where did that money go.
Interest paid is 30m.  Total interest was 44m but only 30m was actually paid.
22m was paid to buy players.  Again this is the actual net paid (66m) less cash received for selling players (44m).  Remember that ofter transfer fees are paid over several years.
23m was paid (yes paid) on the stadium project during the year.
Thats most of it.

Maybe the things you might not be including in your thoughts are the stadium costs (A joke really but anyway) they come to 46m so far, maybe the difference in timing of transfer fees, and the fact that the increase in revenue is very different from increase in profits as costs have gone up by almost as much.

p.s. as regards what H&G take out themselves I agree with Vulmea's answer .

[HelterSkelter3]

Checked my figures.  You are correct. 

I now make it as follows -
Year   07    08     09     10
            
Purchs    54.4     70.0     38.8     20.4

Sales   21.5   20.7   26.0   29.7
            
Net   32.9   49.3   12.8   -9.3

Mate where did you get those figures from? Are they in the Reports?

Oh and is the operating profit including price money?
Thanks

[incredibleL4ever]

Mate where did you get those figures from? Are they in the Reports?

Oh and is the operating profit including price money?
Thanks

yes and yes.

Purchases are directly in the reports.
Sales is calculated by taking the disposal at cost less disposals amortisation plus profit on disposals.

Operating profit is profit before interest and player transfers.

[Timbo's Goals]

Timbo, in as plain english as I can,
I think your question is of our revenue has gone up so much and we are borrowing so much where has the money gone.

Since the takeover (say comparing 2009 to 2006) our Revenue has grown from 121m to 185m per annum which is 64m.  However our wages have grown by 34m and other costs by 19m in the same time, together 53m.  So overall we are up 11m (64 minus 53).   It will surprise most people that costs are rising at the same rate as revenue is going up.

Ok, so were are up 11m ,but we then gave Parry over 3 m so that means we are up 8m.
Then there is the borrowings - we borrowed a mere 53m in 2009.

Next part of the question is where did that money go.
Interest paid is 30m.  Total interest was 44m but only 30m was actually paid.
22m was paid to buy players.  Again this is the actual net paid (66m) less cash received for selling players (44m).  Remember that ofter transfer fees are paid over several years.
23m was paid (yes paid) on the stadium project during the year.
Thats most of it.

Maybe the things you might not be including in your thoughts are the stadium costs (A joke really but anyway) they come to 46m so far, maybe the difference in timing of transfer fees, and the fact that the increase in revenue is very different from increase in profits as costs have gone up by almost as much.

p.s. as regards what H&G take out themselves I agree with Vulmea's answer .

Thanks IL4A. I will try to digest what you say.

However, in the meantime just one quick thing though which might go towards explaining my scepticism.

You say wages rose by £34 million in one year - I assume this comes from the accounts.

Well let's just quickly see what that represents across the squad.

Let's say 20 players x 52 weeks x a conservative average of £15k per week increase per player

That equates to around £15 million.

So to arrive at a wage increase of £34 million over a year it would mean 20 first team squad members negotiating a wage rise of around £35K per week.

As I say I just don't see it.

Or am I interpreting this incorrectly?

I'm not saying the accounts don't show that all the increased turnover money is accounted for. I'm saying that I just don't see how £165 million increased turnover plus £60 million surplus borrowing since the sale has been used up by corresponding additional club costs. And still nothing convinces me otherwise. I just think the figures seem to have been concocted to show that the additional income has been taken up by costs when logic tells us something different.

[incredibleL4ever]

The more I look at the figure the more obvious it seems that Football is not a financial investment and football in general is a basket case of an industry.  Liverpool, one of the biggest clubs in the world, based on support and on revenue, has operating profit of 30m before interest and transfers.  Based on that if we were debt free the most we should be spending on transfers each year is about 25m net (to allow for other capital expenditure etc.) which is not really competitive at Champions League level anymore. 

So we cant compete financially with clubs that have big stadia or big benefactors.  So build the stadium....but with costs of 450m the additional revenue would just about repay a loan for the construction cost, so there is no gain to the clubs finances. So you are back to the big benefactor who would not borrow the money.

The other risk is that if Hicks gets his way and finds someone to pay 500m + for the club, what would that investor be looking for as a return on his investment?  And what happens when the benefactor loses interest or runs into trouble or dies etc.

Fans ownership is the only solution that provides a safe, long term solution if we can get enough people to become involved.

[Timbo's Goals]

Timbo I'm not sure what you are looking for:-

If H&G have taken money out they haven't done so under the accountancy heading 'money stolen through the back door' - they have done so under headings like:

loan arangement fee's
stadium enabling works
architects fee's
expenses

The figures they have declared may have been grossly overstated - but if the income has gone up 165m over 3 years their expenditure has risen by 30-50m on player wages over the same period, by 85 - 115 m on interest over the same period and  by 50 mil on a stadium that doesn't exist - all things which we were not paying for before. Those increases more than pay for the increased turnover.

Given these stats I dont see why you need to think there is another pile of money they've pocketed?

Vulmea.

I'd like to turn your question on its head and ask you and the other financial minded folks on this thread why it is that you cannot explain where the increased turnove of £165 million and surplus borrowed money over 3 years has gone

For my part it's because I simply want to understand what has gone on. At present there is a veil over the real situation. I want to know what the true picture is ie how come a club that was running approximately at break even can have had such a massive increase in its turnover plus a significant borrowed amount that together comfortably outstrips the increased costs [interest plus additional wages] during the same period and yet could not afford to raise a solitary extra groat in the last 3 transfer windows.

I WANT TO FUCKIN KNOW.