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

[Vulmea]

Timbo

The increased turnover = 165million
The increase in spend = between 165 million-215 million - which means possible losses of 55 million

The loaned money = the price they paid for the club = 220 million
The additional loan on the club (they took out in their 2nd year for 'enabling works' and transfer fees) = 70 million
The losses of the club = 55 million - again put back on the club in loans

Total debt = 345 million approx. All money is 'accounted for' isn't it?
Where's the gap?

[HelterSkelter3]

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.

Thanks!

[Timbo's Goals]

Timbo

The increased turnover = 165million
The increase in spend = between 165 million-215 million - which means possible losses of 55 million

The loaned money = the price they paid for the club = 220 million
The additional loan on the club (they took out in their 2nd year for 'enabling works' and transfer fees) = 70 million
The losses of the club = 55 million - again put back on the club in loans

Total debt = 345 million approx. All money is 'accounted for' isn't it?
Where's the gap?

Vulmea - you are trusting the accounts.

I AM NOT.

I suspect within the wages there could be huge amounts paid to the Americans and their cronies.

I'm going beyond the accounts. The accounts to me under the auspices of those two count for jack shit.

As I said - how can there possibly have been an extra £34 million in wages in one fuckin year? Think about it.

[Timbo's Goals]

I'm not an accountant, and I'm not trying to dispel your conviction.  You may be right or you may be wrong, I dont claim to know.  Like I've said a few times, I also have a gut feeling that they have put none of their own cash in, and have just used the group structure to reshuffle the debt around to make it look that way. 

Having said that, RBS will have had a much closer look at the books than anyone else (apart from KPMG), and they have raised no objection (nor have KPMG) to the accounts showing a debt to KC of £145m.    So I accept that I my gut feeling may be wrong, and I accept I have no evidence for it.

You go a lot further than me.  Rather than merely think that G&H have put nothing in, you reckon they have taken £60m out.  Just like there is no evidence to support my claim, there isnt any to support yours either.  That isnt to say you're wrong.  Just that there is no evidence for it.

What has to be accepted, IMHO, is that KPMG are not part of some conspiracy with G&H.  So the figures in the accounts are "genuine" to the extent that KPMG have seen invoices etc, seen the bank record of they money going to pay the invoice, etc, and that there is nothing, on the face of it, to make KPMG suspicious.

Now, I dont know the intricacies of auditor duties.   But I'm gonna assume that they are obliged to report any suspected money-laundering to the relevant authorities.  And I'm gonna assume that they also have to query anything which seems suspicious or extraordinary (paying a window cleaner £10,000 per month, or whatever).

However, I'm also gonna assume that KPMG's duty ends right there.  If there is a bill for window cleaning, and it has been paid, and it seems a reasonable amount, then they record it in the books.  It isnt KPMG's job to check the windows have actually been cleaned.  And it isnt KPMG's job to find out more about the window cleaning company to see if TH owns it. 

The directors are under a duty to declare all interests.  But, afaik, it isnt the auditor's job to turn detective and to see if the directors have hidden interests.  The auditor would do this, possibly, if the transactions were suspicious on the face.  But not otherwise.  (Happy to be corrected on this if someone knows different).

So to prove that G&H had taken money out of the group, someone can't just look at the published accounts.  They would (a) have to have access to all the raw data, such as invoices and bank statements and (b) have to be an expert forensic accountant.

Cheers jack. I appreciate the effort of trying to articulate the thing. We're almost joined at the hip re our views on the calamities that have befallen our club - Moores especially but also the Yanks reign. It's just that I think the costs in the accounts have been significantly raised by monies paid to the Americans.

As I say in the last post - a £34 million increase in wages in one year??!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

No fuckin way.

PS I'm actually seeing our firm's accountant today. I'm going to try to get his take on things. He's an old school type so it might be revealing how he interprets it all. He's a massive Man U and Wigan rugby fan - so he's aware of all the pitfalls in these things.

[Vulmea]

Vulmea - you are trusting the accounts.

I AM NOT.

I suspect within the wages there could be huge amounts paid to the Americans and their cronies.

I'm going beyond the accounts. The accounts to me under the auspices of those two count for jack shit.

As I said - how can there possibly have been an extra £34 million in wages in one fuckin year? Think about it.

What makes you think I'm trusting the accounts? The bits where I've said 50 mil for a non existant stadium is bollox , the bit where I've said they may have massaged all their figures, or the bit where I've said they could have off set charges to their own companies against LFC costs?

To date you've been suggesting there was another pot of money 'unaccounted' for - well its not unaccounted for, its all there, just nobody believes it. Whether there is anything that can be done about it and whether any of it is illegal is a different matter entirely.

Unfortunately as has been made painfully clear any money which comes into LFC belongs to Hicks and Gillet they can do whatever they want with it - the only exception appears to be whatever arrangements they have with RBS.

[ttnbd]

can we just clarify that the wage bill increase was over a 3 year period not one year. And you may not trust the accounts tim but i do and i trust the integrity of the auditors to ensure they represent a true and fair view of the financers

[Graham Smith]

I have assumed (as I haven't seen it anywhere) that there is no breakdown of salaries paid. No breakdown between playing staff, administrative staff and board members?

Would be interesting to know which board members draw a salary and how much. One more way Hicks and Gillett can take money out of the Club, on the face of it legitimately.

And at some pioint we should be asking for a breakdown of the money "spent" on the stadium. Who has received that money and what have they done, in detail, for it.

[ttnbd]

directors pay, albeit not individual directors, is listed separately in the notes after wages. Can't remember which note maybe six

[Graham Smith]

directors pay, albeit not individual directors, is listed separately in the notes after wages. Can't remember which note maybe six

Yup.

In 2009 staff and directors salaries for the "Group" were £90,907,000. No figure for directors as a whole or separately.

It says the directors received no payment from the Company (that being LFC).

[ttnbd]

Of the total £103m wage bill at group level, £4.4m relate to directors remuneration at club level (of which total wage bill is £100.5m), another £1.7m of the group wage bill relates to LFC.tv.

As for the general increase, we've had a number of new contracts issued over that period and a number of potentially higher earners join the club in place of lower earners, plus back room staff etc.  We also don't know if the signing on fees of players is charged via amortisation of player registrations or through the wage bill line of the P&L.  I would have thought latter but can't be certain.

[Timbo's Goals]

Met with our accountant.

Outlined my interpretation as conveyed on here about a zillion times and dismissed just as often.

His response was pretty much the same as all you financially minded souls on here.

At the core of his view was the central tenet that he felt his opinion counted for little unless he was able to conduct a detailed study of the accounts.

Must be something to do with the way accountants think.

Anyroad. Would you believe me if I said I persisted with my own logical view.   

Eventually he conceded that if I was to put a gun to his head for an opinion based upon the premise I'd outlined then he would have to say that something didn't quite stack up. Pushing him further he conceded that if the figures of increased revenue and increased cost across the three years were reliable ones and if LFC were moreorless in a break even situation prior to the sale then yes the amount that didn't stack up might be quite a significant amount.

Thank fuck for that.

[Timbo's Goals]

can we just clarify that the wage bill increase was over a 3 year period not one year. And you may not trust the accounts tim but i do and i trust the integrity of the auditors to ensure they represent a true and fair view of the financers

TTBND - if the wage bill increase across 3 years is only £34 million then this is around £11 million less than the amount of £45 million I'd included in my assessment of the overall increased cost over 3 years to set against the overall increased revenue of £165 million/surplus borrowing of £60 million [Total £225 million].

As I say the thing simply doesn't stack up and significant money has in some way shape or form been haemmorraged out of the club.

[Witherkay]

On a practical basis, my experience suggests that if someone was given enough time and inclination to hide transactions, or 'water them down' to a suitably low enough level, then auditors coming in once a year for a couple of weeks should not really be expected to find everything. Especially as I understand the quality of the club accounting records have been called shocking by a few people who should know.

In fact, given what we know about these two (and some of the clowns we have had working for 'us' on our behalf), I would be very surprised had KPMG found anything. The year end audit could have been easily put off for as long as it took to make everything look ok. Note, we seem to file our accounts as late as possible, never 'early'.

There are many ways of getting cash out of a business, both legit and underhand, often without any obvious recording in the accounts. This is more so when a company is part of a group. Why risk people asking questions on published accounts figures when what you want to do can be achieved more subtly?

Lets face it. H&G aren't here for long term growth. If they can't make a quick buck via a sale, they will want a return another way.

[ttnbd]

TTBND - if the wage bill increase across 3 years is only £34 million then this is around £11 million less than the amount of £45 million I'd included in my assessment of the overall increased cost over 3 years to set against the overall increased revenue of £165 million/surplus borrowing of £60 million [Total £225 million].

As I say the thing simply doesn't stack up and significant money has in some way shape or form been haemmorraged out of the club.

I think alot of the operating cashflows have been going on transfer fees.  In the last 3 reported financial years there's been £97m spent (net) on players (in terms of fees).  The cash outlay in those 3 years was £98m, so in effect all transfers that were done have been paid (not that simple but it's the general premise I'm pointing at).  In the preceeding 3 years to the takeover there were £75m netspent (net) on players (in terms of fees).  The cash outlay in those 3 years was £50m.

There has also been in the last 2 reported accounts £15m (cash) spent on the purchase of 50% of lfc.tv from ITV.

So that's £113m in 3 years spent on transfer fees and 50% of lfc.tv from total operating cash flows of £99m.  That's before the interest that the club has paid (approx £6.6m) and the £54m spent on other fixed assets in the period.

This is why I put forward the suggestion that when Rafa said they needed to "balance the books" last year that this was to effectively clear all, or as much as possible, of the outstanding transfer fee debt as possible.

I don't think there is anything hidden in the clubs accounts except for determining what the £54m spent on fixed assets relates to.  Is this all fees for pretty pictures, or did they order material or when they stopped the pre-construction phase of the stadium did they have to pay laing o'rourke a fee?  Have they had to pay out money in relation to the renavation of stanley park as part of either covering the EU/NWDA grants or as matched funding?

In the actual club accounts that's the only question, in my opinion, that needs to be answered.

As for the wage bill, that was always bound to go up as the TV deal increased in value.  One thing you need to consider with the clubs wage bill is that it is a wage bill for a club with a 44,000 seater stadium.  The gate receipts don't even cover half the wage bill.  When you look at the mancs and arsenal their gate receipts etc cover over 85% of their wage bill (arsenal's is close to 100%).  That's where there is a big big problem.

[Timbo's Goals]

I think alot of the operating cashflows have been going on transfer fees.  In the last 3 reported financial years there's been £97m spent (net) on players (in terms of fees).  The cash outlay in those 3 years was £98m, so in effect all transfers that were done have been paid (not that simple but it's the general premise I'm pointing at).  In the preceeding 3 years to the takeover there were £75m netspent (net) on players (in terms of fees).  The cash outlay in those 3 years was £50m.

There has also been in the last 2 reported accounts £15m (cash) spent on the purchase of 50% of lfc.tv from ITV.

So that's £113m in 3 years spent on transfer fees and 50% of lfc.tv from total operating cash flows of £99m.  That's before the interest that the club has paid (approx £6.6m) and the £54m spent on other fixed assets in the period.

This is why I put forward the suggestion that when Rafa said they needed to "balance the books" last year that this was to effectively clear all, or as much as possible, of the outstanding transfer fee debt as possible.

I don't think there is anything hidden in the clubs accounts except for determining what the £54m spent on fixed assets relates to.  Is this all fees for pretty pictures, or did they order material or when they stopped the pre-construction phase of the stadium did they have to pay laing o'rourke a fee?  Have they had to pay out money in relation to the renavation of stanley park as part of either covering the EU/NWDA grants or as matched funding?

In the actual club accounts that's the only question, in my opinion, that needs to be answered.

As for the wage bill, that was always bound to go up as the TV deal increased in value.  One thing you need to consider with the clubs wage bill is that it is a wage bill for a club with a 44,000 seater stadium.  The gate receipts don't even cover half the wage bill.  When you look at the mancs and arsenal their gate receipts etc cover over 85% of their wage bill (arsenal's is close to 100%).  That's where there is a big big problem.

Cheers for that TTNBD

So filling in more of the blanks from what you've kindly provided we have:

Overall extra over revenue/surplus borrowing over 3 years since sale = total £225 million

Overall extra over costs over 3 years to set against that revenue [£34 million wages + £75 million interest + £48 million additional transfer cash payments + £15 million LFC tv purchase + say £15 million other extraordinary costs such as genuine abortive stadium costs = total £190 million]

I've interpreted the additional transfer cost as the actual difference in cash outlay [£98 million less £50 million = £48 million] as distinct from the differential in net transfer outlay of £22 million. D'you think that's the correct interpretation TTNBD?

So, if your take  - and my interpretation of your take - on this additional transfer outlay is correct it looks as if the haemmorraging may be less than I thought [ie £225 million less £190 million = say circa £35 million] by the amount of the additional transfer cash outlay.

It still means that a substantial amount of around that figure could well have been taken out but of course my objective was to identify a broad trend and the amount of £35 million whilst a substantial figure is not really large enough [unlike the near £90 million it would be without the transfer cash] to draw a conclusion that significant money is being bled out of the club by them.

So on that score for the first time since I began this money searching I feel as if at last somebody has provided me with some firm reasoning as to where the money may have gone.

That said I will ask you TTNBD - could what is termed in the accounts as the transfer cash actually be a smokescreen for money going somewhere else?

The other thing, of course, that emerge from your information is the question of what the hell on earth was the management at the club thinking of in

a]forking out precious money on LFCtv purchase

and b] doing likewise on clearing transfer debts

when that money could have actually gone towards securing the manager the depth of quality in the squad that might well have ensured we achieved the object of the fuckin exercise which is to get a winning and successful football team onto the pitch and on the bench. Instead we seem to have had this change in tack which has a primary object of paying transfer money to other clubs before it was actually due and before they actually expected it and buying a fucking shite TV channel to show an team rendered unsuccessful because the management decided to squander money on showing that unsuccessful team on its own fuckin telly channel. The blind leading the fuckin blind.

Whether the Americans have bled us or whether they haven't the facts seem to point to lunatics running the assylum.

 

[ttnbd]

That said I will ask you TTNBD - could what is termed in the accounts as the transfer cash actually be a smokescreen for money going somewhere else?

Nope, as the figures seem to tally up on that front between balance sheet and cash flow as far as I can make out.

The other thing, of course, that emerge from your information is the question of what the hell on earth was the management at the club thinking of in

a]forking out precious money on LFCtv purchase

The £3m per year pre-tax profit it makes makes it a perfectly sensible purchase for the club as it'll have paid for itself in 5 years.  It's a long term purchase for the long term benefit for the club.

and b] doing likewise on clearing transfer debts

Alot will have been due to be paid on previous transfer deals, whilst they may have change policy of paying over the life of the contract to paying within a year on new purchases (look at the Aquilani transfer, 75% of the fee was payable within 11 months of him signing).  It's easier to budget that way, especially if there is a shock to the system (for example not having european cup football).

Different people budget in different ways, this MAY just be their way, however there is no evidence one way or the other.

You need to remember that there are two big risks for a football club, one is that their players get injured and the other is they are not as "successful" as they hoped/budgeted for.

For years I've heard nothing but complaints about football clubs spending more than they have in the pursuit of success, however if it even looks remotely like a club might be doing that (especially if it looks like a sale is a possibility) then it gets derided.  You can't spend what you don't have, and every last penny the club has made over the years, going back many many year, has gone back into the club despite what others claim.  The "stadium designs" have been via debt but there is £27m of cash that can cover that if required.

Things may change, but we won't have any evidence of that until next year and speculation doesn't always turn out to be correct.

[ttnbd]

It's odd that we've heard little, if anything, about that money since it was given to us.

According to the promises that LFC made at the time, then they ought to have made the repayment by now, I'd have guessed. 

Didnt the failure to put a spade in the ground within 60 days make repayment inevitable?

That's why I'm wondering if that is the case.  Unfortunately we don't know what is happening.

[Timbo's Goals]

Nope, as the figures seem to tally up on that front between balance sheet and cash flow as far as I can make out.

The £3m per year pre-tax profit it makes makes it a perfectly sensible purchase for the club as it'll have paid for itself in 5 years.  It's a long term purchase for the long term benefit for the club.

Alot will have been due to be paid on previous transfer deals, whilst they may have change policy of paying over the life of the contract to paying within a year on new purchases (look at the Aquilani transfer, 75% of the fee was payable within 11 months of him signing).  It's easier to budget that way, especially if there is a shock to the system (for example not having european cup football).

Different people budget in different ways, this MAY just be their way, however there is no evidence one way or the other.

You need to remember that there are two big risks for a football club, one is that their players get injured and the other is they are not as "successful" as they hoped/budgeted for.

For years I've heard nothing but complaints about football clubs spending more than they have in the pursuit of success, however if it even looks remotely like a club might be doing that (especially if it looks like a sale is a possibility) then it gets derided.  You can't spend what you don't have, and every last penny the club has made over the years, going back many many year, has gone back into the club despite what others claim.  The "stadium designs" have been via debt but there is £27m of cash that can cover that if required.

Things may change, but we won't have any evidence of that until next year and speculation doesn't always turn out to be correct.

We'll have to disagree emphatically on these points TTNBD. Could well be your tidy accountant's mentality but what is the point of any sensible long term strategy - even if it were the case that it actually constituted a sensible long term strategy - when during the period it is being enacted the club has fallen apart at the fuckin seams partly or perhaps wholly due to that strategy. And, at the same time, one of the finest managers we could ever wish to have had - one who had bought lock, stock and barrel into the spirit and fabric of this football club and had demonstrated both in his previous employment and at Anfield the proven winning ability we all craved - has been left high and dry and finally forced out due to the deployment of the strategies you seem to interpret as "sensible".

Sensible my FUCKIN ARSEHOLE.

PS That said TTBND - I have to repeat my gratitude for you filling in that huge blank for me in respect of where all that additional revenue and borrowing has gone. It was honestly perplexing me and nobody else seemed able to provide the answer until your transfer cash suggestion. I do take it that my using the £48 million actual cash outlay figure rather than the lower 'paper' figure is the correct one for the logic of the exercise to work?

[royhendo]

OK guys - first I wanted to say thanks for the great efforts on this thread. It's a massive help.

The only gap I'm left with is the comparative profit and loss account numbers for the four years. I have gaps you could drive a bus through.

So... I have as confirmed figures from the accounts...

-	2006	2007	2008	2009
Revenue	121	-	164	185
Cost of sales	(13)	-	(17)	(18)
Staff wages (inc players)	(69)	-	(90)	(103)
Other expenses	(18)	-	(30)	(31)
EBITDA (or whatever you call it)	21	-	27	32
Interest paid	(121)		(164)	(185)
Net transfer spending	(28)	-	(28)	(22)
Money spent on the stadium	0	-	(18)	(22)
Investments (like LFC TV)	0	0	0	(5)
Amount left after all that*	(9)	-	(55)	(52)

*AKA how much we had to increase our debt by each year.

If you boys could correct that where it's needed or fill in any gaps, mucharse grarseiarse.

[royhendo]

FYI - here's where we're going with this stuff.

[incredibleL4ever]

FYI - here's where we're going with this stuff.

Looks good Roy.  Havent had a chance to check your figures.  WIll do in the morning it thats ok (it fucking well has to be!).  2007 is difficult as there is a part year of Kop and it is not clear how much of an over lap there is with the clubs.  Just a quick look tells me your interest paid is wrong.  I think it is about 2m is 2006 and 18m in 2009.  That of course is the amount paid.  The amount charged is a lot more, just that it as not paid on the Kop Cayman loan.  I guess we cant afford it.

[incredibleL4ever]

While it is not the same topic I think the similarities with corinthians and the texas Rangers is an important bit of the required education.  Hicks made the same promises, did the initial big man act buying big named players, borrowed as much as he could get and left them both in the shit.  Type 7 shit that is.

[royhendo]

Yeah - that's gonna be the long-term push mate. The first 'issue' and the early website stuff will focus on us, and then we'll dig deeper.

Cheers for reviewing the figures - if you could let me know what to change it'd be much appreciated.

[royhendo]

...or if anyone could point me in the direction of the actual accounts, that'd be brilliant!

[incredibleL4ever]

another interesting statistic about where money is going -
Staff levels by year 2009   2008  2007  2006

Players/Coaches    142        137    133    127
Groundstaff              57          60     61       59     
Admin, commercial  275        189    150    149

[incredibleL4ever]

Hope this helps -

-	2006	2007	2008	2009
Revenue	121	134	164	185
Cost of sales	(13)	(16)	(17)	(18)
Staff wages (inc players)	(69)	(78)	(90)	(103)
Other expenses	(18)	(32)	(30)	(35)
EBITDA (or whatever you call it)	21	8	27	32
Interest paid	(2)	(8 )	(36)	(30)
Net transfer spending	(28)	(46)	(28)	(22)
Money spent on the stadium	0	0	(18)	(23)
Investments (like LFC TV)	0	-8	0	(5)
Amount left after all that*	(9)	-	(55)	(52)

*AKA how much we had to increase our debt by each year.

Just to note that this is looking at cash movements rather than the cost for the year, for example in 2009 we paid 30m in interest but there was a further cost of 10m which we did not pay at all yet.  Same for transfer spending - the above is the cash paid and received in the year and not the actual deals done.

[davenorthwales]

Timbo

The loaned money = the price they paid for the club = 220 million 218.9m borrowed
The additional loan on the club (they took out in their 2nd year for 'enabling works' and transfer fees) = 70 million

Total debt = 345 million approx. All money is 'accounted for' isn't it?
Where's the gap?

i came up with 347m. whether it's 347 or 345, doesn't exactly amount to 351m borrowed from rbs/wachovia.

who's the resident expert on the subject in here?  381m is the figure atm, but the media still say 351m and in the extreme case the times 473m..lets go back to the beginning. 218.9m was 'paid' for the club in 2007.  whichever way it's looked at, it comes to the same figure.  218m + 100m loan plus interest  @ 10% which turns out to be compound interest = 127.m... so that's 218.9m plus 127.05m = 345.95m
probably expenses like flights etc added on, which results in the refinancing at 350m in 2008.
they get 350m, they lend LFC Ltd 100m plus 10% interest = 27.05m plus 350m = 377.05m plus the money paid for writing off wachovia = 381m

wachovia loan was written off and apparently a 4m writing off fee was paid..

am i on the right track? anything i missed out?  what about 2009-10 figures? do they get added on?

[incredibleL4ever]

Just to clarify where the 351 debt comes from....the total debt is 378m, but there is m27m in the bank.  Of the total debt 234m is owed to the banks and 144m to Kop Cayman.  That is all as of 31 July 2009.

So to use your logic JohnSW -
All the profits are used up in paying interest. 
The total borrowings of 378m comes from 220m on buying the club, 96m net paid on transfers, 41m paid on the stadium, 10m on interest rollup and 5m on LFC.tv. There is a difference of a few million here as the figures are rounded and there would be some other small items.

[davenorthwales]

cheers incredible.  but is it actually 144m owed atm?  i see the 100m plus 10% accumulated on the 100m loan since 2008 = 100m+10%=110m+10%=121m plus half the interest accumulated to june 2010 = 127.05m

that's a sticky point. the arithmatic of the 100m loan says for itself

[davenorthwales]

should there be 27m in the bank, plus the money parry money hasn't been added on, plus 2009-10 figures which started as a rumour of a 25 loss, plus the rafa money which brings it back up to the 378-380 mark. plus interest is accumulating at 0.8m a month on the 100m loan

[incredibleL4ever]

The 100m is the group loan with Liverpool Fc.  The loan with Kop Football Ltd (i.e. the group) is 144m.  At 31/7/08 the total on Kop was 58m.  31/7/07 = nil

Taking that the loan was drawndown evenly over each year -
2008 loan = 55m  + 3m interest
2009 Carried forward 58m + extra 77m + 10m interest
The 10 unpaid interest in 2009 is factual based on the accounts.

[incredibleL4ever]

should there be 27m in the bank, plus the money parry money hasn't been added on, plus 2009-10 figures which started as a rumour of a 25 loss, plus the rafa money which brings it back up to the 378-380 mark. plus interest is accumulating at 0.8m a month on the 100m loan

To speculate where we are now would require knowledge of what revenues and wages in particular have done.  Last summer new improved contracts were awarded to the senuior players which would surely cost a couple of million each.  Then there was the fact that Alonso was sold for cash, but Aqualani and Johnson are paid for over a 2-3 year period.

[davenorthwales]

hmm i'm suprised now that nobody had point that out to me before.

so, the interest of 10% is on the 144m you mean? i always thought this was the case.  but does get confusing when 100m is mentioned as well

[davenorthwales]

grr i've come up with 378.85m now - which is the figure that i worked out over a month ago, and other people were coming up with that figure or thereabouts or rounding it of to 379.

think i''ll leave it at that for now. got a banging headache.

30.24m has been accumulated in interest from feb 2008 until feb 2010 = 1.26m per month
38.95m has been accumulated in interest from feb 2008 until july 2010 = 1.29m per month

i know it's easy to forget sometimes, but is the 100m mentioned the 100m they say they were investing from their own money which turns out to be borrowed when they took over in 2007?

is this 100m a red herring? when they took over in 2007, it was announced in the media that it was a 470m take obverm which turned out to be tosh.

in reality, from feb 2007 they bought the club for 174m plus the 44m debt = 218.9m
they announce that they are investing 100m.

end of jan 2008, the refinance is announced for 351.4m, meaning 218.9m plus 100m = 318.9m plus fees etc..
i haven't looked at the balance sheet for up to that period as that can be discarded for now, as there was activity during that summer involving transfers especially fernando torres which pushes it closer to the 351m mark..
the 100m group loan was refinanced so can be taken off the equation.  that is what confused things.

anyway, going back to the 350m new loan.. 144.4m was lent to LFC Ltd @ 10% interest as we all know has turned out to become £183,460,200m ... add that onto the 218.9m they bought the club for and there's the debt.  take away whatever money is in the bank plus the parry money = £378.36m

hope that is correct figure, and the rafa money isn't in it or the purslow pay, but the parry money is plus their expenses.

next thing i'd like is how on earth the times came up with that figure of 473m which is irresponsible of them.

this also confuses me, one minute im reading wachovia debt was either being written off or whatever, then months after, liverpool echo story - Liverpool has outstanding loans of £237m and its lenders, Royal Bank of Scotland (RBS) and American bank Wachovia, had demanded a £100m repayment by this July.

december 2007 - The Americans, who bought the club from David Moores last January in a £174 million deal, want to re-finance the £298m they borrowed from Royal Bank of Scotland to pay for the deal and give them working capital for players and the stadium.

the refinace was 351m, kopholdings owe RSB 237m - LFC Ltd owe kopholding 144.44m (183,460,200) total them together brings it to £420,460,200 to date minus the current balance, so in effect the overall debt is higher @ 393m... which way do you look at it?

[davenorthwales]

sorry for going on, hope my texting isn't difficult.

another two questions i have. what interest is RSB charging? 7.5% i believed before.
how much from each bank was borrowed in 2008. i don't think they borrowed that much from wachovia. about 60m from them and 180m from rbs, the rest  going on fees.  does this mean the 350m loan is actually 244 or are the fees in the loan?  got a felling the fees are on the slate - silly question then

[incredibleL4ever]

I think the 100m they "invested" relates to the 100m loaned to Liverpool FC Ltd.  H&G seem to distinguish in their own minds between this and Kop Football Ltd which owns Liverpool FC Ltd.  Originally all the loan was to be on KOP but RBS would not continue to lend more on this basis so part of it went on the club. 

The RBS rate i think is mentioned somewhere else in this thread. I think LIBOR + 5%, so about 5.5% currently.  This was higher as LIBOR was higher before the credit crunch.  They dont reveal the RBS/Wachovia split but I recall something along the lines of 75% of it is RBS. 

There was a 350m facility from these two, however part of that was for the stadium.  As the work was stopped not all the 350m was drawn down.  I think about 290 was drawn down and this was then reduced to the 238m as part of the latest restructuring. 

The above figures are just recollection.  I have the accounts on my other pc and I will check them tomorrow.

In the end of the day the problem is that the debt is unaffordable based on our earnings.

[davenorthwales]

before i go to kip lol. just thought of something else.

if i remember correctly, back in january this year, there was supposed to be a 100m shares floatation etc.. purslow was in charge to bring in 100m worth of investment in exchange for 25% of the shares.

pardon me for breathing like, but doesn't 25% of 400m equate to 100m??

the gyst of this is....this.....

why the hell is hickups hanging on for 800m??

if they were willing to sell 25% of their share for 100m, why can't they sell for 400m??

they are psychos!! couple of rats..could this 100m be the 'money set aside for the stadium reborrowed'?

now, this puts it in another light... 350m was applied for but 290m was actually taken up!!  i do remember now a bit, usually business loans are around the 5% mark.  i'll ask around about that 290m bit.  technically, that means that the debt is around 320m in that case, but like you say, the interest on the 144.4 is causing the problems

[royhendo]

incredibleL4ever mate, thanks for all the detail there.

another interesting statistic about where money is going -
Staff levels by year 2009   2008  2007  2006

Players/Coaches    142        137    133    127
Groundstaff              57          60     61       59     
Admin, commercial  275        189    150    149

Hope this helps -

-	2006	2007	2008	2009
Revenue	121	134	164	185
Cost of sales	(13)	(16)	(17)	(18)
Staff wages (inc players)	(69)	(78)	(90)	(103)
Other expenses	(18)	(32)	(30)	(35)
EBITDA (or whatever you call it)	21	8	27	32
Interest paid	(2)	(8 )	(36)	(30)
Net transfer spending	(28)	(46)	(28)	(22)
Money spent on the stadium	0	0	(18)	(23)
Investments (like LFC TV)	0	-8	0	(5)
Amount left after all that*	(9)	-	(55)	(52)

*AKA how much we had to increase our debt by each year.

Just to note that this is looking at cash movements rather than the cost for the year, for example in 2009 we paid 30m in interest but there was a further cost of 10m which we did not pay at all yet.  Same for transfer spending - the above is the cash paid and received in the year and not the actual deals done.

Now - there's a question - which way's the least misleading way?

Can I use the above table? Because the numbers won't tie up with the summary used elsewhere... but equally, is using cashflow movements the only way to include 2007/08?

[davenorthwales]

cheers for the response and information.  not sure where to start.

probaly there are one or two parts i may not be too sure about without being dazzled by tables and info.
sometimes i find it easier to go back to the beginning from march 2007 and calculate from there or from the refinancing in feb 2008. both are just the same but 2007 reveals little nooks and crannies.

jack slater - 350.5m was loaned in the refinance jan 2008?

js - The Jan 08 loan was £245m to KF plus £45m to LFC plus another (potential) £60m to LFC earmaked for stadium.

350m in total... yeah, i thought before it was around the 5% mark.

now, i don't get this bit.. let me if i'm wrong - i was looking at a 100m figure previously and got a bit mixed up somewhere.  as it is generally known that kopholdings loaned LFC Ltd 144m.  looking at your figures now, it states that 45m was loaned to LFC Ltd..
is it a case of LFC Ltd being loaned 45m from RBS plus 99.4m taken from kopholdings loan of 245m ?

the calculation i was making was based on the 144.4m loaned to LFC Ltd from feb 1st 2008 to aug 1st 2010, compound interest. since it is generally known that the interest hasn't been paid.
144.4m + 10% feb 2008 to feb 2009 = year one, year one + 10% feb 2009 - feb 2010 = year two
year two + 10% feb 2010 - aug 2010.... that's how i came up with 183.46m  ... it's based on 144.4m

since the stadium was put on hold, didn't they pay back the 60m set aside for the stadium because it wasn't required anymore?

as for total liabilities, that isn't debt though is it?  is the 60m given back included in that 473m?

[incredibleL4ever]

incredibleL4ever mate, thanks for all the detail there.

Now - there's a question - which way's the least misleading way?

Can I use the above table? Because the numbers won't tie up with the summary used elsewhere... but equally, is using cashflow movements the only way to include 2007/08?

Dont know Roy.....u gotta go with the cashflow or the P&L and balance sheet.  I think people are getting mixed up between them.  Only thing is the media have focused on the P&L/BS stuff....e.g. transfer cost instead of transfer net cash and interest charged instead of interest paid.  So maybe to avoid people questioning things they dont understand anyway (I am being a bitch ain't I) better stick with what they know and accept.