http://www.liverpoolecho.co.uk/live...-is-now-on-a-firmer-footing-10v0252-30892350/ LIVERPOOL FC*MD Ian Ayre says today’s accounts mean the club’s finances have been placed on a solid and stable footing - and helped prepare it to meet new financial fair play regulations which forces European football clubs to live within their means. Said Ayre: “I guess people will focus on the loss of £49.4m and there’s no business - or people running any business - who are going to be pleased with any loss. “But I think the important indicator here is this £59m charge for exceptional items and as a business that’s been in a transition, it’s about moving from where we were to where we want to be. “We have written off a huge amount on the stadium project . “A big chunk of that £50m loss relates to the HKS project - which is now defunct - and associated costs around that “With new ownership, that was kind of milling around within the club’s accounts and there was a very definite need to move that out. Ayre said the millions spent went on a combination of design work by the previous owners who brought in their own design team from Dallas - plus legal and administrative costs around permissions and many other things. He said: “It is a huge chunk and it is a huge loss. “But that goes with a lot of other things that nobody was really happy with in that period. “So rather than dwell on it , we’ve very smartly made the decision to remove it from the club’s accounts. “It’s a positive step forward. “The repayment of debts has been a key part of this process; removing the situation we had under the previous ownership where we had such a high level of debt which most people were aware of. “Certainly our fans were. “It was one of the big bones of contention, to get to a situation where we have reduced interest charges from 18m to about £3m. “That puts us in a much stronger position to utilise our revenues more effectively on the team. “If we had not written off these extraordinary costs, we would have been looking at breaking even. “There is the loss of Champions League revenue too – I don’t think there would have been many clubs that could not be not playing Champions League football but still maintaining a break even position. “That’s as a result of having true commercial and other business related activities that underpin the strength of the football club. “We’ve said that consistently – it’s about having both in parallel. That’s what Financial Fair Play completely alludes to. “You don’t live beyond your means, you can survive in any scenario. This proves that to a certain degree. “It is a big loss and it is a big write off but it means that it’s gone forever now and we can move forward now without that around our neck.“And it also means that we are in pretty good shape in being a sustainable business. * EXCLUSIVE: Liverpool FC accounts show £50m loss including £35m on Hicks & Gillett 'new Anfield' “It just demonstrates the owners are taking a very prudent view on how we operate the business and that’s what everyone wants. “These figures in many ways represent the commitment of the owners, in paying down the acquisition debts and in other areas. “You have to remember that what is reflected in these accounts was going on around the time they actually came into the club. “It’s not where we are today. It’s a year on, so it was a big commitment at an early stage “The owners have continued to make changes and commitments - and that’s a good, healthy approach to running a sustainable business. They have made some great investment at the start; they cleaned up a lot of what was a problem at Liverpool and then, as we’ve gone across the year, they have invested in both the team on and off the pitch. “They continue to do that and look at what’s right - and what works and what doesn't work ".......continued pg2-3
Page 2 AYRE ON LFC’S COMMMERCIAL PERFORMANCE... The rise in commercial revenues outlined in the accounts includes the new kit sponsorship deal with Standard Chartered - worth £80m. But it does not take into account the massive new kit supply deal with American sportswear giants Warrior, worth a guaranteed £25m a year to Liverpool. That will surface in next year’s figures. Ayre told the Echo : “ There is still a lot to do on the commercial side “They are good figures and it is good growth and we’ll grow again this year. “But in the five years I’ve been here, I’ve always said we were a long, long way behind . And I still feel like we’re playing a bit of catch up. “We’ve made great progress over that period of time but Liverpool has still got a lot to go for and achieve commercially. “It’s great that we’ve created a business that can keep us all moving forward even in a year where we didn’t have any European football. “But it’s important we don’t rest on our laurels. We still have a long way to go particularly internationally. “But it’s getting there. “We’ve demonstrated that with big deals that we are still a big club with big attraction and lots of fans worldwide. “And that’s been underpinned this year with the investment of Warrior Sports. “That’s another example of a key, marquee, record breaking type sponsorship level. It shows the club remains a big force off the pitch, as an attraction to fans and sponsors and corporate entities. ”We just need to build upon that. “What we do very, very well commercially is deliver fantastic products across a whole range of different commercial areas and sell those very effectively in the domestic market. “What we have to do next is learn - and put ourselves out there to deliver that on a more localised basis across the world. “Take Asia as the biggest opportunity for Liverpool. “If you break that down into individual markets, we have to create a solution whereby if you live in Jakarta Indonesia, you can consume almost as much. “Obviously you can’t be at the game but you can still consume all the other level of products and services and interactions with Liverpool but you need to do that in a local language. “You need to be able to shop and buy in local currency - and you want it just as fast as the guy on Merseyside. “So we need to be creating and distributing product locally so that if you order something online in Jakarta today, you need to get it tomorrow morning and pay for it. “It needs to be in the right style and size for that market and you need to be able to browse and read and consume in a local language and that’s our next big project. “Our big step forward next year and beyond is that localisation.” Ayre explained the strategy is not not just about commercial revenues improving the bottom line but embracing fans all over the world and making them feel part of the Liverpool family. He added: “We have done lots of pieces of research – some we’ve done ourself and some we’ve seen independently - and there isn’t one piece I’ve seen that says we have less than 100m fans. “But we don’t know who they are and the only way you are going to engage with all of those fans is by attracting them into something locally that appeals to them. “Just like we do in Liverpool, we’ll have a range of fans who buy in at a different level. “It’s about engaging those people and if you engage them, then it’s like with anything. “Once somebody invites you in, you want more and more - and we just have to get the systems and the delivery process right to be able to do that. AYRE ON £8.4M TERMINATION COSTS “It’s nothing untypical of anything in football. “Contracts are typically fixed term. “When you make a decision to terminate somebody, the right and proper thing to do is honour the payout of that contract. “This relates to Roy and to some of his backroom staff; and also to Christian Purslow leaving. “It’s standard across football. “It’s unfortunate to have to have them – nobody wants to see anybody go. But in certain circumstances it’s right to make a change and that’s what that relates to.
Page 3 AYRE ON TRANSFER SPENDING “The ins and outs are reflected. “I think it shows there’s been a significant commitment from the club to new players. “We’re going to a cup final this week knowing we have got a much bigger and better squad than perhaps we had 12 months ago . “And as well as all those players coming in, there were a significant number of players going out “Certainly our fans are very aware of the amount of transfer activity that went on through the transfer window. “It’s important to recognise what we did in terms of clearing up the squad as it is about bringing in the new blood to it. “I think it’s reflective of good and proper investment in the team. AYRE ON CHAMPIONS LEAGUE FOOTBALL “There’s two sides to it. “We absolutely want it. We need it in the long term because if we want to be one of the biggest - or the biggest football club in the world - you have to be playing Champions League football. “But as we’ve said before not having it isn’t the end of LFC or the end of the world. “We will survive and we will move on and we will get back there. “That’s always going to be the objective.” He added: “The real value of being in it is that it comes with significant revenue uplift; the fees, the media awards, the number of games that you play and associated revenue. “Our fans want to see it, our sponsors want to see it. It’s what attracts more and more investment into the club by other parties, sponsors etc “So it’s absolutely on our radar; it has always been an objective of this club to be playing and winning Champions League football. “So it’s absolutely the No1 objective and something we are focused on. “You know, if you look at other football clubs, I think some people would have struggled much greater than we did to survive in an environment with no European football revenue. “And in this same period, we have invested £131m in new players. “That tells you we have got a great foundation and we have to keep building on it. AYRE ON EUROPA LEAGUE FOOTBALL “Many millions of pounds are generated from playing Europa League football. “And I’m sure Kenny would say it’s about building the squad and preparing them for greater things. “Sso playing Europa League football next season will be another step forward. Then hopefully we’ll be onto bigger and better things thereafter. AYRE ON FUTURE STADIUM DEVELOPMENT COSTS “We come under daily pressure from people for a decision on what are we doing. “One thing we have certainly said consistently is that’s that we’ll make the right decision in the long term interests of Liverpool FC. “We have to be very mindful of the cost of doing anything, The cost of building a new stadium is significant. “Equally, if we refurbish Anfield, the cost is significant. “It’s about finding a solution that works, is cost effective and has certainty. “Trying to get all three of those in a row at the moment is a challenge but we will get there - I’m absolutely certain of it. “But the economic model for a new stadium has to be underpinned by a significant investment by a naming rights partner. “And that just takes time. It’s about trying to find the right model that fits with that. “But in terms of a new stadium we have a design, we have planning permission and we have a site. “So that isn’t incurring a cost as such. “In terms of a refurbishment, again it’s not really news but we’ve been in dialogue with residents and house owners and the council and various other stakeholders, to see what can be done on that. “There would be some design and planning permission type costs that would sit around that. “But they are not in anyway near the significant ranges of the material addressed in these accounts. “However, we’ll keep them under a tight rein - and ensure that nobody is squandering any money on this project and it goes forward with due care and attention.” AYRE’S CONCLUSION... “I think what today’s accounts show is that we have gone through a phase in the last year which has involved a cleaning up of our accounts and our business. “Finance Director Philip Nash and the finance team and the FSG finance team have created a great foundation in terms of bank facilities that give us a long term view in that area. “We’ve made a significant investment in the playing squad and will continue to do so. “It’s a new start in many ways. “We find ourselves going into next season with one trophy under our belt and hopefully a second; we find ourself re entering the European football stage which is where every Liverpool fan expects us to be. “And we find ourselves going forward with another year of growth on commercial revenue – a very large announcement around Warrior and another indication that the club is attractive and growing and commercially attractive to people. “We enter a new season with all of those things going on "
Key highlights in the accounts published today show: Liverpool’s losses rose in the year in question - from £19.9m previously to £49.4m. Debt interest charges as a result of the FSG takeover have reduced from £18m to £3m annually £131m was spent in the period on new players including Luis Suarez, Andy Carroll, Jordan Henderson, Stewart Downing, and Charlie Adam. The net spend on players was £41m - as opposed to just under £17m the year previously. Wage costs went up by £10m during the year - reflecting an ageing squad and an issue since addressed, say the club, when ten players left Anfield during the summer (including Emiliano Insua, Christian Poulsen, Paul Konchesky, Philip Degen and Milan Jovanovic). A 25 per cent growth in commercial revenues - up from £62.1m to £77.4m Total club revenue in 2011 fell by just under a million pounds to £183.6m - reflecting the loss of Champions League football this season. Media revenues dropped from £79.6m to £65.3m - again reflecting the loss of Champions League football from TV sources Matchday revenues dropped £2m to £40.9m - again an impact of no Champions league games Read More http://www.liverpoolecho.co.uk/2012...-new-anfield-100252-30892345/2/#ixzz1tnVSPluZ
That's an understatement. Nice one. Well done Purslow you absolute moron. I'm delighted he got well looked after for fooking the club up. Unreal. Oh, look, this bollox again. Jesus wept at this idiocy. Can this be passed to the entire media and all the muppets on twatter please. Impressive under the circumstances. So angry reading that. The damage they've done. May I never meet Tom Hicks...
I am nearly sure i read Peter Hooton saying that when Purslow brought Roy Hodgson in he claimed that he (Purslow) was the Fernando Torres of business.
First of all Ian, the accounts for the year ending July 2011 will be published shortly. Can you talk us through the headline figures and explain what they mean? I think it's important to start by saying what they mean is that we create a much greater stability for the Club now moving forward. There was much talk and conjecture around the debt that the Club was with under previous ownership, there has been over £200 million of that debt paid down and that's very important for the Club moving forward because at the height of it debt service was around £18 million and that has been reduced to somewhere around £3 million now which is obviously a much more palatable and manageable position for the Club to be in. What's also important is that we have created a great commercial platform which underpins the business and drives the business forward and creates important revenue to invest in the team. In addition to that I think people will probably focus on the headline which is there has been a £49-£50 million loss in these accounts, but what I can say is a large majority of that is related to writing off a stadium facility where most of the cost was focused around a design for a stadium which many fans will remember as being the bigger, 70,000 seat proposition which never got built. That particular design and stadium is not a viable project for the Club, although there was a lot of cost associated with it at that time. I think it's important for us to move on from that and move it off the accounts, which is what has happened. Also within that £50 million or so figure were some exceptional costs around the departure of Roy Hodgson as manager and various other staff associated around that time. It creates a very stable platform for us to move forward from, it creates a situation where most of those things are now off the books and we move forward in a positive sense in a sustainable business and with the ability to grow on that basis. This set of account reports a big clean-up of historical issues - does this mean the Club is now on a more stable footing? We are certainly very stable. The important thing to note from these accounts is that in the period they relate to we weren't playing Champions League football, we were playing Europa League football, and in that period our revenue was largely flat so it shows that as a Club, while European football and Champions League football are important to this football club - we have a great history in that competition - it's also important to know that we have a sustainable business that can move forward in that type of scenario. In that same period although our total revenue was largely flat our commercial revenue grew significantly, as the accounts will show. That's the best basis on Liverpool Football Club growing in the future. We've always said it's about building a sustainable business that can support itself, just as Financial Fair Play alludes to. This shows we have a business growing underneath the football and the ability to invest to grow the football, and that has to be the best way forward. A big payment has been written off in terms of previous stadium costs - how did that figure grow to be so large? A big part of that cost was on a particular design that the previous owners were keen to develop and that's a whole mix of design costs, planning costs, legal costs, some other administrative costs, and they escalated quickly. What's important is that fans can take some comfort in the fact that moving forward that certainly isn't the case. We have a different design which was the original design, which we have planning permission for and in terms of the design that's largely done, so there's no additional cost to go to there. In terms of other areas that we're looking at, at Anfield, again we've been very prudent and there has been no view the cost will escalate anywhere near that again. We know Financial Fair Play is on the horizon - is it important to stress this £50m write off wouldn't be counted in any FFP calculation? That's absolutely the case. That would not come into it. If you take the write off around those areas out, what you'll see is we have a very healthy business. We've made a significant investment in the playing squad, even though our revenues have remained on a flat basis. Without that write off we probably would have been at a break even situation, so we're in a healthy position in that regard. We're keen to stress that we're very supportive of the Financial Fair Play model, we believe that we'll continue to grow our commercial revenue and continue to invest that in our playing squad. That's what a good and proper and well run football club should be doing. One of the reasons we're very supportive of FFP is we think running the football club in a proper and sustainable way is definitely the way forward for all clubs. Commercial revenues grew over the course of the financial year - does that show the club is moving in the right direction and how much work is there still to do in this area? It will show we have moved ahead significantly in this period. I think there has been 25 per cent growth which is excellent and important, but there is still a lot of work to do commercially. I remember thinking when I came here five years ago that we were a long, long way behind some of our major competitors and we've made some significant ground on many of them, but nobody here is going to take that for granted and rest on their laurels. It's important we continue to grow it. The next big focus for us is on achieving the same level of growth and the same spread of international activity across international markets. It's something we're very focused on and is where most of our strategy is focused. That can only bring greater growth and greater opportunity for Liverpool. We know we have a massive fan base and we have huge interest from our fans across the world and we almost have an obligation to go and serve those fans and deliver to them the same level of product, services and access to Liverpool Football Club that we do, for instance, to our fans on Merseyside. It's great to see that we've achieved significant commercial growth and, as we've said before, it's important because it underpins everything we do on the pitch. But we certainly have a lot more work to do in that area. The overriding theme of the accounts is the big clean-up of the past - how much does this demonstrate the desire of the new owners to do the right thing for the club moving forward? I think from the very first day that these owners arrived it was very clear what their objectives were. I remember at the first press conference John saying 'we want to win'. They do want to win, they're winners, proven winners, and I think it's also important to recognise that these accounts we talk about are from a year ago and they really relate to a transitional period between the previous ownership under Hicks and Gillett and then the new ownership under Fenway Sports Group. What has been demonstrated since their period of arriving is that they want to create a stable foundation with a platform to build on. There has been a clearing out of debt, a clearing out of money that's been expended on stadium that just isn't going to achieve much going forward and a significant investment in the team, an investment in the commercial and business infrastructure and an ongoing objective of improving that team on and off the pitch. These are all great indicators of people who want to take the business forward. Despite it being a year without Champions League football, the accounts show there was considerable investment to bring players in and also to reduce the average age of the squad... That's one of the key objectives that's been set for the football side. I think there were a lot of players coming in, but there were a lot of players who left as well and that was important to have a manageable playing squad, getting them at the right age, getting the average age down, getting the wage bill in the right place, these are all important dynamics that we go through as part of the overall picture. It's no secret to anyone that the biggest expenditure item in football clubs is players, whether it's transfer fees or players' wages. In financial terms, they're the thing which drives success or failure on the pitch. There has been significant investment, there will continue to be investment in the squad. It's not all going to happen overnight. The investment made has been a lot and I think everyone is focused on continuing down that track of making sure we put the best we can put on the pitch and achieve the best we can achieve as a result of that. As we've said. these accounts relate to a season in which we didn't enjoy Champions League football. How important is Champions League football to Liverpool FC? We're Liverpool Football Club and every fan or player of the Club wants to see Champions League football. In terms of its importance, it's very important. However, this was a season in which we played in the Europa League. We had a reasonable run in that and I think what the accounts show is that our revenue was largely flat as a result of that - and that's a good indicator of the importance of good business and commercial revenue for seasons when you don't have Champions League football. We maintained our revenue position, we grew our commercial revenue in that time, but everybody is always focused on that spot in the Champions League for Liverpool. We have won it five times and I am sure we want to win it again. It's vital we get into that competition and it's important for this Club to be in it, but from a business perspective I think we were able to demonstrate that without it we can still move forward. We've spoken about the costs accrued for past stadium designs - can you update us on the latest position with the stadium project and are we accruing more costs which will see us take another big hit in the future? Let me deal with the progress first. We have said several times that we are following a parallel course and we have been looking at the opportunity we have to build a new stadium in Stanley Park. Some of the money that was written off recently relates to one of the designs that we do think has some opportunity. We have planning permission for it, the design is largely done, or has certainly had a significant amount spent on that, so that dynamic is really about finding the right economic model to build that stadium if that's our ultimate choice. That alludes to things like finding the right naming rights partner, all of which takes time and all of which we're very active on. We'll only do that if we can find the right economic model that makes the long term sense for Liverpool Football Club. What we talked about earlier gives a very clear indication that you have to do these things in a responsible way, you have to expend money in a responsible way, you have to make decisions in a responsible way and that's very much what's happening on that front. On the plans or ideas around the refurbishment of Anfield, similarly, we're taking responsible and timely decisions based on a different set of dynamics; some economical and around cost and expenditure, but some around the more administrative things like planning permission and acquisition of property and really trying to study whether that's a real opportunity. We've said all along it's been challenging in that area, but we continue to look at it and we continue a dialogue with several stakeholders involved in that. We're not done on either side yet, but we're very committed to finding the right solution, but absolutely finding it in a responsible way for the football club. Fans want to see that, fans, just as us, want to see an increase in capacity and that's what we're all focused on. In terms of accruing more costs, we won't take another big hit in the future. That's not to say we won't expend any money on either project, but we do that in a very prudent way. There certainly aren't any landmark costs of the sort we've seen in these accounts. We are going about it in a very responsible way and we've got a lot of expertise, a lot of knowledge and a lot of history under our belt now as a result of many years of looking at this project. I think it's fair to say some of the hard cost has already gone in and what we're doing now is trying to find the right solution. Finally, taking into account everything we have spoken about, what's your message to Liverpool fans today about the future of their Club? The key message has to be that we've created a much more stable environment than the one we were in over a year ago. We're in a very strong situation in terms of the investment we have already made in the team, we've created a platform that will allow us commercially to go and continue to grow our revenue. We've grown it significantly, we have an opportunity to do so globally, which all underpins future investment in the team. We've massively reduced our debt situation so in terms of banking and finance we're in a very stable situation, probably more favourable than most. All of those things are the ingredients to growth and the ingredients to opportunity and I'm sure that's what everybody out there, all our fans, want. They want to see a strong Liverpool, they want to see a sustainable Liverpool and they want to see a Liverpool winning trophies. I think the ingredients are there. We'll continue to tinker with it and work with it to make it work on and off the pitch, and that's the important and right way to run any business, so there's plenty of hope, I think, for Liverpool fans
The key to all this is to get a new stadium and to provide that with Champions league football. Arsenal are in an enviable position in that regard and years ahead of us. Parry and those before him got left behind commercially and we have being playing catch up ever since
Two things strike me about this bit, the inclusion of Christian Purslow being one. Why mention him? Was it because of the amount he was paid or is it a veiled dig to showcase he was a ****? Secondly about the compensation we and others continue to pay. Between Rafa and Roy, that's the cost of a quality scorer Kenny was given a 2 year contract and rightly so, if the owners want to replace him it will be relatively cheap. The next contract Kenny signs or his replacement signs should include several performance clauses, ie if you finish below 4th or 5th for 2 consecutive seasons we can fire you without compo, if we're below 10th at any stage after 19 league games we can fire you without compo. I think any manager worth his salt would find those conditions perfectly reasonable. Anyone know how it works in American sports, are managers rewarded for failure over there too?
An Epic Swindle by Brian Reade reflects on Hicks and Gillettes 44 months at LFC. People who haven't read it should read it.
My bad thought it was 2. Fro a purely financial point of view it makes no sense to give him 3 years when he would've taking a 2 year contract or even a rolling contract.