Bankers: Reds are not in bad shape
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The bit that confuses me about all this profit/loss etc and whether we are in a healthy shape or not is - This 35mill a year interest, and repayment of any of the debt. Did they pay any of the debt off last year? Was that 10mill profit before we paid the interest and any of the debt?
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
[quote author=Mors link=topic=34395.msg895678#msg895678 date=1246022362]
The bit that confuses me about all this profit/loss etc and whether we are in a healthy shape or not is - This 35mill a year interest, and repayment of any of the debt. Did they pay any of the debt off last year? Was that 10mill profit before we paid the interest and any of the debt?
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
[/quote]
The stadium would bring in more than 25 mil a year more.
The bit that confuses me about all this profit/loss etc and whether we are in a healthy shape or not is - This 35mill a year interest, and repayment of any of the debt. Did they pay any of the debt off last year? Was that 10mill profit before we paid the interest and any of the debt?
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
[/quote]
The stadium would bring in more than 25 mil a year more.
S
Squiggles
Guest
The Royal Bank of Scotland has taken the remarkable step of writing to Liverpool supporters to explain its continued financial support for the club's unpopular owners, Tom Hicks and George Gillett.
Here is the letter in full ...
Thank you for your email expressing concern about RBS' banking arrangements with Liverpool FC and its current owners. We are aware of the strength of feeling of a number of fans on this matter and have corresponded with many during the course of the past year or so.
Perhaps I can start by putting RBS' relationship with Liverpool FC in context. RBS is the main banker to the Club including all of its operating accounts, cash management, online banking, automated payments, and credit card processing to facilitate ticket sales and retail merchandising. We also provide a credit facility to support the Club's working capital requirements and a letter of credit facility to facilitate the purchase of players from non-Premiership Clubs, along with a loan facility for design, planning and other preparatory work for the proposed new stadium at Stanley Park. We have set out to establish a long term relationship with the Club, and we look forward to this continuing for many years to come.
We also lent money to the Club's parent, Kop Football Limited, so that it could repay debt which was on the balance sheet of the Club at the time of its acquisition by George Gillett and Tom Hicks. This is the only portion of Kop Football's bank debt for which the Club is legally responsible. We took great care when making our original loan in early 2007 and when refinancing it last January to distinguish between obligations of the Club, primarily those outlined above, and obligations of its parent company, the latter being secured by personal guarantees and collateral from the owners and a pledge of the shares they own in the Club.
As a result the Club does not suffer the burden of debt implied by a lot of the recent press reports and, in our view and that of the executive management of the Club, it is financially healthy and able to service comfortably its debt obligations from cash flow generated by its playing and commercial activities. It is in our commercial interest to support the Club in the manner described above so that it can continue to perform successfully on and off the pitch.
As far as the Government is concerned, they have been very clear that they do not wish to exercise day to day control over RBS or make commercial decisions for us. Indeed they set up an independent body, UKFI, to oversee the Government's shareholding in RBS, so matters such as strategy and governance can be agreed, while they leave commercially related matters to us.
RBS attaches a great deal of value to being associated with Liverpool FC. I hope my comments reassure you as to the strength and depth of our relationship with the Club and that we will endeavour to contribute to its long term health and success.
Kind Regards,
Roger Lowry, Head of Group Public Affairs, Royal Bank of Scotland Group
Here is the letter in full ...
Thank you for your email expressing concern about RBS' banking arrangements with Liverpool FC and its current owners. We are aware of the strength of feeling of a number of fans on this matter and have corresponded with many during the course of the past year or so.
Perhaps I can start by putting RBS' relationship with Liverpool FC in context. RBS is the main banker to the Club including all of its operating accounts, cash management, online banking, automated payments, and credit card processing to facilitate ticket sales and retail merchandising. We also provide a credit facility to support the Club's working capital requirements and a letter of credit facility to facilitate the purchase of players from non-Premiership Clubs, along with a loan facility for design, planning and other preparatory work for the proposed new stadium at Stanley Park. We have set out to establish a long term relationship with the Club, and we look forward to this continuing for many years to come.
We also lent money to the Club's parent, Kop Football Limited, so that it could repay debt which was on the balance sheet of the Club at the time of its acquisition by George Gillett and Tom Hicks. This is the only portion of Kop Football's bank debt for which the Club is legally responsible. We took great care when making our original loan in early 2007 and when refinancing it last January to distinguish between obligations of the Club, primarily those outlined above, and obligations of its parent company, the latter being secured by personal guarantees and collateral from the owners and a pledge of the shares they own in the Club.
As a result the Club does not suffer the burden of debt implied by a lot of the recent press reports and, in our view and that of the executive management of the Club, it is financially healthy and able to service comfortably its debt obligations from cash flow generated by its playing and commercial activities. It is in our commercial interest to support the Club in the manner described above so that it can continue to perform successfully on and off the pitch.
As far as the Government is concerned, they have been very clear that they do not wish to exercise day to day control over RBS or make commercial decisions for us. Indeed they set up an independent body, UKFI, to oversee the Government's shareholding in RBS, so matters such as strategy and governance can be agreed, while they leave commercially related matters to us.
RBS attaches a great deal of value to being associated with Liverpool FC. I hope my comments reassure you as to the strength and depth of our relationship with the Club and that we will endeavour to contribute to its long term health and success.
Kind Regards,
Roger Lowry, Head of Group Public Affairs, Royal Bank of Scotland Group
To be fair to the RBS, this is a laudable move. It seems to reflect that the RBS are aware that they have a responsibility beyond maintaining the financial stability of two opportunistic Yanks, but that they are ultimately responsible for the future of LFC.
I get the impression from this, that the presence of Moores and Parry on the board is no longer necessary. He seems to be saying that the debt that it on the books at Kop Holdings will not become attached to LFC during his shift, no matter whether Hick and Git want to do that or not. Or am I reading this wrong?
I get the impression from this, that the presence of Moores and Parry on the board is no longer necessary. He seems to be saying that the debt that it on the books at Kop Holdings will not become attached to LFC during his shift, no matter whether Hick and Git want to do that or not. Or am I reading this wrong?
S
Squiggles
Guest
Without going into the complexities of finance, RBS seem to be acting very reasonably to me.
[quote author=doctor_mac link=topic=34395.msg895705#msg895705 date=1246025771]
To be fair to the RBS, this is a laudable move. It seems to reflect that the RBS are aware that they have a responsibility beyond maintaining the financial stability of two opportunistic Yanks, but that they are ultimately responsible for the future of LFC.
I get the impression from this, that the presence of Moores and Parry on the board is no longer necessary. He seems to be saying that the debt that it on the books at Kop Holdings will not become attached to LFC during his shift, no matter whether Hick and Git want to do that or not. Or am I reading this wrong?
[/quote]
That's how I read it too, although that can't be right given the levels of media hysteria a few weeks back, can it?
To be fair to the RBS, this is a laudable move. It seems to reflect that the RBS are aware that they have a responsibility beyond maintaining the financial stability of two opportunistic Yanks, but that they are ultimately responsible for the future of LFC.
I get the impression from this, that the presence of Moores and Parry on the board is no longer necessary. He seems to be saying that the debt that it on the books at Kop Holdings will not become attached to LFC during his shift, no matter whether Hick and Git want to do that or not. Or am I reading this wrong?
[/quote]
That's how I read it too, although that can't be right given the levels of media hysteria a few weeks back, can it?
[quote author=doctor_mac link=topic=34395.msg895684#msg895684 date=1246022904]
[quote author=Mors link=topic=34395.msg895678#msg895678 date=1246022362]
The bit that confuses me about all this profit/loss etc and whether we are in a healthy shape or not is - This 35mill a year interest, and repayment of any of the debt. Did they pay any of the debt off last year? Was that 10mill profit before we paid the interest and any of the debt?
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
[/quote]
The stadium would bring in more than 25 mil a year more.
[/quote]
The 25 was an example, but, even if the new ground does bring in more than that - it needs to bring in 35mill just to finance the debt, let alone pay any of it off? :s
What about investment for new players etc - Where is the money for that going to come from?
[quote author=Mors link=topic=34395.msg895678#msg895678 date=1246022362]
The bit that confuses me about all this profit/loss etc and whether we are in a healthy shape or not is - This 35mill a year interest, and repayment of any of the debt. Did they pay any of the debt off last year? Was that 10mill profit before we paid the interest and any of the debt?
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
[/quote]
The stadium would bring in more than 25 mil a year more.
[/quote]
The 25 was an example, but, even if the new ground does bring in more than that - it needs to bring in 35mill just to finance the debt, let alone pay any of it off? :s
What about investment for new players etc - Where is the money for that going to come from?
[quote author=Hardcastle link=topic=34395.msg895743#msg895743 date=1246028734]
[quote author=doctor_mac link=topic=34395.msg895705#msg895705 date=1246025771]
To be fair to the RBS, this is a laudable move. It seems to reflect that the RBS are aware that they have a responsibility beyond maintaining the financial stability of two opportunistic Yanks, but that they are ultimately responsible for the future of LFC.
I get the impression from this, that the presence of Moores and Parry on the board is no longer necessary. He seems to be saying that the debt that it on the books at Kop Holdings will not become attached to LFC during his shift, no matter whether Hick and Git want to do that or not. Or am I reading this wrong?
[/quote]
That's how I read it too, although that can't be right given the levels of media hysteria a few weeks back, can it?
[/quote]
Me three.
So all the loan that the club are responsible for is just repaying the original debt reading that. Therefore we're at square one, & the yanks are liable for the money used to buy the club that has been shifted onto Kop Holdings.
That's how I read it.
[quote author=doctor_mac link=topic=34395.msg895705#msg895705 date=1246025771]
To be fair to the RBS, this is a laudable move. It seems to reflect that the RBS are aware that they have a responsibility beyond maintaining the financial stability of two opportunistic Yanks, but that they are ultimately responsible for the future of LFC.
I get the impression from this, that the presence of Moores and Parry on the board is no longer necessary. He seems to be saying that the debt that it on the books at Kop Holdings will not become attached to LFC during his shift, no matter whether Hick and Git want to do that or not. Or am I reading this wrong?
[/quote]
That's how I read it too, although that can't be right given the levels of media hysteria a few weeks back, can it?
[/quote]
Me three.
So all the loan that the club are responsible for is just repaying the original debt reading that. Therefore we're at square one, & the yanks are liable for the money used to buy the club that has been shifted onto Kop Holdings.
That's how I read it.
[quote author=Mors link=topic=34395.msg895678#msg895678 date=1246022362]
The bit that confuses me about all this profit/loss etc and whether we are in a healthy shape or not is - This 35mill a year interest, and repayment of any of the debt. Did they pay any of the debt off last year? Was that 10mill profit before we paid the interest and any of the debt?
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
[/quote]
The impression I got of the initial finance that it was a short term interest only loan.
That's why I thought they'd sell, you use short term finance for short term things
The bit that confuses me about all this profit/loss etc and whether we are in a healthy shape or not is - This 35mill a year interest, and repayment of any of the debt. Did they pay any of the debt off last year? Was that 10mill profit before we paid the interest and any of the debt?
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
[/quote]
The impression I got of the initial finance that it was a short term interest only loan.
That's why I thought they'd sell, you use short term finance for short term things
[quote author=Mors link=topic=34395.msg895678#msg895678 date=1246022362]
The bit that confuses me about all this profit/loss etc and whether we are in a healthy shape or not is - This 35mill a year interest, and repayment of any of the debt. Did they pay any of the debt off last year? Was that 10mill profit before we paid the interest and any of the debt?
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
[/quote]
Hi Mors -
Hopefully, not too much finance here, but two separate issues being confused here - Profit/Loss and Cash Flow.
Paying off debt primarily affects your Cash Flow (negatively - it eats up available cash). It has some positive affect on Profit/Loss as it reduces the loan amount against which interest is calculated. So if your interest rate is 10% and you pay off £10 million of your debt, your profit would increase by approx. £1. Make sense?
Most people focus on Profits/Loss and that is important, but, when you here words like "Going concern", that is all about Cash Flow. You can be profitable, but not have access to enough cash to pay your debt obligations. Debt is generally manageable for profitable companies (and people too) as long as it is amortized into the distant future. But, when your debt obligations are short term and have a big due date when the entire balance must be repaid (or refinanced) even profitable companies are at risk. This is what the accountants had to say about Kop Holdings because Kop Holdings had bigger bill coming due soon - £350M than cash on hand. That, by definition, creates a "going concern".
So, the status as I understand is:
1. LFC is profitable (and that includes profitable while meeting its current debt obligations - interest payments)
2. Kop Holdings is not profitable, but can manage its current debt level if that debt gets amortized over a distant future at a reasonable interest rate.
The final key consideration is Value.
While Kop Holdings is losing money on an annual basis, that is ok if the value of its assets (LFC) are increasing at a pace faster than the losses are building up. That is the chess game that Hicks and Gillette are playing. They need to invest enough in LFC to ensure that its value grows faster than their losses. They understood on Day 1 - that the best way to ensure that was to build a new stadium and they were right. The problem was the economic turmoil affected their Cash Flow by raising interest rates and making credit less available, thereby putting them at risk as a "Going Concern".
So in summary - three separate economic concepts (Profit/Loss, Cash Flow, Valuation). They are all related to one another, but also have somewhat independent considerations.
I do find the RBS note generally comforting, but they have their own interests at heart in making such a statement and it is unlikely the whole story.
The bit that confuses me about all this profit/loss etc and whether we are in a healthy shape or not is - This 35mill a year interest, and repayment of any of the debt. Did they pay any of the debt off last year? Was that 10mill profit before we paid the interest and any of the debt?
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
[/quote]
Hi Mors -
Hopefully, not too much finance here, but two separate issues being confused here - Profit/Loss and Cash Flow.
Paying off debt primarily affects your Cash Flow (negatively - it eats up available cash). It has some positive affect on Profit/Loss as it reduces the loan amount against which interest is calculated. So if your interest rate is 10% and you pay off £10 million of your debt, your profit would increase by approx. £1. Make sense?
Most people focus on Profits/Loss and that is important, but, when you here words like "Going concern", that is all about Cash Flow. You can be profitable, but not have access to enough cash to pay your debt obligations. Debt is generally manageable for profitable companies (and people too) as long as it is amortized into the distant future. But, when your debt obligations are short term and have a big due date when the entire balance must be repaid (or refinanced) even profitable companies are at risk. This is what the accountants had to say about Kop Holdings because Kop Holdings had bigger bill coming due soon - £350M than cash on hand. That, by definition, creates a "going concern".
So, the status as I understand is:
1. LFC is profitable (and that includes profitable while meeting its current debt obligations - interest payments)
2. Kop Holdings is not profitable, but can manage its current debt level if that debt gets amortized over a distant future at a reasonable interest rate.
The final key consideration is Value.
While Kop Holdings is losing money on an annual basis, that is ok if the value of its assets (LFC) are increasing at a pace faster than the losses are building up. That is the chess game that Hicks and Gillette are playing. They need to invest enough in LFC to ensure that its value grows faster than their losses. They understood on Day 1 - that the best way to ensure that was to build a new stadium and they were right. The problem was the economic turmoil affected their Cash Flow by raising interest rates and making credit less available, thereby putting them at risk as a "Going Concern".
So in summary - three separate economic concepts (Profit/Loss, Cash Flow, Valuation). They are all related to one another, but also have somewhat independent considerations.
I do find the RBS note generally comforting, but they have their own interests at heart in making such a statement and it is unlikely the whole story.
[quote author=FreshRed link=topic=34395.msg895864#msg895864 date=1246039787]
[quote author=Mors link=topic=34395.msg895678#msg895678 date=1246022362]
The bit that confuses me about all this profit/loss etc and whether we are in a healthy shape or not is - This 35mill a year interest, and repayment of any of the debt. Did they pay any of the debt off last year? Was that 10mill profit before we paid the interest and any of the debt?
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
[/quote]
Hi Mors -
Hopefully, not too much finance here, but two separate issues being confused here - Profit/Loss and Cash Flow.
Paying off debt primarily affects your Cash Flow (negatively - it eats up available cash). It has some positive affect on Profit/Loss as it reduces the loan amount against which interest is calculated. So if your interest rate is 10% and you pay off £10 million of your debt, your profit would increase by approx. £1. Make sense?
Most people focus on Profits/Loss and that is important, but, when you here words like "Going concern", that is all about Cash Flow. You can be profitable, but not have access to enough cash to pay your debt obligations. Debt is generally manageable for profitable companies (and people too) as long as it is amortized into the distant future. But, when your debt obligations are short term and have a big due date when the entire balance must be repaid (or refinanced) even profitable companies are at risk. This is what the accountants had to say about Kop Holdings because Kop Holdings had bigger bill coming due soon - £350M than cash on hand. That, by definition, creates a "going concern".
So, the status as I understand is:
1. LFC is profitable (and that includes profitable while meeting its current debt obligations - interest payments)
2. Kop Holdings is not profitable, but can manage its current debt level if that debt gets amortized over a distant future at a reasonable interest rate.
The final key consideration is Value.
While Kop Holdings is losing money on an annual basis, that is ok if the value of its assets (LFC) are increasing at a pace faster than the losses are building up. That is the chess game that Hicks and Gillette are playing. They need to invest enough in LFC to ensure that its value grows faster than their losses. They understood on Day 1 - that the best way to ensure that was to build a new stadium and they were right. The problem was the economic turmoil affected their Cash Flow by raising interest rates and making credit less available, thereby putting them at risk as a "Going Concern".
So in summary - three separate economic concepts (Profit/Loss, Cash Flow, Valuation). They are all related to one another, but also have somewhat independent considerations.
I do find the RBS note generally comforting, but they have their own interests at heart in making such a statement and it is unlikely the whole story.
[/quote]
great post mate
[quote author=Mors link=topic=34395.msg895678#msg895678 date=1246022362]
The bit that confuses me about all this profit/loss etc and whether we are in a healthy shape or not is - This 35mill a year interest, and repayment of any of the debt. Did they pay any of the debt off last year? Was that 10mill profit before we paid the interest and any of the debt?
IF we were for example paying off 35mill a year of the debt - that's 10 fucking years to clear the debt. Not including the interest and any further expenditure on players, cost of a new ground etc
I can't see how we're gonna clear this debt any time soon even with a new stadium? Say a new stadium brought in extra 25mill a year, that wouldn't even cover the interest payments we have to make? All fucked up.
[/quote]
Hi Mors -
Hopefully, not too much finance here, but two separate issues being confused here - Profit/Loss and Cash Flow.
Paying off debt primarily affects your Cash Flow (negatively - it eats up available cash). It has some positive affect on Profit/Loss as it reduces the loan amount against which interest is calculated. So if your interest rate is 10% and you pay off £10 million of your debt, your profit would increase by approx. £1. Make sense?
Most people focus on Profits/Loss and that is important, but, when you here words like "Going concern", that is all about Cash Flow. You can be profitable, but not have access to enough cash to pay your debt obligations. Debt is generally manageable for profitable companies (and people too) as long as it is amortized into the distant future. But, when your debt obligations are short term and have a big due date when the entire balance must be repaid (or refinanced) even profitable companies are at risk. This is what the accountants had to say about Kop Holdings because Kop Holdings had bigger bill coming due soon - £350M than cash on hand. That, by definition, creates a "going concern".
So, the status as I understand is:
1. LFC is profitable (and that includes profitable while meeting its current debt obligations - interest payments)
2. Kop Holdings is not profitable, but can manage its current debt level if that debt gets amortized over a distant future at a reasonable interest rate.
The final key consideration is Value.
While Kop Holdings is losing money on an annual basis, that is ok if the value of its assets (LFC) are increasing at a pace faster than the losses are building up. That is the chess game that Hicks and Gillette are playing. They need to invest enough in LFC to ensure that its value grows faster than their losses. They understood on Day 1 - that the best way to ensure that was to build a new stadium and they were right. The problem was the economic turmoil affected their Cash Flow by raising interest rates and making credit less available, thereby putting them at risk as a "Going Concern".
So in summary - three separate economic concepts (Profit/Loss, Cash Flow, Valuation). They are all related to one another, but also have somewhat independent considerations.
I do find the RBS note generally comforting, but they have their own interests at heart in making such a statement and it is unlikely the whole story.
[/quote]
great post mate
So when are we getting a stadium?
And when realistically may that be in your opinion?
We need to "build that sucker".
We need to "build that sucker".
Thanks FreshRed - Very informative.
So by the sounds of it then, even though the club is profitable we're not touching the debt, we're just making the interest repayments on the debt?
And to get into a position to be able to pay off the debt and not just the interest, we're going to have to get ourselves into a lot more debt? (Build a new ground, invest in the team, marketing etc etc)
So if we're in 350mill of debt at the moment and comfortably servicing the interest (so assuming the loan isn't to get any bigger) and the ground is forecast to be another 300+mill, plus the investment in the team over the period it takes to build the new ground, it's likely that we're going to be in well over 700mill in debt before we actually start paying it off? 😱
So by the sounds of it then, even though the club is profitable we're not touching the debt, we're just making the interest repayments on the debt?
And to get into a position to be able to pay off the debt and not just the interest, we're going to have to get ourselves into a lot more debt? (Build a new ground, invest in the team, marketing etc etc)
So if we're in 350mill of debt at the moment and comfortably servicing the interest (so assuming the loan isn't to get any bigger) and the ground is forecast to be another 300+mill, plus the investment in the team over the period it takes to build the new ground, it's likely that we're going to be in well over 700mill in debt before we actually start paying it off? 😱
[quote author=Mors link=topic=34395.msg896007#msg896007 date=1246051855]
Thanks FreshRed - Very informative.
So by the sounds of it then, even though the club is profitable we're not touching the debt, we're just making the interest repayments on the debt?
And to get into a position to be able to pay off the debt and not just the interest, we're going to have to get ourselves into a lot more debt? (Build a new ground, invest in the team, marketing etc etc)
So if we're in 350mill of debt at the moment and comfortably servicing the interest (so assuming the loan isn't to get any bigger) and the ground is forecast to be another 300+mill, plus the investment in the team over the period it takes to build the new ground, it's likely that we're going to be in well over 700mill in debt before we actually start paying it off? 😱
[/quote]
Yup. That is all exactly right. But, manageable debt is not a bad thing. It's a good thing. It frees up cash to invest in growth opportunities - i.e. players, marketing opportunities that increase the value of the whole enterprise. Unmanageable debt is a bad thing. Seems like we were very close to the edge of the good vs. bad line, but things are turning more positive now.
At least I hope so.
Thanks FreshRed - Very informative.
So by the sounds of it then, even though the club is profitable we're not touching the debt, we're just making the interest repayments on the debt?
And to get into a position to be able to pay off the debt and not just the interest, we're going to have to get ourselves into a lot more debt? (Build a new ground, invest in the team, marketing etc etc)
So if we're in 350mill of debt at the moment and comfortably servicing the interest (so assuming the loan isn't to get any bigger) and the ground is forecast to be another 300+mill, plus the investment in the team over the period it takes to build the new ground, it's likely that we're going to be in well over 700mill in debt before we actually start paying it off? 😱
[/quote]
Yup. That is all exactly right. But, manageable debt is not a bad thing. It's a good thing. It frees up cash to invest in growth opportunities - i.e. players, marketing opportunities that increase the value of the whole enterprise. Unmanageable debt is a bad thing. Seems like we were very close to the edge of the good vs. bad line, but things are turning more positive now.
At least I hope so.
Excellent PR by RBS and nothing more than that.... saying nice and reassuring things is always a winner. Of course they were going to refinance we are paying them 35M pounds a year in interest.
35M pounds in interest.... not paying off a debt mind you just interest on a loan.... a loan to buy the new stadium?? .... nah.... a loan to buy our fucking selves...
its a fucking disaster.
it will take more than PR.
35M pounds in interest.... not paying off a debt mind you just interest on a loan.... a loan to buy the new stadium?? .... nah.... a loan to buy our fucking selves...
its a fucking disaster.
it will take more than PR.
[quote author=Molbystwin link=topic=34395.msg896248#msg896248 date=1246104627]
Excellent PR by RBS
[/quote]
Very true and RBS certainly would like to keep receiving $35M in interest payments. But, it is also interesting that the debt is clearly separated and the majority of the debt is not held by the club itself.
Excellent PR by RBS
[/quote]
Very true and RBS certainly would like to keep receiving $35M in interest payments. But, it is also interesting that the debt is clearly separated and the majority of the debt is not held by the club itself.
[quote author=Molbystwin link=topic=34395.msg896248#msg896248 date=1246104627]
Excellent PR by RBS and nothing more than that.... saying nice and reassuring things is always a winner. Of course they were going to refinance we are paying them 35M pounds a year in interest.
35M pounds in interest.... not paying off a debt mind you just interest on a loan.... a loan to buy the new stadium?? .... nah.... a loan to buy our fucking selves...
its a fucking disaster.
it will take more than PR.
[/quote]
This is much more than just good PR... it just goes to show that everything isn't as bad as the media wanted us to believe.
I'll go through the figures for you again in case you didn't understand. Of that £350m that G&H borrowed, only £185m was money they used to buy the club. The rest was used to pay off the existing debt that the club held and as working capital for the club. So half that money was used to fund our transfers etc.
Since G&H have been the owners, our spending on the transfer market has gone up a notch. We're not at a level where we can spend £40m on one player but we're a long way up from when Moores has to lend the club the £9m to buy Kuyt.
Everything isn't rosy but it's a long way from a 'fucking disaster' too. Just don't believe the media hype.
Excellent PR by RBS and nothing more than that.... saying nice and reassuring things is always a winner. Of course they were going to refinance we are paying them 35M pounds a year in interest.
35M pounds in interest.... not paying off a debt mind you just interest on a loan.... a loan to buy the new stadium?? .... nah.... a loan to buy our fucking selves...
its a fucking disaster.
it will take more than PR.
[/quote]
This is much more than just good PR... it just goes to show that everything isn't as bad as the media wanted us to believe.
I'll go through the figures for you again in case you didn't understand. Of that £350m that G&H borrowed, only £185m was money they used to buy the club. The rest was used to pay off the existing debt that the club held and as working capital for the club. So half that money was used to fund our transfers etc.
Since G&H have been the owners, our spending on the transfer market has gone up a notch. We're not at a level where we can spend £40m on one player but we're a long way up from when Moores has to lend the club the £9m to buy Kuyt.
Everything isn't rosy but it's a long way from a 'fucking disaster' too. Just don't believe the media hype.
[quote author=Tinto link=topic=34395.msg896298#msg896298 date=1246113093]
[quote author=Molbystwin link=topic=34395.msg896248#msg896248 date=1246104627]
Excellent PR by RBS and nothing more than that.... saying nice and reassuring things is always a winner. Of course they were going to refinance we are paying them 35M pounds a year in interest.
35M pounds in interest.... not paying off a debt mind you just interest on a loan.... a loan to buy the new stadium?? .... nah.... a loan to buy our fucking selves...
its a fucking disaster.
it will take more than PR.
[/quote]
This is much more than just good PR... it just goes to show that everything isn't as bad as the media wanted us to believe.
I'll go through the figures for you again in case you didn't understand. Of that £350m that G&H borrowed, only £185m was money they used to buy the club. The rest was used to pay off the existing debt that the club held and as working capital for the club. So half that money was used to fund our transfers etc.
Since G&H have been the owners, our spending on the transfer market has gone up a notch. We're not at a level where we can spend £40m on one player but we're a long way up from when Moores has to lend the club the £9m to buy Kuyt.
Everything isn't rosy but it's a long way from a 'fucking disaster' too. Just don't believe the media hype.
[/quote]
I understood that its a fair ol crock of shite and that whether the press is exaggerrating or not the people who bought us did so with whopping expensive loans that we ourselves are paying. KOp holdings only asset is the club so to suggest that in some way we are not in trouble is ridiculous. We are. however you dress ity up, if they are liable to pay large amounts of interest in loans then the club will be what foots the bill. Unless the finally stick to their word and do what needs to be done.
Disaster or not, and i tend to see it as that if i'm honest, we are no closer to being financially able to compete and we do not have a new stadium, both the things they purported to be able to do when they took over, this is before we consider the long awaited arrival of snoogy doogy.
A company who is earning 35M interest a year from us doesn't want us to be miffed about it is how i read that letter. Incidentally what kind of cunt negotiates a loan at 10% interest rates???its fucking scandalous. Its OK if we keep getting deep into the champs league every year, but we are highly exposed financially and that causes problems. FACT. What happens when city get really good??
It is possible to have some level of sympathy with the owners in that the finacial markets did blow up just as they were arriving but they were and are far from benevolent to our club, something that up until his last days you could not say about Moores. IMHO Gillet and hicks must invest more withut bborrowing against us to do so. And until they do i for one will continue to point out that they are no good robbing lying cunts. I sincerely hope that they force me to change my tune but ....
[quote author=Molbystwin link=topic=34395.msg896248#msg896248 date=1246104627]
Excellent PR by RBS and nothing more than that.... saying nice and reassuring things is always a winner. Of course they were going to refinance we are paying them 35M pounds a year in interest.
35M pounds in interest.... not paying off a debt mind you just interest on a loan.... a loan to buy the new stadium?? .... nah.... a loan to buy our fucking selves...
its a fucking disaster.
it will take more than PR.
[/quote]
This is much more than just good PR... it just goes to show that everything isn't as bad as the media wanted us to believe.
I'll go through the figures for you again in case you didn't understand. Of that £350m that G&H borrowed, only £185m was money they used to buy the club. The rest was used to pay off the existing debt that the club held and as working capital for the club. So half that money was used to fund our transfers etc.
Since G&H have been the owners, our spending on the transfer market has gone up a notch. We're not at a level where we can spend £40m on one player but we're a long way up from when Moores has to lend the club the £9m to buy Kuyt.
Everything isn't rosy but it's a long way from a 'fucking disaster' too. Just don't believe the media hype.
[/quote]
I understood that its a fair ol crock of shite and that whether the press is exaggerrating or not the people who bought us did so with whopping expensive loans that we ourselves are paying. KOp holdings only asset is the club so to suggest that in some way we are not in trouble is ridiculous. We are. however you dress ity up, if they are liable to pay large amounts of interest in loans then the club will be what foots the bill. Unless the finally stick to their word and do what needs to be done.
Disaster or not, and i tend to see it as that if i'm honest, we are no closer to being financially able to compete and we do not have a new stadium, both the things they purported to be able to do when they took over, this is before we consider the long awaited arrival of snoogy doogy.
A company who is earning 35M interest a year from us doesn't want us to be miffed about it is how i read that letter. Incidentally what kind of cunt negotiates a loan at 10% interest rates???its fucking scandalous. Its OK if we keep getting deep into the champs league every year, but we are highly exposed financially and that causes problems. FACT. What happens when city get really good??
It is possible to have some level of sympathy with the owners in that the finacial markets did blow up just as they were arriving but they were and are far from benevolent to our club, something that up until his last days you could not say about Moores. IMHO Gillet and hicks must invest more withut bborrowing against us to do so. And until they do i for one will continue to point out that they are no good robbing lying cunts. I sincerely hope that they force me to change my tune but ....
[quote author=Molbystwin link=topic=34395.msg896328#msg896328 date=1246117483]
I understood that its a fair ol crock of shite and that whether the press is exaggerrating or not the people who bought us did so with whopping expensive loans that we ourselves are paying. KOp holdings only asset is the club so to suggest that in some way we are not in trouble is ridiculous. We are. however you dress ity up, if they are liable to pay large amounts of interest in loans then the club will be what foots the bill. Unless the finally stick to their word and do what needs to be done.
Disaster or not, and i tend to see it as that if i'm honest, we are no closer to being financially able to compete and we do not have a new stadium, both the things they purported to be able to do when they took over, this is before we consider the long awaited arrival of snoogy doogy.
A company who is earning 35M interest a year from us doesn't want us to be miffed about it is how i read that letter. Incidentally what kind of cunt negotiates a loan at 10% interest rates???its fucking scandalous. Its OK if we keep getting deep into the champs league every year, but we are highly exposed financially and that causes problems. FACT. What happens when city get really good??
It is possible to have some level of sympathy with the owners in that the finacial markets did blow up just as they were arriving but they were and are far from benevolent to our club, something that up until his last days you could not say about Moores. IMHO Gillet and hicks must invest more withut bborrowing against us to do so. And until they do i for one will continue to point out that they are no good robbing lying cunts. I sincerely hope that they force me to change my tune but ....
[/quote]
Financially to compete with whom? United? Real Madrid? Chelsea? Arsenal? City?
We've spent more than Arsenal... much more.... since G&H become our owners and it seems like we will continue to do so this summer.
United and Real Madrid, like it or not, are bigger than us financially and so have earned their right to be much bigger spenders than us. Chelsea aren't ran as a business and Ambromovich will never see that money he has pumped into Chelsea ever again. Same for City.
G&H are running us as a business, which they expect to earn a huge bloody fortune from. They're certainly not fans and benevolent towards the club as you say. However for them to earn that fortune, the club needs to do well on the pitch. It's as simple as that. Also, if everything was to go horribly wrong for us, they are the guarantors of a huge chunk of that debt and so they stand to lose a huge slice of their own wealth too.
I thought Fernando Torres was that star signing, which we certainly wouldn't have been able to afford if G&H didn't take out that £350m loan. If Moores was still in charge, our record fee for a signing will still be what we paid for Cisse.
It seems to me, you don't want Liverpool to be ran as a business and to be able to stand on it's own two feet but to be a rich man's play thing like Chelsea or City.
I understood that its a fair ol crock of shite and that whether the press is exaggerrating or not the people who bought us did so with whopping expensive loans that we ourselves are paying. KOp holdings only asset is the club so to suggest that in some way we are not in trouble is ridiculous. We are. however you dress ity up, if they are liable to pay large amounts of interest in loans then the club will be what foots the bill. Unless the finally stick to their word and do what needs to be done.
Disaster or not, and i tend to see it as that if i'm honest, we are no closer to being financially able to compete and we do not have a new stadium, both the things they purported to be able to do when they took over, this is before we consider the long awaited arrival of snoogy doogy.
A company who is earning 35M interest a year from us doesn't want us to be miffed about it is how i read that letter. Incidentally what kind of cunt negotiates a loan at 10% interest rates???its fucking scandalous. Its OK if we keep getting deep into the champs league every year, but we are highly exposed financially and that causes problems. FACT. What happens when city get really good??
It is possible to have some level of sympathy with the owners in that the finacial markets did blow up just as they were arriving but they were and are far from benevolent to our club, something that up until his last days you could not say about Moores. IMHO Gillet and hicks must invest more withut bborrowing against us to do so. And until they do i for one will continue to point out that they are no good robbing lying cunts. I sincerely hope that they force me to change my tune but ....
[/quote]
Financially to compete with whom? United? Real Madrid? Chelsea? Arsenal? City?
We've spent more than Arsenal... much more.... since G&H become our owners and it seems like we will continue to do so this summer.
United and Real Madrid, like it or not, are bigger than us financially and so have earned their right to be much bigger spenders than us. Chelsea aren't ran as a business and Ambromovich will never see that money he has pumped into Chelsea ever again. Same for City.
G&H are running us as a business, which they expect to earn a huge bloody fortune from. They're certainly not fans and benevolent towards the club as you say. However for them to earn that fortune, the club needs to do well on the pitch. It's as simple as that. Also, if everything was to go horribly wrong for us, they are the guarantors of a huge chunk of that debt and so they stand to lose a huge slice of their own wealth too.
I thought Fernando Torres was that star signing, which we certainly wouldn't have been able to afford if G&H didn't take out that £350m loan. If Moores was still in charge, our record fee for a signing will still be what we paid for Cisse.
It seems to me, you don't want Liverpool to be ran as a business and to be able to stand on it's own two feet but to be a rich man's play thing like Chelsea or City.
Well said Tinto.
I keep banging the drum about it being in the Americans interest to keep us competitive, and if that means speculating on top players they will do as long as they see the justification for a return.
regards
I keep banging the drum about it being in the Americans interest to keep us competitive, and if that means speculating on top players they will do as long as they see the justification for a return.
regards
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