Tuesday, June 09, 2009

Anfield Anquish

Ursula Errington from Sky NewsBusiness believes that the current plight surrounding Liverpool isn't as bad as it may appear.

Liverpool fans are fearing the worst following the announcement that despite a record turnover, the Anfield club's net debt has nearly doubled to £86million.

Auditors have warned George Gillett and Tom Hicks that failure to refinance a £350million loan - due on July 24 - "may cast significant doubt upon the group's ability to continue as a going concern".

However, speaking to Sky Sports News Errington pointed out that both Gillett and Hicks money tied up in a number of other companies in the US, and this could help refinance the loan repayment.

"I think we also need to be aware that Gillett and Hicks have other assets in the US that they could liquidate if necessary and use the money to appease the bankers in the UK and extend that debt financing," she explained.

"When you've got an awful lot of debt in this current economic climate, many of us recognise this is not the best of times to try and negotiate with the banks. But at the same time there is room for manoeuvre there and these guys are very able and adept. They have teams that will help them renegotiate with the banks and sort out these refinancing situations."

Sky Sports News also caught up with Professor Tom Cannon, who believes Liverpool owners Hicks and Gillett must sell off some of their other assets if they are to ease the club's financial woes.

Professor Cannon said: "Accountants like KPMG don't use the kind of language they've used here lightly. They've talked about material concerns, they've warned about their ability to continue under the present basis. I don't think I've ever heard accountants talk about a top football club in this way before.

"Fans should be very concerned. In some senses the fans have delivered what they've been expected to do. Turnover and trading profit have both gone up, but I'm afraid the cost of debt and management fees has produced a deficit which is frankly very worrying given the turnover. You're talking about a loss of almost £40million on a turnover of £200million. That is very worrying."

The Reds currently have a deficit which is roughly a third of the company in terms of trading, which is a massive difference from Premier League rivals Manchester United, whose figures are in the range of £300million and have a trading deficit of around £20million.

Professor Cannon, who is professor of strategic development at Liverpool University's school of management, cites the interest charges as the most worrying element of Liverpool's plight.

"They've got big debts but they're paying about £35million in interest," he explained. "We all know how interest rates have declined in the past year but Liverpool seem to be paying a rate that is over 10 per cent. This is at a rate where people are borrowing money at rates of around two and three per cent. It just goes to show how hard it has been to renegotiate the extension of their funding. In July they will be under pressure to renegotiate a much better deal.

"I think the pressure on Hicks and Gillett to bring in another investor is too hard to resist. Whether another investor will come in under the type of conditions Hicks and Gillett seem to be asking I don't know. It's more likely Hicks will sell some of his interest in the Texas Rangers or the Montreal Canadians. They desperately need new finance, not least to take the burden of this debt and the related interest. They can't seriously think in terms of another six-month extension this July; they need long term secure financing."

Liverpool are already counting the cost of their off-the-field troubles. This week they missed out on Gareth Barry, a player who last season publicly stated he wished to move to Anfield but has now instead gone to moneybags Manchester City. They have been heavily linked with a move for Portsmouth's £2million-rated defender Silvin Distin but Professor Cannon believes that unless finances improve, they will miss out on big-name players this summer.

He said: "We now understand why they didn't compete even more vigorously for Gareth Barry. They were talking of paying £18million for him last summer; the difference now is something that has been clearly shaped by these figures. I think Rafa Benitez is in a very powerful position; he has a lot to offer players who might want to come in, but he will clearly be operating under very strict trading conditions in terms of anybody he wants to sign.

"This is certainly going to hit Benitez's budget significantly. Most people around Merseyside thought he would sign Barry, which would have produced a phenomenal midfield with Gerrard and Mascherano. Unless they can sell Alonso or do more in the buying and selling then they're clearly going to be operating under straightened conditions."

New Liverpool FC Academy Director Frank McParland Outlines Future

Liverpool’s new Academy director Frank McParland has outlined plans for the overhaul of the club’s youth set-up.

Manager Rafael Benitez appointed McParland to conduct a review of the Academy earlier this year and the changes required continue apace.

As reported in the Daily Post yesterday John McMahon has taken over from Gary Ablett as reserve team coach, while several other changes to the coaching staff are expected over the coming weeks.

As many as 16 academy employees – including coaches, physiotherapists and sports scientists – have left the club in recent weeks.

And McParland is heading up a new set-up with new technical director Jose Segura, who has worked in Barcelona’s youth set-up, also on board.

McParland said: “Work continues to identify the best possible people to get the academy working properly again and producing players that can progress through to the first team.

“I hope to be able to confirm other additions to our team within the next month.

“We will examine every part of the academy’s operation and will be looking to make improvements not just in the coaching set-up, but also in areas such as medical, physio and fitness work.

“One new initiative will see the appointment of a head of sports science, who will tailor specific programmes for individual age groups to help them progress more quickly.”

MARK LAWRENSON: American Dream Liverpool FC Fans Can’t Wait To Wake Up From

I had a fear that when the full extent of Liverpool’s financial meltdown was made public it would look like we were back to square one.

But that’s not the case – I now think we’re worse off than that.

Just when we have our best season for years.

Just when it looks like we can finally build a team to challenge Manchester United for the title, all that hope and optimism is out on hold by this almighty mess.

It’s worrying enough that Rafael Benitez has to face another summer of trying to get in early on his transfer targets and stressing over who he wants to bring in to strengthen his side.

But the difference this year is that his main rivals could leave him lagging so far behind that he can’t catch up.

Chelsea look like they will spend big again, Manchester United will want to strengthen, Arsenal have already started buying.

And Manchester City have to be taken seriously now. After all, they’ve just completed the signing of the man who was Benitez’s top target last year.

And whether the manager or the fans wanted Gareth Barry this summer or not is immaterial.

Last season when he was top of the list, the money wasn’t there for him but as soon as City wave the chequebook at him he’s up the M6 quicker than you can say “fulfilling my ambition to play Champions League football”.

It all indicates just how hard it will be for Benitez this year.

He has hinted he will have to sell to buy but what will this entail?

If Xabi Alonso wants to go then they should get good money for him. But he was one of the top players at Anfield last season and will be difficult to replace. You’re looking at getting two players in to make up for him.

And I don’t know what Dossena and Babel will fetch in but it won’t be megabucks.

All of which leaves one hope that the club can be sold as quickly as possible.

The only good thing about the release of those figures last week was that it brought home just how much the club has suffered since Tom Hicks and George Gillett took over.

The debt has got bigger and the chances of refinancing with the banks in a few weeks have to be very slim. But that might not be a bad thing.

Because I, like thousands of other Liverpool supporters, hope this will finally be the wake-up call the Americans need to convince them to get out as quickly as they can.

And if there is someone waiting in the wings to relieve them of this situation they have created, then happy days!

Liverpool Pay US Owners Millions In Expenses

Liverpool are being made to pay almost £2m to cover the travel, legal and other personal expenses of the club's owners, Tom Hicks and George Gillett. The accounts published for the owners' holding company, Kop Football, for the year to 31 July 2008, show that Hicks charged £192,000 for "third party consulting, travel and other expenses," while Gillett charged £129,000 for "reimbursable travel, legal, personnel and other expenses".

The two men charged significant amounts of money for the same expenses, incurred by themselves personally "and affiliated companies", during the previous seven-month accounting period, which ran from 18 December 2006 to 31 July 2007, too. Hicks charged Kop £198,000, while Gillett charged £375,000.

The pair also claimed almost £1m for what are described in the accounts as "transaction-related expenses". Hicks and affiliated companies charged Kop £133,000 in this category, while Gillett's figure was much higher: £823,000. The total charged to Kop in expenses, for the owners and their affiliated companies, in 18 months from their takeover in early February 2007 to the accounts' end date of 31 July 2008, was £1.85m.

The accounts do not explain in further detail what "consulting, travel, legal, personnel and other expenses" were, or which were regarded as "reimbursable", and Hicks and Gillett were not available to respond with details yesterday. Nor was there any explanation of what constituted "transaction-related expenses". However, the only substantial transaction from December 2006 to July 2007 was the pair's takeover of the club itself. They borrowed £185m from the Royal Bank of Scotland to buy Liverpool in February 2007, and the club has been made responsible for paying the interest on that loan. Now it seems the club has also been made to pay for the pair's costs of doing the deal.

The accounts, published last week, showed that Kop owed a total of £313m to the Royal Bank of Scotland and Wachovia in January this year, and that £36.8m was payable in interest last year. Kop's only asset is Liverpool Football Club so the interest, and the reimbursement of expenses, have to come from the club's income, made from television, supporters paying to watch matches, and other commercial earnings. Hicks and Gillett did loan Kop £58.2m from their holding company in the Cayman Islands last year.

Not all the expenses claimed had been paid by July 2008. The accounts state that of the £523,000 charged by Hicks and his affiliates, £188,000 was still owed, which meant he had been paid £335,000 by Liverpool. Of the £1.327m Gillett claimed for his expenses, £255,000 was outstanding, so Liverpool had paid him £1.072m.

The revelation about the expenses has further incensed supporters' groups who have campaigned for Hicks and Gillett to sell up and leave. The groups accuse the pair of breaking their promise not to make the club pay for their own borrowings to take it over, as the Glazer family did at Manchester United. Liverpool was sold because the previous chairman, David Moores, and chief executive, Rick Parry, believed the club needed wealthy backers to build the long-planned new stadium on Stanley Park, yet the North American pair have not found the finance.

James McKenna, spokesman for the Spirit of Shankly fans' group, said: "Hicks and Gillett were the multimillionaires who promised not to do a Glazer and that work would start on the new stadium within 60 days. Yet now we find, as fans, not only are we paying for their takeover, but we are also paying for their costs of having done it, and, for coming over to visit the football club. They were supposed to bring investment to take the club forward, but it turns out we're even paying their travel costs."

Rafa Benitez: Liverpool Are Not Interested In Ezequiel Lavezzi

Liverpool have reportedly been chasing the signature of Napoli star Ezequiel Lavezzi, but Rafa Benitez has quashed the speculation, stating that the Premier League side do not want to add the ex-San Lorenzo star to their squad.

"We never contacted Lavezzi and we have no intention of doing so. We want to put a stop to these rumours," the Spanish tactician claimed to the English press, according to tuttomercatoweb.

One of Lavezzi's representatives, Eduardo Rossetto, had recently made statements to the contrary, indicating the the Reds were extremely interested in signing the Partenopei forward.

The Argentine international has been an influential figure and fan favourite at the Stadio San Paolo for the last two seasons, but has become unsettled after what he claims is "a lack of respect" from the Serie A outfit.

Press reports from the peninsula suggest that AC Milan, Juventus, and Manchester City are also in the running for the 24-year-old.

Liverpool Did Approach Napoli About Ezequiel Lavezzi - Agent

While Napoli striker Ezequiel Lavezzi has shown signs of discontent in the last few months of the season, his future remains very much uncertain. Recent rumours linked him with a move to Liverpool, but this was quickly denied by Reds coach Rafael Benitez.

Nevertheless, today his agent Alejandro Mazzoni claimed that the English club have spoken with Napoli director Pierpaolo Marino about the player, and he also said Lavezzi now wants to stay at the club.

"Lavezzi wants to stay at Napoli, but Marino has to maintain his promises," Mazzoni said to Sky Sport 24.

"I've read Benitez's words, but I'm sure that the English club spoke with Marino in the past few days. In football it's not necessary to make offers official. In any case, nothing has changed, the key issue is that Marino promised Lavezzi an improved contract over the last few months.

"Lavezzi has said several times that his desire is to stay in Naples."

Javier Mascherano Wants A 'Better Balanced' Liverpool

Liverpool midfielder Javier Mascherano has revealed that he felt the club did not beat enough of the sides beneath them in the domestic table, as their bid to end a 19-year drought of league titles failed, despite some excellent victories over the teams at the top of the Premier League standings.

"It has been a very good experience," he told LFC Magazine. "Of course, it would have been much better for us to win the title, but it is good for us to know what it takes to try and win the league.

"We have drawn a lot of games at home against some of the clubs outside the top four, and we know this is an area we must improve next season.

"This season has been a bit strange. We have done really well against all the top teams but have sometimes struggled to beat the others.

"You win the league when you beat all the teams, the bigger ones and the smaller ones.

"But this season we went to Stamford Bridge, the Bernabeu and Old Trafford and won. This is very positive for the future."

Although the side has proved that it can win in some of the most challenging venues in world football, it now needs to increase its capacity to grind out results, the midfielder feels.

"This team is now showing we can win anywhere, but we need to get the balance right for next season," he concluded.

Javier Mascherano Would Leave Liverpool For Barcelona

Liverpool midfielder Javier Mascherano has become one of Barcelona’s prime transfer targets this summer and it appears that the Blaugrana could get their man should they step up their pursuit.

The Argentine captain’s agent, Walter Tamer, has revealed that his client would not hesitate in accepting an offer to join the Catalans should one be officially made.

“If a club like Barcelona want to bring you into their ranks after having completed such a brilliant season and having won everything, obviously as a player, you are going to say, ‘Yes, I want to play there,’” he told RAC-1 programme ‘Tu Diras’.

“It is an honour for Javier that a club like Barca pay such close attention to him, especially after the incredible season they had. I believe that a transfer would be feasible. If Barca really want him, he will sign for them.”

Tamer also believes that ‘Masche’ would have no problems fitting into Pep Guardiola’s setup at the Camp Nou.

“He would have a very easy job at Barca,” claimed the agent.

“Sometimes we talk and joke that the only thing he has to do is run, rob the ball, and pass it on to all the superstars in front of him.”

Tamer, however, is aware that a Mascherano switch to Catalunya is not as easy as it seems, especially since Liverpool have to be willing to sell first.

“I have spoken with [Barca technical director] Txiki Begiristain before, but we have not been in contact for a while now,” the representative asserted.

“To have something concrete, we have to talk to Liverpool first to know what their options are for Javier to leave, and then talk to Barcelona to find out their level of interest.

“What if Xabi Alonso also leaves? Surely, [Liverpool manager] Rafael Benitez would not want to have both his central midfielders go. It will be difficult, although Xabi’s future does not depend on Mascherano and vice-versa.

“The transaction would certainly happen, but the first to leave will have more options.”