The revelation that Tom Hicks and George Gillett will rely on Liverpool's profits to pay the interest on loans with which they bought the club will come as no surprise to those inside Anfield and beyond who have long suspected the worst of the Americans.
In the on-going debate over football's finances no club better capture the concerns of regulators and supporters than Liverpool under the stewardship of the dysfunctional duo.
The issues of ownership, financial transparency and debt raised by Culture Secretary Andy Burnham and Football Association chairman Lord Triesman in recent weeks all coalesce at Anfield, once home to the most dominant team in Europe but now symbolic of the uncertainty stalking the game.
On Wednesday night in Spain Rafael Benitez's side will attempt to extend their unbeaten start to the season against Atletico Madrid in the Champions League, a run that has temporarily stilled some of the dissenting voices on the Kop disturbed at the conduct of Gillett and Hicks, who borrowed almost £300 million to buy the club 18 months ago.
For all the current success, questions remain over the sustainability of the club's finances, and Telegraph Sport's revelations will heighten the suspicion that with plans for a new stadium on hold, Hicks and Gillett have no chance of paying off any of the capital on their loans from the club's revenue streams, leaving Liverpool carrying a millstone into an uncertain future.
When it comes to financial transparency, Liverpool fail most of the tests set out by Burnham and Triesman. The football club and their immediate holding company are registered in the UK and subject to normal reporting requirements, but the ultimate ownership is concealed behind brass-plates. Starting with a holding company in the American state of Delaware, and passing through a Cayman Islands tax haven en route to L4, the ownership structure is opaque at best.
Neither has the Americans' tenure been harmonious, with regular rows between Hicks and his partner destabilising Benitez and chief executive Rick Parry, as well as alienating supporters initially impressed by the grand promises from owners who promised to respect the club's grand traditions.
The Americans financed their purchase with a £298 million loan from the Royal Bank of Scotland and Wachovia, £174 million of which was used to buy the club from existing shareholders, a deal that brought David Moores, last of the family line to run the club, close to £90 million.
That initial loan was replaced in January by a £350.5 million facility with the same banks. At the time Hicks and Gillett were determined to formally load the entire debt on to the football club, but were prevented from doing so by chief executive Parry and Moores, now honorary life president, who invoked a "whitewash clause" that required all board members to agree on debt issues.
The American's compromise was to forward £105 million to the football club, much of which has been used to buy players, with the remaining £245 million sitting with holding company Kop Football. Combined, those loans, secured at rates estimated at around nine per cent, will cost the club £25 million a year.
That is broadly equivalent to the revenue raised by last season's run to the Champions League semi-final. With European performance generally representing the difference between breaking even and turning a profit at Anfield, the owners' decision to suck money out of the club to cover their interest payments leaves Liverpool running to stand still.
It also makes a mockery of Gillett's boast on the day he and Hicks took control of the club in March 2007, that "we have purchased the club with no debt on the club".
The concern for supporters taking the long view is that the requirement to service debt will inhibit transfer spending, and could eventually prove impossible to sustain from current revenue.
Share Liverpool, the supporters group with aspirations to buy the club on behalf of the fans, have used financial modelling software in use at several football clubs to forecast the club's financial performance and predict annual losses of between £30 million and £70 million over the next five years as player costs increase.
They argue that on their figures, the club do not have a large enough stadium or commercial income to support their player and debt costs. In such circumstances even servicing the interest on the acquisition loans may prove difficult.
Hicks and Gillett dispute these projections and point to recent commercial deals with Paddy Power and Thomas Cook worth £10 million as evidence that they are enhancing the club's commercial appeal.
Impressive though these deals may be, ultimately Liverpool's ability to compete with Chelsea, Manchester United and Arsenal will depend on moving to a new stadium, a project that poses the biggest question of all about Hicks and Gillett's stewardship.
They insist that plans for a 75,000-seat stadium are on hold only while the worst of the banking crisis has eased, and that next year they will retender for contractors and suppliers on the project.
What they do not say, however, is how the £300-400 million project will be financed. They already face the prospect of refinancing their loans in July next year, and it is difficult to see how they will be able to secure double the debt against the club without providing fresh capital.
Until they do, the suspicion will linger that they are caught in a Catch-22 of their own design, unable to clear their acquisition debt without a new stadium, but unable to build one because of their inability to raise fresh finance.
In the on-going debate over football's finances no club better capture the concerns of regulators and supporters than Liverpool under the stewardship of the dysfunctional duo.
The issues of ownership, financial transparency and debt raised by Culture Secretary Andy Burnham and Football Association chairman Lord Triesman in recent weeks all coalesce at Anfield, once home to the most dominant team in Europe but now symbolic of the uncertainty stalking the game.
On Wednesday night in Spain Rafael Benitez's side will attempt to extend their unbeaten start to the season against Atletico Madrid in the Champions League, a run that has temporarily stilled some of the dissenting voices on the Kop disturbed at the conduct of Gillett and Hicks, who borrowed almost £300 million to buy the club 18 months ago.
For all the current success, questions remain over the sustainability of the club's finances, and Telegraph Sport's revelations will heighten the suspicion that with plans for a new stadium on hold, Hicks and Gillett have no chance of paying off any of the capital on their loans from the club's revenue streams, leaving Liverpool carrying a millstone into an uncertain future.
When it comes to financial transparency, Liverpool fail most of the tests set out by Burnham and Triesman. The football club and their immediate holding company are registered in the UK and subject to normal reporting requirements, but the ultimate ownership is concealed behind brass-plates. Starting with a holding company in the American state of Delaware, and passing through a Cayman Islands tax haven en route to L4, the ownership structure is opaque at best.
Neither has the Americans' tenure been harmonious, with regular rows between Hicks and his partner destabilising Benitez and chief executive Rick Parry, as well as alienating supporters initially impressed by the grand promises from owners who promised to respect the club's grand traditions.
The Americans financed their purchase with a £298 million loan from the Royal Bank of Scotland and Wachovia, £174 million of which was used to buy the club from existing shareholders, a deal that brought David Moores, last of the family line to run the club, close to £90 million.
That initial loan was replaced in January by a £350.5 million facility with the same banks. At the time Hicks and Gillett were determined to formally load the entire debt on to the football club, but were prevented from doing so by chief executive Parry and Moores, now honorary life president, who invoked a "whitewash clause" that required all board members to agree on debt issues.
The American's compromise was to forward £105 million to the football club, much of which has been used to buy players, with the remaining £245 million sitting with holding company Kop Football. Combined, those loans, secured at rates estimated at around nine per cent, will cost the club £25 million a year.
That is broadly equivalent to the revenue raised by last season's run to the Champions League semi-final. With European performance generally representing the difference between breaking even and turning a profit at Anfield, the owners' decision to suck money out of the club to cover their interest payments leaves Liverpool running to stand still.
It also makes a mockery of Gillett's boast on the day he and Hicks took control of the club in March 2007, that "we have purchased the club with no debt on the club".
The concern for supporters taking the long view is that the requirement to service debt will inhibit transfer spending, and could eventually prove impossible to sustain from current revenue.
Share Liverpool, the supporters group with aspirations to buy the club on behalf of the fans, have used financial modelling software in use at several football clubs to forecast the club's financial performance and predict annual losses of between £30 million and £70 million over the next five years as player costs increase.
They argue that on their figures, the club do not have a large enough stadium or commercial income to support their player and debt costs. In such circumstances even servicing the interest on the acquisition loans may prove difficult.
Hicks and Gillett dispute these projections and point to recent commercial deals with Paddy Power and Thomas Cook worth £10 million as evidence that they are enhancing the club's commercial appeal.
Impressive though these deals may be, ultimately Liverpool's ability to compete with Chelsea, Manchester United and Arsenal will depend on moving to a new stadium, a project that poses the biggest question of all about Hicks and Gillett's stewardship.
They insist that plans for a 75,000-seat stadium are on hold only while the worst of the banking crisis has eased, and that next year they will retender for contractors and suppliers on the project.
What they do not say, however, is how the £300-400 million project will be financed. They already face the prospect of refinancing their loans in July next year, and it is difficult to see how they will be able to secure double the debt against the club without providing fresh capital.
Until they do, the suspicion will linger that they are caught in a Catch-22 of their own design, unable to clear their acquisition debt without a new stadium, but unable to build one because of their inability to raise fresh finance.
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