Liverpool’s owners proposed increasing the soccer club’s average ticket price by 8 percent and raising 100 million pounds ($163 million) from investors and loans as pressure built to refinance debt of 290 million pounds.
The team’s U.S. owners George Gillett and Tom Hicks considered selling equity in the 18-time English league champion to pay down their debts with Royal Bank of Scotland Plc and Wachovia Corp., according to documents prepared by the club’s bankers and obtained by Bloomberg News. Jonathon Brill, a spokesman for Liverpool’s owners, declined to comment. He confirmed the documents.
Gillett and Hicks paid 50 million pounds in July to get a year’s extension to the debt facility they used to purchase and run the club since their February 2007 takeover. Liverpool owes about 240 million pounds to the banks. Fans of the five-time European champion have criticized the owners for backtracking on a pledge not to raise the club’s debt and delaying work on a new 72,000-seat stadium. Ticket prices stayed the same in the end.
“It would have been a very unpopular move” to increase prices, said Rogan Taylor, director of the Football Industry Group at Liverpool University and a member of a supporter-led group trying to acquire the club. “It looks like they took some wise advice not to do it.”
The proposed hike, which came as the majority of the 20 English Premier League clubs decided to freeze or reduce the price of some tickets for the 2009-2010 season, was one of a number of revenue-boosting plans outlined in the document. Liverpool may convert 1,000 regular seats into corporate seating by July 2011 and establish its own soccer academies.
The March 2009 prospectus drawn up by investment banks Rothschild and Merrill Lynch tells potential investors that for 50 million pounds they would get a minority stake in “one of the world’s most successful football clubs.” The document says Liverpool was considering raising another 50 million pounds in high-interest payment-in-kind loans that would’ve ended up costing 104.4 million pounds by the end of a five-year term.
In June, Kop Football (Holdings) Ltd., the club’s parent company, reported a loss of 42.6 million pounds for the year ended July 2008 on interest charges of 36.5 million pounds.
According to the document, all but 5 million pounds of the new 100 million pounds the club was trying to access would have gone toward reducing its debts. U.K. media have reported that the new money would kick-start the stadium project.
Liverpool last week announced a record sponsorship with Standard Chartered Plc, which will pay about 20 million pounds a season to replace Carlsberg A/S on the front of the players’ shirts. The document reveals Liverpool had forecast that it would retain the brewer by charging it 14.2 million pounds a season. Other forecasts in the prospectus include player wages and manager Rafael Benitez’s transfer budget until 2014.
According to management, Benitez would have about 20 million pounds a season to spend on new players, a figure that “will grow together with increases in broadcast revenues,” the document said.
Liverpool made a profit in the last transfer window after the purchase of defender Glen Johnson was offset by the 30 million euro ($44 million) sale of Xabi Alonso to Real Madrid. Player wages will increase to 115.2 million pounds from the current level of 81.7 million, the club estimates.
Other details of Liverpool’s future commercial strategy are outlined in the document alongside the increased corporate seating and Liverpool-branded academies. New secondary sponsors will be targeted and catering facilities improved to increase commercial revenue to 111.4 million pounds from 59 million pounds in the next five years.
The team’s U.S. owners George Gillett and Tom Hicks considered selling equity in the 18-time English league champion to pay down their debts with Royal Bank of Scotland Plc and Wachovia Corp., according to documents prepared by the club’s bankers and obtained by Bloomberg News. Jonathon Brill, a spokesman for Liverpool’s owners, declined to comment. He confirmed the documents.
Gillett and Hicks paid 50 million pounds in July to get a year’s extension to the debt facility they used to purchase and run the club since their February 2007 takeover. Liverpool owes about 240 million pounds to the banks. Fans of the five-time European champion have criticized the owners for backtracking on a pledge not to raise the club’s debt and delaying work on a new 72,000-seat stadium. Ticket prices stayed the same in the end.
“It would have been a very unpopular move” to increase prices, said Rogan Taylor, director of the Football Industry Group at Liverpool University and a member of a supporter-led group trying to acquire the club. “It looks like they took some wise advice not to do it.”
The proposed hike, which came as the majority of the 20 English Premier League clubs decided to freeze or reduce the price of some tickets for the 2009-2010 season, was one of a number of revenue-boosting plans outlined in the document. Liverpool may convert 1,000 regular seats into corporate seating by July 2011 and establish its own soccer academies.
The March 2009 prospectus drawn up by investment banks Rothschild and Merrill Lynch tells potential investors that for 50 million pounds they would get a minority stake in “one of the world’s most successful football clubs.” The document says Liverpool was considering raising another 50 million pounds in high-interest payment-in-kind loans that would’ve ended up costing 104.4 million pounds by the end of a five-year term.
In June, Kop Football (Holdings) Ltd., the club’s parent company, reported a loss of 42.6 million pounds for the year ended July 2008 on interest charges of 36.5 million pounds.
According to the document, all but 5 million pounds of the new 100 million pounds the club was trying to access would have gone toward reducing its debts. U.K. media have reported that the new money would kick-start the stadium project.
Liverpool last week announced a record sponsorship with Standard Chartered Plc, which will pay about 20 million pounds a season to replace Carlsberg A/S on the front of the players’ shirts. The document reveals Liverpool had forecast that it would retain the brewer by charging it 14.2 million pounds a season. Other forecasts in the prospectus include player wages and manager Rafael Benitez’s transfer budget until 2014.
According to management, Benitez would have about 20 million pounds a season to spend on new players, a figure that “will grow together with increases in broadcast revenues,” the document said.
Liverpool made a profit in the last transfer window after the purchase of defender Glen Johnson was offset by the 30 million euro ($44 million) sale of Xabi Alonso to Real Madrid. Player wages will increase to 115.2 million pounds from the current level of 81.7 million, the club estimates.
Other details of Liverpool’s future commercial strategy are outlined in the document alongside the increased corporate seating and Liverpool-branded academies. New secondary sponsors will be targeted and catering facilities improved to increase commercial revenue to 111.4 million pounds from 59 million pounds in the next five years.
No comments:
Post a Comment