Liverpool FC – Can’t Stop Debts From Rising

If you thought the change of ownership from two years ago has made a huge difference in the way Liverpool are run financially, think again. Despite the FSG way of handling things, the lack of success (meaning Champions League) while adding quite expensive players these last couple of years hasn’t helped.

So how much has the debt grown in? They rose by£21.8 million to £87.2 million last season, with no European football last season really hurting the team. The Europa League is OK, but it’s no Champions League in terms of the money the team can generate from the competition, which means the ownership needs to keep funding the club with interest-free loans to keep things running, although the final goal, as stated more than once, is to have a club that’s self-sustainable through its own profits. Just like in Germany.

However, just like with Rangers and their losses for obvious reasons, the men in charge of Liverpool aren’t that worried, and claim that neither should the fans be. According to Ian Ayre, the club’s managing director, the team is moving in the right direction.

We will continue to invest in the squad – I think that is what our fans would expect. But the most important thing is that we do it prudently and in a sustainable way that is affordable, and that we all have our sights on the same goal – success. 

The key message for me is that we are continuing to transition to the point we have been working on for several years under this ownership – which is to continue to improve revenues and manage our cost base effectively. The biggest cost base, without doubt, is player trading and player wages – but these accounts demonstrate that we are still working hard to improve that.

Liverpool signed a sponsorship deal with Warrior worth £25 million a season for the next six years, but that will show in the accounts only for the next set of accounts. Despite the debt increase, Liverpool’s annual pre-tax loss fell from £49.3 million to £40.5 million in 2011-12.

Under Brendan Rodgers, the club has attempted to cut down on the enormous wage bill, but the accounts detail the periods of the Stewart Downing and Jordan Henderson signings, which combine for £36 million.

Nobody in a position of authority would say it is a good set of accounts where you lose money in any business. But you have to take them in the context of the place that we are in the journey we are on. The unaudited turnover was £188.7 million – an increase on last year’s £183.6 million. So we are growing – we continue to grow.

While Liverpool struggle in the league, hoping that European football won’t elude them next season as they try to nibble at Arsenal and Everton in the places above them, they’re also hoping that they find a way to keep revenue growing without been so reliant on the Champions League or loans from the uncles from America.

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