Questions, questions and yet more questions

Posted: October 6, 2010 by mcdonaldtaf in Business, Finance, Liverpool FC
Tags: , ,

Well, as we head towards the end of a very turbulent 24 hours the question is – are we heading for closure? Closure on what has been a horrific tenure by the current custodians of our great club.  The last thing anyone should be doing, in our bid to bring closure though, is go crashing into another 3 years which might resemble anything like the last three.

Google’s servers have undoubtedly been under some significant pressure since the news broke last night. I haven’t even googled our potential new suitors myself yet, but I already have a list of questions. Questions that I hope will be answered in due course, to allow fans the peace of mind that any new custodians have clear, well thought out answers. We need our new owners to have a plan. One which we, in the majority, can be confident will deliver football and commercial success.

While I continue to consider and research I thought it may be useful to include some early questions. the source of the article I am quoting from (sporting intelligence) is here.

“NESV has promised £240m in cash to wipe out the majority of the monies owed to RBS and Wachovia. This is cash, not borrowed money, and therefore not to be leveraged against any Liverpool assets, sources say.”

Is there an echo? Were these not the same lines delivered by George Gillett in 2007? This obviously leads to the key question of: Will the club’s assets be used as security for loans in either of the short to medium, or, long term?

There is also the question of what is happening to the money the club owes (up through a chain of companies) to Hicks and Gillett? This presumbaly is contained with the club’s current balance sheet and is also incurring interest. Knowing Hicks and Gillett at a rate in excess of what we’re paying RBS/Wachovia.

Based on what is expected to be the current level of total debts owing, surely this leaves a lot of debt on the table. Debt which is incurring interest, is this correct and if so what are their plans for dealing with it?

“NESV has “an open mind” on whether it will build a new stadium. The Red Sox’s Fenway Park was redeveloped rather than the Sox being relocated, for example.”

Is this the reason why both sides of Merseyside have been dropping hints about stadium sharing again? An open mind would say that all options are on the table.

We also have the problem of a balance sheet which includes c.£50m of ‘stadium costs’ as an asset. These are the costs of development to date. If they scrap the new stadium these will have to be dealt with. When I say dealt with it will mean that if we (say) break even (from a profit and loss perspective) this year but write off the stadium, we’ll actually make a loss of c.£50m. Are the owners willing to do this?

I’d love to be able to provide answers. Unfortunately I can’t. Only the people within Anfield can shed any light on the deal. What I can say though is that I hope one of the calls our potential new owners is making is to Spirit of Shankly and that, through them, they can assuage the very real and current fears felt within the fan base. Especially when every answer I’ve heard to date generally leads to more questions.


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