- LIVERPOOL were facing financial meltdown last night.
The club's accountants issued a chilling statement admitting there is 'significant doubt' whether the company which runs the Merseysiders can 'continue as a going concern'.
Liverpool's parent company Kop Football (Holdings) Ltd, run by American duo George Gillett and Tom Hicks, made a £42.6million loss last year.
Around £36.5m of that is interest payments on the whopping £350m loan they took out to refinance the club.
A top City analyst said: "Unless the owners find more money, the club is facing financial meltdown. Not only are the figures bleak, the future is gloomy too.
"The more you read through the accounts, the more transparent it is that the owners don't have the resources to meet the targets they've set for next year either.
"Everyone associated with Liverpool should be deeply concerned by this set of figures." ( read rest of article here )
On Fox Sports Liverpool Verge On Financial Meltdown!
On the Daily Mail Transfer shock for manager Rafa Benitez as Liverpool cash crisis deepens
- Hicks and Gillett face a July 24 deadline to refinance their £350m debt and though they remain optimistic about meeting it, there was a warning from the accountants that could have repercussions on Rafa Benitez's spending plans.
Benitez has already admitted he may have to sell to top up a limited budget, and there were more concerns for the Liverpool manager after accountants KPMG LLP delivered a sombre assessment.
Referring to the losses incurred by parent company Kop Football (Holdings) Ltd, they said: 'The directors have initiated negotiations to secure the replacement finance required by the group, and they are ongoing.
'These conditions indicate the existence of a material uncertainty which may cast significant
On the UK Guardian. Liverpool owners lose 42.6 million pounds, say auditors
- The accounts for the year ending July 2008 showed Liverpool made a 10.2 million pound profit but Kop Football (Holdings) Limited lost money after paying 36.5 million in interest.
Despite Liverpool posting a record turnover of 159.1 million pounds, the club's net debt -- not including that of the holding company -- jumped from 43.9 million to 86 million.
Net debt soaring.
Again.. there are massive risks when one borrows and borrows and borrows for one capital expenditure. And in Kop Football's case, despite record turnover, they lost money!
Well.. money is not for nothing!
Also on the UK Sun, some interesting comments on the editorial Kop lesson for Big Four
- If Liverpool are teetering on the precipice then what about Manchester United?
The debt the Glazers took on board to finance the purchase of the club means United have to make £60m just to pay off the interest.
That’s all well and good if they keep on generating vast amounts of Champions League revenue. But what happens if they reach the stage of a few years ago when they went out at the first group phase and didn’t even qualify for the UEFA Cup?
And what of Chelsea? Their future is so inextricably linked with Roman Abramovich that God forbid anything should happen to him.
Even anything as mundane as the Russian deciding he has had enough of football should he fail once again to fulfil his dream of winning the Champions League.
Of the Big Four, Arsenal appear on the best financial footing as their £318m debt includes £250m in long-term bonds taken out to finance the Emirates stadium.
Meanwhile, Real Madrid blow everyone out of the water by agreeing a £62m fee for Kaka and then turn their attention to Cristiano Ronaldo.
How do they afford it? Because they have an individual domestic TV rights contract with MediaPro that pays an astonishing £135m a season.
Ditto Barcelona at £130m a season.
And the so-called Big Four under the collective Premier League deal? A relative pittance with figures of United (£52m), Liverpool (£51m), Chelsea (£48m) and Arsenal (£47m).
How much longer before one or more of these clubs strike out on their own?
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