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ECHO Comment: "Fears of Witch-hunt Against Liverpool FC" part 3


EverTheOptimist said:
The revenue gap between both clubs before Covid was almost £350 million, £189 million to £533 million, and it was an even bigger gap in the last results posted during Covid.

You are getting way ahead of yourself, Unless you are actually Usmanov and have decided to sponsor Goodison for £400 million a season.

They just snagged Man United's Commercial Director as well, who'd been in the job when Woodward left the role to be Chief Executive.
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Thing is: once you're that big commercial giant, you stay that way, even if you fcuk up... It's basic capitalism, once you get to a certain 'monopoly', things stay the same.
This FFP thing is basically a tool for the establisment to prevent others joining in.

Fair play died in the nineties. Last time Leeds won it was the last year of the fertile meritocracy that was English football
 
catcherintherye said:
A good thread. No doubt the FSG out bedwetters will not read or understand it.

The key take outs for me;
1) The only reason they are not massively in debt is because of player sales profit. They've made over 300m doing this. You have that at a net neutral and the 60m loss last year, and 200m ish loss this year will be added to with another 300m on top. It is not a very sustainable business model and relies in player sales to make it work. If you have a downturn in the market, it will effect them badly, over a medium term period.

2) Any improvements have been swallowed by costs. Again not really a very good sign for a business. They have grown turnover but have precious little profit/cash to show for it. Costs are out of control to be absolutely frank.

3) They are a cash negative business. They have lost 160m in cash terms under FSG and only through loans are they in a cash positive situation.

4) Loans/debt is growing. Now at 270m and that is before this years accounts which will increase that much further. Crucially if you take out owners contribution and look at external debt, it sits at 200m which is up around 400%.
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Kinell lad, I think you are spending a bit too much time on the RS.
 
FrenchDarrenBent said:
Thing is: once you're that big commercial giant, you stay that way, even if you fcuk up... It's basic capitalism, once you get to a certain 'monopoly', things stay the same.
This FFP thing is basically a tool for the establisment to prevent others joining in.

Fair play died in the nineties. Last time Leeds won it was the last year of the fertile meritocracy that was English football
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Northern Rock, Carrilion, ABN Amro, Lehman Bros, Enron, Barings et al say hi, or they would if they were still around.
 

EverTheOptimist said:
I don't get the theory or importance of profit for football clubs, most clubs barely make any anyway, its usually single to low double digits, it really doesn't mean anything in the grand scheme of things, a club making a loss is still going to spend money on transfers, Banks have no qualms giving money to football clubs, even a pandemic clubs still survive.

You only have to see the elite clubs, with debt and huge turnovers, still spending huge on wages and transfers, profit is the least of the worries for the elite, they are printing money anyway, bigger stadium matchday revenues, CL revenues, huge TV and commercial revenues, lucrative pre season tours and you can see why they service any debt with ease while spending while reporting losses.

The best run club in the World, Bayern Munich before Covid, their profit was £17 million and they had a £570 million turnover then.

Turnover and growth is king in football finance, it's what makes the headlines, profit is hardly ever mentioned because clubs don't make much of it.

Check this Deloitte list of the top 20 clubs in the world, page 14 onwards, profit isn't even mentioned on any club results.

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Doesnt this just show that the entire industry is badly run? And that there is an entire industry around football that seems dedicated to a superficial, almost wilfully ignorant approach to analysing commercial performance.

Call me old fashioned, but I would say profit and (particularly) cash are quite important metrics when evaluating a business. If you keep losing money, it eventually catches up with you mate.

What's that phrase, revenue vanity, profit sanity but cash is king!
 
FrenchDarrenBent said:
Thing is: once you're that big commercial giant, you stay that way, even if you fcuk up... It's basic capitalism, once you get to a certain 'monopoly', things stay the same.
This FFP thing is basically a tool for the establisment to prevent others joining in.

Fair play died in the nineties. Last time Leeds won it was the last year of the fertile meritocracy that was English football
Click to expand...

Well a couple of points on this. Liverpool are not a commercial giant. They are a small cap company in the grand scheme of things.

Secondly, I'm afraid the idea that size is an insulation is wholly untrue. Warren Buffet at his last shareholders meeting noted the 30 biggest companies in 1990. Not a single company in the top 30 then are in the top 30 now. We are dealing with companies multiple times bigger than Liverpool. Within a generation not a single one would remain in that position.

Go back a few years, it would have been laughable to think clubs like Milan, Inter etc would be also rans. Go back further same with Ajax, PSV, etc.

Nothing is guaranteed in life. You need to keep making good decisions. Having a big turnover really dowsnt insulate you either. Lots of cash (or to a degree profit) may protect you, but turnover is not much of an insulator if it doesnt convert well into cash/profit.
 
Saint Domingo said:
This is why those being so confident of a sale shouldn’t be so absolutely certain. As the saying goes ‘if the cash don’t flow, just say no’, and the cash is not flowing there at the moment. That therefore leaves any potential buyer with only a few options: 1) raising revenue, difficult to do when the stadium is already expanded and the club are in CL already charging some of the highest ticket prices. 2) Operating at a loss for the ego boost of owning Liverpool - not many billionaires got where they are through losing money. 3) Cutting costs - will be murder with the fan base.
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I think a sale, at the price FSG want would be almost impossible without it being leveraged.

I cant think of any big investor paying 2bn. You are not going to get the growth opportunities from a company performing close to its potential.

I mean the Newcastle story was complete fluff, but you could see why it was real, as it was for 2-300m. 2bn, nearly 10 x as much just isnt a value play.
 

catcherintherye said:
Well a couple of points on this. Liverpool are not a commercial giant. They are a small cap company in the grand scheme of things.

Secondly, I'm afraid the idea that size is an insulation is wholly untrue. Warren Buffet at his last shareholders meeting noted the 30 biggest companies in 1990. Not a single company in the top 30 then are in the top 30 now. We are dealing with companies multiple times bigger than Liverpool. Within a generation not a single one would remain in that position.

Go back a few years, it would have been laughable to think clubs like Milan, Inter etc would be also rans. Go back further same with Ajax, PSV, etc.

Nothing is guaranteed in life. You need to keep making good decisions. Having a big turnover really dowsnt insulate you either. Lots of cash (or to a degree profit) may protect you, but turnover is not much of an insulator if it doesnt convert well into cash/profit.
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You have you look within your sector. Microsoft is still Microsoft. Aramco is still Aramco. Pfizer is still Pfizer.
My Point: the big clubs of 20 years ago are still dominant today.
Ac Milan and Inter (champions of Italy) were still big enough for the super league... They we're giants in 2000, they are now...

Look at football in 2005, and now. What has changed? It's still Liverpool, Chelsea, Utd, Arsenal (and now obviously city). Tottenham as also rans...

Now compare 2005 to 1985: Everton champions, Aston Villa champions of Europe a few years before, Nottingham Forest, Man Utd relegated. Tottenham UEFAcup winners.

I dare say that, without a major crisis or major, continued investment by other clubs it's still going to be Utd, Arsenal, Liverpool, city and Chelsea with Tottenham as also rans... (Providing the oligarchs still pay up)
 
FrenchDarrenBent said:
You have you look within your sector. Microsoft is still Microsoft. Aramco is still Aramco. Pfizer is still Pfizer.
My Point: the big clubs of 20 years ago are still dominant today.
Ac Milan and Inter (champions of Italy) were still big enough for the super league... They we're giants in 2000, they are now...

Look at football in 2005, and now. What has changed? It's still Liverpool, Chelsea, Utd, Arsenal (and now obviously city). Tottenham as also rans...

Now compare 2005 to 1985: Everton champions, Aston Villa champions of Europe a few years before, Nottingham Forest, Man Utd relegated. Tottenham UEFAcup winners.

I dare say that, without a major crisis or major, continued investment by other clubs it's still going to be Utd, Arsenal, Liverpool, city and Chelsea with Tottenham as also rans... (Providing the oligarchs still pay up)
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Microsoft are a big company yes. Something of an exception, and actually I'm very pro Microsoft (despite lots of analysts writing them off). Most think they will be overtaken over the next 10-15 years though. Tech is a bit of an exception though (due to huge margins). Go and look at the top 30 companies in 1990, and how many of them are in the top 30 now.

As for 2005. Arsenal were the best team in the league. They havent won it since and are currently 19th. City were still un the championship, they are now the dominant team. Italian teams dominated the CL, they are now also rans. Liverpool have gone from 4th, to 2nd, and then nearly went bankrupt before re building again.

The one certainty of life and sport is things change. It's actually very hard to stay at the top for prolonged periods. I sense Chelsea and City will manage it while they have shareholder investment. United have huge cash reserves. Outside of that, not really sure on the rest.
 
derek duvall said:
Good post. Commercially they are struggling too. Financially we are in a much stronger position then they are and I reckon we'll be above them in 4-5 years.
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Do you mean in turnover or profit ?


it means they would need to stand still, yet we make up $400 to overtake them in turnover

https://www.statista.com/statistics/1231497/revenue-of-football-clubs-in-2021/


and as for overtaking them in profit.........

https://www.liverpoolfc.com/news/an...ces-financial-results-for-year-to-may-31-2020

https://www.theguardian.com/footbal...e-annual-loss-of-1399m-as-covid-19-takes-toll

Do you think we will make up approx £100M to overtake them in that area ?


I like your optimism but no way this happens


If you get the opportunity give this a read..


41IN+UZ4TEL._SX331_BO1,204,203,200_.jpg

Obv written before covid struck, but still gives good insights on football club finances
 
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