Premier League DebtSat, 6 June 2009
As summarized on BBC News:
The Premier League saw its revenues soar by 26% in the 2007/08 season to nearly £2bn ($3.15bn; 2.2bn euros), ….
The revenues of top-flight English sides were £1.93bn, up from £1.5bn a year earlier, Deloitte said.
Despite the downturn, 11 of the 20 top league clubs made an operating profit in 2007/08, from eight a year before.
But Premier League salary costs topped £1bn for the first time, and the clubs’ total net debt was £3.1bn.
Two-thirds of the debt was carried by the big four of Manchester United, Liverpool, Chelsea and Arsenal, but Dan Jones, the editor of Deloitte’s Annual Review of Football Finance, said those clubs all had business plans “that they feel make sense”.
Varying degreeing of “sense”.
The parent company of Liverpool FC, owned by Tom Hicks and George Gillett, lost £42.6m in the year to August 2008.
The loss was mainly due to the £36m of interest payments that Kop Football Holdings had to make to service the debt taken on to buy the club.
Its auditors warned that the need to refinance loans by 24 July cast “significant doubt” on the future of the group as a going concern.
But they added the club’s owners were confident they would secure the funds.
The US owners bought Liverpool in February 2007, promising to build a new stadium.
In their accounts, they say they are “committed to building a new stadium and actively seeking funding to complete the project”.
But they admit that “the opening of the new stadium will be delayed until 2012″.
It’s got former Liverpool defender Mark Lawrenson worried:
“The great problem is that it looks at the moment as if Liverpool are going to have to sell quite a few players just to get the two or three very high profile match-winners in.”
BBC News also reports that:
… the Anfield club’s two American owners Tom Hicks and George Gillett are fast approaching the 24 July deadline to repay the £350m they owe to banks RBS and Wachovia.
The pair bought Liverpool in February 2007 and since then have squabbled with each other, alienated some fans, failed to progress with a promised new stadium, and seen potential sales of the club fall away.
There are many questions surrounding the future of the £350m loans, after the repayment deadline was extended for six months this January.
Hicks and Gillett have been scouring the globe to find investors for the club but Rogan Taylor, creator of Share Liverpool FC, a group aimed at recruiting fans to purchase the club, believes the only way Liverpool can move forward is if they are taken over by fresh investors.
“There’s no way anybody is going to lend the Americans that kind of money when the club is in such deep debt,” Taylor told BBC Radio 5 Live.