Comments on: Liverpool To Be Bled Dry http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/ Exploring football culture around the world. Sun, 12 Oct 2008 15:26:42 +0000 http://wordpress.org/?v=2.6.2 By: Tom Dunmore http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2534 Tom Dunmore Thu, 31 Jan 2008 01:37:07 +0000 http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2534 Marc, thanks for the link (and it looks like it hyerplinked fine, however you did it). That is very interesting news -- I'd heard bits and pieces, but this does seem to be a serious effort. (And yes, I'm 110% sure my absence explains the loss...) Marc, thanks for the link (and it looks like it hyerplinked fine, however you did it). That is very interesting news — I’d heard bits and pieces, but this does seem to be a serious effort.

(And yes, I’m 110% sure my absence explains the loss…)

]]> By: Bahnsen http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2531 Bahnsen Thu, 31 Jan 2008 00:46:11 +0000 http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2531 http://news.bbc.co.uk/2/hi/business/7217238.stm Liverpool supporters to make a bid to buy the club. (Tom is there a way to insert hypertext in comments box, or will they automatically link? Also, Huddalis Utd tragically suffered our first ever loss Sunday. Your absence... a coincidence???) http://news.bbc.co.uk/2/hi/business/7217238.stm

Liverpool supporters to make a bid to buy the club.

(Tom is there a way to insert hypertext in comments box, or will they automatically link? Also, Huddalis Utd tragically suffered our first ever loss Sunday. Your absence… a coincidence???)

]]> By: Ian http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2530 Ian Wed, 30 Jan 2008 23:41:40 +0000 http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2530 This is, of course, what happened at Leeds United. As soon as they failed to qualify for the Champions League, their world fell to pieces (you could plausibly argue that this hastened an already inevitable process, but I'll disregard that for now). I don't think that the immediate Liverpool prognosis for Liverpool is quite as bad - they're a stronger "brand" than Leeds United, and they can't possibly have signed the ridiculous contracts for players that Leeds did. Having said that, though, they're far more exposed that Manchester United are - Manchester United were (and, indeed, still are) a global brand in a way that Liverpool still aren't, and already have the additional revenue of Old Trafford. In that respect, Liverpool still have another £300m to borrow to catch up, if they desperately want that new stadium. I take no pleasure in saying it, but I can't see how this can end well. This is, of course, what happened at Leeds United. As soon as they failed to qualify for the Champions League, their world fell to pieces (you could plausibly argue that this hastened an already inevitable process, but I’ll disregard that for now). I don’t think that the immediate Liverpool prognosis for Liverpool is quite as bad - they’re a stronger “brand” than Leeds United, and they can’t possibly have signed the ridiculous contracts for players that Leeds did. Having said that, though, they’re far more exposed that Manchester United are - Manchester United were (and, indeed, still are) a global brand in a way that Liverpool still aren’t, and already have the additional revenue of Old Trafford. In that respect, Liverpool still have another £300m to borrow to catch up, if they desperately want that new stadium.

I take no pleasure in saying it, but I can’t see how this can end well.

]]> By: Dave's Football Blog http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2529 Dave's Football Blog Wed, 30 Jan 2008 22:53:44 +0000 http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2529 Here's the thing nobody is talking about right now -- Liverpool earned almost £30 million in TV revenue from the Champions League last season. It will have to keep earning that money for the next 2-3 years until the new stadium is built, just so it can make its interest payments. Liverpool is 3 points adrift of the final Champions League spot after losing 1-0 to West Ham today. They have a game in hand, but guess what? It's against West Ham. What happens if the Reds don't qualify for the Champions League next season? Where is that money going to come from? This whole thing is a terrible gamble. Liverpool supporters better hope that new stadium gets built a lot more quickly than Wembley. Here’s the thing nobody is talking about right now — Liverpool earned almost £30 million in TV revenue from the Champions League last season. It will have to keep earning that money for the next 2-3 years until the new stadium is built, just so it can make its interest payments.

Liverpool is 3 points adrift of the final Champions League spot after losing 1-0 to West Ham today. They have a game in hand, but guess what? It’s against West Ham.

What happens if the Reds don’t qualify for the Champions League next season? Where is that money going to come from?

This whole thing is a terrible gamble. Liverpool supporters better hope that new stadium gets built a lot more quickly than Wembley.

]]> By: Tom Dunmore http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2506 Tom Dunmore Tue, 29 Jan 2008 20:32:49 +0000 http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2506 That is an excellent question, Tybalt. Regulation should include a deeper scrutiny of the ownership's business plan and funding, which would help with the problem you raise regarding comparing Liverpool/AFCW (see Dave's excellent point towards the bottom of <a href="http://pitchinvasion.net/blog/2008/01/24/why-leveraged-takeovers-are-bad-for-football/" rel="nofollow">this piece</a>. That is an excellent question, Tybalt. Regulation should include a deeper scrutiny of the ownership’s business plan and funding, which would help with the problem you raise regarding comparing Liverpool/AFCW (see Dave’s excellent point towards the bottom of this piece.

]]> By: Tybalt http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2504 Tybalt Tue, 29 Jan 2008 20:07:44 +0000 http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2504 What do you do, though? Does it make sense for the FA or the League or the Premiership to set limits on clubs borrowing, perhaps in some form of debt-to-equity ratio? If so, what counts as equity, and are you deliberately hamstringing clubs that are attempting to compete and grow? (That's what borrowing limitations are bound to do - restrict access to capital and you restrict growth). The Premiership mavens will never agree to such a limit, because they will never voluntarily agree to limit their access to capital. So any such limit must come from the FA. The sad thing is, borrowing limits might not only affect the Liverpools and the Leeds Uniteds, it may well prevent the formation of future AFC Wimbledons. AFCW have used debt pretty wisely and well so far, even if they were borrowing a lot to buy and revamp The Fans Stadium. What do you do, though? Does it make sense for the FA or the League or the Premiership to set limits on clubs borrowing, perhaps in some form of debt-to-equity ratio? If so, what counts as equity, and are you deliberately hamstringing clubs that are attempting to compete and grow? (That’s what borrowing limitations are bound to do - restrict access to capital and you restrict growth).

The Premiership mavens will never agree to such a limit, because they will never voluntarily agree to limit their access to capital. So any such limit must come from the FA.

The sad thing is, borrowing limits might not only affect the Liverpools and the Leeds Uniteds, it may well prevent the formation of future AFC Wimbledons. AFCW have used debt pretty wisely and well so far, even if they were borrowing a lot to buy and revamp The Fans Stadium.

]]> By: JD http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2503 JD Tue, 29 Jan 2008 19:48:31 +0000 http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2503 Did we learn nothing from Leeds example? Did we learn nothing from Leeds example?

]]> By: Tybalt http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2502 Tybalt Tue, 29 Jan 2008 19:35:18 +0000 http://pitchinvasion.net/blog/2008/01/29/liverpool-to-be-bled-dry/#comment-2502 AFC Liverpool to come next, then? I welcome it. AFC Liverpool to come next, then? I welcome it.

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