So it seems
we’ve been barking up the wrong tree. Liverpool Football Club is still the 9th
richest club in world football, which is some going considering that up until
January 23 we were 5th in the Premiership for attendance with 44,674 (536,089). Credit where credit is due, John W Henry and co
have steered the good ship LFC away from the economic iceberg which countrymen
Hicks and Gillet almost dashed our hopes on.
Or has
it? The annual accounts revealed that
the club’s debt rose to £87.2 million.
While the annual loss was £40.5million (down £8.8million on the previous
year), the loss shows the impact a continuous lack of Champions League football
has had, the overall debt has risen by £22million.
That being
said, it throws even more light on our transfer policy. Great play has been made of club policy in
acquiring top young talent, but it seems economic prudence is the marker by
which the board stipulates is paramount to any transfer. The board placed a set price on Ince and
Coutinho and refused to go much beyond their
valuation. While economically that’s an admiral stance to take, unfortunately
making a football club viable and then become a winner to boot just doesn’t cut
the mustard, unless as in Germany, every club, in theory, sings from the same
hymn sheet.
Man United,
League winners by twelve points and ahead of us by a massive 28 points, have
arguably the two of the top five players in the league, but it still hasn’t
stopped them from splashing out £15million on Wilfried Zaha who many observers
believe to be one of the most exciting home grown youngsters in years and on
the verge, as I’m writing, of signing the brilliant Barcelona and Spanish
under-21 captain Thiago. By all accounts
they were looking at re-signing the mercurial Ronaldo.
Was the
price too rich for LFC blood or did Iain Ayre and Brendan Rodgers just not rate
the player, so we didn’t even enter the race for Zaha or Paulinho? The club’s
stance on Thomas Ince was easy to understand as there’s the embarrassment
factor of paying a huge sum for a player who until recently was on the Anfield
books and next summer will be available on a free transfer which throws up too
many internal questions.
How is
Brendan Rodgers supposed to keep pace with Fergusson, Mourinho, Pellegrini and
with Wenger seemingly about to let the moths out of the Arsenal wallet, knowing that he’s not allowed to enter the
ball park marked top players or the ball park marked exceptionally talented
youngsters? A tad unfair don’t you think
to manage with one hand tied behind his back? FSG could justifiably say “once bitten, twice shy”
with Allen, Borini, Henderson, Downing and Carroll costing almost £100million
and failing to set the world alight.
Are we
trying to get back to the top on the cheap or making sure the mistakes of
yesteryear do not return to destabilise us? Have we been banished from the top
table by the inadequacies of our own board or is this just the culmination of
years of miss-management finally catching up with us and we are now as one blog
follower Livi said, “feeding off crumbs from the big table”?
The club’s
debt rose by £21.8 million to £87.2 million in the 10 months between August 1
2011 to May 31 2012. Even if the losswas
substantially less than the previous year’s £49.3million and that’s taking on
board the fact we got to the two domestic finals it’s still a substantial
increase.
Managing
Director Ian Ayre claims that even £9.5million of “exceptional payments” which
included the pay-off to Kenny Dalglish will not hinder the club movements into
the transfer market. The board pumped an
interest free inter-company loan into the Liverpool coffers to keep the debt at
a manageable level to stave off the threat of another few seasons of not
challenging for a Champions League position let alone winning the Premiership.
While I’m
not saying that Liverpool Football Club should throw money around like confetti
destabilising the club’s future, both Rodgers and the Board are correct in their
assertion that the need to re-build the foundation and structure of the club
was intrinsic to its future, but the other teams will not stand still. The
board, I believe have missed the boat in their determination to realigned the
club using UEFA’s fair play rules as the barometer because the massive increase in Premiership
money will still keep the bigger clubs top of the pile.
On the face
of it the Premier Leagues new financial regulations has strengthen Liverpool’s
stance with clubs potentially penalised with a points deduction if they make a
total loss of more than £105million over the next three seasons, in addition, player wages will be curtailed from
next season. Incidentally, if these
regulations had been in force over the last three seasons preceding the last
one, LFC would have been punished with a points deduction after reporting losses of over £105million
(with Chelsea and Manchester City over that period).
The club
having rid itself of many of its high wage earners before the 2012-13 season, is
preparing for the new guidelines which state clubs whose total wage bill is
over £52million will only be allowed to increase their salaries by an
accumulative £4million over the next three seasons.
It’s difficult
to see how these regulations can be enforced with the spending power of the
Manchester clubs and Chelsea where advertising revenue can be raised to levels
which will make up for any shortfall which shouldn’t be difficult given the rarefied
atmosphere these clubs operate in, particularly taking into account the curb on
wages only applies to television revenue.
The club finishing
last in 2012-2013 received £60 million (rising from £39 million) which is the
same as Man City earned for winning the Premiership in 2012, which means the
prized Champions League places will have grown exponentially. By 2014, depending on the level of overseas
television income, the Premier League winners could receive somewhere between
£90 and £110 million.
If one takes
future Premiership revenue into account, and then looks at our lost revenue on
match day compared to Arsenal and Man United and the probable ways of getting
round UEFA’s rules like the signing of massive one off contracts under the
guise of advertising revenue we still trail along way behind. As I said, the brilliant work by the board in
terms of the club’s off the field activities is keeping Liverpool, although a
long way behind, on the same lap as the big boys, but where the Manchester
clubs and Chelsea will again have the advantage is their continuation year on
year in the Champions League and it’s why we need to breach that gap sooner
rather later.
This is why
I believe FSG are naïve in their belief that Financial Fair Play will lead to a
level playing field. Ian Ayre stated,
“The recent rules that we’ve adopted at the Premier League will expect people
to break even and limit their spending and player wages. We will conform just as everyone else does.
“We’ve been
a big advocate in pushing for that so we’re certainly not going to fall foul of
it.” Does Mr Ayre really think because
LFC are subscribing to the news rules the imbalance will change?
It will be
interesting to see whether the Premier League sanctions points reduction for
teams who fail to comply with the new regulations.
Arsenal
announced profits of £17 million in the six months leading up to November 2012
which bolstered their cash reserves up to a staggering £120 million. When you consider that the club invested
£40.9 million on four new players and extended players contracts it has to be
said that Arsenal are pinning all their hopes on financial fair play. Chairman, Peter Hill-Wood said ‘These new
rules will be good for us, good for the Premier League and good for the game as
a whole.
'It is
important that we maintain the quality and level of competition if the game is
to continue being a compelling spectacle and we believe the introduction of
tighter financial regulation will assist all clubs to compete while remaining financially
responsible.'
Its admiral
thinking, but the lifeblood of any club is its fans and the announcement of
stockpiles of cash will only make the losses of Robin van Persie, Samir Nasri
and Cesc Fabregas with the replacements of inferior models more painful. While Arsenal made the Champions League
another trophy less season is hard to bare for Gooners fans.
The Arsenal
Supporters' Trust (AST) said the figures highlighted the need for the club to
spend more money on team strengthening.
An AST
spokesman said: 'These figures contain few surprises. They show that Arsenal
yet again made a profit from the sale of their best players and that the club
has large cash reserves. 'Arsenal fans have contributed to this financial
health through paying some of the highest ticket prices in world football. A
further improvement in the club's financial strength is expected when new TV
monies and commercial deals come on stream in 2013 and 2014. AST members want to see this money used for
more, and better, investment in the team'.
Top players
these days want to sign for teams who qualify for the Champions League, while
Fabregas may have left Arsenal to ‘go home’, the loss of van Persie is more
keenly felt as he left the club to win silverware, and did so in his first season at Old Trafford,
which sends out a massive message.
Moreover,
just as Arsenal lost van Persie, there is the huge possibility of us losing Luis
Suarez. I hear the arguments that we
replaced Keegan with Dalglish, but the difference was that then we were the premier
team in Europe and had the choice of the cream in terms of the top British
players of the time.
Suarez is
now seen as the replacement for Torres, although he was originally bought to
play alongside the Spaniard and Suarez has admitted the thought played a large
part in his signature. With Gerrard now in
his 34th year, Suarez is the world-class light the club needs to
pull in other talent and right now we are in the position where we have to push
on or languish amongst with the also rans.
If Suarez leaves a player of equal standing must be brought in if we are
not to languish among the also-rans.
Paulinho, on the verge of signing for Spurs said recently, "To play
in England for a great team like Tottenham is a dream. What I respect about
Tottenham is the ambition they have shown.
"This
summer there has been interest in their coach and their best player - and they
have been clear they are both not going anywhere."
Conversely,
FSG are releasing funds, though not at the top end of the market, it’s been enough
for Rodgers to buy-in quality like Sturridge and Coutinho who at the moment
seem relative bargains and Iago Aspas and Luis Alberto who may well be more of
the same.
Borussia
Dortmund have a proven track record for building teams over the years without
shopping at the top end of the market, by concentrating on quality and with a
proven breeding ground for bringing young players through their much vaunted
youth set up and pinpointing talented South Americans, rather than stressing
the need to spend £30 million on one player is a much better way, for them, to
approach the transfer market. Thus it is possible to go against the grain. The
difference is that Liverpool are up against three world super powers in their
own backyard, hence by the time the youth team becomes the potent force the
owners would like it to be, the gap to the top three could turn out to be as
wide as the Laurel Canyon.
Bayern
Munich’s mantra is to have a good business you need a good team… says it all
doesn’t it.
The club
needs to make a statement of intent, by buying in a recognise world-class
talent, if Suarez is to leave, the talent coming in needs to be more than one
of that ilk. The pressure is now on Brendan
Rodgers, having seen the club improve dramatically in the second-half of his
first season.
If Liverpool
fail abysmally to get into the top four next season, I’m afraid Rodgers will
have to go, because he and the board have maintained their mantra of only
buying in a particular type of player with sell on value and as such can only
be measured, as they should be, by the results of those players and not by the
fact that have not made big money buys.
The transfer
market is open and we will see whether we can compete with Arsenal and
Tottenham and for that matter the “big three”.
Ayre said
recently, “We can still attract top players to Liverpool – I have no doubt
about that.”
“I have
never been in negotiations with anyone who has said they want to sign for
Liverpool, because we are not big or successful enough.
“We’re
focused on finding great young talent but we also need experience and
leadership. It’s about getting the right balance.”
Let’s see if
the club lives up to his words or it proves to be yet another false dawn.