It is worrying times for Liverpool Football Club. To read headlines like: Liverpool’s accounts reveal £420m black hole, Auditors’ fears are a bomb in Liverpool’s books and Hicks and Gillett ‘relaxed’ about debt is not good news.
I find it shocking that the finances can continue to stack up this way. The parent company owned by Tom Hicks and George Gillett lost £42.6m last year, mainly because of interest payments on the debts they took on to buy the club.
In the annual accounts, KPMG warned that remaining uncertainty over refinancing the £350m debt before the 24 July deadline “may cast significant doubt on the group’s and parent company’s ability to continue as a going concern”.
Although Hicks and Gillett say they are confident of securing a refinancing deal, the figures reveal that the financial success of the football club is being swallowed up by the cost of the parent company’s loans. For the year ending July 2008 showed Liverpool made a £10.2m profit but the parent company Kop Football (Holdings) Ltd made a substantial loss of £42.6m, largely as a result of interest payments totalling £36.5m.
Whilst Benitez has been assured he has £20m to buy players, it does leave me concerned that the club I love and support is taking itself so far into debt. We need to be careful that we don’t end up going in the direction of a club like Leeds United where spending got out of control and it all went wrong.
Having come so close to winning our first title in 19 years, we need to keep momentum going this summer by bringing in those 3 players that Benitez has spoken about (striker, creative/wide midfielder, full back) to win the Premiership, but with these worrying financial statements, Benitez “on holiday”, no new chief executive in place and others such as Man City, Chelsea and Real Madrid all prepared to get the money out I do worry that we might struggle to make decent signings.