1 Oct 2010

LFC debts + Hicks and Gillett's holding companies: I've been proven right again

A few months ago, I posted a series of detailed articles outlining exactly how the debts incurred by Tom Hicks and George Gillett would affect the club. The main point I tried to get across (with evidence) was that the CLUB was not responsible for their debts, and if everything went wrong, there would be minimal impact on the club. Of course, practically no one would accept my argument at the time, but now - as a new article from The Liverpool Echo shows - I have been proven right.

I’m sorry, but given the intense criticism I received at the time for daring to suggest that the club would not suffer as a result of H+G's debts, I feel the need to highlight this vindication. This is just part of the usual pattern: I make points about LFC (with evidence); I get shouted down/slagged off etc, and then a few months later, what I was arguing actually comes true/is confirmed.

In the aforementioned articles, I argued the following:

1. Kop Football (Holdings) Ltd / Kop Football Limited / Kop Cayman = H+G’s companies

2. Liverpool Football and Athletic Grounds Ltd (LFCAGL) = Liverpool FC (i.e. the CLUB)

3. KFHL and KFL are liable for the bulk of the debts *not* LFCAGL

4. LFCAGL is only liable for the money loaned to it by KFL (Approx 100m)

5. KFL (i.e. H+G) cannot demand payment of that loan if it would make LFCAGL insolvent

6. If the shit hit the fan, it would be KFL/KFHL that went into administration, NOT LFCAGL.

7. If RBS take control of the club, there would be practically no negative consequences for Liverpool.

8. There would be practically no chance of a major points deduction.

9. Basically, the debts associated with the club will have no real impact.


As I said, no one would accept this; and I understand why – people could not (or sometimes would not) appreciate the difference between the club and its holding companies, and the media (including some journalists who are LFC fans) did an absolutely disgraceful job of sensationalizing everything and making out that the club was on the edge of a financial apocalypse.

Well, reports are starting to surface now confirming my version of how things will pan out. The Liverpool Echo published an article earlier today, which stated the following:

"LIVERPOOL FC are likely to avoid a Premier League points deductions even if the Royal Bank of Scotland takes over the club. Some football legal experts have predicted that Kop Holdings, which owns LFC, would automatically be placed into administration. But the ECHO understands the Premier League would not view that move as Liverpool being declared insolvent.

Regular discussions have been taking place between Liverpool chairman Martin Broughton and league chief executive Richard Scudamore…a nine point deduction, threatened to football clubs when they go bust like Portsmouth last season, would not materialise.

League chiefs crucially consider the debt to rest squarely on the shoulders of Tom Hicks and George Gillett, co-chairmen of the club and owners of Kop Football Holdings.

A source familiar with the process told the ECHO: 'A deal's been done to make sure those nine points aren't deducted from Liverpool. It's not actually the football club that goes into administration, it's the holding company. If it's only the holding company that goes under, that's when they've got clearance. The deal has been done between the club and the Premier League'.


6 months ago, this site was the ONLY source - either on or offline - arguing these points.

I’ve said it once and I’ll say it again: The responsibility for debts associated with LFC lies with Hicks and Gillett. The Club itself will suffer very little negative impact if/when RBS take over. Even if the club is sold at a knock-down price by RBS, Hicks and Gillett are the only ones who will suffer, which is why Hicks is so desperate to refinance (which is not going to happen because the board has veto his every attempt).

The sensationalized nightmare scenario fed to everyone by the media is not going to materialize; it was never going to happen, and I tried my best to explain this to people.

Contrary to popular belief - and as this situation proves - I do actually know what I’m talking about. I am legally trained, and when it comes to finances, I have everything I post checked by a qualified accountant.

This is not about being praised or gloating - my goal is and always has been to cut through the exaggeration and sensationalisation associated with LFC's finances, and it's important that people have the right information, whoever provides it. In this instance, it just happened to be this site.

If you want a true, unbiased, accurate picture of LFC’s finances, this is the place to come.

Below are the articles in which I argued the points highlighted above:

Liverpool FC's debt: The lies, misinformation and exaggeration exposed

Liverpool fans BEWARE: "The State of LFC – An Idiot’s Guide" (posted on RAOTL) is FALSE. And here's the proof.

EXCLUSIVE: Proof that Liverpool FC does NOT pay interest on H+G's parent company debts

Anyone who sensationalises Liverpool FC's debt level is - quite simply - Anti-LFC

Liverpool FC interest payments: The media MYTH exposed (Brief facts with *evidence*)

Jaimie Kanwar



104 comments:

  1. Anyone not abiding by the comment policy will have their comments deleted.

    http://www.liverpool-kop.com/2007/10/comment-policy.html

    ReplyDelete
  2. A desperate sounding article.

    So if LFC don't go into administration we still owe £100million to H&G (KFL) then, yes (even after a sale)?

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  3. Jaimie, your quote above," <span>The main point I tried to get across (with evidence) was that the CLUB was not responsible for their debts, and if everything went wrong, there would be minimal impact on the club".</span>

    Just let me repeat the last part of that quote," <span>there would be minimal impact on the club". KPMG have said "there is a material uncertainty about the club as a going concern". KPMG are the official auditors brought in by HICKS and GILLETT to assess the club. Thats not minimal impact, thats maximum damage to the club.</span>

    Christian Purslow the MD has said the club can just about service the debt on the loans at the moment and that a majority of LFCs board are opposed to HICKS refinancing the debt, which will increase the payments made to the banks. Yet HICKS is still seeking further refinancing deals against the wishes of the majority of the board.

    Liverpool have made a net profit in the last 5 transfer windows. They are selling more than they are buying. 

    These FACTS ( with evidence) prove that the effect on the club has been disastrous, and far from minimal.
    <span><span>
    </span></span>

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  4. What is desperate about it? 

    The desperate thing is that you obviously can't read. Liverpool owne H+G money, but they cannot demand repayment if it would make LFC insolvent.  That's a standard company law guideline, and it basically means that H+G have no real chance of getting that money back.

    Not that it matters either way - that is what the sale of the club is for; they'll get their money when the club is sold. And if there's not enough to cover it, then they'll have to pursue the money in the courts, which would take a ridiculous amount of time.

    LFC is under no financial threat from Hicks and Gillett.  Why is that so hard to accept?

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  5. ive read your comments on this subject and it isn't that you said you what you said it was the way it came across ,that you supported  professor bunsen and beaker, now maybe you did and maybe you didn't,but you need to word your articles properly so people do not misunderstand or misinterprate what you wish to say and be perfectly clear in those words, where your loyalties lie and what you stand for and as the creator of this site and the one who makes the statements you should know that we the people aren't all going to read it in the way you want us to, that being said you do make some good points and have been inciteful in what you print, but please double check the validity of some of your pieces before putting them  on here cos  we only want to read the truth not conjecture ,hearsay or as on some other sites complete bulls---
    thanks  rob.k
    YNWA

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  6. Frank - this is same meaningless argument that people raised 6 months ago.  KPMG's statement about 'material uncertainty' means nothing.  Tell me: what is the negative impact of that belief on the club?  There is none.  It is an opinion based on the facts - it doesn't mean it is going to materialise.  Give me one example - just one - of a top first premier league club that has ceased to be a going concern.  It's never happened, and it's not going to happen with LFC.

    Hicks seeking refinancing is also irrelevant because it's not going to happen.  The board  can (and will) veto any attempt, so that's the end of that.  Are you suggesting that the mere fact that Hicks is trying to refinance is having a negative financial impact?!

    Re servicing the debts - Purslow also said that the club is very far from financial meltdown. 

    Your claim that the effect on the club has been diastrous is just plain wrong.

    Debt is a part of mondern football.  Man United have far more debt that we do yet they won the league 3 years in a row.  It's about proper management of the finances you have, and as a result of the abject failure of Benitez in the transfer market, Liverpool are suffering now.    
    The transfer fund belt has been tightened for the last 3 transfer windows because Benitez could not be trusted with more money.  He'd wasted so much that the board had no faith in him.  The reason there was no money for transfers in the most recent window is because of a potential takeover; the club isn't going to splash huge sums on players that might not be wanted by the new regime.

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  7. In a world of financial meltdown I strongly believed my club had been all but destroyed your words are very reassuring but the financial instability of the club is having a huge knock on effect to everything lfc is about. The ingredients of the FACTS seem to change all the time. The only FACT that remains is we need new owners who understand what Liverpool F.C stands for.  YNWA

    In Ireland we are bailing out the banks weather we like it or not and the majority dont. I would gladly contribute to any Liverpool Bailout and I know deep down if it some how it became nesesessary the supporters of the club would stand up and be counted.

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  8. In a world of financial meltdown I strongly believed my club had been all but destroyed your words are very reassuring but the financial instability of the club is having a huge knock on effect to everything lfc is about. The ingredients of the FACTS seem to change all the time. The only FACT that remains is we need new owners who understand what Liverpool F.C stands for.  YNWA

    In Ireland we are bailing out the banks weather we like it or not and the majority dont. I would gladly contribute to any Liverpool Bailout and I know deep down if it some how it became nesesessary the supporters of the club would stand up and be counted.

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  9. I agree that we need new owners, and I'm sure that will happen sooner rather than later.

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  10. Jaime... I really hope you are right cos' realistically I just see speculations all the time. Prospective buyer this Possible buyer that all that you can imagine... Honestly I let my heart rule me when it's Liverpool we talk about so I'm mostly not a big fan of you. But this is the only one time i really wish and hope and would like to agree to you... We all have our opinions and it's fair so I'll always respect the fact that You are a Liverpool fan no matter what happens... Peace

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  11. Massive respect to Jamie. I supported you at the time of those publications you made and this shows again how blind and stupid so many fans are.

    The club may find itself in some sort of trouble because of the finances in future, but accusing authors like you to be 'not real fans' or something just because your posts do not share views of the majority is disgusting.

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  12. One rule for the big clubs, and one for the rest of us.Do not worry though we will be back. We rule the South we are Portsmouth FC,or will be if we ever get out of administration,caused by dodgy owners.

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  13. I don't know the ins and outs of what was said by you or others during whatever online spat you've been having with other Reds, Jamie, but this thought at the end literally made me laugh out loud -

    "This is not about being praised or gloating<span>"</span>

    Gimme a break. This is quite possibly the most needy "I told you so" missive I've ever read.

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  14. I don't know the ins and outs of what was said by you or others during whatever online spat you've been having with other Reds, Jamie, but this thought at the end literally made me laugh out loud -

    "This is not about being praised or gloating<span>"</span>

    Gimme a break. This is quite possibly the most needy "I told you so" missive I've ever read.

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  15. I don't know the ins and outs of what was said by you or others during whatever online spat you've been having with other Reds, Jamie, but this thought at the end literally made me laugh out loud -

    "This is not about being praised or gloating<span>"</span>

    Gimme a break. This is quite possibly the most needy "I told you so" missive I've ever read.

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  16. I told you so - yes. Needy? Do me a favour! I just returned from 5 months off from writing on this site; there's no neediness; I'm not in it for the validation (ha! Likecthat ever happens much anyway!) it's just important that visitors know that what's written here is accurate.

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  17. I told you so - yes. Needy? Do me a favour! I just returned from 5 months off from writing on this site; there's no neediness; I'm not in it for the validation (ha! Likecthat ever happens much anyway!) it's just important that visitors know that what's written here is accurate.

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  18. So what will happen to the 100million we owe H&G? We still owe them right? To KHL

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  19. Spot on Jerry, definitely the most needy "I TOLD YOU SO" ever in this history of writing....

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  20. Jamie. You have constantly been the voice of reason.  There's no doubt the regime of G+H has been disastarous, but Benitez needs to take some of the blame for many of his decisions and his negativity. However,our focus now has to be on getting these owners out. We must stand and work together. This will be a messy fight.

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  21. Jamie , there are no official financial records of the club.Once Kop Holdings are declared insolvent, H and G will slowly pull out net profits and player money from LFC to revive Kop H.

    Any difference? 

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  22. Jamie...glad you are back even though you are seriously wrong about the impact on the club.

    It is the arrogant nature in which you speak to perhaps the uneducated rank and file fans which makes people believe that you work for H+G! The fans are your LFC brothers so treat them with respect...their views are sometimes wrong but you are not right all the time either!

    Now, Man Utd spent big big money a year before Rafa came to liverpool and still spent big for 2 years after. Their squad consists of reserves that cost 18 mill (Anderson,Carrick, Hargreaves) ours does not. Fergie has been backed heavily since the start of the premiership era. Apart from this year so far Berbatov was a 30 mill + misfit for 2 seasons.Our most expesive defender cost way under 10 million...Rio Ferdinand 30 mill! Funds that Rafa could only have dreamed of!

    Sure Rafa made mistakes with signings but overall he bought pretty well since the days of Diouf, Diao, Biscan, Traore.

    As I previously said I am very happy that you are back writing articles and I do agree the debt is on the holding companies. However, the fact that LFC is servicing the debt on those companies is making us very uncompetitive.

    I have been involved before in due dilligence on LFC on behalf of a buyer that bidded no less than 2 times for LFC (from UAE). The largest bid being 550 million which was rejected buy the idiots some times ago. And yes I have proof if neccesary on most matters to do with LFC and have met our board and the previous manager (as stated in previous posts)

    RBS are very reluctant to take over LFC and buyers are scarce due to many issues such as H+G asking price, economic and financing problems, stadium funding in this enviroment. I fear it will take at least 2 years unless some or all conditions change.

    I look forward to reading more from you Jamie and respect you as a genuine LFC supporter.

    BTW you were dead right in a previous post on being positive behind the new manager. YNWA

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  23. Agreed Jaimie!, Kop Holdings are in debt which is not going to be paid back by H+G, Liverpool the club is very solvent. We have record turnover and profits which cover any club debt and assets galore!. We still need new owners absolutely, yet some of the Liverpool hating media have been pathetic.

    We have records broken in every aspect of commercial revenues, the club is in no danger at all. The sale of the club has never been closer.......not long to wait now!!!!

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  24. Agreed Jaimie!, Kop Holdings are in debt which is not going to be paid back by H+G, Liverpool the club is very solvent. We have record turnover and profits which cover any club debt and assets galore!. We still need new owners absolutely, yet some of the Liverpool hating media have been pathetic.

    We have records broken in every aspect of commercial revenues, the club is in no danger at all. The sale of the club has never been closer.......not long to wait now!!!!

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  25. Agreed Jaimie!, Kop Holdings are in debt which is not going to be paid back by H+G, Liverpool the club is very solvent. We have record turnover and profits which cover any club debt and assets galore!. We still need new owners absolutely, yet some of the Liverpool hating media have been pathetic.

    We have records broken in every aspect of commercial revenues, the club is in no danger at all. The sale of the club has never been closer.......not long to wait now!!!!

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  26. Agreed Jaimie!, Kop Holdings are in debt which is not going to be paid back by H+G, Liverpool the club is very solvent. We have record turnover and profits which cover any club debt and assets galore!. We still need new owners absolutely, yet some of the Liverpool hating media have been pathetic.

    We have records broken in every aspect of commercial revenues, the club is in no danger at all. The sale of the club has never been closer.......not long to wait now!!!!

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  27. Agreed Jaimie!, Kop Holdings are in debt which is not going to be paid back by H+G, Liverpool the club is very solvent. We have record turnover and profits which cover any club debt and assets galore!. We still need new owners absolutely, yet some of the Liverpool hating media have been pathetic.

    We have records broken in every aspect of commercial revenues, the club is in no danger at all. The sale of the club has never been closer.......not long to wait now!!!!

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  28. I think that the it is obvious in a legal and financial sense that the impact on the club would be minimal so to that end Jaimie is totally and utterly correct and was correct during his previous articles. However, it is also not practical to say the finances on day to day and operational running has been minimal. It is absolutely absurd to say that the club did not give Rafa funds as they did not trust him since he was sanctioned to spend £20 odd million on Aqualani so clearly the lack of trust is not entirely true. The fact remains that, as the MD has stated, the club is very profitable but have had to service the debt and just about. That has had a clearly negative impact on available funds for player investment which is nothing to do with confidence in the manager. RH was not given funds again not down to potential new ownership it was down to the lack of funds available.

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  29. really want you to be right on this Jaimie. It may be. as you say, that it is not damaging us financially as the media and others would have us believe but the damage being done to our standing in the football world is there for all to see. We are treated at best as a joke and at worst with contempt by the media and this has a knock-on effect on stuff like referee-ing decisions and player confidence as well as how we are disrespected by rival teams and fans.
    The echo says that two parties are a good way along in the process of acquiring LFC but that bids are still a ways off - do you have any info on who these people may be lad

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  30. <span>"....the debts associated with the club will have no real impact."</span>

    <span></span>
    <span>Appart from....</span>
    <span></span>
    <span>- Performance and results <span>- Liverpools worst start for a generation.  </span></span>
    <span>- The squad is clearly going down in quality for the 4th Transfer Window in a row</span>
    <span></span>
    <span>Everything you have said with regards to who's liable for the debt, the 9 point deduction etc etc is common knowledge.  It doesnt make you a genius to point out the obvious, and ultimatley it doesnt make any difference because the bottom line is results on the pitch.  </span>
    <span></span><span></span><span></span>
    <span>Putting the debt to one side for the moment - Surley even you has to accept that the ownership situation has directly effected the quality of the squad and as a result LFC are slipping further behind our rivals?  Its crystal clear we are not good enough. The only evidence you need is the league table, which says it all.</span>
    <span></span><span></span>
    <span>Last season you blaimed it all on Rafa, but now we have Roy, Things havent improved - Infact, things have gotten MUCH worse - 1 win in 6 (at home to West Brom FFS).  </span>
    <span></span>
    Stop being so self righous - you have proved nothing.  The end result is there for everybody to see and it boils down to ownership.

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  31. <span>Everything you have said with regards to who's liable for the debt, the 9 point deduction etc etc is common knowledge.  It doesnt make you a genius to point out the obvious, and ultimatley it doesnt make any difference because the bottom line is results on the pitch.  </span>
    Common knowlege?  Don't make me laugh. At the time I was arguing these points 5- months ago, every other LFC source was arguing the opposite, including every newspaper.  Exaggerating the debt levels; making out that all the debt was on the club; ignoring the impact of holding companies; painting a doomsday scenario of massive point deductions and insolvency; arguing that Liverpool would have sell all their assets to pay off the debts etc.  If it was such common knowledge, why did 90% of people vehemently argue against the points I made?  It was not common knowledge - it was the opposite.  Just because you say it was doesn't make it so.



    <span>Putting the debt to one side for the moment - Surley even you has to accept that the ownership situation has directly effected the quality of the squad and as a result LFC are slipping further behind our rivals?  Its crystal clear we are not good enough. The only evidence you need is the league table, which says it all.</span><span></span>
    It is not the ownership situation that has affected the club, it is the gross mismanagement of transfer funds by Benitez over the last 4 years that has left the squad in the state its in.  This is the point you seem to be missing: IF Benitez had spent the money available to him *wisely*, our squad would be much stronger now.  Instead, he pissed tens of millions away on the following:
    Keane - 20mAquilani -18mJohnson - 17mBabel - 11mDossena - 8mRiera - 7mLucas - 6m
    Tell me: what benefit has LFC derived from those players?!
    ABSOLUTELY NONE
    That is 87m down the toilet for no return.
    Just imagine if that money had been spent on GOOD players - some of them would still be at the club, and Hodgson would be able to call upon them now.
    Four of them have left; the remainder off nothing to the team, and are mostly liabilities.
    You also have to  consider the players alienated by Benitez who might still be here: Alonso, Crouch, Hyypia etc.

    The club gave Benitez stacks of cash, and he pissed it against the wall.
    No supportable argument can be made for the Owners being responsible for performances on the pitch.  The complete financial mismanagement of transfer funds if the main issue.
    having said that, Hicks and Gillett displayed utter negligence in giving Benitez a new contract last year.  That was a mistake of epic proportions.

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  32. Jamie - very interesting read & great to read something without the hysteria. However having worked myself in a number of administration and insolvency situations I also know that the results are never certain. While H&G may not be able to reclaim their 100 million the other main creditor (The Bank - also RBS?) can withdraw that overdraft facility at the drop of a hat - that may not be sufficient to trigger administration but it may necessitate a "fire sale" which would further weaken the team. Also I am assuming the Club is a wholly owned subsidiary of the holding company & if that were to fold where does that leave the Club? My guess would be that the Administrators would allow it to continue to trade and then sell as the most efficient means to recover maximum cash - but I would suggest this cannot be considered a certainty. Are all the legal entities and agreements involved covered by English law, or is there potential consideration from US via Wachovia or H&G's other companies? One thing on which all parties agree I am sure is that the sooner the ownership situation is resolved, the better - however I cannot see anyone tabling an offer now until the parent company is taken over by RBS's administrators (bit like a Bosman!) - nobody will pay H&G any sort of premium unless they have to - nothing personal, it just would not make sense.
    GR

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  33. <span>

    Yes Jaimie, you were correct all along. There was no negative impact whatsoever from the debt placed on the club. How could we all be so stupid as to think there is.
    You claim that debt is part of modern football and we should deal with it. You also claim to hate modern football but I digress as I could spend all day highlighting the hypocrisy in your words. I will pick you up in this though - how many recent takeovers of football clubs have been operated the same as ours? United, us and who? You claim and have claimed previously it is the norm. So who else?
    Debt is in football although normally associated with stadium building (Arsenal) or player purchases/inflated wages (Portsmouth/Chelsea/City). Our debt is for our esteemed owners to own us so, tell me, who else bar United is operated in this way.
    You say the transfer budget has been tightened for 3 windows because Benitez couldn't be trusted with the money? Really, you know this? Seems odd since he was trusted with a bid fat contract.
    Although this will probably be deleted as you have a habit of shying away from arguments you can't win.
    Keep a look out on Newsnow, I will be running an article about your site myself shortly. You won't be able to control the edit function on comments though, sorry.
    </span>

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  34. Dear Jamie i have a degree in corporate law and the difference between that, and your average account is massive.
    When it comes down to a complete evaluation of a companies holdings many things are factored out, one i will bet is they can structure a number of bases to which you probably have no knowledge of, one of which is a profit sharing base.
    So whilst poking around in the dark saying i told you all so just remember you still do not have all the facts

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  35. I didn't read your original article, but agree with you and feel I should give you a pat on the back for your analytical skills!!

    It's true that there is minimal chance of facing a points deduction, and the negative impact will be on the holding companies. Companies going into admin is a normal occurence, and as such is no big thing. Only if the admin been placed directly on the club, would that require the Premier League to get involved.

    As much as I hate H+G for their vitrionic plague upon our club - I am mildly pleased that they at least took the loans out via the holding companies. Whether it was their choice or not, or they foresaw the problems now faced is irrelevant - I'm just glad!!!!!

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  36. Have to agree with you. No matter how much we loved Rafa some of his buys were appalling

    17m for a right back that cannot defend :'(

    18m for a crocked player, who when he was fit Rafa played sparingly ?

    20m for Keane and then would not play him because he spat his dummy out over not getting Barry. :-[

    Hawking Alonso around europe to try and raise the funds to buy Barry, Barry is not fit to lace Alonso's boots, he left the next season for £30m, so we lost a £30m player :(

    Dossena, Babel, Riera, the list goes on.

    Yes he bought some great players but his last great buy was Torres 3 yrs ago, Rafa had the money he just spent it badly and we lost a great player because of his posturing.

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  37. You are so imbalanced in your views of Benitez.

    Just look at your list:
    Keane - 20m  
    Aquilani -18m  
    Johnson - 17m  
    Babel - 11m  
    Dossena - 8m  
    Riera - 7m  
    Lucas - 6m Then you followed it with: "Just imagine if that money had been spent on GOOD players - some of them would still be at the club, and Hodgson would be able to call upon them now. "Keene was purchased and sold for a loss- The loss is what should be mentioned in this context. Johnson is still here-Have you forgotten conveniently? and was purchased mainly with money owed for Crouch from a club about to go under(By the way, I'm sure Portsmouth DID go into administration, so there's the example you asked for- ok ,not totally out of business, but in no way escaping unharmed) He can still be an important player for LFC esp if we convert him to RMBabel seems to have a better attitude this season, and has already been the subject of a bid near to his original price, so he's not going to be a big net loss even if playing him up front doesn't workAquilani was paid in installments- so hasn't cost £18m yet- and although on loan is still either an LFC player or a decent sized fee, certainly close to what we've paid for him so farLucas again, was subject to abid recently which would mean no net loss (apart from early woeful performances of course)That just leaves Dossena and Riera, both sold at a loss, but hardly catastrophic onesThere isn't a Manager out there who hasn't signed expensive turkeys-in Ferguson's case there's Veron £26m, Djemba Djemba , Carrick ,Anderson, Berbatov until the last few games etc etc . We could never afford benches of £15m+ players like Utd - we indeed only have signed a handful in TOTAL , never mind adding them to existing £30m players. It was time for Benitez to go- but let's have some of that balance you keep saying you display...I don't see any mention of the £20m profit from Alonso or the Masch profit either. What most fans see is players like those being sold for big money, but when players like Tevez, who reportedly wanted to join us from that shower up the road- become available, we are nowhere to be seen. Whatever the inner workings of the debt and the interest et al, THAT'S the reality

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  38. I don't shy away from any arguments; I have many things going on so I don't waste my time on people who snipe/antagonise.

    And re writing something about this site?  Knock yourself out!  Lots of other LFC sites have done the same, trying the best with negative propaganda to make you seem like some kind of lunatic non-fan.  it doesn't work.  Visitor numbers just keep on rising.  In fact, all such articles do is drive extra traffic to this site, so carry on :)

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  39. I sincerely doubt you have read the 6 or so articles I posted on the state of LFC's finances, so pleae don't make that judgment based on a tiny summary in the above article.  I provided irrefutable evidence for all of my contentions, directly from the club's own accounts.  i also had everything double checked by a qualified accountant who specialises in football accounting. Profit sharing in this context is irrelevant - it has no bearing and/or impact on the club.

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  40. <span>

    You either didn't want to answer the questions posted or couldn't. Hmmm. Why do you care about traffic being driven to the site, I thought it didn't matter (or so you have claimed many many times).
    Site traffic shouldn’t be your main aim for validation though, should it? After all, I know a lot of people visit here to laugh at what you are going to claim next. Do you ever check your posts for feedback, I have noticed that most, if not all, of your posts contain negative indicators. What does that tell you about your site traffic?
    Besides, if you think I would name this place you are mistaken. But don't worry, you will know it is you.
    Happy editing.
    KB
    </span>

    ReplyDelete
  41. You are "legally trained"?  What does this mean?  Are you a qualified solicitor or a barrister who has completed Pupillage?

    ReplyDelete
  42. Are there figures to show Rafa's transfer record as a whole?  I know he sold several players at a profit too.

    As for Aquilani, I liked him and wanted to see more of him so in that respect I would not call the money wasted.  I dislike the fact Roy binned him off even though we are crying out for some creativity in our hopeless midfield right now.

    Riera was rumoured to be mr party boy was he not.  And I hear he likes to give young players a smack??  A shame as he did show some promise during 08-09 when we were flying.

    Dossena just did not adapt.  I suppose you expect more from an international.

    Keane?  Well I doubt we'll know the full story but he went back to spurs and within a few months was at celtic.  Was Harry Redknapp slated for spending so much and then shipping him out on loan?  No.  I think most will agree, he has never been the same since his move to Liverpool.

    Babel, the enigma.  Has so much promise but just clearly is not showing any signs of developing.  Wants to be a striker but appears to have no attributes to play such a role.  Has a great shot but is far too easily pushed off the ball.  Difficult to predict when players will shine or not.  There were several doubters of Torres' ability when he first arrived.

    Lucas, the scapegoat.  I think could be a decent player, but is playing without confidence and in a role he didn't play in in Brazil.

    What I really dislike at present is the fact that we are playing with zero creativity, zero width and seemingly intent of starving Torres of any kind of decent service at all.  We are being over run in midfield by lesser teams and have a manager who seems content with draws against lesser teams.  Shocking.

    Reina
    Johnson/Kelly
    Agger
    Skrtel
    Aurelio
    Meireles
    Gerrard
    Cole
    Kuyt
    Aquilani
    Torres

    Now that is a team that should be going places.  I can see it.  Lots of other fans can see it.  Why can't Roy.

    People have for years argues we need a motivator, a man manager, someone who the press like.  We got one and we seem to be regressing 12 games in.  I'm sorry but with that group of players, we should be doing and performing far better.

    ReplyDelete
  43. The Roy Hodgson Brigade5:31 pm, October 01, 2010

    Well the fact that LFC wont be going into admin just puts the cherry on top of the cake. All of those who were smearing this clubs name with utter tripe are now running into a brick wall and trying to decide whos theeth belongs to who. To even think that there are those who were predicting the end of LFC just makes that cherry even bigger. The predictors seriously need to determine their behinds from their mouths.

    Rafa is gone, now get over it... :-D  

    ReplyDelete
  44. I like 2 see U rigth, but only time will show. 

    ReplyDelete
  45. nice comments i like to hear the truth about liverpool fc for a change

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  46. You should recheck your sources.It was the holding company of Pompey that went bust not the club but they were docked.
    The Premier League have catagorically denied discussing this with anyone at Liverpool so again it's more nonsense from you.

    ReplyDelete
  47. Jeez - wake up, already. The Premier League is never going to publicly admit to striking a deal with LFC, or talking to the club about issues relating to finances/administration. That would not look professional, would it? Every time x, y or z denies something, it doesn't mean it's true.

    ReplyDelete
  48. And ehat do Portsmouth have to do with anything - their situation is completely different to LFC.  I can't be bothered to waste my time explaining how again.  Check the facebook site for comments related to this.

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  49. Sorry - that's all the news that's fit to print.

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  50. Agreed, Indy.  The ironic thing here is that H+G ave actually helped the club, and potentially stopped any devastating consequences related to the finances.  All this whilst fans are calling for their heads for wrecking the club ;)

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  51. Agreed, Indy.  The ironic thing here is that H+G ave actually helped the club, and potentially stopped any devastating consequences related to the finances.  All this whilst fans are calling for their heads for wrecking the club ;)

    ReplyDelete
  52. Self important shit. I always taste vomit when I read your stuff.

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  53. Hi there - if you've read the 6 or so articles I posted on the state of LFC's finances, then you'll know I provided irrefutable evidence for all of my contentions, directly from the club's own accounts.  I also had everything double checked by a qualified accountant who specialises in football accounting. Profit sharing in this context is irrelevant - it has no bearing and/or impact on the club.

    ReplyDelete
  54. I think you're right, GR - nothing is an absolute certainty at this stage, but I just can't see RBS conducting a fire-sale, the impact of which would almost certainly lower the value of the club, and make us unattractive to potential buyers.

    Also, I really doubt RBS want to be forever branded as 'the bank that ruined LFC'.  Liverpool FC is a national institution, and I think they are very aware of that. 

    If/when RBS take over, the sale of the club will move along much more swiftly, as you suggest.  The next few months should be very interesting.

    ReplyDelete
  55. The Roy Hodgson Brigade7:16 pm, October 01, 2010

    You know what is really funny? Would the FA allow the biggest club in Englands history to go to the slumps. That alone will send English football down the drain. What makes it even more hysterical is that there are people who who thrived on the comical drivel that surrounds this club created by those who are a disgrace to this club. The same people who are now calling for Roy Hodgson to be sacked 3 months into his job which is an even bigger disgrace.

    ReplyDelete
  56. I'd like to know what 'legally trained' means too. Self promotionist

    ReplyDelete
  57. The Roy Hodgson Brigade7:29 pm, October 01, 2010

    Please take care and remember to not choke on your own vomit :-D

    ReplyDelete
  58. The I suggest you visit a doctor, cos that 'aint normal.  :)   Sounds like you have some kind of gut-rot.  Tapeworm, perhaps?

    ReplyDelete
  59. The I suggest you visit a doctor, cos that 'aint right.  :)   Sounds like some kind of gut-rot.  Tapeworm, perhaps?

    ReplyDelete
  60. u pratt portsmouth went in ad directly unless u cant read it a the club that will go in2 admin its hicks and gillet try and use ye pea brain 2 work out the difference PRATT

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  61. Exactly.  There's no way a the FA or the Premier League will allow a national institution like LFC to go down the pan. If Liverpool suffer, English football suffers.

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  62. Thanks, Kieran.  Appreciate your visit to the site :)

    ReplyDelete
  63. It means I did a health and safety certificate once when I was working at mcD's during my student days :-P

    ReplyDelete
  64. Jaimie
    Not a bad article but just before we all rest a bit easier i am not sure your qualifications are of any help to a small matter.Here it goes:We are currently just about servicing interest payments AGREED? Say KOP Holdings goes belly up.The club is shielded from the crash BUT the interest payments will contiue simply because Kop holdings will now have creditors to negotiate with.Something like 20p on a pound.The scenario will look like Player sales under duress TORRES anyone?YNWA

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  65. That's true - due diligence is being undertaken by two interested parties right now, but we won't hear anything until the deadline for paying off the RBS loans passes.  After the fallout from that, potential bidders will (hopefully) no longer have to deal with H+G, and the sale process with speed up exponentially.

    ReplyDelete
  66. the jaimie and Roy hodgson brigrade are like a comical duoble act now, one says a rubbish statement  and the other say that you are right and vice versa.
    i have not seen anyone here except roy brigrade mentioning about manager getting sacked....
    your comment"What makes it even more hysterical is that there are people who who thrived on the comical drivel that surrounds this club created by those who are a disgrace to this club." is what we could say about certain person on this site who thrived on Liverpool losing or playing bad game last season..... do u remember that man Jaimie

    ReplyDelete
  67. The Roy Hodgson Brigade7:52 pm, October 01, 2010

    Taken from the Liverpool Echo article above...

    The Reds reported a £200m turnover for the first time during the last 12 months, a significant rise compared to previous financial years and Anfield bosses insist the club remains highly profitable.
    Run along now :-D

    ReplyDelete
  68. Back on this one JK.  Always glad to see your "qualified" opinion on complex legal and accounting structures and matters.  What are your qualifications by the way? Despite creditable research you deal with your findings in such absolutes and contrite self-knowing that its difficult to take your arguments for anything other than a dogmatic and self-important.  

    Perhaps that's why people argue with you (not just because we're all dumb and don't understand the difference between two companies).  In fact I'm overqualified to even be writing on this site and understand all your points.  Still doesn't mean I agree with your *facts*.  

    I'm still waiting (months by now) for you to tell me who is paying the interest on H&G borrowing?  

    I've decided to give you a choice. It's either:
    A) Ultimately paid from the profits of LFC.  Either via direct interest payments or by dividends paid up through the holding companies eventually. (and therefore would of course damage the club in the long run)

    B) Hicks & Gillet keep on investing money in Kop Holdings to pay off the interest.  Even for these two monkeys thats a terrible business strategy.

    C) The bank doesn't mind that we owe loads of money and forgets about it.

    I wonder which it is?

    I've also read RBS have been taking legal advice as a precaution in the situation they called in the debt, whether the club would be deemed to go into administration under premier league rules.  Clearly it was never in doubt and they're wasting their money on expensive lawyers when they could just come to you for your expert opinion on the matter for free. Perhaps you should email them before they waste anymore of their money.

    ReplyDelete
  69. You release hundreds (if not thousands of stories) a year, and you make this much of a deal when one of them comes true (a fact which has yet to be proven mind). You give yourself another pat on the back mate - because no one else will!

    ReplyDelete
  70. They should string up the owners parade them from goal post to goal post, at the kop end...
    whilst letting gerrard practice his shooting from the 6yrd line....

    And would suggest He use Jamie Anwar as the ball?

    Yes? I am I alone here?
    Surely most sane people would agree this is the correct thing to do, if anything it's being lenient?

    :D

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  71. They should string up the owners parade them from goal post to goal post, at the kop end...
    whilst letting gerrard practice his shooting from the 6yrd line....

    And would suggest He use Jamie Anwar as the ball?

    Yes? I am I alone here?
    Surely most sane people would agree this is the correct thing to do, if anything it's being lenient?

    :D

    ReplyDelete
  72. They should string up the owners parade them from goal post to goal post, at the kop end...
    whilst letting gerrard practice his shooting from the 6yrd line....

    And would suggest He use Jamie Anwar as the ball?

    Yes? I am I alone here?
    Surely most sane people would agree this is the correct thing to do, if anything it's being lenient?

    :D

    ReplyDelete
  73. They should string up the owners parade them from goal post to goal post, at the kop end...
    whilst letting gerrard practice his shooting from the 6yrd line....

    And would suggest He use Jamie Anwar as the ball?

    Yes? I am I alone here?
    Surely most sane people would agree this is the correct thing to do, if anything it's being lenient?

    :D

    ReplyDelete
  74. I'm happy to know that the club's board, some membars anyway, made this enquary about points deduction becouse it means there are serius plans for the club to be taken over and sold by the banks.

      But even with 9 points deduction I would like the club to be free of those 2. Even Hodgson should be able to keep the club from relegation if the penalty would take place.

    About that fourth CL spot, I'm not sure Liverpool under Hodgson could reach it if all PL clubs apart from Liverpool would have 9 points deduction.

    ReplyDelete
  75. funny how you spent years bigging up Babel (or maybe you were just using him as yet another club to bash Benitez with....?) But now you're writing him off as "money down the toilet"?

    ReplyDelete
  76. I hope you you are right about this but have some concerns,didnt southamptons parent company go bust and they still suffered a 9 point deduction?Also it seems gormless george has given up but terrigle tom is still fighting for the club,now although you say the board will veto any move by terrible tom to refinance surely as owner he can just get rid of them as he appointed them.The only one whose seat would be safe would be BA Broughton who was appointed by the bank.It may seem unliklely but would be in keeping with his past record.

    ReplyDelete
  77. The Roy Hodgson Brigade9:25 pm, October 01, 2010

    Johno, I was hoping you would reply to my comment...

    You go on about Jaimie's qualification when clearly you have no clue? This is my take on how it will go ahead and if I am wrong then please feel free to correct me cause I am not a financial guru 8-)

    Kop Holdings belongs to H&G. When RBS send them back to America Kop Holdings will be no longer end of the story. H&G will walk away with nothing. RBS take over their ASSET which means LFC then belongs to RBS. 

    So once Kop Holdings has been discarded which is looking pretty done and dusted there will no longer be interest payments. When RBS take over, they will make the money which is owed by H&G out of the sale which leaves everyone as happy as a pig in s***. RBS make the money from the sale owed by KOP Holdings (H&G) from the new owner who pays RBS for making the yankies leave which then puts a smile back on everyones faces again, well lets hope because there are still alot of angry people regarding Rafa leaving the club and it looks like they will be angry for some time to come :-D

    YNWA

    ReplyDelete
  78. jaimie kanwar well done, nice research and work, i admire what you are doing, and your article make alot of sense. Don't listen to people who would criticise you, you are eligible to know this situation better than alot of media reports and news. we all know that the media just want some hot topics to talk about and publish, alot of it is just a bull shit!

    so, well done again jamie.. ;)

    ReplyDelete
  79. i totally agree pompey being shafted by everyone and the football league wont even let them out of admin also they wont let us sign anyone which means we cant even field a bench. and all the big teams can do what they like....... this takes the mick. every single person within football were against pompey we even qualified for europe and werent aloud are place and who got it yes liverpool do you really think they deserve it i dont................

    ReplyDelete
  80. You must be confusing me with someone else - I have never bigged Babel up!  Not even once.  I've always thought he a waste of money.  I argued in the past that he was treated badly by Benitez, but that in no way is bigging him up (!).

    ReplyDelete
  81. I see you're deleted my comment.  I can only assume that you therefore can't answer the questions without undermining your own arguments.

    After months of asking you still can't tell me who you think is paying the interest?  I wont repeat my whole comment before (which contained no profanity or break of your own rules) which you deleted.  If you can't take proper critique why bother holding yourself out as some sort of vessel of truth.

    Continue to keep the comments which you can answer with your normal flippant response.  Delete the ones that cast proper doubt on your interpretation of the facts.

    If H&G and their holding companies are doing no harm; tell me who pays the interest on the loans?  Of course ultimately it will be LFC.  So why do you continue to peddle the message that H&G ownership structure does no harm to LFC?

    I look forward to being deleted or receiving a flippant response.  And also looking forward to hearing about your law qualifications. 

    ReplyDelete
  82. Jaimie, I think you make valid points with credible references and research. You also put your articles across articulately. However, I feel that much of the critisism you recieve is due to the manner in which you write, particularly with responses to posts. I can predict that you will say that some posts are over zealous, but your replies are very venamous at times. As a result this site seems like less of a discussion page and more like an agree with Jaimie or be prepared for a harsh reply page. Alot of the articles here come across as "l am always right". Funnily enough, alot of the stuff you write I agree with, but the tone in which it is written is irritating.

    You can choose to take this post down if you like, I didnt write it to personally attack you. I wrote it to give you feed back and an insight into why you might get some of the replies you do. I also wrote it because I think the stuff you write is good, but the tone in which it is written isn't. I hope you take this post as constructive critisism and feedback as it was meant to be written in.

    ReplyDelete
  83. So what you're saying is that you were slagging a manager off for not giving a player that you really thought was shit enough game time..... Interesting...

    ReplyDelete
  84. Peter from Perth WAust3:48 am, October 02, 2010

    It is rather simplistic to claim that you were right all the time, I agree that it was and is unlikely that LFC will collapse but the fact of the matter is when you are deriving a substantial amount of money in marketing, sales  and gate reciepts etc etc but you can only pay off an interest burden month after month then the playing squad becomes stagnent and that has an impact in such a way that the lesser clubs end up vying for the spot that belongs to LFC. That my friend is definately no minimal impact on LFC by H+G and they should be castigated by every LFC supporter including yourself, if you are as you claim.

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  85. In your infinite wisdom, if it isnt LFC that pays intetest on the bank borrow, perhaps you can tell us who does pay the interest on the loans? And how exactly they get the money to pay it? Before you march through the streets shouting how correct and vindicated you are, just answer that one question.

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  86. In your infinite wisdom, if it isnt LFC that pays intetest on the bank borrow, perhaps you can tell us who does pay the interest on the loans? And how exactly they get the money to pay it? Before you march through the streets shouting how correct and vindicated you are, just answer that one question.

    ReplyDelete
  87. In your infinite wisdom, if it isnt LFC that pays intetest on the bank borrow, perhaps you can tell us who does pay the interest on the loans? And how exactly they get the money to pay it? Before you march through the streets shouting how correct and vindicated you are, just answer that one question.

    ReplyDelete
  88. LFCAGL pays interest on the money loaned to it by Hicks and Gillett (from Kop Football), which is approx 10m a year.

    It does NOT pay 40m a year/100k a day, which is the ridiculous figure repeatedly quoted by the press.

    The two holding companies have interest burdens that are NOT met by the club, and the club accounts prove this beyond a shadow of a doubt!  I posted the evidence in the following article:

    http://www.liverpool-kop.com/2010/05/liverpool-fc-interest-payments-media.html

    I've never argued that the club pays NO interest - it does, just like any other club, and just like it did when Moores was in charge.

    My problem is with the silly figures bandied about.  The interest debts of H+G's 2 holding companies are not borne by the club, and the accounts prove that.

    The interest for the holding companies is paid by Kop Cayman, an offshore company also set up by H+G.

    ReplyDelete
  89. <span>LFCAGL (i.e. the club) pays interest on the money loaned to it by Hicks and Gillett (from Kop Football), which is approx 10m a year.  
     
    It does NOT pay 40m a year/100k a day, which is the ridiculous figure repeatedly quoted by the press.  
     
    The two holding companies have interest burdens that are NOT met by the club, and the club accounts prove this beyond a shadow of a doubt!  I posted the evidence in the following article:  
     
    http://www.liverpool-kop.com/2010/05/liverpool-fc-interest-payments-media.html  
     
    I've never argued that the club pays NO interest - it does, just like any other club, and just like it did when Moores was in charge.  
     
    My problem is with the silly figures bandied about.  The interest debts of H+G's 2 holding companies are not borne by the club, and the accounts prove that.  
     
    The interest for the holding companies is paid by Kop Cayman, an offshore company also set up by H+G.</span>
    <span>
    </span>

    ReplyDelete
  90. Mo - if you want to be permanently banned then just continue with comments like this.  

    ReplyDelete
  91. I may not have rated Babel but that doesn't mean he deserved to be treated like a non-entity.  He had potential to improve - if Benitez had given him more of a chance, perhaps he might have improved, and it wouldn't have been 11m wasted.

    ReplyDelete
  92. Ian - if you keep posting snide comments (and you know what I mean), I'll keep deleting them.  I cannot be bothered to waste my time with deliberately antagonistic posters anymore.

    The question about who is paying the interest has been answered many times in various articles, but you just don't seem to get it.

    <span>LFCAG (i.e the CLUB) pays interest only on the money loaned to it by Hicks and Gillett (from Kop Football).  This interest amounts to approx  10m a year.  

    </span>
    <span>It does NOT pay 40m a year/100k a day, which is the ridiculous figure repeatedly quoted by the press, and constitutes he interest burden of the club + KFL + KFHL.
     
    The two holding companies have interest burdens that are NOT met by the club, and the club accounts prove this beyond a shadow of a doubt!  I posted the evidence in the following article:  
     
    http://www.liverpool-kop.com/2010/05/liverpool-fc-interest-payments-media.html  
     </span>
    <span>LFCAGLS's accounts would show if Liverpool were payiong more than the interest amount I stated above; they don't.</span>
    <span>
    I've never argued that the club pays NO interest - it does, just like any other club, and just like it did when Moores was in charge.  
     
    My problem is with the silly figures bandied about.  The interest debts of H+G's 2 holding companies are not borne by the club, and the accounts prove that.  
     
    The interest for the holding companies is paid by Kop Cayman, an offshore company also set up by H+G.  Or by H+G themselves.  Or from some other source we don't know about yet.  Ultimately, WHO pays the interest doesn't matter; it is NOT paid by the club, and that is all that matters.  This has not changed, and WILL NOT change in the future.</span>

    So, when Purslow says the club is just about making the payments, he is referring to the 10m of interest payments per year, not 40m.
    <span>
    </span>

    ReplyDelete
  93. <p><span>LFCAG (i.e the CLUB) pays interest only on the money loaned to it by Hicks and Gillett (from Kop Football).  This interest amounts to approx  10m a year.  

    </span>
    </p><p><span>It does NOT pay 40m a year/100k a day, which is the ridiculous figure repeatedly quoted by the press, and constitutes he interest burden of the club + KFL + KFHL.
     
    The two holding companies have interest burdens that are NOT met by the club, and the club accounts prove this beyond a shadow of a doubt!  I posted the evidence in the following article:  
     
    http://www.liverpool-kop.com/2010/05/liverpool-fc-interest-payments-media.html  
     </span>
    </p><p><span>LFCAGLS's accounts would show if Liverpool were payiong more than the interest amount I stated above; they don't.</span>
    </p><p><span>
    I've never argued that the club pays NO interest - it does, just like any other club, and just like it did when Moores was in charge.  
     
    My problem is with the silly figures bandied about.  The interest debts of H+G's 2 holding companies are not borne by the club, and the accounts prove that.  
     
    The interest for the holding companies is paid by Kop Cayman, an offshore company also set up by H+G.  Or by H+G themselves.  Or from some other source we don't know about yet.  Ultimately, WHO pays the interest doesn't matter; it is NOT paid by the club, and that is all that matters.  This has not changed, and WILL NOT change in the future.</span>
    </p><p> 
    </p><p>So, when Purslow says the club is just about making the payments, he is referring to the 10m of interest payments per year, not 40m.
    </p>

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  94.  i rest my case
    please dont ban me for life
    i beg you

    ReplyDelete
  95. I beg you please, dont ban me
    I rest my case and wish you and all real fans best of luck.
    hey say good bye to Roy brigard fela too,
    i get a sneaky feeling you and him could be very close  

    ReplyDelete
  96. The point banker and I both make is that as you state in your last answer is that H&G or Cayman pay the interest or someone else that we do not know.  In any event I think you'll find they lend the money to pay the interest.  

    The most glaring point that you do not ever concede is this:  

    The only investments that the holding companies own is LFC.  This means that eventually profits (ie in the form of dividends) will have to be paid up to the holding companies to pay off the interest and/or the loans from Cayman or H&G which they put in to pay interest in the short term.  This is how a leverage buy out works.  Like any business investment, you borrow money for the business, interest on that borrowing is then paid out of the profits that that investment brings.  OK no dividends have been paid YET (the latest published accounts are becoming quite dated now), but under the current owners that is the inevitable course that they conceived.  The sooner they go the better and this type of buy-out of course is damaging the club, because in the hands of these two it is unsustainable (ie they cannot afford the loans and cannot afford themselves to pay the interest, therefore they need out).

    I agree that the *club* only pays £10m in interest and as yet dividends have not been paid.  I've never said you're wrong on this (its fact)  But the structure of these buys-outs of course are paid out of the profits of the clubs eventually.  Fortunately we are getting rid (hopefully) before too much further damage is done.

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  97. There are two very separate issues here; the level of debt currently being funded by the club and the level of debt that the club is currently liable for.

    No distinction between the various corporate entities is necessary when talking about the level of debt being funded by the club; all interest payments are ultimately funded by "the club" because it's the only income generating element.

    The interest incurred by the owners on the loans they took out to fund the purchase costs after buying the club, the interest payable to them on the loans they made to the club from the holding companies through which those funds were invested, the interest on the credit extended by the Royal Bank of Scotland and Wachovia - all of it has either been paid from income generated by the footall club (i.e. season ticket sales, ticket sales, merchandising and sponsorship revenue) or has been rolled up into the existing debts.

    If Gillett and Hicks (or more likely Hicks on his own) are able to attract further loans or other investment to enable them to remain at the club, the interest that has been rolled up into the existing debt will be paid off but only by either new credit (which will itself be attracting new interest - call it the "Ocean Finance" model) or by funds made available by new investors (for example a hedge fund) who will in turn anticipate making a profit from their investment, again ultimately paid by the club's commercial activities.

    None of that changes the fact that although "the club" is the revenue generator that's funding the interest, it is not directly liable for all of the debt incurred by Hicks and Gillett - not all of the debt is secured against "the club" and that's a critically important distinction when analysing what may happen if RBS and/or Wachovia call in their loans.

    Calling in the loans would damage Hicks and Gillett financially but as long as the club could be sold by RBS for a figure that would cover their exposure, the club itself would actually be better off - it's revenues would not be affected in any way as long as people are still buying tickets, shirts and hotdogs at the match, whilst the current expenditure on interest payments to RBS would be removed.

    The club have apparently already investigated this issue and had clarification that the financial structure currently in place would not result in the club being considered to be in administration in the event that RBS call in their loans.  Members of the board would not have decided to block Hicks' attempt to secure more finance directly against the club, using the stadium as security, if they had not already established that they would not be risking the club being forced into administration by doing so.  As directors, they would have failed in their legal responsibilities if they had driven the club into administration by blocking a potential source of investment and would have faced legal action from the owners as a result.

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  98. (Cont...)

    Administration and Bankruptcy are specific, legally defined processes, not generic terms applied to an organisation that has a change of ownership forced on it by financial realities.  The Royal Bank of Scotland could put the club into administration if they wished to - they are not required to take over the running of the club themselves if they call in the loans and the owners are unable to meet their obligations, but there is nothing at all in the club's current financial situation that would force them to do so; especially wit the interest payments  removed, the club is perfectly able to service it's running costs from existing revenue streams.

    In response to the earlier comment, that is where our situation differs from Portsmouth's and any other club that has gone into administration.  Liverpool can pay the players wages, outstanding installments on transfer fees, win bonuses, coaches salaries and all of their other runnings costs - the current "crisis" that may see the club change hands is not due to imminent financial meltdown - it's due to one of our creditors having asked the owners to pay back their loans by a set date, the owners not having the funds to pay those loans back and not the owners being able to borrow those funds from elsewhere.  The only defaulters would be the owners and not the club.

    I'm not sure what you mean by saying that you're the "only source" that was making that claim six months ago though.  I've seen the same, correct explanation of the situation given by posters on virtually every Liverpool web forum (along with other, incorrect versions and some which were so risible as to be beyond parody) and the professional financial community has never even suggested an alternative scenario to the one that you've presented here.

    I can only assume your impression that you were a lone voice in the wilderness has been informed by your failure to consult (or perhaps to recognise and acknowledge) a sufficiently wide variety of sources.  Of course, a large proportion of your readership won't have done that either, a fact that I'm sure you took into account before making such a wide-ranging claim.

    It's usually best to just present your information and let others decide whether it's deserving of praise rather than making absurd claims in order to present yourself as a svengali-like figure.

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  99. "The interest for the holding companies is paid by Kop Cayman, an offshore company also set up by H+G.  Or by H+G themselves.  Or from some other source we don't know about yet.<span>"</span>
    Kop Cayman is a shell company.  It has no assets, it does not trade and it has no revenue stream, other than the interest due to it on loans made to the club and/or it's UK holding companies from Kop Cayman.  That is the sole purpose that it was created for.

    The interest on those loans is currently being rolled up into the club's overall debt - effectively no-one is paying it at the moment but the loand from Kop Cayman can be called in at any time; the only legal provison around this is that the loans cannot be called in if doing so would bankrupt the club.
    When the club is sold, those loans will either be called in, or Hicks and Gillett may decide to leave them in place in the short term - after all, they attract interest at 10%.  Nice work if you can get it.
    I imagine that if new owners do come in, paying those loans off will be an immediate priority.

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  100. The negative impact on the club is bloody obvious it is the club not Hicks or Gilette or a cayman holding company paying the intrest on the loans it is the club and it is those repayments that will eventualy destroy the club unless the debt is manage in a way that benefits the club not the owners. if DIC had not been stabbed in the back at the last minute we would have been playing in a new stadium thats 2 major negatives

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  101. Interesting that you decide to completely ignore it if someone performs a similar deconstruction of your posts as I did a few posts back. Seems that that tactic and some judicious editing  allows you to ptrsent your virws as accepted truths

    Maybe you should be in politics......

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  102. I don't have the time to reply to every comments, and this may seem hard to grasp but I'm not attached to PC 24/7.  I respond when I have time.

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  103. Any funds filtered from any organisation is in any context completely relevant, tell that to the tax office.

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  104. Hi Jaimie,
                  love your stuff, balanced as always. i'm curious as to the state of Man Utd's debt. Was this taken out by a holding company or on the club itself?

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