In his recent interview with Sky Sports, former Liverpool owner Tom Hicks made a series of statements relating to his tenure at the club. In this new series, I will examine the veracity of his major claims, using documentary evidence where possible to establish whether Hicks was telling the truth.
I have no allegiance to Hicks, Gillett, or indeed anyone at LFC. All I am interested in is the truth, whatever it might be. In his recent interview with Sky Sports, Hicks stated the following:
"We've invested - George and I have put in $270m into the club".
PRELIMINARY NOTES
* Any money that comes into the club from any source must be accounted for in the club's official accounts. This is the law. This point is irrefutable.
* Thus, any money put into the club by Hicks and Gillett will be traceable through the accounts.
* Money put in by H+G filters down through the club's various holding companies:
Kop Investment LLC (KI)
An American company, co-owned by Gillett & Hicks. This owns:
Kop Football (Cayman) Ltd (KFCL)
A company registered in the Cayman Islands. This owns:
Kop Football (Holdings) Ltd. (KFHL)
A UK holding company. This owns:
Kop Football Ltd (KFL)
Another UK holding company. This owns:
Liverpool Football Club & Athletic Grounds Ltd (LFCAGL).
This is the club itself.
Money has been loaned from KI all the way down to the club (LFCAGL). This is the process:
1. KI loans money to KFCL
2. KFCL loans money to KFHL
3. KFHL loans money to KFL
4. KFL loans money to LFCAGL
WHAT DO WE KNOW FOR A FACT?
We know that on the 31 July 2009, the date of the last published accounts for LFCAGL, KFL and KFHL, H+G had loaned the following:
* £144.4m into KFHL (via KFCL)
* £145.3m into KFL (via KFHL, passing on the £144.4m)
* £100.8m into the CLUB i.e. LFCAGL (via KFL)
Total amount loaned to the CLUB = £108.m
Clearly, that is nowhere near $270m. However, I think it is reasonable to assume that when Hicks says 'we put $270m into the club', he is referring to:
* All the money loaned to the various companies associated with LFC.
* NOT just the money loaned to LFCAGL.
Having said that, it could also be argued that when Hicks states 'we put $270m into the CLUB', he could actually be referring to LFCAGL.
I personally think that the former is more likely - It would seem to be the only logical explanation, especially since Hicks will know that his figures can and will be verified.
CURRENCY CONVERSION
As illustrated above, the total amount loaned by Hicks and Gillett into the Liverpool FC group of companies at the date of the last published accounts is:
£144.4m
Currency conversion rates have obviously fluctuated over the last 3 years, which makes it difficult to accurately convert H+G's loans. To be fair, I've looked a the historical currency conversion rates for July of each year since H+G bought the club:
July 2007 - $2 to the pound
July 2008 - $1.9
July 2009 - $1.6
July 2010 - $1.5
Average currency exchange rate since H+G bought Liverpool = $1.7
£144m x $1.7 = $244m
This still does not correspond to the $270m Hicks claims he and Gillett have put into the club. There is, however, another possibility to consider: the last set of accounts were published on the 31 July 2009; over a year has passed since then, so it is possible that H+G loaned the remaining $26m over the last year.
Considering the fact that H+G have loaned money *every year* since taking over, this would seem like a strong possibility. Unfortunately, we will have to wait for the next set of accounts to be published in 2011 to see if this actually happened!
VERDICT: $270m - FACT OR FICTION
FACT: Taking currency conversion fluctutations into account, H+G have put in approximately $244m into the Liverpool FC company structure.
PROBABLE: Another $26m may have been loaned in the 2009-10 financial year.
No specific judgement can be made either way until the next club accounts are published, but on the balance of probabilities (and in all fairness), the available evidence would seem to suggest that Hicks is, for the most part, telling the truth here.
I do concede, however, that using on a completely literal interpretation of Hicks' words ('we put $270m into the CLUB') it could argued that he's lying. I sincerely doubt that's the case though. On the evidence, and setting aside any anti-Hicks bias, could it really be said that he has displayed a deliberate intent to deceive here?
I would argue no, which is why I believe Hicks is telling the truth here.
NB. This is not a pro-Hicks article. That is a simplistic interpretation. I do not create the facts. Facts are facts!
Jaimie Kanwar
I have no allegiance to Hicks, Gillett, or indeed anyone at LFC. All I am interested in is the truth, whatever it might be. In his recent interview with Sky Sports, Hicks stated the following:
"We've invested - George and I have put in $270m into the club".
PRELIMINARY NOTES
* Any money that comes into the club from any source must be accounted for in the club's official accounts. This is the law. This point is irrefutable.
* Thus, any money put into the club by Hicks and Gillett will be traceable through the accounts.
* Money put in by H+G filters down through the club's various holding companies:
Kop Investment LLC (KI)
An American company, co-owned by Gillett & Hicks. This owns:
Kop Football (Cayman) Ltd (KFCL)
A company registered in the Cayman Islands. This owns:
Kop Football (Holdings) Ltd. (KFHL)
A UK holding company. This owns:
Kop Football Ltd (KFL)
Another UK holding company. This owns:
Liverpool Football Club & Athletic Grounds Ltd (LFCAGL).
This is the club itself.
Money has been loaned from KI all the way down to the club (LFCAGL). This is the process:
1. KI loans money to KFCL
2. KFCL loans money to KFHL
3. KFHL loans money to KFL
4. KFL loans money to LFCAGL
WHAT DO WE KNOW FOR A FACT?
We know that on the 31 July 2009, the date of the last published accounts for LFCAGL, KFL and KFHL, H+G had loaned the following:
* £144.4m into KFHL (via KFCL)
* £145.3m into KFL (via KFHL, passing on the £144.4m)
* £100.8m into the CLUB i.e. LFCAGL (via KFL)
Total amount loaned to the CLUB = £108.m
Clearly, that is nowhere near $270m. However, I think it is reasonable to assume that when Hicks says 'we put $270m into the club', he is referring to:
* All the money loaned to the various companies associated with LFC.
* NOT just the money loaned to LFCAGL.
Having said that, it could also be argued that when Hicks states 'we put $270m into the CLUB', he could actually be referring to LFCAGL.
I personally think that the former is more likely - It would seem to be the only logical explanation, especially since Hicks will know that his figures can and will be verified.
CURRENCY CONVERSION
As illustrated above, the total amount loaned by Hicks and Gillett into the Liverpool FC group of companies at the date of the last published accounts is:
£144.4m
Currency conversion rates have obviously fluctuated over the last 3 years, which makes it difficult to accurately convert H+G's loans. To be fair, I've looked a the historical currency conversion rates for July of each year since H+G bought the club:
July 2007 - $2 to the pound
July 2008 - $1.9
July 2009 - $1.6
July 2010 - $1.5
Average currency exchange rate since H+G bought Liverpool = $1.7
£144m x $1.7 = $244m
This still does not correspond to the $270m Hicks claims he and Gillett have put into the club. There is, however, another possibility to consider: the last set of accounts were published on the 31 July 2009; over a year has passed since then, so it is possible that H+G loaned the remaining $26m over the last year.
Considering the fact that H+G have loaned money *every year* since taking over, this would seem like a strong possibility. Unfortunately, we will have to wait for the next set of accounts to be published in 2011 to see if this actually happened!
VERDICT: $270m - FACT OR FICTION
FACT: Taking currency conversion fluctutations into account, H+G have put in approximately $244m into the Liverpool FC company structure.
PROBABLE: Another $26m may have been loaned in the 2009-10 financial year.
No specific judgement can be made either way until the next club accounts are published, but on the balance of probabilities (and in all fairness), the available evidence would seem to suggest that Hicks is, for the most part, telling the truth here.
I do concede, however, that using on a completely literal interpretation of Hicks' words ('we put $270m into the CLUB') it could argued that he's lying. I sincerely doubt that's the case though. On the evidence, and setting aside any anti-Hicks bias, could it really be said that he has displayed a deliberate intent to deceive here?
I would argue no, which is why I believe Hicks is telling the truth here.
NB. This is not a pro-Hicks article. That is a simplistic interpretation. I do not create the facts. Facts are facts!
Jaimie Kanwar
A loan is not the same as an investment, or am I missing something. If H and G indeed LOANED in the region of £144m pounds, were they expecting THE CLUB (as they refer to it) to service that debt, just like the debt that we serviced to RBS. If so, at what interest rate. If we can say taht RBS were making in the region of £25m in interest payments from a loan of £275m, then H and G could in fact have been making in the region of £12m in interest payments also from us. So to suggest that this is investment is preposterous. An investment would have been paying off the existing debt with £144m, not taking on more debt. If they had money, then whay not use it to benefit the club. We could borrow money from anywhere, why do we need to do so from our owners. I am so mad that they still have the gall to claim such rubbish.
ReplyDeleteNice factual article Jamie!
ReplyDeleteIts nice to get a bit of perspective on the whole shabang!
I still cant say i'm sorry the pair of them lost the cash though, i'm sure they have plenty tucked away in various off shore accounts!!
I am sorry, but you are wrong. All the money that went into the club
ReplyDeletefrom H+G is recorded in the accounts. Are you trying to refut that? it is a legal requirement; there is no other way money could come into the club without being accounted for. The vehicle by which H+G 'invested' in the club is via loans. And the accounts explicitly state that the money they put in was used for working capital/funding transfers etc.
Was it an investment or a loan?
ReplyDeleteI thought that bloke who knocks on my door every Friday morning demanding £50 or he'll give me a slap was a loan shark. I'm relieved to know he's actually an 'investor'.
When i say Factual i'm reffering to the statement of "we invested $270 million dollars" the whole leveraged buyout and debt is a whole other story!!
ReplyDeleteSemantics. Why do people waste time with trying to prove me wrong purely for the sake of doing so? Do you not understand that any money invested into a football club has to be accounted for? Any money they put in would be recorded in the accounts, and it has been. This is irrefutable. It is fact. Arguing against it is pointless.
ReplyDeleteIn any event, Hicks said ' we PUT $270m into the club; he didn't say INVEST". That's my fault for changing 'Put' to 'Invest' in the title of the article.
ReplyDeleteI will change it now.
What about "<span><span>FACT</span>: Taking currency conversion fluctutations into account, H+G have invested approximately $244m into the Liverpool FC company structure."</span>
ReplyDeleteYes, but if they demanded the money be repaid, and if they demanded that the loan be serviced, then that is not the same as a straight investment. Of course all money must be accounted for, and as you can see the money that we are talking about is accounted for as a DEBT, and certainly not a pot of rainy-day money stashed away under the matrass. I have no problem with a business model based on loaning money to make capital expenditure. We all do it, in order to buy cars and houses and the things that make our idiotic middle-class lives seem meaningful. However, if the money is simply a capital transfer with fixed-term repayment schedule then this is not the same as an investor committing resources and willing to take both the cost and benefit of that investment. As it goes, it seems they lost out, ironically because they LOANED money to their own club that turned out to be not credit-worthy. I have no sympathy for H and G. I do not question your facts and your accounting, I simply question the motivation behind the loan, and consider it somewhat disingenious.
ReplyDeleteWhat about: "<span>makes it difficult to accurately convert H+G's investment."</span>
ReplyDelete<span>"We've invested - George and I have put in $270m into the club".</span><span></span>
ReplyDeleteTHe issue is not to argue with your analysis. Analyses of this kind are very valuable and necessary for tempering the often-unthinking media hype. However, I still maintain that they have implied making investments when in fact they have not done so in anymeaningful way. And another question arises: If we did indeed have £100m for transfers, or even if we had half that, then where are the players?
What about: "<span>* Money invested by H+G filters down through the club's various holding companies:"</span>
ReplyDeleteIs it normal for so many companies to be involved in moving this money round? Does that not look a little suspect?
ReplyDeleteThis is ridiculous as hicks clearly said he put in £270mill not $270mill.
ReplyDeleteYou've changed the title but your article is still littered with the word "invest" which might give the impression that H+G actually invested in the club, rather than the reality of saddling the club with crippling debts.
ReplyDeleteThe critics of Hicks and Gillette forget that the global credit crunch only occurred after they bought the club. Lending from banks worldwide became extremely problematic for many businesses, hence it became impossible to obtain funding for a new stadium. Why do liverpool fans never complain about the ridiculously high wage bill that Rafa presided over where so many inept players were paid lavish wages for little or no productivity?
ReplyDeletethey simply got credit crunched before they could perform the complete rip off, i think i'll have another one of those crunchy nature bars to celebrate. i could feel sorry for gillett for choosing a complete greedy b for a partner, i could feel sorry but i dont. it's no good blaming rafa, it was up to them to sack him, and the joke court case, they had loads of time plus a six month extension to repay the loan or get a buyer themselves.
ReplyDeleteYour analysis lacks the other part of the equation. How much, in dividends, loan interest repayments etc, did Hicks and Gillette take out of the club? Netting these off will provide the true level of funding/investment/money put in.
ReplyDeletethe issue for me is, when we finished second in the league, how much was invested to take us to the next level ?
ReplyDeletelike with any business you need to invest the right amount at the right time or your business will fail. that is why H&G failed. they did not have the basic understanding of how things work in european sport. hopefully are new owners have learnt a lot from the mistakes made by H&G
GUIDE TO LEVERAGED BUYOUT
ReplyDeleteBuy company with a lot of false promises.
Tart it up with a lick of paint and a shiny architect's drawing of the new HQ.
Load the company up with debt and outrageous interest payments to cover the purchase cost.
Time the market right to get a nice easy profit when the next sucker buyer comes along.
Time it wrong and you're SOOL. Suck it up fat boy.
He also said he had spent £150m net on players at one point. That is a blatant lie.
ReplyDeletejamie could you give us all the breakdown on the expeniture on the new stadium, we have heard £35 million and £50 million yet the ground has not been broken ?
ReplyDeleteIt happens because company a borrows from the bank at (example) 4%. It then lends to company b at 5.5%, who then lend to company see at 7.4% and so on.
ReplyDeleteJaimie, I admire your desire to be a celebrity blogger but this has to stop. You did a good one last week and people asked for more of the same. What they didnt mean though was to church out the same screen shots and make stuff up about accounts you dont truly understand.
Always the Hicks apologist (apart from the odd token post)...
ReplyDeleteSure there's no remuneration?
Just for a laugh, justify his £300m gross player spend and £150m net...
No, you are wrong. Why don't you think before you post. Hicks said $270m.
ReplyDeleteI dont come on to your site very often. But I had a bet with someone that you would somehow come up with a statement confirming hicks had spent loadsa dosh. You didnt disappoint! I probably wont come back until after Hodgson is sacked and you explain how that was a mistake. You really need to get a life.
ReplyDeleteWhat H+G took out of the club is irrelevant to the question in hand, i.e. how much did they put INTO the club.
ReplyDeleteAnd re dividends, the answer is zero: no money was paid out in dividends during their tenure.
I will get to that soon.
ReplyDeleteWhat would you suggest as an alternative? We only sign players on 'pay as you play' deals or offer low wages with big incentives based on performance? Don't think we'd be attracting many players then to be honest. A big club like Liverpool pays big wages- some transfers work out and some don't: it's the same at every other big club as well. I wont argue Benitez made mistakes but tell me a manager that hasn't...
ReplyDeleteSuch a simplistic view. You just do not have the capacity to grasp that it's about fairness. How is the post about being an apologist for Hicks?! The facts are the facts. i didn't make them up. And my next article will be about the 300/150m issue. And if he's wrong, I will say so.
ReplyDeleteYou're right - my bad. I'll make the necessary changes.
ReplyDeleteWhy is it irrelevant to ask how much they took out?
ReplyDeleteFor example if you "invest" £100 but remove £50. Your total investment is £50.
Am looking forward to that. Fairly certain you will include wages to 'massage' the figures to suit the agenda.
ReplyDeleteInvestment I don't think so. Show me where the original purchase money came from. Fact this was a leverages buy out. Fact if you understood the meaning of that you wouldn't produce such a pathetic piece.
ReplyDeleteFact £182m invested in player squad
Fact £172m recouped in transfer fees
Investment I don't think so. Show me where the original purchase money came from. Fact this was a leverages buy out. Fact if you understood the meaning of that you wouldn't produce such a pathetic piece.
ReplyDeleteFact £182m invested in player squad
Fact £172m recouped in transfer fees
Am looking forward to that. Fairly certain you will include wages to 'massage' the figures to suit the agenda.
ReplyDeleteHi Jamie, there is no way in my book that the money that was paid towards interest/bank charges for their leveraged buyout can be excluded when looking at the money they "invested". It wouldn't help one iota if they invested a billion and paid a billion towards anything other than the team or a stadium. (a generalisation, but you get the point..)
ReplyDeleteIf even a small part of the $270 went to pay the debt that THEY laid on the club, that should disqualify hicks' claim out of hand. The real question is where did the money to service the debt come from....
H&G put nothing into the club' they put it all ON to the club.
ReplyDeleteBig difference
Facts are indeed facts, however you choose only to use selective facts. You really are a fool.
ReplyDeleteFacts are indeed facts, however you choose only to use selective facts. You really are a fool.
ReplyDeletehow do you know the owner money is in UK pound or in US dollar?
ReplyDeleteFor all we know they might have save money in a fix deposit at British pound in 2007!
so the conversion to dollar would be at 2007?
Just to check my understanding. Presumably in the accounts of Cayman we would see a loan from KI and in the accounts of KI a loan from the shareholders - ie H&G? Given the companies were not insolvent then is this money still owed to H&G as a creditor?
ReplyDeleteTotally right Estwest. This article completely misses the point. H&G never invested anything. It was loans. Those loans will have been repaid at the level at which whatever company NESV purchased as part of the £300m. Somewhere in the top company this may mean that they've not been able to pay back all "their" loans. This will be a loss to them. But most of those loans arose from H&G lending more money to pay interest. That interest arose only from acquisition loans. So in summary everything they "invested" was either paid back. And that which wasn't relates to interest costs that they saddled the holding companies with. So in fact they invested nothing. The loss they made in paying Moores more than than NESV paid is another factor, but again that is nothing to do with investment in LFC.
ReplyDeleteAnd how much exactly did they take out to pay the banks?? About 200m usd in reality. They also paid 30m gbp to architects who were close buddies of hicks. There is basically all the money they put in. They deserved to lose it
ReplyDeleteAnd how much exactly did they take out to pay the banks?? About 200m usd in reality. They also paid 30m gbp to architects who were close buddies of hicks. There is basically all the money they put in. They deserved to lose it
ReplyDeleteAnd how much exactly did they take out to pay the banks?? About 200m usd in reality. They also paid 30m gbp to architects who were close buddies of hicks. There is basically all the money they put in. They deserved to lose it
ReplyDeleteAnd how much exactly did they take out to pay the banks?? About 200m usd in reality. They also paid 30m gbp to architects who were close buddies of hicks. There is basically all the money they put in. They deserved to lose it
ReplyDeleteAnd how much exactly did they take out to pay the banks?? About 200m usd in reality. They also paid 30m gbp to architects who were close buddies of hicks. There is basically all the money they put in. They deserved to lose it
ReplyDeleteNo, Ian - it is you who completely misses the point:
ReplyDelete* The loans by H+G have not and will not be repaid.
* Martin Broughton has stated publicly what the 300m will be spent on (aquisition debts;other working capital debts and liabilities etc)
* Everything they put in was not paid back. At the date of sale to NESV, the 100.8m loaned to LFCAGL was still outstanding, and so on back up the chain.
Estwest - All the money loaned by H+ originated from Kop Investments Ltd. The money was then loaned to Kop Cayman and so on all the way down.
The money loaned is still outstanding, and I personally don't see how it can just be written off. Others have argued that the outstanding loans were converted into equite (how convenient), but there is no evidence that proves that has taken place.
I replied to a very similar article you wrote about a week ago when you were saying H & G put $100m in to LFC and all the papers and Broughton were wrong. When I pointed out that you had based your assumption on accounts that are 14 months old and the amounts could have altered in this time you told me 'it is not possible' and then spouted some rubbish.
ReplyDeleteIt seems now you are agreeing with my statement and you've actually modified your article to basically says it's highly probable. Can you explain this to me because it seems a bit two faced to me??
I replied to a very similar article you wrote about a week ago when you were saying H & G put $100m in to LFC and all the papers and Broughton were wrong. When I pointed out that you had based your assumption on accounts that are 14 months old and the amounts could have altered in this time you told me 'it is not possible' and then spouted some rubbish.
ReplyDeleteIt seems now you are agreeing with my statement and you've actually modified your article to basically says it's highly probable. Can you explain this to me because it seems a bit two faced to me??
I'm sory, but you're wrong. Irrespective of how the money arrived at the club, it is a matter of recorded fact that 144.4m was loaned by H+G to Kop Football Holdings. That filtered down to the club, where 100.8m of that money ended up. This is real money. Even martin broughton has admitted this publicly. When I have more time I'll post the quote.
ReplyDeleteI replied to a very similar article you wrote about a week ago when you were saying H & G put $100m in to LFC and all the papers and Broughton were wrong. When I pointed out that you had based your assumption on accounts that are 14 months old and the amounts could have altered in this time you told me 'it is not possible' and then spouted some rubbish.
ReplyDeleteIt seems now you are agreeing with my statement and you've actually modified your article to basically says it's highly probable. Can you explain this to me because it seems a bit two faced to me??
<span><span>No, like *so many other people* you are seemingly incapable of representing my arguments accurately:</span></span>
ReplyDelete* I argued that only 100m had been loaned to THE CLUB.
* KFHL is not the club: LFCAGL is the club.
* In the article you mention, I even posted the proof of the 144m loaned to KFHL.
* When I said it's not possible, I was referring to further loans to LFCAGL; considering there was still 45m somewhere in KFL, further loans would've been unnecessary.
* In this article, I am trying to be objective by sating that further loans might be possible. i personally don't think so, but just because I think it doesn't mean it might not be the case.
<span><span>No, like *so many other people* you are seemingly incapable of representing my arguments accurately:</span></span>
ReplyDelete* I argued that only 100m had been loaned to THE CLUB.
* KFHL is not the club: LFCAGL is the club.
* In the article you mention, I even posted the proof of the 144m loaned to KFHL.
* When I said it's not possible, I was referring to further loans to LFCAGL; considering there was still 45m somewhere in KFL, further loans would've been unnecessary.
* In this article, I am trying to be objective by sating that further loans might be possible. i personally don't think so, but just because I think it doesn't mean it might not be the case.
I look forward to you providing evidence that NSEV have purchased Liverpool companies with loans still outstanding to H&G. Don't make me laugh. You think H&G are going to leave their money in for more than 10 seconds. You think NSEV want H&G as creditors? You must be joking?
ReplyDeleteAny loans owned to H&G or H&G companies in the companies that NESV purchased will have been paid back as part of the structuring of the £300m. It's standard procedure for this type of sale.
It is very possible the £100.8 remains as this is owned to Kop Holdings who I understand NSEV purchased. So this could remain, or in likelihood it will be capitalised (tunred into equity). In any event it wont be owed to H&G owned company any more.
You quote the following:
<span>"Everything they put in was not paid back. At the date of sale to NESV, the 100.8m loaned to LFCAGL was still outstanding, and so on back up the chain."</span>
Are you telling me that you have had sight of the SPA, the management accounts? What is this sweeping statement based on?<span> </span>
When you say, others have suggested the loans have been converted into equity. This make sense. Then you say "how convenient". I'm not sure you understand. H&G will not have capitalised this, it will be NESV. IF H&G capitalise this, they would be losing more. In fact it would be very inconvenient for them to do this, and also completely bonkers.
Jamie have you seen in any of your investigations H&G invest in share capital? If so you should do any article on this. Then you will demonstrate that H&G have invested cash. Otherwise they have done nothing more than loan the club money, which will be repaid.
Man, this is getting tedious.... You know, if H and G HAD put $270m of their own money into buying LFC plus borrowed another $200m +, then there would surely have been more than enough money to have run LFC well clear of any threat of administration?
ReplyDeleteI have long seen the effect of taking out more loans to pay for your previous ones... Sooner or later the gravy train dries up and you are left to pay the Piper, I don't know how much H and G have lost. I hope it's a lot. What I do believe is that they cheated us out of a potentially excellent prospective owner in DIC by pretending that they were personally funding the deal when all they were doing was putting it all on their credit cards....
If they hadn't loaded the club or the holdings with the aquisition debt they may have found it easier to find funding for a stadium.
ReplyDeleteWhere has the difference between those 144.4m and 100.8m gone?
ReplyDeleteA novice watching that interview would think that he had "invested" his own money into the club. We obviously can't prove where the money came from but it must have been more loans of some kind
ReplyDeleteHicks is a serial LBO expert, his ventures in sports investment have ultimately been disastrous
Just move on from these chumps, they put the debt on the club even though they said they wouldn't. Don't give that stomach turning Sky interview any serious regard
The fact is that Liverpool FC are blessed to get away from Hicks relatively unscathed, when compared to his US sports investments
Perhaps he would have built us a stadium if finance had not dried up, but it did and we are probably lucky that recession didn't hit a year or two later or we'd be like Valencia are now, financially speaking
Discuss the issues at hand, not the truth behind Hicks' subterfuge
We are in trouble. Although things have looked up a bit with Chris Samba getting sent off tonight. He woulda caused us trouble next week
Roy will be gone if we don't get 4 points from next 2 games and show a bit of endeavour against Chelsea, Kenny as caretaker until a replacement is sourced
I really hope we can dig out some results
It's irrelevant because this article is about what Hicks said in his statement. He said nothing about taking money out of the club. That is another article.
ReplyDeleteGood question. I imagine it paid for stadium development costs, or something along those lines. Interest payments for the loan from KFHL as well, perhaps.
ReplyDeleteSorry, Ian, but you are wrong on this. The chairman has already stated numerous times that H+G will lose ALL the money they put into the club. Are you now calling him a liar? I admit that I was wrong about Broughton stating that H+G would lose 140m, but he did actually say it in an interview with Bloomberg:
ReplyDelete"They’ve invested about 140 million pounds of their own money in this and they’re losing it all"
http://www.bloomberg.com/news/2010-10-06/liverpool-chairman-broughton-says-hicks-gillett-lost-222-million-on-sale.html
He also said this about how the sale would be structured:
"[The sale price is] £300 million effectively. £200 million in writing down all of the acquisition debt, taking on some of the additional working capital debts etc and other liabilities. So it’s £300 million all together"<span>
Read more: http://www.liverpool-kop.com/2010/10/lfc-sale-breakdown-of-how-nesvs-300m.html#ixzz12l6VlMrL</span>
So, as you can see, for whatever reason, the loans they put in will not be paid back by NESV.
(before anyone tries to twist my words: My argument re the 144m was that the media had reported that KFL had loaned the club 144m, which is wrong. The club has only received 100.8m)
So G+H allowed 144 million pounds to flow from the top level parent company to LFC and they won't see that money back. I think on the basis of that we can't really call Hicks a liar, as JK points out the facts are there in black and white. What worries me and what seems to worry many other fans is why so little of that money can be accounted for. Total outlay on transfer fees can not be more than 40 million and the club has indeed recorded a new high level of turnover. The stadium planning has eaten up quite a bit of money although I can't quite understand why. 30 million or more for that? Seems crazy but perhaps it's true. Even still that's a total nowhere near 144 milllion so where did this money go? I can't imagine it was for player wages or running costs, surely record club revenue would sufficiently cover this.
ReplyDeleteHas anyone seen this "fact sheet" that Hicks mentioned in his interview? Perhaps it would tell us where the money has gone. It shouldn't be that hard to explain after all.
when you buy a club for commercial reason... it is call investment..
ReplyDeleteAnd when you put money into the club it is called an investment!
Unless you wanna wasted it like that Jew or Arab r doing..
So did H&G did invest and put as much as 270 Million dollar to club and lost it.
They put it as an investment in hoping that they could made more money when the club is being sold...
They put the 145 million pound in 2009 the parent company and then loan it down till it reach club but it was never 100 Million in one swoop... Most of 145 million pound was use to reduce the debt level from 350+ million to 237 million. Plus paying the annual interest payment.
Face the fact Jamie,
H&G will not get the loan back ot the invested money put in the club because the parent company had been sold!
(I know Kanwar, You admire Great Business man more than you admire Great Football Manager..
But Rafa is a great Football Manager/Coach..
Ang H&K is just some salesman)
Jamie,
ReplyDeleteWhich press outlets suggested that 144m had been lent by H&G to the LFC? The article you wrote last week indicated two artciles written by the Daily mail and Telegraph. If you read both of the articles you provided links for both of them indicate that 144m was lent to the Kop Holdings.
Broughton is not speaking technically about a single issue, debts, capital or what they paid Moores. Unless you would like to define what "this" is in his quote.
ReplyDeleteTherefore, as you usual are are making massive assumption on a thread of information and holding it out as fact. As you almost concede you do not know how any loans have been written off. Why would H&G allow loans to be written off? Overall I suspect Broughton refers to the amount H&G have put into the venture ie by paying Moores and yes the amount they invested in LFC companies up the chain. Which has mainly been used to pay interest (which shouild never have been a cost on Liverpool at any point).
Its pointless arguing with you.
Article 1:
ReplyDeleteAccording to the media, Tom Hicks and George Gillett have invested £144m into Liverpool FC since 2007.. £144m is the magic number, and it has been repeated in almost every newspaper, blog and news program worldwide over the last couple of weeks. However, as I will illustrate, that figure is not even correct (!), and not a single journalist on the planet has got it right yet
Article 2:
However, I think it is reasonable to assume that when Hicks says 'we put $270m into the club', he is referring to:
* All the money loaned to the various companies associated with LFC.
* NOT just the money loaned to LFCAGL
Article 1:
The fact is Hicks and Gillett have NOT invested £144m into the club itself
Article 2:
I believe Hicks is telling the truth here
putting it all on their credit cards, but making us pay the interest!
ReplyDeleteso why publish such a pointless piece . Its neither here nor there if we dont establish what status the money put in was . I dont intend to be offensive here Jamie but can you understand why you seem to annoy some people ? We have just removed a cancer from the club and you seem to want to antagonise people by trying to illustrate the cancer was at least an honest disease .
ReplyDeleteNow facts are facts and the truth is out there and that is always best etc but a half baked piece is surely self defeating if you really do want people to have serious debate .
lets back this up now with the facts on the interest on these loans .
But maybe it is prudent to consider this question when analysing what he said. It is yet to be 100% proven if he and G put $270m into the club (but i am sure it will be about that number) but we must also consider the money that was taken out of the club to service debt and their expenses(!) Remember it is their debt that we were paying off. If Hicks is trying to validate his ownership at Liverpool then we need to look at the flow of money both ways.
ReplyDeletejamie, you say you have no interest in lfc nor do you have links with hick's and gillette your only interested in the truth. dont other clubs have any truth that interests you - your such a phoney you remind me of derek hatton, as for the interview you should know, you interviewed him.
ReplyDeletelike who ? Hodgson just brought Aurellio back on the same salary to be injured again .Benitez said pay as you play .. Konchesky on a 3 year deal at 30 years old .Poulson 30 years old ..Cole , huge salary 29 years old an dthis is just the start . Cant believe people cant see what a good job Benitez did with so little .He had a well disciplined team . Now we have a likeable Hodgson but little else . Those players without their master are useless .Would Benitez have bought half of them on a less rerstrictive budget ? would he heckers like.
ReplyDeleteI'm a little confused. Last week you went on the offensive and proved that H&G did not invest £144.4m into the club, but rather only £100m or so filtered down to Liverpool FC. And you made a big deal of differentiating betwen the clubs itself and the holding companies. I don't think anyone can dispute that, the facts are there. But now you write an article proving that H&G "invested" $270 into the Liverpool FC and you agree with it but the only way you can substamtiate it is to inc lude the company structure. But as you so vehemently argued, only £100m went to the actual CLUB. So on that basis, no H&G did not put $270 into the club. Liverpool Football Club and Athletics Ground Ltd did not get $270m.
ReplyDeleteYou're asking other journalists to tell the truth but here you are twisting it yourself. H&G said that they invested into the club. As you proved, only £100m when to the club itself; they didn't invest $270 into the club, they invested it into the company structure in the form of loan, which they would have expected to be repaid. Abramovich has recently turned his c£350m "loan" into the club into equity. That is investment. H&G loaned money to the club and i doubt they would have any intention of turning that into equity. There is a big difference.
And the question that really needs to be asked is if they did put so much money into the club, what was it spent on. It certainly wasn't players as only there has only been a net spend of approximately £30m on players in the 3 years they were here. The equivalent of one Dimitar Berbatov. Funny how people expect us to challenege when we get £30 million to spend on a team when the likes of Man Utd. Chelsea, Man City are spending that on one player.
so this article becomes irrelevant . surely it does not matter if they put 270 mil. into the club or not if they also took out the whole lot to service the debts . it should be analysed in a wider context or not at all , because as I said earlier it can be construed as to be in poor taste trying to show Hicks telling the truth when clearly he did not in most of the issues that mattered ..and we have the highest court in the land to back us up on that .
ReplyDeleteJaimie
ReplyDeleteFollowing the various discussions on the finance of Liverpool FC with great interest. And that is to some extent the point. The extract from the notes to the KF(H)L states that the loan to the club is interest bearing at the company's discretion and interest has been charged since 2008. Is it possible to work ou from the accounts how this has been accounted for. If the interest due for the year is simply added to the outstanding oan, which is quite possible, that means that H&G have put in less than you are assuming.
Secondly there was a loan due from the club to its immediate holding company at 31 July 2009 (and so on up through the holding companies). This would still be due, plus any interest, at 31 July 2010 unless it had been converted into equity (ie share capital) or somehow the terms of the loan had changed in the year.
In a similar way you would expect the accumulated loan to be outstanding at the date of sale of the company. The change of ownership cannot of itself change the nature of the creditors of the club, so for H&G to have lost it would require a renegotiation of the loan before the sale.
All of this is necessarily speculation as we cannot work it out from the published documents.
If G+H are due to be paid back 144 million in loans by NESV then I would say they won't have lost anything at all on this sale. I'm guessing it would represent a small profit for them. It would also mean that the ultimate price of the club to NESV is close to 450 million. Perhaps this is unexplored but I don't see any mention so far of those loans needing to be paid back and the general impression we're getting from all reports is that this money has essentially been "lost" in the sale. That would imply that NESV have bought not just LFC but also the various holding companies that G+H set up. I'd be very interested to have someone in the know confirm this.
ReplyDelete<span>White liquid in a bottle has to be milk</span>
ReplyDeletejamie i can assure you that lfc lawyers are rubbing their hands at all the help your site has provided them with, boy have hick's and gillett got a lot of questions to answer, you like them put forward a hopeless case.
ReplyDeleteor gaviscon or milk of magnisia or hick and gillett's sperm bank
ReplyDeleteGary - There is a very obvious difference. In my other article, I'm talking about *my* opinion of how the money was invested (based on the evidence). In this article, I'm looking at it from Hicks' POV: what did *he* mean when he said 'we put 270m into the club'. I posted both possibilities:
ReplyDelete* He meant the company structure, or:
* He meant LFCAGL
I personally believe that *in his mind*, Hicks was talking about putting money into the LFC company structure. That's not my personal opinion of ths situation; that's what I believe he was thinking when he made his comments.
And with that in mind, I believe that he was saying that $270m was invested into the company structure.
Fraggs - why are you having such trouble understanding this?
ReplyDeleteArticle 1:
The fact is Hicks and Gillett have NOT invested £144m into the club itself
The club = LFCAGL. It is a fact that H+G did not invest 144m into the club - the correct figure is 100.8m.
Article 2:
I believe Hicks is telling the truth here
Yes, I believe he is telling the truth when he says that $270m has been put into the company structure.
What is so difficult to understand about this?
I've never denied that 144m was loaned to the company structure. I've argued the same point myself many times. The distinction here is how much money was loaned to the CLUB, and it was NOT 144m.
In Hicks' statement, he says 'we put $270m into the club'. Question: does he mean LFCAGL, or is he referring to the company structure (i.e. holding companies + club).
In my view, he must be referring to the company structure as obviously wrong that $270 was invested into the club (i.e. LFCAGL).
I don't believe someone with Hicks' business experience would blatantly lie in public about that, especially in an interview in which he pledges to change the fans' minds about him (!).
So, once again:
* I've argued that 1
* A total of 144m has been loaned to the company structure with 100.8m being passed on to LFCAGL (the club).
* it is categorically wrong to state that 144m has been loaned to the CLUB.
* I believe Hicks was referring to the company structure in his statement.
There is no contradiction there, just people desperate to find one.
Fraggs - why are you having such trouble understanding this?
ReplyDeleteArticle 1:
The fact is Hicks and Gillett have NOT invested £144m into the club itself
The club = LFCAGL. It is a fact that H+G did not invest 144m into the club - the correct figure is 100.8m.
Article 2:
I believe Hicks is telling the truth here
Yes, I believe he is telling the truth when he says that $270m has been put into the company structure.
What is so difficult to understand about this?
I've never denied that 144m was loaned to the company structure. I've argued the same point myself many times. The distinction here is how much money was loaned to the CLUB, and it was NOT 144m.
In Hicks' statement, he says 'we put $270m into the club'. Question: does he mean LFCAGL, or is he referring to the company structure (i.e. holding companies + club).
In my view, he must be referring to the company structure as obviously wrong that $270 was invested into the club (i.e. LFCAGL).
I don't believe someone with Hicks' business experience would blatantly lie in public about that, especially in an interview in which he pledges to change the fans' minds about him (!).
So, once again:
* I've argued that 1
* A total of 144m has been loaned to the company structure with 100.8m being passed on to LFCAGL (the club).
* it is categorically wrong to state that 144m has been loaned to the CLUB.
* I believe Hicks was referring to the company structure in his statement.
There is no contradiction there, just people desperate to find one.
You are just incapable of seeing how the evidence fits together. You're a pedant of the highest order, and you deliberately argue the opposite of what the facts suggest in order to attempt to undermine the points made in the article.
ReplyDeleteYou are just incapable of seeing how the evidence fits together. You're a pedant of the highest order, and you deliberately argue the opposite of what the facts suggest in order to attempt to undermine the points made in the article.
ReplyDeleteExcellent points :)
ReplyDeleteI completely agree that the interest payments due could have been added to the loans. I've argued that before but, alas, there is no evidence to support it. That would indeed mean H+G have put in a little less than they say. I'm currently researching exactly how much money H+G took out of the club, and I'll post an article soon.
I agree with you re the loan still being outstanding too. At the end of the day, a loan is a loan, and needs to be repaid. Having said that, martin broughton has stated that H+G will lose all the money they put in, so unless he's lying, we have to believe that I guess.
Quite how that's the case is still a mystery. Many on this site have argued that the loans were converted into equity but again, there is no evidence available to suggest that.
There is the renegotiation aspect you mention, and that may well be the case. I can also see another couple of (tenuous) possibilities:
1. Broughton is lying. LFC are still liable to repay the loans. Considering the accoutns which would show this are not going to be published until 2012 (!), perhspa Broughton and the club are hoping everyone will have forgotten about H+G by then. Or, when the truth is revealed, no one will care as so much time has passed.
2. NESV made a compensation deal with H+G that required a confidentiality agreement (hence no public kowledge of the deal). They agreed to pay off the loans, and did so by crediting the cash at the source: i.e. payment to Kop Investment LLC.
KI is registered in Delaware, and LLCs in Delaware do not have to file annual reports. Thus, no one can ever discover what's going on in their accounts, which is very convenient.
As I said, very tenuous.
Again ignoring the FACT that he never gave the club access to the money in Kop (Caymen) but still charged the club compound interest, whilst never letting the 'club' pay off any of the principal, this increasing the debt year on year.
ReplyDelete