According to LFC Managing Director Ian Ayre, LFC are making 'good progress' on the financial side of things, and the club's latest accounts seem to support that. A 29% decrease in overall bank debt is a great result, and although the club made an overall £50m loss, Turnover rose 9% to £206, fuelled by the the club's burgeoning commercial activities. One particular aspect of the club's finances is not, however, in the greatest shape, and it's an issue that Ayre - and LFC - have quietly brushed under the carpet.
Since arriving in 2012, Brendan Rodgers has repeatedly stated that slashing the wage bill is one of the club's key goals, and quite a few players (including Pepe Reina) have left over the last 18 months to facilitate a decrease in the club's overall salary costs.
The problem is, however, that the wage bill is NOT decreasing. Despite all the apparent cost-cutting since FSG arrived, it is getting BIGGER, and the latest accounts show that once again. Below is a table showing an FSG vs. Hicks/Gillett wage-bill comparison:
KEY POINTS
* The wage bill under FSG is currently higher than at any point under Hicks and Gillett.
* Importantly, despite the lack of Champions League football under FSG, the wage bill continues to rise, and overall, is higher over a three-year period than the H+G era, when LFC had the luxury of Champions League income.
* in 2011-12, the club appeared to make huge headway in reducing the wage bill with an 11.9% reduction, but a year later, all that hard work appears to have gone down the pan.
* Turnover has increased by 11% since the H+G era, but the wage bill has also INCREASED by 19.2%, and this is despite LFC not being in the Champions League.
* LFC's wage bill as a percentage of turnover is almost 7% higher under FSG.
With these figures in mind, the following questions need to be asked (IMO):
* If the club's alleged goal is reduce salary costs, why is the wage bill rising, despite significant changes in playing staff over the last 18 months?
* Why is the wage bill increasing when LFC does not have the luxury of Champions League income?
Granted, for 2012-13, wages costs as a percentage of turnover reduced to 64%, but this does not take into account Luis Suarez's massive pay rise at the end of 2013, which will inevitably have a knock on effect on overall salary costs for 2013-14.
Additionally, under FSG, wages are currently at 69% of turnover (which seems high). If wages continue to increase at the current rate (10% from 2012 to 2013), then LFC turnover will have to rise another 18% for 2013-14 to keep the club's salary costs at 69% of turnover.
No wonder LFC is signing up commercial partners left, right and centre :-)
Overall, I just find it interesting (and a little worrying) that the club has allowed its wage costs to spiral despite the lack of Champions League income. Given the club's aggressive goal to reduce wages, I personally expected to see (Over a three-year period) a decrease from the H+G era, not a 19% overall increase in wages (7% increase as a percentage of turnover).
In my view, despite Ian Ayre's continued positive spin about the club's financial affairs, this particular aspect of the club's financial management doesn't appear to be in the healthiest state, though whether this makes any real difference is open to debate.
If LFC qualify for the Champions League this season then there will (hopefully) be a big influx of much-needed CL cash into the club. However, that will inevitably be offset by the bigger wages the Reds will have to pay to sign the top-quality players needed to compete on that level.
If, that is, FSG sanction the purchase of top quality players on higher wages. It's entirely possible that given the £50m loss in 2012-13 - and the spiralling wage bill - Rodgers may be forced to scramble around in the lower end of the market for cheap players on comparatively low wages.
Author: Jaimie K
Since arriving in 2012, Brendan Rodgers has repeatedly stated that slashing the wage bill is one of the club's key goals, and quite a few players (including Pepe Reina) have left over the last 18 months to facilitate a decrease in the club's overall salary costs.
The problem is, however, that the wage bill is NOT decreasing. Despite all the apparent cost-cutting since FSG arrived, it is getting BIGGER, and the latest accounts show that once again. Below is a table showing an FSG vs. Hicks/Gillett wage-bill comparison:
KEY POINTS
* The wage bill under FSG is currently higher than at any point under Hicks and Gillett.
* Importantly, despite the lack of Champions League football under FSG, the wage bill continues to rise, and overall, is higher over a three-year period than the H+G era, when LFC had the luxury of Champions League income.
* in 2011-12, the club appeared to make huge headway in reducing the wage bill with an 11.9% reduction, but a year later, all that hard work appears to have gone down the pan.
* Turnover has increased by 11% since the H+G era, but the wage bill has also INCREASED by 19.2%, and this is despite LFC not being in the Champions League.
* LFC's wage bill as a percentage of turnover is almost 7% higher under FSG.
With these figures in mind, the following questions need to be asked (IMO):
* If the club's alleged goal is reduce salary costs, why is the wage bill rising, despite significant changes in playing staff over the last 18 months?
* Why is the wage bill increasing when LFC does not have the luxury of Champions League income?
Granted, for 2012-13, wages costs as a percentage of turnover reduced to 64%, but this does not take into account Luis Suarez's massive pay rise at the end of 2013, which will inevitably have a knock on effect on overall salary costs for 2013-14.
Additionally, under FSG, wages are currently at 69% of turnover (which seems high). If wages continue to increase at the current rate (10% from 2012 to 2013), then LFC turnover will have to rise another 18% for 2013-14 to keep the club's salary costs at 69% of turnover.
No wonder LFC is signing up commercial partners left, right and centre :-)
Overall, I just find it interesting (and a little worrying) that the club has allowed its wage costs to spiral despite the lack of Champions League income. Given the club's aggressive goal to reduce wages, I personally expected to see (Over a three-year period) a decrease from the H+G era, not a 19% overall increase in wages (7% increase as a percentage of turnover).
In my view, despite Ian Ayre's continued positive spin about the club's financial affairs, this particular aspect of the club's financial management doesn't appear to be in the healthiest state, though whether this makes any real difference is open to debate.
If LFC qualify for the Champions League this season then there will (hopefully) be a big influx of much-needed CL cash into the club. However, that will inevitably be offset by the bigger wages the Reds will have to pay to sign the top-quality players needed to compete on that level.
If, that is, FSG sanction the purchase of top quality players on higher wages. It's entirely possible that given the £50m loss in 2012-13 - and the spiralling wage bill - Rodgers may be forced to scramble around in the lower end of the market for cheap players on comparatively low wages.
Author: Jaimie K
Would you rather have seen the club let Suarez and others go to get them off the wage bill when they had the chance? Or pay top dollar to keep top class players? I understand where you are coming from to a point but when we get back where we deserve in the champions league - and the additional tv revenue kicks in next year - you ll forget about this in the blink of an eye...
ReplyDeleteWy bring Suarez into the equation? He didn't even cross my mind. I'm just pointing out that despite LFC's apparent goal to cut the wage bill, it has actually increased by 19% since the H+G era, and this is despite the lack of Champions League football.
ReplyDeleteFirst of all the wage bill doesn't just show players salaries, it shows the overall wage costs of the club. That includes payments made to directors that have left their posts and there have been quite a few of those in recent years. Obviously, players salaries will probably make up for at least 80% of the total though. Secondly, it's not just about the amounts, it's also about how heavily they push on the total revenue and in that respect the 2012/13 season had less impact than two of the three G+H years. Third of all I think that when Ayre says we can compete financially he means, if we want to. It doesn't mean we can also go out and waste hundreds of millions on players like Chelsea, Citeh or Real Madrid do. I guess it will all become clear in the summer. We'll have Champions League football, be the reigning champions of England (and Wales) so when it comes down to the wire we'll see if we can spend what is needed for the right players.
ReplyDeleteDid FSG not cut the wages to re-direct wages to players who deserved it?, as opposed to the older players who were not?. I don't believe there was ever a long-term plan to reduce wages, as that would not entice CL players to join Liverpool. As for the rest of the accounts, It is very positive on the commercial side of things, the much maligned Ian Ayre really does know how to bring big deals to Liverpool. Once the new sponsorship deals kick-in, the next accounts will look very good, as these are 18 months out of date already!!
ReplyDeleteWhy not bring Suarez into it. He signed a new mega deal to keep him at the club. So I repeat again would you rather the club had let him go to keep the wage bill down or pay top dollar to keep him and others and get back where we belong. I repeat again the extra revenue for domestic tv and champs league tv will make u forget about this in an instant and that is even without the extra commercial deals that are not reflected in the figures you quote...
ReplyDeleteHey Tony - just a clarification: the accounts are 8 months out of date, not 18. The current accounts are for the period ending 31 May 2013.
ReplyDeleteDo a more in depth evaluation. Most of the high wage players now are key figures in the team. In the past Aquilani, Maxi, Carragher, Kuyt, Carroll, Doni etc were high wage earners but bit players or marginal players. Don't forget we're still fixing the wage bill as players like Reina, Agger, Johnson are on super high wages they don't deserve. And lastly, Suarez has double his wages deservedly so. It's just total wages, but quality wages.
ReplyDeleteUnderstood: Still very decent though, don't you think JK???
ReplyDeleteYes, I know that the overall wage bill includes directors etc, but it's the same for every club, and figures reported by the likes of Deloitte etc include the total figure.
ReplyDeleteBut Suarez is a reason for why that wage bill has gone up Jaimie. You have to spend money to make money. In this case, it's paying the good players big wages to make them stay, hence get into champions league, and then at the end make money from being in that competition.
ReplyDeleteIf Turnover is increasing at the rate it is, it doesn't mater if the wage bill has increasing- Providing it remains manageable- It's simply an expenditure that is necessary to ensure the club continues to attract the best available talent for all departments of it's operations.. I think you're just indulging in a tasty bit of scaremongering JK..
ReplyDeleteYes!!!..................agreed!!!.
ReplyDeleteAnd so it begins: someone doesn't like the results shown by the stats, so they start making exceptions, trying to drill-down to the nth degree until the results match their expectations. These are the figures. Deal with it. If you want a more in-depth evaluation, which you can manipulate endlessly until you get a result that you like, then you're free to go and do that :-)
ReplyDelete*sigh* Please read the article properly. Suarez's new deal is NOT part of these figures. He signed the deal in December 2013; the current accounts are for the period up ending 31 May 2013. Suarez's new deal will show up on the next set of accounts.
ReplyDeleteAnother scare mongering article
ReplyDeleteH&G slashed the wage bill by offloading all the expensive foreign talent
Alonso Mascherano etc and that cost us Champions league, and lead directly to the departure of torres who saw the squad being dismantled rather than improved
the FSG regime has properly gripped commercial revenue and is earning the right to bring in top talent on high wages; this Commercial team will be costed in to the wage equation
The Premiership income will sky rocket shortly; and we stand to make a mint off Champions League merchandising
I am not concerned and no explanations are required
Absolutely. Lots to be happy about.
ReplyDeleteIt is entirely feasible that Liverpool could be turning-over £250m in a couple of season from now, with the BT Sport CL coverage doubling the CL money in 12 months time?.
ReplyDeleteAgreed.........................At last the shadow of H+G is being washed from our accounts, 12 months from now will see even better results!!
ReplyDeleteI suppose some of the increase can be put down to new contracts for young players. Sterling had a new contract, Wisdom got a new contract, also you have to factor in the overall inflation of player wages in the premiership, wages across the board rose by 9% from 2010-11 to 2012-13.
ReplyDeleteWe also have Coates picking up c.30k a week, I suspect that we are still paying Mr Cole some money, dunno if that counts as wages or what.
I also think that are wages are good for a top 4 club, Kenny was supposed to get us there with the players he signed with those wages. I think that currently our wage bill presents value for money. 65% of turnover on wages seems like a sensible figure.
For 2012-13 Prem clubs spent 70% of their TV money on wages, so I guess we are about average.
fsg = 50m debt to service. h+g = 250m debt to service. therefore more to spend on wages rather than waste
ReplyDeleteSuarez got a new deal earlier though no? He signed a deal the season before wanting to leave didn't he? I am not a 100% but I am was of thinking he was on about a 3rd contract with us.
ReplyDeleteSturridge is also on relatively high money. I am not sure about the bonus schemes either. Top goalcorers at club and things like that. I would be concerned if it was a higher % of the turnover but as there are things like new deals and TV money that are not even included in the info above I am less worried. Plus Johnson is on over a £100k a week. That will not continue past this year.
FSG have reduced the debt by £200m since 2010 and still given us a proper football team, they'll do for me ..... :-)
ReplyDeleteYes interesting. Do you know who the big earners are exactly and how the wages are spread throughout the squad?
ReplyDeleteI also would have thought the wages would have come down when we shed Joe Cole, Kuyt, Torres, Carra, Alonso, Mascha, Benayoun etc. I guess big earners would be Stevie G, Suarez, Sturridge (?), Johnston, Reina (still on books for % of wages)....who else? Henderson was negotiated in Kenny era also Downing and Carrol would have been on the books for some of that period....maybe it will even out if we sell Reina and some of the historic high earners are eased out. However, looking at the squad do we have more youth players and loanees now?
It would be very useful if the wage structure could be broken down across the squad and other teams - is this available in the accounts?
Cheers
Didn;t Agger and Skrtel get new contracts when clubs were sniffing around too/
ReplyDeleteDepending on what glasses you want to wear when you look at the numbers, the numbers could be disconcerting. The numbers are from a 10 month period which ended in May, 2013. Think about who was on the books then and who no longer plays for LFC now. I think you have failed to mention the club's debt has gone down significantly since 2010. Wasn't that one of the biggest issues during the Gillette and Hicks era? The LiverpoolEcho reports the debt has gone down 200M quid since 2010. If you look at certain pieces of the financial data, I would be worried as well. If you look at where we were and where we stand now with all the Financial Data in front of you, the glass looks 69% full. If LFC gets into Champions League Football and gets into the top 3, the water is going to rise. I am only worried about Sunday's match.
ReplyDeleteDo you think putting a smiley face at the end takes away the actual tone of the post?
ReplyDelete'Scaremongering'? Utter nonsense. The whole reason this site exists is to take a critical look at LFC, and I've posted many articles about the club's wage bills in the past (including comparisons with other clubs). it's not my fault the figures show that the wage bill is rising despite no CL football.
ReplyDeleteThis is an important issue that fans will want to know about, and discuss.
While I agree, we would like wages decrease. I think you are interpreting the results bit harshly. Wages will always make up a big percentage of turnover and when I look at those figures I see steady decrease in Wage as % of revenue. Don't forget that 2010/2011 represents the 1st year they took over and the wages there basically reflect what they took over from G&H. It is also not fair to say that they just doubled suarez' salary which will negatively impact on next years wages/revenue without conceding that suarez staying at the club will also undoubtedly contribute to our revenue both for on the field reasons and probably also selling shirts
ReplyDelete*sigh* and not are most of the new commercial deals so your percentage calculation is also skewed. The point remains that to get back where we belong we have to pay more. We all know that when BR said he wanted to cut the wage bill he really needed to just cut the dead wood. The salary costs as a percentage of our income will slide again next season for the reasons I have said. Just focus on the bigger picture please.
ReplyDeleteWe were still paying Cole and Carrol wages after they left. Not all the wages but some.
ReplyDeleteExactly my point and one overlooked by jamie....
ReplyDeletePlease don't tell me what to focus on. You view things your way, I'll view things my way.
ReplyDeleteAnd next season, I predict right now that the wages as a percentage of turnover will *increase*, not slide, as you suggest. 2010-2012 are a more accurate indicator of what will happen next year, not this one result, which in context, is a bit of a freak result (when compared to the last 20 years of figures)
Look at the Garuda Indonesia deal for the training kit, £16m a year alone, Dunkin Donuts, Xolo, LFCTV deal with 9 new territories and Gatorade.....................all yet to kick-in to Liverpool's accounts.
ReplyDeleteFive of England's outfield players who started in the last international game were Liverpool players... Out of the top 5 clubs which one has the lowest ?
ReplyDeleteHow can I overlook a point that is an entirely speculatory prediction about the future? Are you serious?
ReplyDeleteLiverpool also have the 2nd youngest squad in the PL???, It does change but probably not that much excluding youth players!!!
ReplyDeleteYes I remember...as people are suggesting these stats do not tell the whole story of where the wages are assigned...to get a better idea...damn I'm now gonna have to read teh accounts myself!
ReplyDeleteThis view / analysis is so lope sided. It is irrational making comparisons of wages / turnover without putting club progress and performance into the equation. How does your analysis fail to consider average age of the squad during Hicks & Gillet time and during FSG's time?? How much have squad players progressed and how many have progressed from the academy into the senior squad and for how much would they be sold if they were to be sold??
ReplyDeleteHow do you fail to mention that the ratio has taken a downward trend from 2010-2011 to 2012-2013??
I would rather seek to take a strategic view and what the owners and management intend to do over about five years to come and the benefits to come with champion's league football and improved sponsorship. In other words your conclusion is misleading.
Yes, of course it's misleading. You don't like the results presented, so like so many others, you go on the attack, and think of ways to manipulate the results so they become more palatable.
ReplyDeleteIt's always the same: 'But you didn't include this, that, and the next thing' etc, and invariably, the things people want changed are subjective and largely unquantifiable.
These figures are objective and factual. Furthermore, I haven't drawn any overall 'conclusion' - I've just interpreted the available factual data in a reasonable, self-evident manner.
Everyone else can do the same and draw their own conclusions. If you can't handle what the figures show, that's your issue, not mine.
Just a quick question. Are wages in football, in general, not going up? Can the rise in our wage bill not be at least partially explained by the inflationary nature of the market?
ReplyDeleteI dont see the particular issue your taking here. The wage bill should be looked at as a percentage of turnover as to whats manageable and what's not. I actually find it quite refreshing that they havent drastically decreased the wage bill just to cut cost. As that would surely point to them skimming money from the club. We have had a lot of players on high salaries who can and should be moved on. Pepe and Agger.....maybe Johnson. We can get younger players for fraction of the salaries and about same performances with room to improve. They have actually instead try and succeeded in increasing the turnover and kept the percantage round about the same. Like Ayre said the final step us to get CL football and the stadium bigger.
ReplyDeletealso.. does this not take into account sacking Roy and Kenny and the payoffs that went with??..
ReplyDeleteHeard of anything called inflation?!?! Cost of living rises!?!? Might as well compare figures from The 80's If U Want To Carry On Scaremongering.
ReplyDeleteFrom 2010-11, there was still a transfer window when H+G controlled the club, so part of that has to be attributed to them (at least based on the way the chart is currently set up by season).
ReplyDeleteAdditionally, if you take the 2012-13 season vs. the 2009-10 season, our turnover increased by almost 22m, while our wage bill only increased by about 11m.
So relatively, speaking, they've cut down on the expenditures related to the wage bill as they've only increased it proportionately to the overall turnover.
Furthermore, if you compare 2011-12 to 2012-13, our turnover increased by about 38m but our wages increased by only 14m.
The bottom line is that the club is in much better position than we were approximately 3 years ago. We're bringing in more money while not spending all of it, and subsequently relieving some of the debt.
I'm by no means a big fan of Ian Ayre, but in this instance, he's accurate.
The above article states that the wage bill is going up despite the likes Carroll, Downing and Reina leaving, but the accounts that we are looking at are based on a period up to a month or so before these guys left. There will be no visible evidence in the accounts until the 2013-2014 period.
ReplyDeleteFeel sorry for Jamie here, he's had to repeat himself in the comments at least 5-6 times already!
ReplyDeleteYes the data presented is absent any supporting information which puts these figures into better context.
And yes they aren't taking into account other key Financial aspects from both eras, most notably the interest payments. Overall Operating Profit as a percentage of Revenue's under both era would be both alarming and a lot more accurate to present.
But Jamie presents one fairly blunt point, the line from Liverpool's hierarchy is that we need to spend within our means, and lower wages etc etc.
The figures clearly state they have increased.
The question is have they increased in line with the market and the overall Premier League growth or have they increased more than that?
If the former then I'd be fairly content with that as performances have been better and also the quality, age and future re-sale value of who we have on these wages is also a lot better.
If the latter then the concern is we're taking financial risks to achieve further Financial stability which will bring out success. A risky strategy.
Even allowing for an increase from Suarez's recent new contract, won't next year's accounts show a truer reflection of the wage bill? Surely the 2012-13 accounts still include the huge salaries of Reina, Carroll, Downing, etc plus the payments we still have had to pay Joe Cole. With those off the books this season (and replaced with players on lesser salaries) and no more payoffs like we made to Dalglish and others, the wage bill shouldn't, in theory, continue to increase in the 2013-14 accounts.
ReplyDeleteExactly
ReplyDeleteWest Ham paid Carroll's wages from August 2012 onwards, so the bulk of Carroll's salary will not be included.
ReplyDeleteI think also the wages will include bonus payments etc to players that have been sold, as an example, as carroll did not request a transfer he would still of been intitled to any loyalty/signing bonus and LFC would have had to pay, same with downing etc, so I think next years accounts will offer a better understanding
ReplyDeleteAnd so it begins. Somebody posts some basic level nonsense on the web for hits. You don't like reality mate?
ReplyDeleteSorry, when you pay Suarez 200k a week it's better spent than paying Joe Cole + Doni. Or paying Coutinho 50k+ Sterling 25k is worth more than paying Downing 70k.
Not to mention our commercial revenues have grown. FSG never said they want to lower the wage bill. They wanted to remove deadwood.
PS. If you don't like comments, then don't make a comments section.
The 2013-2014 figures will give a better idea of how the wage bill has been reduced. Carra, Riena, Carroll and Downing were consuming a large part of the wages which no longer is so.
ReplyDeleteDo the payouts to Hodgson and Dalglish also not affect the figures?
Also, FSG still had to pay many of the high earners such as Kuyt, Maxi, Cole, Aurelio, Aquilani, Ngog, Bellamy etc while they were spending money on new signings.
The next wage bill figures will show that FSG most definitely have decreased the wage bill.
2010-2012 turnover increased at a higher rate than wages. With TV deals, Dunken donuts and other monies not included in those figures above the increase in turnover will continue but over the last season only Suarez getting a pay rise will affect the wages (apart from bonuses if they are involved), so % of TO will decrease. Or at least the trend would suggest so.
ReplyDeleteJ mate....wages are not takling into account for the fairplay rules....the players sponsors cover a lot of this...the club claim a lot of their personal sponsors...so it can be written off....what ayre put forward was the correct accounts....they cut back big time but still need to pay the best players or we may as well be aston villa
ReplyDeletesaid it before I am surs u support man u....u drag the club through the muck constantly....away and suppport them mate
u do walk alone bro
This report is for the 2012/13 season, so Pepe's, Joe Cole's, Downing's, Carroll's wage all incuded in it. The big cut will be seen in the next report, about THIS season.
ReplyDeleteSo in 2010-11 was £134.7m @73.3% of Turn Over and 2012-13 was £132.2m @ 64.1% of TO
ReplyDeleteExactly which part of this isnt going down???
Remembering at the same time the team has been taking major strides forward and is now also on the crest of a major cash boost from Champions League football.
Wheres the negative here?
Just wondering do your figures show that in the previous period the wages are for just 10 months?
ReplyDeleteAnd Bovvered, to add to your point.. this financial statement includes the wages paid to Downing's 70k/week salary, 60k/month compensation to Joe Cole (for playing for West Ham), Pepe Reina's 95/month salary(around 11.7m/ year). What about the savings of wages players who are loaned: Assaidi+Borini+Suso +Ibe+Coady + Adorjan+ Ngoo. Another 5 million? Also other players sold like Shelvey. Dont forget the 110k we were giving to Nuri Sahin for half a season. So we saved like 22 million. And the only players we got are: Sakho, Toure, Victor Moses, Cissokho, Alberto and Illori (loaned out) in this season. So together, that would account to 12 million.. Luis Suarez would make an extra 2 milion this season. So overall we reduced like 8 million this season which is good.
ReplyDeleteI see - so let's just ignore the fact that *with* all the big salaries from 2011-12, the wage bill was over £14m LESS than 2012-13.
ReplyDeleteAs usual, people just see what they want to see.
So, what happened in 2011-12 when LFC had all the 'high earners' you mention, but managed to achieve a wage bill £14m less than 2012-13, with the same people on the bill?!
ReplyDeletePayouts to Dalglish and Hodgson are accounted for elsewhere.
And it's amusing how, as always, you emphatically state something will happen in the future as if it is a fact. (i.e. the next wag bill will show FSG 'will most definitely have decreased the wage bill'.
Do you have a crystal ball?
I remember this time last year people saying exactly the same thing, and what happened? The wage bill increased by over £14m.
It is worth mentioning these figures wont include the removal of Reina's & Downing's wages. Possibly Carroll's too. All those players left after these figures' range (Carroll permanently)
ReplyDeleteCarroll's wages are not included. West Ham paid his salary for 2012-13.
ReplyDeleteAlso, 2011-12's wage bill was £14m LESS than 2012-13, and that was with all the high earners, so this excuse that lots of people are making about Downing etc doesn't make any sense.
It's relevant for two reasons:
ReplyDelete1. Because you specifically mention the removal of Reina's, Downing's and Carroll's wages as having not helped reduce the overall wage bill on the piece
Fair point. Mind you why though is there such a difference between 2010-11 and 2011-12? 2010-11 and 2012-13 are very similar salary levels, 2011-12 looks out of sync with the trend so is there any particular reason why that year experienced a reduction?
ReplyDeleteWage as a percentage of turnover is good at 64 percent.
ReplyDeleteNew TV deal this year more expensive dead wood leaving LFC finaces are looking good.
The same is true for the turnover figures for that year - they are out of sync with the overall trend of a gradual increase in revenue from 2010-2013 which is odd.
ReplyDeleteGood point. That was my mistake in the article. I didn't think about this particular point when I wrote it.
ReplyDeleteI don't believe it is that important, personally. You can't take a growing wage bill as a stand alone figure, it's merely a factor of the the larger picture. When the club is significantly increasing it's revenue, the wage bill inflating isn't particularly significant within itself. The wage increase is resultant of the club's overall increase in competitiveness both commercially and on the pitch.. As I said, if you want the best people in you've got to be willing to pay the premiums.
ReplyDeletePS, sorry if I offended you- But it does occasionally come across that you write pieces just to cause a reaction... :-P
Not offended at all. There's nothing wrong with your view that I'm 'scaremongering'. I'm just disagreeing with that view.
ReplyDeleteTo predict that the wages of this year will have decreased on last year seems to make sense considering that Downing and Reina were big earners and have not been here this year. Include (like others have) the players on loan and no Nuri Sahin for half a year and we may be looking at a decrease that can easily factor in Suarez's pay rise. There may well be bonuses included though which is understandable. CL will fetch more than those bonuses tale up.
ReplyDeleteIt's not seeing what we want to see it's just a logical assumption. Skrtel, Agger and others got pay rises and we had Sahin for half a season too. It's like what 270,000 a week? How much more did the CB's get? It does seem a lot.
ReplyDeleteOh yeah they wanted to change the system so it coincided with the league season didn't they? Sh!t how do we work it out then?
ReplyDeleteUntil we get the stadium expanded our wage bill is always going to eat into our funds. No team is guaranteed champions league footie each year (as utd are finding out) so a bigger stadium is the only guarantee of bigger revenue. I do believe FSG are getting things right,it takes time,but we are moving in the right direction.
ReplyDeleteYou're right, isn't this what really is going on? We can't compare the last three years like for like given that the accounts for the 2011-12 season weren't a full year?
ReplyDeleteFSG only bought the club in October 2010.
ReplyDeleteJovanovic, Torres, Babel, Meireles, Ngog, Poulsen, Kyrgiakos, Insua and Konchesky no longer formed part of 11/12 wage bill which would have seen a huge reduction in wages that season I guess?
What's your point? I'm talking about 2011-12; why don't you focus on the actual point instead of trying to muddy the waters? 2010-11 is irrelevant to what's being discussed here.
ReplyDeleteYou (and others) state that wage results for 2012-13 are inflated because of all the high earners. My point is that those high earners were also at the club in 2011-12, yet the wage bill was over £14m *lower*.
The 'high earners' excuse is exactly that: an excuse, peddled by fans who refuse to accept what's in front of their face, and would rather concoct some false positive story than accept that there might be an issue with the wage bill.
You asked me what happened in 2011-2012 and I gave you my answer.
ReplyDeleteJeez, people really will try and find any excuse to block out the truth! It really is like we're in the Twilight Zone or something.
ReplyDeleteAccounting periods for the last three years:
* 2010-11: 01 August 2010 - 31 July 2011
* 2011-12: 01 August 2011 - 31 May 2012
* 2012-13: 1 June - 31 May 2013
As you can see, all the time over the last three years is accounted for.
Other players came into the team in 2011 (Suarez, Carroll, Downing, Henderson, etc), plus there were still lots of high earners at the club (Gerrard, Carragher et al). That group of players you mentioned doesn't amount to £17m in extra salary costs.
ReplyDeleteThat's right but you can't say wages have gone up year on year when the time periods you are comparing the data for are not the same. That doesn't make sense.
ReplyDeleteYou're comparing apples and oranges because the data you have listed for the first and third of those time periods is over 12 months and the data for the second period is for 10 months so it stands to reason that the figures for 2011-12 are going to less than the other two periods. If you extrapolate the figures for the 10 months of 2011-12 to a full 12 month year like the other years then the wage bill is actually more than reported for 2012-13.
Over a three year period, the figures are the same, irrespective of time periods. You're just splitting hairs IMO. The main argument I've made in the article relates to the three-year total, which shows that:
ReplyDelete- Wages under FSG have risen 19% from the H+G era.
- Wages as a percentage of turnover is a 69% for the three year period.
You make it sound like the whole article is based on a year-by-year comparison, which it isn't.
You're right, things have risen since H&G - I'm not disputing that. What I am disputing is your belief that FSG are not delivering on their aim to reduce wages, etc. because if you compare year on year properly (not 12mths v 10mths v 12mths) there is a downward trend on wages and an upward trend on revenue which surely is a positive thing?
ReplyDeleteThe wage bill is 14mill less in 2011/12 as this is a 10 month period.
ReplyDeleteYou also say in your article that FSG made huge headway in reducing the wage bill in 2011-12 only for that to go down the pan a year later. That is just totally not true. The figures for 2011-12 are an anomaly because they are for just 10 months not 12 like all the other figures listed.
ReplyDeleteFootball is a business, it does not remain static, if everything remained static I would still be earning £3.50 an hour from being a 16 year old. Wages have gone up, but look at the size of our squad compared to a few years ago, higher wages, more people, it's only natural to spike. Commercial sponsorship is a must as well as foreign tours as we are not competing in Europe and our stadium is well below the capacity it should be for our status/following. Stop being dramatic, without spending we will not be able to keep up or change, yes we are doing well this season but how many competitions are we left in. Also, we may struggle next season especially as we will not have as many loans out as we will utilise the whole squad. Wouldn't mind if we dropped Coates, Aspas, Johnson, Skrtel, Toure and Allen to fund a new LB, CDM and CB. On a plus note, excited to see what Borini, Coady, Suso, Wisdom, Assaidi, and Adorjan do when they come back from loan, plus Teixeira, Sinclair, McLaughlin, Sama and Ibe will get some pre season action again with the first team. Missed out Harry Wilson and Yesil who hopefully we'll see in action. That's a lot of potential considering Nemeth and Morgan just didn't cut it in my eyes. We're almost there, BR and FSG are building foundations for sure!
ReplyDeleteFootball is a business, it does not remain static, if everything remained static I would still be earning £3.50 an hour from being a 16 year old. Wages have gone up, but look at the size of our squad compared to a few years ago, higher wages, more people, it's only natural to spike. Commercial sponsorship is a must as well as foreign tours as we are not competing in Europe and our stadium is well below the capacity it should be for our status/following. Stop being dramatic, without spending we will not be able to keep up or change, yes we are doing well this season but how many competitions are we left in. Also, we may struggle next season especially as we will not have as many loans out as we will utilise the whole squad. Wouldn't mind if we dropped Coates, Aspas, Johnson, Skrtel, Toure and Allen to fund a new LB, CDM and CB. On a plus note, excited to see what Borini, Coady, Suso, Wisdom, Assaidi, and Adorjan do when they come back from loan, plus Teixeira, Sinclair, McLaughlin, Sama and Ibe will get some pre season action again with the first team. Missed out Harry Wilson and Yesil who hopefully we'll see in action. That's a lot of potential considering Nemeth and Morgan just didn't cut it in my eyes. We're almost there, BR and FSG are building foundations for sure :)
ReplyDeleteJaimie, clearly you love your sport but you not a finance person, you can not for start measure £ for £ and say a today's figure is higher than 4 yrs ago figure, that's just stupid. The question you should be asking is there a negative increase or not ( (y2 -y1)/y1)*100, now use this formula so that you make an informed comment regarding finances or just focus on the football stuff on the pitch.
ReplyDeleteWhy are you so intolerant of being corrected when you've made balls up or assumed wrong?, which company has positive growth but negative increase in remuneration ?.
ReplyDeleteHi Jamie. Your comparison does not take into account inflation!
ReplyDeleteThe bottom line is financially the clubs fortunes are on the up and we are getting more bang for our buck out of this team more so than the latter days of H and G.
ReplyDeleteNot only that but there is many in the club who have huge potential something that was sorely lacking under the previous regime.
I see things quite differently. The shifting wage position is just a natural adjustment over time. Wages went up with Comolli's spending spree but then came back hard as the owners learned a tough lesson. They have since come back into line but I'd guess the difference is that now we are paying players what they deserve and we don't have anyone on a wage that is not manageable. It might look like the same figure but it surely is not the same team, and that's an important difference. Same wage bill but a vastly different league position. There is also no reason to think we'll have an extra 10% to account for in the current financial year, it will probably be a much more modest adjustment. If it was a consistent 10% each year then maybe you'd expect it but we've only had that increase happen once. That's hardly a strong precedent.
ReplyDeleteThe other point is to note the clear decline in portion of income spent on wages. Each year the % is slightly less. Rather than assume we've been trying to simply reduce the wage bill, like a conservative politician hell bent on slashing spending, I guess we've simply looked to bring wages in line with income. If income increases then I think it's natural for wages to increase. That's in part just a fair deal for the players and also a sign that Rodgers is slowly improving all the players and they are deserving the raises they get when they re-sign. It's certainly not a concern because it shows the club are watching their money carefully and there is no reason to imagine it's out of control. "Spiralling" is a bit over-dramatic.
Income will continue to increase, I think that's for sure. More TV money and CL football will add a big chunk of money and so if the wage bill goes up again it's certainly within reasonable limits. Liverpool is growing as a brand and this time around we won't waste the opportunity of being in European football. The club is going all out to increase revenue and it's obviously working. I'd bet that even with a sizeable wage increase we'll still see that % vs income to keep dropping and that's the best indicator of how well controlled the club finances are.
Just pointing out that the sacking of two heads of PR and two directors at the Academy will have probably cost a couple of million too
ReplyDeleteBut surely the crux of the article is future speculation? That wages will rise, we will have to sign cheaper players, sell players etc to offset the increased wage bill?
ReplyDeleteAnd 73, 70, 64 is a decreasing sequence from where I am sitting...
"Hot AYRE". all talk and no action
ReplyDeleteAccording to the editor of this site, h&g weren't running lfc into the ground with all the debt repayments.
ReplyDeleteBut he chooses to be critical of fsg for paying wages which have resulted in better results.
Then claims he doesn't simply write articles to store controversy.
Lol
This accounts are rather outdated though it does reflect the costly nature of the poor transfer policy led by Comolli and KK. I'm sure the next financial report will paint a much healthier picture given the reduction of wages (sale of high earning flops like Downing and Carroll and other loan deals) and the increase in commercial revenues.
ReplyDeleteI think as some of the players that were offered previous contracts like johnson and agger (for example) do leave the club the wage might drop relatively, also the new contracts offered are more performance based which would also help. If the player does well he deserves more but if he doesnt perform then he gets less. Im sure this is a problem every club faces cos the top players just expect high wages, hopefully this overall trend can be curbed but i doubt it will due to the ever increasing tv money.
ReplyDeleteStop Press: Premiership Club's wage bill rises over the past few years.
ReplyDeleteIn other news: bear found to have relieved himself in woods.....