• Premier League

Ayre not worried by Liverpool debt pile

ESPN staff
March 4, 2013
Ian Ayre feels Liverpool are in a strong position despite the rise in debt © PA Photos

Liverpool's debts rose to £87.2 million last season - but managing director Ian Ayre insists there is no cause for alarm.

And he is adamant that American owners Fenway Sports Group will continue to give manager Brendan Rodgers the backing he needs to improve his squad.

The club's debt went up by £21.8 million according to the latest set of accounts released on Monday, covering the period from August 1, 2011 to May 31, 2012.

But Ayre has highlighted the cost of rebuilding a squad without any European football under Kenny Dalglish last season as a major factor in that rise.

And he has declared that the club has been working hard to reduce the size of their wage bill under Rodgers, who replaced Dalglish as manager in June.

During the period covered by the accounts, significant instalments were due on the £20 million purchase of Stewart Downing from Aston Villa and the £16 million buy of Jordan Henderson from Sunderland.

Liverpool also signed seven players, including Jose Enrique, Sebastian Coates and Craig Bellamy, and extended the contracts of five more, most notably that of captain Steven Gerrard. In addition, eight youngsters were given professional contracts.

Eight players were transferred out of the club, while three more - Alberto Aquilani, Joe Cole and Daniel Pacheco - left on loan.

Ayre stated that an interest-free loan of £46.8 million, made by FSG, has since reduced the debt. That money paid off the £37.8 million balance on a loan taken out to fund stadium projects, which include the current plans to redevelop Anfield plus costs relating to two previous proposals to build a new ground on neighbouring Stanley Park. The rest of the FSG loan has gone towards servicing the club's credit facility.

The managing director also pointed to Liverpool's growing commercial revenues as a reason to be optimistic about their financial future.

He told the Liverpool Echo: "We will continue to invest in the squad - I think that is what our fans would expect. But the most important thing is that we do it prudently and in a sustainable way that is affordable. And that we all have our sights on the same goal - success."

A record-breaking six-year kit deal with supplier Warrior, worth £25 million a season, is not included in the accounts, lodged with Companies House.

That will fall under the next set of accounts, which Ayre believes will show the club are moving in the right direction off the field.

He said: "The key message for me is that we are continuing to transition to the point we have been working on for several years under this ownership - which is to continue to improve revenues and manage our cost base effectively.

"The biggest cost base without doubt is player trading and player wages - but these accounts demonstrate that we are still working hard to improve that."

Despite the debt increase, Liverpool's annual pre-tax loss fell in 2011-12, from £49.3 million to £40.5 million.

Ayre added: "Nobody in a position of authority would say it is a good set of accounts where you lose money in any business. But you have to take them in the context of the place that we are - in the journey we are on.

"I think there has never been a better time for Liverpool Football Club - ever - to have success than now because we have such a great team of people and depth to the infrastructure. Everything is there to capitalise upon it."

The accounts only cover a 10-month period so that those released next year will fall into line with the playing season.

They show a turnover of £169 million which, taken over a full year, would have translated to a rise on the previous year of just over £5 million.

Ayre added: "Turnover, if taken over 12 months, would show a reasonably healthy increase.

"The unaudited turnover, which we shared with Deloitte for their publication this year, was £188.7m - an increase on last year's £183.6m. So we are growing - we continue to grow.

"Our commercial revenues continue to grow and I think that is the key message."

The accounts also show exceptional costs totalling £9.6 million, which relate in part to settlements with several high-profile employees who left the club.

They are understood to include Dalglish, former director of football Damien Comolli and head of sports science Peter Brukner.

The figure for exceptional costs is also understood to include stadium project expenses, with Liverpool making moves to redevelop Anfield as part of a local regeneration project.

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