• Premier League

Liverpool make £49.8m loss as debts rise by 31%

ESPN staff
March 4, 2014
Ian Ayre says Fenway Sports Group has brought "much-needed stability" to Liverpool © PA Photos

Liverpool managing director Ian Ayre insists the club are heading in the right direction off the pitch despite recording a loss of £49.8 million and seeing their net debt rise by 31% to £114m in their latest accounts.

He has told manager Brendan Rodgers that he will be backed by owners Fenway Sports Group (FSG) in the transfer window despite the financial results and claimed the club have made great strides since they were taken over in 2010.

With turnover having increased by 9% to £206.1m for the year to May, 2013, Ayre points out that a restructuring of the club's debt - which was £87.2m in the previous set of accounts - has provided firmer foundations.

Champions League the key

  • However the debt is structured in Liverpool's accounts, there is no getting away from the fact that they still owe an awful lot of money.
  • FSG may be more friendly lenders than the banks but the losses have increased and the funding is loaned not given.
  • The need for Champions League football, which would bring additional income of £30m or more, has seldom been clearer.
  • That money would not only make a dent in the debt, it should also increase the likelihood of Liverpool's prized asset, Luis Suarez, staying at the club beyond next summer.
  • Leo Spall, ESPN Deputy Editor

"Given where Liverpool Football Club was only a few years ago, the progress that has been made since FSG acquired the club has brought back much-needed stability with an ambitious vision which everyone is focused on," Ayre told the Liverpool Echo.

"What we have with this ownership group is a very true group of investors. They recognise the huge investment they made to buy Liverpool and as smart investors they know that they have to continue to invest to realise the true value of their investment long term.

"They've been very supportive to the business, to Brendan. This year we've not played any European football - but we continue to get support from the ownership. They are very involved in the business and I think that helps."

The source of Liverpool's borrowing has changed since FSG took control and external debt, consisting of money owed to banks, went down to £45.1m from £65m in the club's financial year 2012-13.

That reduction was largely due to an interest-free loan of £46.8m made by FSG. "We could not have a better set of people owning and running the club," Ayre said of the company to which more than 60% of Liverpool's debt is owed. "They want what every fan wants."

Liverpool's bank debt has been reduced by more than £200m since FSG took control of the club from Tom Hicks and George Gillett in October 2010.

Of the FSG loan recorded in the 2012-13 accounts, £37.8m paid off a long-term loan taken out to fund stadium projects, which include current plans to redevelop Anfield as well as costs relating to two previous proposals made by former owners.

The rest of the FSG loan went towards servicing the club's credit facility and there is some way to go before the club gets close to profit.

Liverpool's loss of £49.8m for 2012-13 was an increase from £40.5m in the previous accounts, although the 2011-12 figures only covered a 10-month period, and will have a bearing on how they fare under UEFA's new Financial Fair Play regulations.

The club's losses over three seasons, including the next campaign, will be assessed but allowances are made for stadium spending and exactly where Liverpool stand will not become clear until their next set of accounts are released.

The club signed six players on permanent deals during the period covered by the latest figures: Fabio Borini, Joe Allen, Oussama Assaidi, Samed Yesil, Daniel Sturridge and Philippe Coutinho.

Liverpool also extended the contracts of seven players, including Daniel Agger, Martin Skrtel, Martin Kelly, Lucas Leiva and Raheem Sterling.

Ayre said: "These results demonstrate that the financial health of the club continues to make good progress as we continue our journey to transform the club on and off the pitch.

"Over the past four or five years, revenue has been consistently increasing from around £170m in 2009 to over £200m today, and external debt has decreased significantly.

"With a hugely supportive ownership group, we have taken a measured approach to bring back financial stability to this great club by ensuring it is properly structured on and off the pitch."

The accounts, released on Monday night, reflect Liverpool's financial fortunes during Brendan Rodgers' first season as manager.

Commercial revenues went up from £63.9m pounds to £97.7m, thanks partly to an increase in money brought in from sponsorship, although the longer accounting period for 2012-13 must again be taken into account.

Media revenue for 2012-13 was £63.8m, as opposed to £62.8m for 2011-12.

Despite an increase in turnover, Liverpool dropped out of the top 10 in the Deloitte Money League - an annual table compiled by the UK accountancy company, which ranks clubs by the income they generate from football operations.

The Reds dropped from ninth place to 12th as they were overtaken by Paris Saint-Germain, Juventus and Borussia Dortmund.

But they were the highest-ranked club not to be competing in the Champions League, which can be worth around £30m a season to clubs taking part.

Ayre is confident that Liverpool's financial standing will improve should they qualify for next season's competition.

The club have also signed a number of new sponsorship deals since May 2013, which will be reflected in the 2013-14 accounts, likely to be published in spring 2015.

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