Premier League side Liverpool report losses of £50m

 

Managing director Ian Ayre insists it was essential for Liverpool to clean up their accounts in order to be able to move forward - even if it did mean making a near-£50million loss.

Documents filed to Companies House have revealed in the year up to July 2011 the club's accounts were £49.4m in the red before tax.

That was primarily the result of an incredible £35million of wasted money from previous owners Tim Hicks and George Gillett's ambitious Stanley Park stadium plans being written off in a single stroke.

The departure of former manager Roy Hodgson, managing director Christian Purslow and other staff cost a further £4.8m.

Owners Fenway Sports Group decided to settle up all the costs - which includes design, legal, planning and other associated fees related to the stadium project - in order to get the balance sheet back in order having inherited a difficult financial position from Hicks and Gillett despite eradicating almost £200million of debt when they took over in October 2011.

"I think what today's accounts show is that we have gone through a phase in the last year which has involved a cleaning up of our accounts and our business," said Ayre. "There was much talk and conjecture around the debt that the club was with under previous ownership.

"There has been over £200m of that debt paid down and that's very important for the club moving forward because at the height of it debt service was around £18m and that has been reduced to somewhere around £3m, now which is obviously a much more palatable and manageable position for the club to be in.

"It creates a very stable platform for us to move forward from, it creates a situation where most of those things are now off the books and we move forward in a positive sense in a sustainable business and with the ability to grow on that basis.

"Finance director Philip Nash and the finance team and the FSG finance team have created a great foundation in terms of bank facilities that give us a long-term view in that area.

"What has been demonstrated since their (FSG) period of arriving is that they want to create a stable foundation with a platform to build on.

"There has been a clearing out of debt, a clearing out of money that's been expended on stadium that just isn't going to achieve much going forward.

"We've made a significant investment in the playing squad and will continue to do so.

"It's a new start in many ways."

While FSG could do little about Hicks and Gillette's ill-fated stadium proposal - the 70,000-seater glass and steel project designed by Dallas-based HKS architects has now been scrapped due to it being unviable for the club - the money spent on pay-offs for former staff falls under their remit.

Purslow's departure was inevitable once the Americans had taken over but Hodgson was dispensed with after just 191 days in charge after a run of disappointing results.

"It's nothing untypical of anything in football. Contracts are typically fixed term," said Ayre of the pay-offs.

"When you make a decision to terminate somebody, the right and proper thing to do is honour the pay-out of that contract.

"This relates to Roy and to some of his backroom staff and also to Christian Purslow leaving. It's standard across football.

"It's unfortunate to have to have them - nobody wants to see anybody go - but in certain circumstances it's right to make a change and that's what that relates to."

On the accounts as a whole he told the Liverpool Echo: "I guess people will focus on the loss of £49.4m and there's no business - or people running any business - who are going to be pleased with any loss.

"But I think the important indicator here is this £59m charge for exceptional items and as a business that's been in a transition, it's about moving from where we were to where we want to be."

The figures, which have yet to be made available for public inspection, do not include the kit deal signed with American company Warrior Sports which is worth at least £25million a year.

PA

Sport
sportSo, how closely were you paying attention during 2014?
Arts and Entertainment
Dennis speaks to his French teacher
tvThe Boy in the Dress, TV review
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
The Plaza Theatre in Atlanta, Georgia was one of the 300 US cinemas screening
filmTim Walker settles down to watch the controversial gross-out satire
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
Life and Style
Mark's crab tarts are just the right size
food + drinkMark Hix cooks up some snacks that pack a punch
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all