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

Have you tried new the Independent Digital Edition apps?
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
SPONSORED FEATURES
Independent Dating
and  

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

Day In a Page

A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory