Liverpool severely in red

SOCCER:THE PARLOUS financial position at Liverpool was underlined yesterday when accounts were released showing the club €290 million in debt. The figures covered the year to July 30th, 2009, so included Liverpool's relative success last season. Yet the club recorded the biggest loss in its history, €64 million, having paid €46 million in interest on its loans.

The bulk of the loans, owed to Royal Bank of Scotland and Wachovia, are the borrowings originally made by the US owners, Tom Hicks and George Gillett, to buy Liverpool, which they then imposed on the club to pay off.

The accounts detail how impatient the banks have been for the debts to be reduced; Liverpool were formally due to repay the €290 million owed on January 24th this year and the banks extended that loan by only six weeks, to March 3rd.

Since then, following negotiations with the banks, Hicks and Gillett agreed to sell the club, and a chairman, Martin Broughton, was appointed to get a sale agreed. The banks extended their loans – which the club says stand at €275 million – until the sale, which Broughton said yesterday will be “a matter of months”.

The club’s auditors, KPMG, summed up that Liverpool are now “dependent on short-term (bank loan) facility extensions” until investment arrives and for the second year running raised a stark warning about the club’s financial health.

“This fact indicates the existence of a material uncertainty which may cast significant doubt upon (Liverpool’s) ability to continue as a going concern,” they said.

It is understood the Premier League last month sought detailed reassurances from Liverpool that it does have the backing from the banks to fulfil its fixtures next season and not go bust.

Since last July Liverpool’s position can be assumed to have worsened, although commercial deals, including sponsorships, have improved.

The club’s income went up from €188 million the previous year to €214 million and it said “a large part of this increase” was due to Premier League TV and merit payments for finishing second. Liverpool received €23 million from Uefa for their run in the Champions League and made around €8.2 million more from hosting the European matches.

Despite these figures Broughton said he will achieve a sale “in a relatively short period”, so the club will not have to sell its star players.

“There’s absolutely no reason to sell either (Fernando) Torres or (Steven) Gerrard,” he said.

“I don’t want to sell either of them; Rafa (Benitez) doesn’t want to sell either of them. We don’t need to do it to pay off any debt.”