Liverpool plunged into financial meltdown

Comment & analysis round-up

Quote of the day: “The current economic conditions have had a significant impact upon world credit markets and, accordingly, raising finance in this environment is challenging. Whilst the directors believe the going concern basis is appropriate, the fact that facilities are not currently in place to fund all projected cash requirements over the next 12 months indicates the existence of a material uncertainty, which may cast significant doubt upon the group’s ability to continue as a going concern, and it may therefore be unable to realise assets and discharge liabilities in the ordinary course of business. Nevertheless, after making full inquiries and considering the uncertainties described above, the directors have a reasonable expectation that the group will secure adequate resources to enable the group to continue in operational existence for the foreseeable future.” – KPMG write-off the accounts submitted for Kop Football (Holdings) Ltd.

Runner-up: “The position I play for England is, as I’ve said, the one I like playing most. Obviously I haven’t played that position for a while for United. Of course, it’s the manager’s choice, but I’ve always said my best position is playing up front, so I’m enjoying that.” – Wayne Rooney.

Today’s overview: The main story across the paper divide this Friday morning is the troubled financial state Liverpool find themselves in. Besides the daily transfer lies, there are also a number of articles focused on the relationship between money and football, with Simon Barnes’ comment piece in The Times well worth a read.

Oliver Kay in The Times lays out the stark situation facing the red side of Merseyside: “The full extent of Liverpool’s financial troubles is laid bare today in a stark warning from the club’s auditors about the struggle to meet soaring interest payments. The club’s latest accounts, which were released by Companies House yesterday, revealed that Liverpool paid £36.5 million in interest on their debts in the financial year ending July 31, 2008. Even more alarming is a statement by KPMG, the auditor, that warned of a ‘material uncertainty which may cast significant doubt upon the group’s ability to continue as a going concern’.”

John Edwards in The Daily Mail sums up the potential consequences of the KPMG statement, “That will panic the club’s supporters, who are seeing their rivals move quickly in the transfer market – and may even unsettle their star players, just as the club seemed to be gearing up to challenge champions Manchester United.” Martin Blackburn adds “The devastating news will intensify calls from fans for the US pair to sell up. As things stand, any profits being made on the pitch are being swallowed up by the crippling repayments on the loan. The disastrous figures not only place the club’s future in jeopardy, they also have serious side-effects for boss Rafa Benitez. The scale of the financial woes casts a huge question-mark over whether Benitez will have any significant money to spend this summer.”

Steven Howard blames “the men who run the Premier League” for Liverpool’s financial mess. “For some time, the men who run the Premier League have been living in a fool’s paradise. Making hay while the sun shone and, like the Government, failing to repair the roof. Warned time and again that debts like these cannot be sustained — especially during a recession — their response has been that English football generates so much money the prospect of a big club going to the wall was inconceivable.”

Ashling O’Connor in The Times sums up Liverpool’s predicament, “What is worrying for Liverpool is a basic admission that the club are not generating enough income to cover interest payments totalling £36.5 million and the ambition to attract the biggest — and most expensive — players to Anfield. Staff costs in the 2007-08 season were nearly £90 million. Even if Gillett and Hicks do successfully renegotiate the soon-to-expire credit facility, there remains the question about their long-term ability to take losses that at the last count were £42.6 million.”

The Deloitte figues, the Gareth Barry transfer and Kaka’s potential move to Real Madrid seems to have set off a whole debate about money and the Beautiful Game. Simon Barnes writes “it’s not the money itself that’s obscene. It is the way the bastards earn it. They earn all this money just for playing football. It doesn’t seem right, somehow. These people are paid, and paid a fortune, for having fun. The rest of us work hard all week and football is our reward, our relaxation, our fun. We play it, we watch it, we talk about it; football is for most of us the exact opposite of work. What’s more, it is something we actually pay for, in our admission money, television licence, Sky subscription. Football is what we spend money on, not what we get money for. Is it right that anybody should be paid for doing what we do for fun?”

Harry Redknapp reveals how Spurs bid for Barry and then goes on to claim that “it’s making my stomach turn at the amount of money swilling around in football at the moment. It’s obscene. While I benefit from a good wage, I’m embarrassed about it, to be honest. A lot of people in football are embarrassed. I never thought it would get this out of hand. The sums we are now talking to get good players are really, really crazy.”

Barry Glendenning urges fans “not to be so green.” “The delusion: That an already-wealthy footballer who accepts double his current salary to play elsewhere is greedy. The reality: Any player who turns down double their current salary, however large it may be, to do the exact same job with employers who look better equipped to challenge for trophies in the next couple of years is a fool.”

James Lawton takes a different angle on the Barry transfer, analysing what it means for Manchester City. “Nothing is guaranteed in football, of course, but then there are a few laws which are broken only at grave peril. One is that you always give a manager – a real manager at least – the time to decide where his team needs to be going. You give him the required resources. Then, nobody needs to tell Mark Hughes, the options come down to just two – the glory or the sack.”

As a result of all the financial worries at Anfield it will come as no surprise that they are set to lose out on another “transfer target,” with David Silva set for a move to Real Madrid. The main transfer news in the Daily Mail is the likely battle between Manchester City and Arsenal for Edin Dzeko, whilst there are also claims over the futures of Jose Bosingwa and Djibril Cisse. The Sun also detail how Ashley Cole will be offered a £27million four-year deal to fend off a bid from Barcelona and resurrect the old rumour of Yaya Toure joining brother Kolo at the Emirates.

The Sun continue to peddle the Cristiano Ronaldo to Real Madrid story and incredibly The Independent point out that “Real Madrid are preparing to step-up their campaign to sign Cristiano Ronaldo amid suggestions that not signing him would cost the club €30m (£26.2m).” One rumour that does seem close to fruition is Roberto Martinez’s managerial move to Wigan.

As is increasingly the case, the Daily Mirror bring the most outlandish of all transfer lies. Today they claim Ashley Young is a target for Chelsea and Real Madrid and that Xabi Alonso could sign for Manchester City.

With the England Kazakhstan match just a day away, Oliver Kay responds to Wayne Rooney’s comments on his preferred position (see runner-up quote). “It may not look like the most outspoken comment, but, coming from a player such as Rooney about the choices made by a manager such as Ferguson, it was surprisingly candid, hinting at the forward’s frustration at continually being asked to ‘do a job for the team’ while Cristiano Ronaldo, a natural winger, is given the freedom to do a job for himself up front.” Also on Rooney, Charles Sale details the ongoing dispute over his representation.

On England, all the papers report how “Tensions flared in England’s training session at the Dinamo Stadium yesterday as the squad’s most recent call-up, the uncapped centre-back Gary Cahill, clashed with Gareth Barry, his former team-mate at Aston Villa.”

On international football, John Duerden comments on the lack of Australian-based players in the Socceroos squad. “The man who has led the Green and Gold to the brink of South Africa is Pim Verbeek, a laconic Dutchman who was Guus Hiddink’s assistant with South Korea in 2002 and is following his former boss in taking the Socceroos to the World Cup with the complete absence of fuss. Without the usual heartbreak-delight and general palpitations usually associated with qualification, fans and media have had the luxury of taking in the scenery on the way to Africa. Not all, however, have enjoyed the ride.”

Matt Scott points out a potential fixture pile-up that could dominate next season. “The Football Association and Premier League are under intense pressure to solve a potential fixture list meltdown before next year’s World Cup. Fifa’s rules forbid domestic-season fixtures taking place after 16 May, yet with the season due to kick off on 15 August, it means all 38 league fixtures must be crammed into 34 available weekends, with 19 midweek dates already ruled out due to international and Uefa competition commitments.”

Jim White in the Telegraph reviews the new film featuring Eric Cantona, Looking for Eric. “Despite it bearing his name, despite his being credited as an executive producer, despite turning up on Jonathan Ross’s show to promote it, Eric Cantona does not have anywhere near the biggest part in Ken Loach’s wonderful new movie Looking For Eric.”

Liverpool are not the only ones facing financial problems, Dan Sabbagh hands out some advice to Setanta. “Setanta does not deserve to die; for all its problems, it has not been going long enough to determine that it cannot win enough customers to succeed. It needs to invest more, find more subscribers and perhaps target new sports. Virgin Media customers get Setanta’s channels too cheaply – the channels are bundled with Virgin Media’s premium pack – while Sky subscribers, paying £13 a month, may be charged too much. Setanta may well have a future if it allows Sky to sell its channels on its behalf, too. To do all these things it needs new investors, or one single backer, prepared to give the company another three years. That is probably a company with deep pockets. So far, investors seem prepared to stump up only half of the £100 million apparantly needed, which seems pointlessly miserly. It is to be hoped that somebody will emerge because without willing backers Setanta is certainly finished.”

Finally, the excellent Jonathan Wilson ponders the rise and rise of the defensive forward. “Dirk Kuyt has become adept in the role, harrying and pestering his full-back. Given Steven Gerrard seems certain to continue at the centre of their 4-2-3-1, it is easy to understand why Rafa Benítez might be tempted to bring in Carlos Tevez. Not only would he offer a second central striking option, but playing on the left he would give Liverpool a formidable line of three creative players, all of whom work exceptionally hard, and all of whom are prepared to do their share of defending.”