In the Red! Liverpool debt rises to 87.2million… and instalments on Downing and Henderson transfers are to blame
– a restructured period designed to bring alignment with the football season.
However, the loss was less than the 49.3million made the previous year and done against the backdrop of no European football, although Liverpool did get to two cup finals, winning one.
Some of the deficit was as a result of investing heavily in the transfer market – and the costs associated with bringing in the likes of Stewart Downing (20million) and Jordan Henderson (16million) in the weeks preceding the accounting period – while offloading other players at a loss.
Costly: Kenny Dalglish unveils his new signings Jordan Henderson, Charlie Adam, Doni and Stewart Downing
But with the club's owners Fenway
Sports Group firmly focused on the impending arrival of Financial Fair
Play Ayre stressed there was necessary work to be undertaken.
'The key message for me is that we are
continuing to transition to the point we have been working on for
several years under this ownership – which is to continue to improve
revenues and manage our cost base effectively,' he said.
'The biggest cost base without doubt
is player trading and player wages – but these accounts demonstrate that
we are still working hard to improve that.
'I take comfort in the fact that the
work we have done, some of which costs us a lot of money in this period
and beyond, looks pretty painful at the time.
'But as long as you invest in it and
manage it in the right way, then hopefully it bears fruit as we go
forward and gives us a better platform to exist on in a different
environment and in a world where we are expected to break even.
'You never take comfort from any business that makes a loss but I am pleased that we're making the progress we are making.'
In the period relating to these
accounts the club offloaded 11 players, including the likes of Milan
Jovanovic, Christian Poulsen and Raul Meireles – all signings by
previous managers.
The then boss Kenny Dalglish – the
cost of whose sacking last May was included in 9.5million of 'exceptional payments' – wanted reinforcements for his squad and that
meant players had to be moved on to make room.
Lead: Downing scored the opening goal in Liverpool's 4-0 win over Wigan on Saturday
Contribution: Henderson has scored three goals for Liverpool this season
Reassurance: Liverpool managing director Ian Ayre
Boss: Liverpool owner John W Henry
CAN'T SCORE STREET
Downing had a well-documented goal drought at Anfield, and his Wikipedia page was hacked to reflect that.
'We see a big charge within the
accounts for amortisation (depreciation in value) of players that have
been disposed of within the period that perhaps came in on a higher
cost,' Ayre told the Liverpool Echo.
'We've made losses as a result of
selling them but at the same time we've improved our longer-term
position in terms of our wage bill by reducing the wages for those
particular contracts.
'These accounts show investment in the
squad – players like Jose Enrique and Sebastian Coates – and as we have
seen in accounts that flow from that – we will continue to invest in
the squad both for improved playing performance but also a far better
structure in deals that we have with players.
'So we are fortunate in some sense in that we know we are improving in this year and we are continuing to improve.'
In addition to transfer-related costs
captain Steven Gerrard and Luis Suarez were among five players who
signed new contracts during the accounting period, since the end of
which FSG have injected 46.8million via a non-interest bearing
intercompany loan.
Turnover increased by 5million but so did wages, with the salary bill now around 142million or 70 per cent of income.
Out of the big league: Liverpool have not played in the Champions League since being eliminated from the group stage in 2009 and this will have affected their financial situation
'It's good to see that even in a year
where we have a downturn in fortunes by not playing European football,
we can bolster our revenues by performing in other areas,' added Ayre.
'It shows that we have a very strong and growing business that sits behind the football club.
'And as we approach things like Financial Fair Play and that type of environment, that puts us in a very strong position.'
The figures do not include the record
25million-a-season six-year sponsorship deal with kit manufacturers
Warrior, which came into effect last summer and could net the club a
similar amount through associated merchandising.
'We've had record sales of their products throughout this year,' said Ayre.
'We've also seen new sponsors come on board, notably Chevrolet and Garuda Airlines.
'If you have got a successfully
performing team and you have got an infrastructure which we now have and
the business ability to deliver revenue, then both of them coming
together would be a fantastic solution for the football club all round.'
VIDEO: Watch highlights of Liverpool's 4-0 win at Wigan on Saturday
.epl_container,.epl_top_container, .spon_left, .spon_right, .epl_cleardisplay:block;margin:0px;padding:0px;min-height:0px;font-size:0px;border:0px;white-space:nowrap;
.epl_containerbackground-color:#000000;
.epl_top_containerbackground:#F9F9F9 url(http://l.yimg.com/i/i/uk/any/e/bkg.jpg) repeat-x scroll top;
.spon_leftwidth:140px;float:left;height:60px;overflow:hidden;background:#000000 url(http://l.yimg.com/i/i/uk/any/e/ylogo.jpg) no-repeat;
.spon_rightwidth:160px;float:right;height:60px;overflow:hidden;background:#000000 url(http://l.yimg.com/i/i/uk/any/e/right.jpg) no-repeat;
.epl_clearclear:both;
