SOS: LFC The Next Leeds?

Competing in the Champions League, reaching the semi-final stages. Doing well in the Premier League. An ownership of the football club, that has borrowed heavily against its success, reliant on its continued appearance in the lucrative Champions League and on money from ever-increasing television deals to service the debts. It sounds awfully familiar. But this isn't Liverpool Football Club in 2009. It's Leeds United, 2001. 8 years ago. Yet it seems lessons haven't been learnt by those who run football clubs, building them up 'artificially through debt'.

On Tuesday night, Liverpool Football Club play Leeds United. Two great teams of English football, both with a long history, both successful and winning trophies throughout the 60's, 70's and 80's. But the circumstances in which Liverpool now play Leeds United, could hardly have been imagined back in 2001. Whilst Leeds United now reside in League 1, looking for promotion to the Championship, Liverpool find themselves looking to take the next step in the league, from challengers to title winners, and for a European Cup Final appearance. Just like Leeds United did 8 years ago. The reason they aren't - The financial mis-management of their football club. Leeds failed to qualify for the Champions League. They couldn't afford to repay their loans. Players were sold to meet the repayments. Eventually they were relegated, having sold many of the star players. The stadium and training ground soon followed.

Liverpool Football Club can be the next Leeds United. Some may believe it is far off, never to happen to us. Ask Leeds fans - I'm sure they never expected to be where they are now. The management of LFC claim we are able to comfortably service our level of debt. Whilst we all urge them to define 'comfortable', it won't be comfortable to service them if we don't have Champions League income. Other clubs are spending heavily to become part of the top four - Manchester City and Tottenham to name just two, whilst we only spend what we make from players sales. It inspires little confidence in those running our club. If we don't qualify for the Champions League, what happens next summer? Do the owners invest heavily, ensuring it doesn't happen again? Or do they re-finance the present debt, with a player sale required to provide the equity needed?

We all have our own answers, our own opinions. But it's fair to say that Liverpool Football Club can be the next Leeds United. Will they? Under the present ownership, it is much more likely.

So on Tuesday night, at Leeds United, make yourself heard. Make sure your voice, your opinion, is heard on how Tom Hicks and George Gillett are taking us closer to a financial cliff edge. Banners need to be seen, chants aired. Tell the world Tom and George aren't wanted here. We don't believe their promises, and we don't want to hear their lies.

LFC - The Next Leeds? Maybe.

Yanks Out? Definitely!

Spirit Of Shankly

Read that earlier today HR.  Worrying thought isn't it.  All looks well at the moment on the pitch but if we get unlucky with injuries, the squad is so thin thanks to the lack of investment by the lying bas**rds that we could be in danger of missing out on a CL place.

Yanks OUT!

NO CHANCE.

Aren't we financially reliant on finishing in the top four? I heard a while ago that if we fail to qualify for the CL we're going to be in a quite a bit of trouble.

If we don't finish in the top four then we are in big enormous sh*t.

Simple fact.

Players will be sold and we will begin to tumble.

There is one man keeping Liverpool above water at the moment. Rafa Benitez.  We should be making £50M profit a year to spend on new players or whatever.  Not £10M and handing £40M of it to banks to pay interest on a £300M loan that we never ever had before.

The sooner these pair of wankers do one the better for all involved.

It's exactly what happened to Leeds.  You're spot on JD, thank god for Rafa.

^

Is true, but we'll never be the next Leeds because worst case scenario is that we don't finish top four and players would be sold.Yes we'll owe shed loads of money but them "owners" will gone out the door (Dead Or Alive) faster than Usain Bolt, and then SOS will put their plan into action and take control.

I can't ever see us not being in the top flight.

YNWA

We will not be the next Leeds.

When you look at it it is quite frightening but i can not see us ever being in that predicament but i suppose Leeds fans said the same.

The only way we can guarentee this does not happen is to get rid of the two yanks and get somebody in who cares about Liverpool Football Club.

Today it's not even someone who loves Liverpool it's about money solely money

We won't be the "next" Leeds, but we could be in serious difficulties if we fail to not only qualify for Cl but also fail to get to the more lucrative semi-final stage of the competition.Our current "financial model" requires this cash to finance its debt. The alternative to non-qualification would have to be LFC becoming a selling club. We are already doing it to finance transfers, and I would suggest that without Rafa at the helm, we would be doing it even more. What odds do you think on Mascher being next summer's cash cow? Next Leeds no but with these gobsh*te owners, mid table is a possibility.

Do we have to change the colour of our kits and start in-breeding?

We are run at an operating profit. Far cry from Leeds who borrowed on the strength of champions league football and crashed and burned.

We are run at an operating profit. Far cry from Leeds who borrowed on the strength of champions league football and crashed and burned.

I dont think so mate.

Operating profit concerns regular income/cashflow - currently sponsorship, advertising merchandise sales and gate receipts. You think this also covers the £40m interest yearly as well as the running of the business?

We are run at an operating profit. Far cry from Leeds who borrowed on the strength of champions league football and crashed and burned.

You are right mate,LFC ltd are running at a small profit, but not enough to cover the debts imposed by it's holding company, Kop Holdings Ltd.who own us.Without CL success we would not be able to support even this level of debt , and as KHL do'nt have any other revenue streams, the football club would be in deep sh*t, unless the owners were prepered to put their own money into the club.So far they have refused to do this,other than on the recent refinancing agreement, where they were obliged to reduce the debt by £60 million. Where did this money come from? I wait to see from next year's accounts, but I have my suspicsions.

^^^^

Well said.

The problem they have is a common problem in business. Its the inability to refinance the debt on more favourable terms due to the credit crunch. Not sticking up for G&H and but some of the problem is not of their own making.

Its a fact that to get this finance/refinancing in the first place they have laid down collaterol for the debt. Especially with the way it has been structured, Liverpool FC are not responsible for most of it, Kop Holdings are and thhe borrowing arranged by KHL will have been negitiated with some kind of personal garuantees from the shareholders.

The problem we are stuck with at the moment is that we need to raise our matchday revenue. We only raise about £1m a game. We cant do that without a 60-70,000 seater stadium and a huge collection of corporate hospitality suites. When you look at Arsenal their corporate hospitality at The Emirates raise more than the whole of Highbury did.

Unfoirtunately, due the global economic crisis it seems people with a few hundred million to spend on a stadium are thin on the ground.

I only hope Purslow has the business sense to find us stadium name sponsor as it is the only thing that only thing that can get our stadium built at the moment and if we dont do that, then this debt will take a decade to reduce to a more manageable level.

We wont go bust as club. I have no doubt that G&H can make their interest payments and have been. KHL made a loss, that doesnt mean they havent been paying the bills. It means that they have been paying down interest, while not taking any revenue from the club (which is KHL's only asset).

Sadly everyone thinks they are an accountant these days.