Liverpool FC record £20 million loses in final year of Hicks-Gillett ownership

£20 million - The amount the club lost during Hicks and Gillett's last year of ownership. The losses occur during the financial year starting August 2009 to July 2010. 

Hicks and Gillett bought the club promising a league title and to bring Liverpool back to the pinnacle of English football, where our beloved club belongs. However, these promise were broken, fans accused the two Americans of draining the club of its stature. Hicks and Gillett used the club to offset their borrowing and loaded the club with a mountain of debt. The club, part of it's £20 million loses, was paying close to £13 million in interest payments alone which rose nearly £5 million annually.

The Liverpool Echo exclusively obtained the accounts which reveal the extent of the losses endured. The cost to part company with former manager Rafael Benitez, who constantly battled the owners, and his staff nearly broke the £8 million pound mark.

Hicks and Gillett also promised the club a new stadium in Stanley Park which, unsurprisingly, never materialized.

They continued to suck the life out of a club that millions adored until the inevitable happened. In October 2010 their dark strangle hold of the club was lifted. FSG, an American sports group, came in to safe the club and give it new life, something it has accomplished in its short tenure as owners.

FSG re-payed close to £200 million in outstanding debt to The Royal Bank of Scotland an lowered interest payments to £3 million annually. Suddenly things looked brighter around the club and under Kenny Dalglish the team is flourishing.

A round up of some of today's financial figures:

Club revenue is up by £7 million from £177m to £184m (not including £81m shirt sponsorship deal)

Profit on player return of nearly £23m

Media revenues up by £5m to £80

Administration expenses rose £20m from £162m to £182m (mainly player contract extensions)

 These are just some of the many points carried out in the financial aspect of the club. For more information please refer to the Liverpool Echo.

Ian Ayre, former Commercial Director, said:

“As much as we were well aware of the difficulties surrounding these accounts, everyone in the world is now aware of what has been achieved since.

“The club is now in an excellent position to move forward.”

Hicks-Gillett ownership should serve as a lesson

William Gaillard, who is an adviser to UEFA president Michel Platini, has said the Hicks-Gillett era of Liverpool should serve as a lesson to other football clubs. He states that football clubs should take caution when dealing with potential buyers who are funded by debt.

Gaillard  said;
'The club has been rescued, thank God, of the fantastic heritage of Liverpool Football Club, but it was a close call. There was the extraordinary situation where a club was being owned by the British and American governments. They suddenly found themselves being owned by two failed banks that had been taken over by Governments - RBS by the British government and Wachovia by the US government.'

Hicks and Gillett were bought out by Fenway Sports Group (FSG), who are led by John Henry as the leading shareholder, in October 2010. The takeover was heavily publicized as it involved the English courts to force the deal through. Henry, who cleared the debt owed by the former to RSB, gained full control despite great protests from Hicks.

Read more: http://www.dailymail.co.uk/sport/football/article-1380794/Liverpool-went-bust-debt.html#ixzz1KeyM0IM6