Liverpool Count Cost Of Stadium Ambitions
Thu 3rd May 2012 | Money & Finance
Liverpool’s latest accounts show the true extent of Hicks and Gillett’s troubled tenure with over £35m wasted on the failed Stanley Park project.
In an interview on the club’s official website Managing Director, Ian Ayre revealed just how the club’s former owners pursuit of a new stadium had affected the accounts which show they made a loss of £50m for the year ending July 2011.
“I think people will probably focus on the headline which is there has been a £49-£50 million loss in these accounts, but what I can say is a large majority of that is related to writing off a stadium facility where most of the cost was focused around a design for a stadium which many fans will remember as being the bigger, 70,000 seat proposition which never got built,” explained Ayre.
“A big part of that cost was on a particular design that the previous owners were keen to develop and that's a whole mix of design costs, planning costs, legal costs, some other administrative costs, and they escalated quickly.”
Plans for a 55,000 capacity stadium on Stanley Park were first submitted in 2002 but plans were resubmitted in 2007 for a bigger 70,000 capacity stadium following Hicks and Gillett’s takeover. However, the Americans’ were unable to raise the finance required after falling into financial difficulties before they were eventually scrapped when new owners Fenway Sports Group acquired the club.
Hicks and Gillett's leveraged buyout loaded over £230m on the club which they struggled to repay.
“There was much talk and conjecture around the debt that the Club was with under previous ownership, there has been over £200 million of that debt paid down and that's very important for the Club moving forward because at the height of it debt service was around £18 million and that has been reduced to somewhere around £3 million now which is obviously a much more palatable and manageable position for the Club to be in.”
The club will now look to resurrect the original plans for the 55,000 capacity stadium. “What's important is that fans can take some comfort in the fact that moving forward that certainly isn't the case. We have a different design which was the original design, which we have planning permission for and in terms of the design that's largely done, so there's no additional cost to go to there.”
Ayre was also keen to stress the improved commercial performance of the club: “What's also important is that we have created a great commercial platform which underpins the business and drives the business forward and creates important revenue to invest in the team.
”The important thing to note from these accounts is that in the period they relate to we weren't playing Champions League football, we were playing Europa League football, and in that period our revenue was largely flat so it shows that as a Club, while European football and Champions League football are important to this football club - we have a great history in that competition - it's also important to know that we have a sustainable business that can move forward in that type of scenario. In that same period although our total revenue was largely flat our commercial revenue grew significantly, as the accounts will show.
”We've always said it's about building a sustainable business that can support itself, just as Financial Fair Play alludes to. This shows we have a business growing underneath the football and the ability to invest to grow the football, and that has to be the best way forward.”
Posted by: Aaron Gourley
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