Reds lay bare financial ruin of old regime
How bleak Liverpool's future was before the club's £300m takeover by Fenway Sports Group has been laid bare after the last set of accounts from the Tom Hicks and George Gillett regime revealed a £20m pre-tax loss despite increased revenues and profit on player sales.
Liverpool's accounts for the year ending July 2010 were filed yesterday, offering fans a glimpse as to what the future might have entailed had new ownership not been found in October.
Only a £23m profit on player trading -- thanks to the £30m sale of Xabi Alonso -- prevented the club matching the record £55m loss of the previous financial year.
Liverpool also posted improved revenues of £184m, up £7m, though that was offset by soaring administration expenses of £182m and an £8m pay-off to Rafael Benitez and his coaches.
That the club still managed to record such a substantial loss was due in part to a soaring wage bill -- more than £100m for the second consecutive year -- and the mounting cost of servicing the interest accrued by Hicks and Gillett when they bought the club in 2007. Liverpool spent £17.7m on interest in the last year of their tenure, an increase of £5m on the previous 12 months.
Managing director Ian Ayre said: "FSG has paid off £200m of acquisition debt from the previous owners, dramatically reducing interest payments as a result and meaning we are able to invest more revenue in the team rather than servicing debt." (© Daily Telegraph, London)