Sunday 17 November 2019

Liverpool must offer Rodgers a new deal now

Liverpool manager Brendan Rodgers has made huge progress with the club this season.
Liverpool manager Brendan Rodgers has made huge progress with the club this season.


It is a sign of Liverpool's progress under Fenway Sports Group that the club's accounts were released a week ago amid a blaze of apathy.

A couple of years ago, you needed a deep breath and a NASA countdown while waiting for Companies House to make the financial figures available.

Those were the days when Tom Hicks and George Gillett Jr had a pressing refinance deadline to meet, and a £300m debt, causing auditors KPMG to issue 'going concern' warnings.

FSG, in comparison, can boast of relative serenity, with Liverpool Managing Director Ian Ayre acclaiming the most recent figures as evidence of 'good progress'.

Ayre spoke once again this week regarding Liverpool's intentions of returning to the Top 10 of Deloitte's football rich list

It is a corporate ambition that leaves those who want to focus on football colder than a penguin's lip, but the intrinsic link between financial and sporting health is dutifully acknowledged.

Liverpool were able to put a positive spin on these accounts by embracing favourable points of comparison.

Basically, it does not matter how unexceptional Liverpool's current accounts are, you only have to mention the name 'Hicks' and there will be a shudder down the spine of every Kopite and suddenly FSG possess the financial acumen of John D. Rockefeller.

Even the current debts are in large part due to Hicks' Disneyland vision of a new stadium at Stanley Park, setting the current ownership back £39 million when they abolished the plan. The legacy of the old regime has not been overcome yet.

While the perception of the current financial landscape at Anfield is relative to what came before, what cannot be ignored, amid a headline figure of £49m losses for the Merseyside club, is the enduring vitality of reclaiming a Champions League place.

It has always been thus, but a club of Liverpool's stature truly does need the sustenance of the elite league. The startling fact overseas commercial revenue is worth just £8 million tells you how far being a 'global brand' really takes you.

Liverpool are actually still a bit skint. Not worryingly skint. Not so skint the Premier League TV deal and Champions League qualification won't make them a whole lot less skint, but skint to the tune of £49 million, nonetheless.

In fact, this £49m loss is rather confusing because, according to Liverpool's holding company, UKSV, the figure is really £69 million.

UKSV was formed in 2010 when FSG bought Liverpool and the anomaly is down to the complicated process of 'amortisation' of players.

In the past, if you signed a player for £25m on a five-year deal, that showed as £25m in that year's accounts. Nowadays, the value is spread over the course of that five-year contract, hence £5m a year.

It means Liverpool will still be paying in 2015 for anyone signed on a five-year deal in 2010. The squad's value was re-evaluated when FSG (or UKSV) took over the club, so they differ between the two sets of accounts. Confused? That's why aspiring football reporters would be better off doing a finance rather than English degree.

Is it a concern Liverpool has two sets of accounts? Not especially, but you'll recall Hicks and Gillett loaded their debt on the holding company they formed in 2010 called Kop Football. Their argument was their loans were not taken against the club, but Kop. Sadly for them, Kop and Liverpool were effectively one and the same so their claims of not mortgaging the club's future were swiftly exposed as a sham.

Again, we're not talking anywhere near the same levels of crippling, suffocating debt here - not in the same ball park - but the quizzical among you might think that since this hasn't been mentioned before it's better to do so late than never, just to keep an eye on in future.

That's not to say Liverpool are not justified in being more upbeat, especially as fresh TV revenue comes in and only a calamity will deny the club a top four place now.

When that happens, one imagines the reward will be swift for Brendan Rodgers.

His guiding Liverpool into a Champions League place may not have defied the expectations of his board, who predicted a surprising season, but it certainly has those who recognise he has been working with a squad which - goalkeeper apart - is not much better in personnel than the one that finished seventh last year.

Liverpool's transformation into title contenders within the space of 12 months can be put down almost entirely to Rodgers's 'coaching and training' of the first team (dare one use the term given the historical connotations?)

Rodgers has one year left on his contract after this summer, although the club can exercise an option to make that two.

John W Henry knows value when he sees it and Rodgers's stock is now considerably higher than when he arrived from Swansea. He has been good for Liverpool and Liverpool has been good for him. History shows how contract talks can be a distraction during a season, but Rodgers is currently a few more good results from being in a territory where it makes sense for the club to drag his representatives to the negotiating table as quickly as possible.

Liverpool's future accounts will look much healthier thanks to Champions League participation. If so, it is just as inevitable the staff costs will also show an increase as Rodgers is duly rewarded for his efforts.

A £30m dividend from Uefa could be coming Liverpool's way at the end of this season, but you can be sure some of this will be swallowed up in staff and player bonuses - not least the manager's - before the Champions League anthem is played again at Anfield.

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