KopTalk.com Forums Football Liverpool FC Forum Turns out we aren't debt free...

I think we are on a very solid financial footing now and we can leap forward from where we are now. These Americans know what they are doing they are very clever businessmen and I trust them at the moment but only time will tell if they get it right but I'm sure they will and return our great club to where it should be at the very top of world football

YNWA

agreed they made this quite clear to those that listened that this is what they would be doing.

They should up it by a couple of million and get it paid off quicker.

Yeh I think I heard when the deal went ahead for lfc to be sold to them it was announced that our debt would only be 3-6mil a year from now on.

but why even have this?

Shows the club can aquire some sort of debt and has the means to pay it off

If John Henry acquired LFC out of his own personal funds then it is debt free. But if we were acquired by NESV we are a subsidiary of the NESV Group. In which case NESV will want a return equal to the groups cost of capital. Therefore a notional charge will be made in the group accounts against the Profit & Loss of LFC. That will be equivalent to what we would pay externally. Put simply no interest cash changes hands but they allow for it in the accounts in America as if it did. So we are not debt free and never where. The difference between this arrangement and G&H is NESV can ignore the notional charge if they so wish it’s up to them e.g they can pat the bean counters on the head for the odd year. But at the end of the day and over medium term they WILL want a return = to the cost of capital (COC). COC = interest plus risk premium.

Must admit I thought TW4TS, but after a bit of digging and reading up it all makes sense!

John henry is principle owner of fsg/nesn/nesv

They own Liverpool fc, the Boston red sox and rouge racing.

Nothing difficult to understand is there

Totally agree with you both. The new stadium debt was left on the balance sheet as Henry regarded this as different (and rightly so) to the acquisition debt that dumb and dumber had put on the club. The totally right and correct thing to IMO.