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The Owners

Kopstar

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The accounts seem to suggest that after 31 May 2018 we've contracted to spend somewhere between £50m and £65m more on player acquisition(s) than we've so far been reported as spending...

Edwards not hiding player acquisition(s) up his sleeve is he?
 


Arminius

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The accounts seem to suggest that after 31 May 2018 we've contracted to spend somewhere between £50m and £65m more on player acquisition(s) than we've so far been reported as spending...

Edwards not hiding player acquisition(s) up his sleeve is he?
Well Icardi would be about 40 of that, no?
 

Arminius

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Hah! I'd think he'd be more, he's such a quality player who defies all the haters in the name of love. He'd be way, way more...surely? ;-)

To me the shortfall looks more like the size of a Werner...
No, it is classic money ball, 90M talent but with all sorts of hair around the deal that gets you the knock-down price. It is a done deal, I am telling you.
 

RedForever2014

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FSM wouldn't be charging more than they charge other commercial clients so it is minimal as to how much (if any) they would be taking out via that method.

At the end of the day, FSG owns Liverpool too and I don't think that they are that hungry about yield that they need to take it out in a backhanded way.
I've long said that a club the size of LFC doesn't need third party deal makers to bring in commercial deals.

If the senior management of a 'company' of LFCs size aren't capable of doing those deals in house, it's pretty shocking. It's not like we're talking £50k a year directors, we're talking people who've worked for billion dollar brands and done deals worth hundreds of millions.

I'm not sure if FSM are collecting their cut via a separate contract with the commercial partner that contracts separately with LFC, or whether LFC pays FSM for their services. But it nets to the same thing.

If LFC was being run to maximise revenues and profits, to ensure we can spend as much as possible on transfers within FFP, you'd do it in house and you'd keep all monies in the business.

The reason FSG would do it via FSM is to extract cash, and to do so under a different tax jurisdiction, whilst also reducing the profit in the UK business and thus reducing corporation tax here.

I wonder what the rolled up losses incurred in the years before we became profitable were? These will now be used to offset UK corporation tax liability. So if we say lost a cumulative £80m in years 2010 to 2017, we'd only pay CT on the c£10m of this profit.

Any group financial officer worth his salt would be managing profits in individual companies in the international group to this effect, just like Amazon et al do.

How much of an issue this is depends on the amount in question, whether the money as a %age is a reasonable ROI on the money funding sources, and indeed whether it's all just an ROI or is part funding the Redsox.

A 'dividend' of 5% to 8%, with all money returned to equity holders is one thing, 10% plus with money generated by LFC being redirected to the Redsox is quite another.
 
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redfanman

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I've long said that a club the size of LFC doesn't need third party deal makers to bring in commercial deals.

If the senior management of a 'company' of LFCs size aren't capable of doing those deals in house, it's pretty shocking. It's not like we're talking £50k a year directors, we're talking people who've worked for billion dollar brands and done deals worth hundreds of millions.

I'm not sure if FSM are collecting their cut via a separate contract with the commercial partner that contracts separately with LFC, or whether LFC pays FSM for their services. But it nets to the same thing.

If LFC was being run to maximise revenues and profits, to ensure we can spend as much as possible on transfers within FFP, you'd do it in house and you'd keep all monies in the business.

The reason FSG would do it via FSM is to extract cash, and to do so under a different tax jurisdiction, whilst also reducing the profit in the UK business and thus reducing corporation tax here.

I wonder what the rolled up losses incurred in the years before we became profitable were? These will now be used to offset UK corporation tax liability. So if we say lost a cumulative £80m in years 2010 to 2017, we'd only pay CT on the c£10m of this profit.

Any group financial officer worth his salt would be managing profits in individual companies in the international group to this effect, just like Amazon et al do.

How much of an issue this is depends on the amount in question, whether the money as a %age is a reasonable ROI on the money funding sources, and indeed whether it's all just an ROI or is part funding the Redsox.

A 'dividend' of 5% to 8%, with all money returned to equity holders is one thing, 10% plus with money generated by LFC being redirected to the Redsox is quite another.
I dont think anyone with any knowledge has suggested we are subsidising the Red Sox, If anything it has probably been the other way round.
 

epsomred

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For a quick view / analysis of the company accounts:

Really helpful. Thanks. Amazed to see non tv commercial is now at £154m. I remember when all we had was a couple of old dears selling tat from a portacabin behind the stand. Used to be a massive queue on match days and they had an old fashioned carbon paper credit card machine that you had to sign. Those were the days my freind, we thought they’d never end...
 

lfc.eddie

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The reason FSG would do it via FSM is to extract cash, and to do so under a different tax jurisdiction, whilst also reducing the profit in the UK business and thus reducing corporation tax here.

I wonder what the rolled up losses incurred in the years before we became profitable were?
These will now be used to offset UK corporation tax liability. So if we say lost a cumulative £80m in years 2010 to 2017, we'd only pay CT on the c£10m of this profit.

Any group financial officer worth his salt would be managing profits in individual companies in the international group to this effect, just like Amazon et al do.
I am sorry, but if this is what they are trying to do, then you are right, they do need a better CFO in the company. By reporting the highest profit ever recorded pre-tax by any football club in one financial year means they are cutting down their profit so that they don't get tax, they have shit CFO.

To rebuild any company in the world that had just gone through a leverage buyout crew is going to take time, and a lot of losses will be incurred throughout those years. Yes, they did take a bit more time than expected and that is down to their mistakes in hiring managers and directors at the time. Looking back the hiring of Comolli had delayed their plans for some good 2 years, and then not able to get Klopp and instead Rodgers again set them probably back another two years. So for them to take nearly a decade to turn the club financial around didn't surprise me.

So I don't know why you are so angry at them for making us profitable. And if you think they are using FSM to suck money out of the club, you are not giving them enough credit in their expertise in corporate exercises. And if what you say is actually true, I would surely send my company profile over to their London office soon to offer my consulting services, they can do so much better than that.
 

dockers_strike

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I've long said that a club the size of LFC doesn't need third party deal makers to bring in commercial deals.

If the senior management of a 'company' of LFCs size aren't capable of doing those deals in house, it's pretty shocking. It's not like we're talking £50k a year directors, we're talking people who've worked for billion dollar brands and done deals worth hundreds of millions.

I'm not sure if FSM are collecting their cut via a separate contract with the commercial partner that contracts separately with LFC, or whether LFC pays FSM for their services. But it nets to the same thing.

If LFC was being run to maximise revenues and profits, to ensure we can spend as much as possible on transfers within FFP, you'd do it in house and you'd keep all monies in the business.

The reason FSG would do it via FSM is to extract cash, and to do so under a different tax jurisdiction, whilst also reducing the profit in the UK business and thus reducing corporation tax here.

I wonder what the rolled up losses incurred in the years before we became profitable were? These will now be used to offset UK corporation tax liability. So if we say lost a cumulative £80m in years 2010 to 2017, we'd only pay CT on the c£10m of this profit.

Any group financial officer worth his salt would be managing profits in individual companies in the international group to this effect, just like Amazon et al do.

How much of an issue this is depends on the amount in question, whether the money as a %age is a reasonable ROI on the money funding sources, and indeed whether it's all just an ROI or is part funding the Redsox.

A 'dividend' of 5% to 8%, with all money returned to equity holders is one thing, 10% plus with money generated by LFC being redirected to the Redsox is quite another.
Sorry, you're just chatting shit to keep your agenda of every last penny not being spent on players going. You havent a clue how the club are operating and just floating 'maybe's' and 'if' to suit your repetitive negative agenda.
 

dockers_strike

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My previous comment is now time locked so cannot add the following from The Echo -
"Other details (from LFC's accounts), though, have since emerged with the accounts now having been published on the Companies House website.

They include Liverpool's debt to the bank, after deferred loan costs, has decreased from £67.7m to £44.8m.

It is also reported the club's highest-paid director was paid £1.329m last year.

This was up on the £907,000 given to the highest-paid director the previous year."


So in the last accounting period, the club paid back £10m of the intra company loan on the Main Stand and paid off around £23m of the bank debt. One director saw an increase in pay by around £400,000 which was, probably, performance related. It also bought van Dijk and sold Coutinho in that accounting period.
 



Kopstar

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My previous comment is now time locked so cannot add the following from The Echo -
"Other details (from LFC's accounts), though, have since emerged with the accounts now having been published on the Companies House website.

They include Liverpool's debt to the bank, after deferred loan costs, has decreased from £67.7m to £44.8m.

It is also reported the club's highest-paid director was paid £1.329m last year.

This was up on the £907,000 given to the highest-paid director the previous year."


So in the last accounting period, the club paid back £10m of the intra company loan on the Main Stand and paid off around £23m of the bank debt. One director saw an increase in pay by around £400,000 which was, probably, performance related. It also bought van Dijk and sold Coutinho in that accounting period.
This has already been covered.

Director's pay not performance related but reflects the change from Ayre to Moore.
 

Red over the water

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If the owners are taking a dividend it’s all fine and well, but I would rather they reported it so it’s all in the open. They could argue they don’t have to as it’s a private company. They may also have tax reasons to apportion money this way or that. Arguably they don’t want to be open about a dividend for fan-relation reasons, as sometimes fans can get their knickers in a twist.

Nobody in their right mind would begrudge an investor getting a return on investment. So let’s imagine they are taking a £10-15M dividend through various deals coming into the club. Now let’s imagine we didn’t get this player or that player, and we wonder if it was due to budget. Or let’s imagine someone moved on and got more wages elsewhere. Or let’s imagine things weren’t going so well on the pitch as now.

It wouldn’t be too much of a stretch to think that some fans would begrudge the dividend. “They are never here!” “I’ve worked hard all my life and the most I’ve ever made is £25k a year!” “They’ll get paid when they sell up, and they will make hundreds of millions, or maybe even a billion or more!” Etc.
 

Iluvatar

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For me it's really simple, FSG came in and said they would make us competitive whilst living within our means. They have delivered on that to this point. Yes they need to make the step into winning some trophies but I don't think thats too far away.

Most clubs in the world make their owners money, its a very few which are play things for the ultra rich.
 

RedForever2014

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I am sorry, but if this is what they are trying to do, then you are right, they do need a better CFO in the company. By reporting the highest profit ever recorded pre-tax by any football club in one financial year means they are cutting down their profit so that they don't get tax, they have shit CFO.

To rebuild any company in the world that had just gone through a leverage buyout crew is going to take time, and a lot of losses will be incurred throughout those years. Yes, they did take a bit more time than expected and that is down to their mistakes in hiring managers and directors at the time. Looking back the hiring of Comolli had delayed their plans for some good 2 years, and then not able to get Klopp and instead Rodgers again set them probably back another two years. So for them to take nearly a decade to turn the club financial around didn't surprise me.

So I don't know why you are so angry at them for making us profitable. And if you think they are using FSM to suck money out of the club, you are not giving them enough credit in their expertise in corporate exercises. And if what you say is actually true, I would surely send my company profile over to their London office soon to offer my consulting services, they can do so much better than that.
You completely missed the point, or didn’t understand it.

I said that the CFO is wholly competent, if the goal is to ensure tax efficiency and extract cash from LFC.

LFC can't do a full on Amazon because it is a different business type, and the company will declare profits that are basically a largely accurate refection of its trading activities.

But within that there is still scope for tax planning based on the international nature of the group.

The club can declare a profit in the UK business and use rolled up losses to offset those profits for corporation tax purposes.

It can also use overseas businesses in the group, or indeed completely independent businesses the owners own, to cross charge 'services' to LFC, in order to get money out of LFC and move money around to ensure favourable tax treatment.

Given the scale of previous losses at LFC, they can declare large profits here and not pay as much corporation tax, under those losses are used up.

They can also take money out via other businesses and put the money in lower tax jurisdictions, and/or into companies that have their own losses to use up for corporation tax purposes.

FSG is being run wholly competently from commercial, financial, taxation and investment perspectives.

LFC is a key part of that, and whilst the piece of the overall pie LFC has available to spend on players still represents a larger amount under good commercial ownership than 100% would under less commercially competent owners, that doesn't change the fact that the club isn't able to spend as much net in the transfer market as a club of its standing should, because of cash being extracted.

We're going to win something sooner or later, but I see a far bigger opportunity than that, and with the right investment now we can lock that opportunity in.
 



Iluvatar

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You completely missed the point, or didn’t understand it.

We're going to win something sooner or later, but I see a far bigger opportunity than that, and with the right investment now we can lock that opportunity in.
I think you miss the point, FSG do not have the deep pockets of mafia money russian or Human right abuser Saudis.

What you are talking about (if true) is so marginal, it would have a near zero impact on our ability to invest more in the squad.

The market is so inflated currently adding an extra £10mil to our pool of transfer funds is like a drop of water in an ocean.

So the two don't correlate, to invest to the level of City would take completely new owners, which don't grow on trees.

Just be happy with the progress made and stop bleating it could be better based on nothing but assumptions.
 

RedForever2014

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I think you miss the point, FSG do not have the deep pockets of mafia money russian or Human right abuser Saudis.

What you are talking about (if true) is so marginal, it would have a near zero impact on our ability to invest more in the squad.

The market is so inflated currently adding an extra £10mil to our pool of transfer funds is like a drop of water in an ocean.

So the two don't correlate, to invest to the level of City would take completely new owners, which don't grow on trees.

Just be happy with the progress made and stop bleating it could be better based on nothing but assumptions.
It'll be more than £10m.

Anyway the point is really that they are extracting cash when many said they weren't.

The fact that FSM are involved, and won't work for 'free', proves that fact.
 

Iluvatar

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It'll be more than £10m.

Anyway the point is really that they are extracting cash when many said they weren't.

The fact that FSM are involved, and won't work for 'free', proves that fact.
Can you post proof of that please?
 

lfc.eddie

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You completely missed the point, or didn’t understand it.

I said that the CFO is wholly competent, if the goal is to ensure tax efficiency and extract cash from LFC.
That's the thing though, the CFO is far from competent if their goal is to extract money from the club and ensuring tax efficiencies. Their way of extracting money from the club opens them up to being tax for UKSV and FSG in the United States. The way they extract cash based on your assumptions would exposed these other companies. And for tax efficiencies, we should not be publishing our account with £125m pre-tax profit, that will clear up all the tax break discount we've been enjoying in the last 8 years with just one year. I didn't miss the point at all.
 

RedForever2014

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That's the thing though, the CFO is far from competent if their goal is to extract money from the club and ensuring tax efficiencies. Their way of extracting money from the club opens them up to being tax for UKSV and FSG in the United States. The way they extract cash based on your assumptions would exposed these other companies. And for tax efficiencies, we should not be publishing our account with £125m pre-tax profit, that will clear up all the tax break discount we've been enjoying in the last 8 years with just one year. I didn't miss the point at all.
The UK and US tax rates are similar, plus it depends on whether the company they are moving money from LFC to makes money.

If the money they're extracting from LFC nets off against losses on something else at FSM, or indeed further up the chain in the group, then they would avoid UK corporation tax on that money and the US version.

Whatever is going on, it will be to the benefit of FSG and its shareholders.

That's their right, I'm just saying that it is a different situation than was stated.

As to the UK profit, maybe the profit they posted was what they could get away with without questions being asked in terms of the net commercial revenue versus other clubs, figures which actually started this particular conversation up. That is, maybe they couldn't take more revenue out via FSM without questions being asked.

Maybe they want to use all the accrued losses now in case a Labour government comes in and changes the system.
 



lfc.eddie

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The UK and US tax rates are similar, plus it depends on whether the company they are moving money from LFC to makes money.

If the money they're extracting from LFC nets off against losses on something else at FSM, or indeed further up the chain in the group, then they would avoid UK corporation tax on that money and the US version.

Whatever is going on, it will be to the benefit of FSG and its shareholders.

That's their right, I'm just saying that it is a different situation than was stated.

As to the UK profit, maybe the profit they posted was what they could get away with without questions being asked in terms of the net commercial revenue versus other clubs, figures which actually started this particular conversation up. That is, maybe they couldn't take more revenue out via FSM without questions being asked.

Maybe they want to use all the accrued losses now in case a Labour government comes in and changes the system.
So you are ranting about the figures posted based on "maybe"? Come on. I am no fan of the owners when it comes to their past operational management, but for someone to just rant about them taking money out on "maybe" and not knowing exactly what transpired is a bit of a stretch. I don't like their idea of staying competitive is to sell prized assets to fuel our purchase, and that's about all I could complain about them in the past.

By the way US tax rates are quite different to UK corporate tax rates. If I was them I'd keep my profit in the UK since I do enjoy 19% better tax compared to the US.
 

RedForever2014

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So you are ranting about the figures posted based on "maybe"? Come on. I am no fan of the owners when it comes to their past operational management, but for someone to just rant about them taking money out on "maybe" and not knowing exactly what transpired is a bit of a stretch. I don't like their idea of staying competitive is to sell prized assets to fuel our purchase, and that's about all I could complain about them in the past.

By the way US tax rates are quite different to UK corporate tax rates. If I was them I'd keep my profit in the UK since I do enjoy 19% better tax compared to the US.
It's 21% in the US, more yes, but not hugely and of course there's the issue of then getting post tax profits out of the business to consider (where they are resident etc.).

It also depends whether the money transferred is taxable at all at FSM in the context of their business activities during the year in question.

Anyways let's leave it at that.

Have a nice weekend Eddie.
 
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Mascot88

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At the end of the day we are owned by a sports investment company, and I’d rather that than the sovereign wealth fund of a human rights abusing oil nation, or a batshit sugar daddy. If the price of that arrangement is that they need their investors to see a return, that so be it - that’s not a problem. That’s if they are topslicing their dividend off the commercial deals.

Where it becomes a problem if if affects us on the pitch. There is no evidence that the possible sums are going to be felt elsewhere, no evidence that Klopp is frustrated he doesn’t have the money he needs, and no evidence that there is any problem with either recruiting or retaining players.

Show me that Klopp is pissed off that money isn’t available, or we’ve missed a player for financial reasons, and I’ll be on the protest march with you.
 

lfc.eddie

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It's 21% in the US, more yes, but not hugely and of course there's the issue of then getting post tax profits out of the business to consider (where they are resident etc.).

It also depends whether the money transferred is taxable at all at FSM in the context of their business activities during the year in question.

Anyways let's leave it at that.


Have a nice weekend Eddie.
Lowest bracket is 21%, not including state taxes as well. Money moved from company to company, if it is not booked as loan, the bottom line profit is always taxable. It's how you cook your books to show no profit or making losses that exempt you from any form of taxes. It is hard to leave it at that if you are ranting about rates and figures you claimed that FSM is taking money out of the club without having to pay taxes.

Bottom line is, you are harping on things that isn't there. Like I said to you before, if you are angry about the fact that they are still using the "I am new to this business" routine, messing up the appointment of CEOs and Directors for continuity and failed to have contingencies if and when Klopp move on, when that time comes, I will join you on that train. But for now, we should not be too unhappy with how the club has been turned around from making losses year-in, year-out to being the most profitable in the league.

I just hope they can get better commercial and sponsorship deals further down the road, and less dependent on the TV licensing revenue.
 

RedForever2014

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Lowest bracket is 21%, not including state taxes as well. Money moved from company to company, if it is not booked as loan, the bottom line profit is always taxable. It's how you cook your books to show no profit or making losses that exempt you from any form of taxes. It is hard to leave it at that if you are ranting about rates and figures you claimed that FSM is taking money out of the club without having to pay taxes.

Bottom line is, you are harping on things that isn't there. Like I said to you before, if you are angry about the fact that they are still using the "I am new to this business" routine, messing up the appointment of CEOs and Directors for continuity and failed to have contingencies if and when Klopp move on, when that time comes, I will join you on that train. But for now, we should not be too unhappy with how the club has been turned around from making losses year-in, year-out to being the most profitable in the league.

I just hope they can get better commercial and sponsorship deals further down the road, and less dependent on the TV licensing revenue.
As I said another time, I'll never celebrate being the most profitable in the league when that profit came from selling a top player.
 



lfc.eddie

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As I said another time, I'll never celebrate being the most profitable in the league when that profit came from selling a top player.
Didn’t ask you to celebrate the profitability, just don’t have to make up some figures that wasn’t there just to criticise the owners. Like I said before, there are things we could jump on them but not all the time. I still don’t believe they are not going to sell the club for profit, either by way of finding new individual owners or put the club up in an exchange. But that’s my opinion of what they might do.
 

RedForever2014

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Didn’t ask you to celebrate the profitability, just don’t have to make up some figures that wasn’t there just to criticise the owners. Like I said before, there are things we could jump on them but not all the time. I still don’t believe they are not going to sell the club for profit, either by way of finding new individual owners or put the club up in an exchange. But that’s my opinion of what they might do.
Didn't make figures up, just outlined the process by which international groups move money around.

It's not all about tax rates either, it's about where they want the money to sit.

Being an American company, they prefer to have some profit after tax sat in dollars in the US, even if US tax rates are a little higher than UK ones, especially given the volatility in the value of the UK pound.

Get all the commercial deals paid direct to LFC in UK sterling, and the value of the pound could easily go against them when trying to repatriate sterling to dollars.

Hence why you'd put some money through a US company in the group, even when paying a little more tax on it.
 

lfc.eddie

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You be surprised that a lot of American based company would rather have their cash stashed outside of their country, @RedForever2014. I could name the whole lot of them having offshore companies for a reason.
 

RedForever2014

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You be surprised that a lot of American based company would rather have their cash stashed outside of their country, @RedForever2014. I could name the whole lot of them having offshore companies for a reason.
At the end of the day, these are clever people who will be organising their affairs to their own ends.

But the point remains that these ends are not just about LFC's success on the pitch.