Abandoned stadium plans blamed for Liverpool's £50 million loss

By David Gold

May 4 – Liverpool FC have made a loss of almost £49.4 million ($81 million/€61 million) for the last financial year ending July 2011, most of which is accounted for by abandoning a plan to move into a new stadium.

The proposed new stadium (pictured above), designed by HKS, was a project of the club’s former owners, Tom Hicks and George Gillett, which cost Fenway Sports Group £35 million ($57 million/€43 million) to terminate.

The firing of newly appointed England coach Roy Hodgson (pictured below) last year and former managing director Christian Purslow added another £8.4 million ($13.6 million/€10 million) to their losses.

As the figures run until the end of last season, they will not count towards the first audit of the club accounts under UEFA’s new Financial Fair Play (FFP) rules, which come into effect this season – and could explain why Liverpool chose to write off the cost of the project at this point.

Without those one-off costs, Liverpool will be confident of complying with the requirement not to make losses of more than £45 million ($59 million/€38 million) of losses in the first two years of FFP.

“I guess people will focus on the loss of £49.4 million ($81 million/€61 million) and there’s no business – or people running any business – who are going to be pleased with any loss,” managing director Ian Ayre told the Liverpool Echo.

“But I think the important indicator here is the charge for exceptional items and as a business that’s been in a transition, it’s about moving from where we were to where we want to be.

“We have written off a huge amount on the stadium project.

“A big chunk of that loss relates to the HKS project – which is now defunct – and associated costs around that.

“With new ownership that was kind of milling around within the club’s accounts and there was a very definite need to move that out.

“It is a huge loss but that goes with a lot of other things that nobody was really happy with in that period.

“So rather than dwell on it, we’ve very smartly made the decision to remove it from the club’s accounts.

“It is a big write-off but it means that it’s gone for ever now and we can move forward now without that around our neck.

“It also means that we are in pretty good shape in being a sustainable business.

“It’s a positive step forward.”

The figures also do not include a kit deal signed with American company Warrior Sports, worth £25 million ($40 million/€30 million) a year.

Contact the writer of this story at zib.l1734830605labto1734830605ofdlr1734830605owedi1734830605sni@d1734830605log.d1734830605ivad1734830605