A few weeks ago a certain university doctor challenged Hereford United's chairman over his view of the recent financial problems at Stockport County.
Today Dr John Beech looks at the problems at Liverpool and notes that their auditors, KPMG, have warned of a “material uncertainty which may cast significant doubt upon the group’s ability to continue as a going concern”. And he manages to mention Graham Turner in his article.
In essence Beech discusses the question of what does the qualification of a company’s accounts by its auditors imply?
With a conventional business it would certainly be a cause for concern, and an indicator to potential investors to steer clear. But football is not a conventional business. In particular, a club may have its finances structured around ’soft debt’ – long-term debt which it is not under pressure to repay, a loan from its benefactor for example.
Liverpool is in the minority of Premier League clubs, but certainly not unique he says.
The most extreme case I have come across is at Hereford United, where, regular readers will recall, Chairman Graham Turner was swift to attack the business operations of Stockport County, and which is about to move down to League 2. For the last ten years, the club’s auditors have qualified the published annual accounts on every single occasion.
Beech maintains that what matters is the 'specific underlying reason for the qualification'.
That reason is of course the uncertainty hanging over the renewal of the loan facility (at Liverpool) for £350m due to be made next month, debt which is certainly not ’soft’.
He ends the article by suggesting that Liverpool probably isn't in any real danger of folding as they are still a more attractive club to purchase than most others.
There may well be some sticky moments in the next few months, but Liverpool will undoubtedly survive.
Editor's Note - As did Hereford Dr Beech.
Text at top (next game etc)
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