Liverpool, Man Yoo & Hearts Finances - Similar to how SDM did things?

[ascender 352]

There's been a lot talked about the finances of these clubs over the last while and a lot of the steps being mentioned by all three sound very familiar. Things like debt for equity, bond issues, talk of selling parts of the club off and leasing them back etc. Are these all things that SDM has done in the past with us? TBH I can't remember the details of the various steps SDM has taken in the past to re-finance the club, but they all sound very familiar.

 

Man Yoo seem to be on an incredibly sticky wicket as their debt now looks like outweighing their equity by 2.5 times or something like that. The figures they're talking about are properly mental, looking like a total debt of over 1 Billion?!?

 

I suppose Hearts are slightly different because Romanov is also their banker, so as long as nothing happens to him, they're safe. Same deal with Chelsea and Abramovich. But by them swapping debt for equity, is that not just what SDM used to do with MIH, so he wasn't getting rid of the debt, just putting it against another part of MIH? Which again, is fine, so long as the parent company doesn't get in to trouble?

 

At what point do all these clubs run in to the danger of going to the wall? Like has happened here, while there's a good source of income and the potential to be run in the black, what good is that if its buried under a mountain of debt?

 

Sorry, loads of boring financial stuff, but I know a few of the guys here are well up on this sort of stuff.

 

Cheers,

 

Mike.

[Frankie 8,151]

I'll defer to more knowledgeable people than me...

[Bluedell 5,329]

My understanding if what the Glazers have done at Man Utd was to put debt into the club to finance their purchase of it.

 

Murray did the opposite by taking debt out of the club, so it's not the same.

 

I presume in the Man Utd situation, the financers believe that the club could be sold to new owners and the proceeds would be sufficient to pay off the debt, although it's something I haven't looked into in detail.