Warning, debt can seriously damage your core support

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On Monday afternoon, the same day they announced the signing of Joe Cole (a “good day to bury bad news”?), Liverpool FC slipped out a juicy little press release about ticket prices for members (of which I understand there are around 15,000 available per game). The gist of the statement is that prices for 2010/11 are rising by a blended 10.6% for the Kop and 10.1% for the other three stands and that’s prior to the impact of the “progressive” VAT rise in January.

Having previously operated on a “Category A” and “Category B” system, LFC have now added “Category C” on the following basis:

Category A: Arsenal, Chelsea, Everton, Man City, Man United, Tottenham
Category B: Aston Villa, Blackburn, Bolton, Newcastle, West Ham
Category C: Birmingham, Blackpool, Fulham, Stoke, Sunderland, West Brom, Wigan, Wolves

Although the price rises vary by category, the message is clear, Liverpool are joining Man United in the debt driven game of pricing out their core working class support. The Kop now has the dubious privilege of being more expensive than the Stretford End which, when you consider the relative quality of football, is a true injustice.

LFC are in real financial trouble, something it actually gives me no pleasure in writing. In the last accounts (2008/09), the club reported EBITDA of £35m and interest of £40m. The dream of a new stadium was screwed the moment the credit crunch hit, leaving the business enormously overleveraged. Despite a valuable new shirt deal with Standard Chartered, the loss of Champions League income will inevitably impact the top line this season. That leaves Chelsea supporting Chairman Martin Broughton scrabbling around for other ways to boost revenues.

In 2008/09 LFC generated £42.5m of matchday revenue from 27 home games at an average attendance of 42,728. That’s £28.74 per occupied seat. The equivalent figure for Old Trafford is £39.58 per seat and for Chelsea £52.72. With the club up for sale and in dire need of new equity investment, yesterday’s announcement (plus the previously announced 4.6% increases in season ticket prices) look like being just the start….

So now we have the spectacle of both of England’s most famous and successful clubs screwing their core support to pay the debts of unwanted speculators. All the while the Premier League and Football Association stand around being “ownership neutral”. Is this truly the “Best League in the World”?

  • Article courtesy of Anders Red Blog – a website dedicated to football finance, focussing on Man United and the Glazer’s.
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