Compare the fortunes of Manchester United and Liverpool based on their respective performances and league campaigns of last season and it appears that there is no comparison to make. United, Premier League runner-up and Liverpool, a dismal and distant seventh place finish. Two teams which appear to be heading in opposite directions.
Look into the situation off the pitch however and things perhaps start to even themselves out. Liverpool and Manchester United, at least in financial terms are both in a mess. Both American owned, both with mountainous debts and both saddled with huge annual interest payments.
Liverpool’s debt currently stands at £394 million compared to Man United’s £717 million. Glance at those figures and you can wonder why it is Liverpool whose future is being most hotly debated. The annual interest payments on this debt are £40 million and £69 million respectively and it is in this area particularly where the fortunes of the two North West giants begins to differ.
Manchester United, although carrying such an astronomical debt have, at this time, better means than Liverpool from which to raise the interest payments required to service this debt. Match day income at Anfield currently stands at £42 million. Manchester United’s? £109 million. The difference in income between the two clubs in this respect is mammoth. It is imperative that Liverpool move to a bigger stadium as soon as possible. Such is the capacity of Old Traffford, including the many lucrative corporate suites and boxes it offers, that United make up to £3 million more than Liverpool each match day. Added up over a season and this amounts to a near £60 million. This has allowed United to deal in a different transfer market than the Reds in previous years. The problem, Manchester United may now have, as a result of their debt, is that instead of the money being given to Alex Ferguson to spend on new recruits, this money will be given to the banks.
Manchester United also, despite financial struggles off the pitch, have been able to maintain a successful, quality side, which has enabled them to challenge for the biggest prizes, win trophies and as a result ensure that big money continues to flow into the club. At this moment, Manchester United although not secure off the pitch, certainly are on it. Liverpool, on the other hand, cannot claim to be so secure. Possessing a team which currently lacks enough quality and now without Champions League football, the ability to repay loans again becomes a problem. Added to that the possible loss of appeal of the club to the better, more marketable footballers and problems begin to mount. It is imperative Liverpool retain Steven Gerrard and Fernando Torres, firstly and most importantly for the future prospects of the team on the field. Players of such quality cannot be seen to leave Liverpool if the club wishes to remain one of the leading names. Also important however, is the need to retain the marketable ability of players such as Torres, to raise valuable income for the club in foreign markets such as the Far East where his popularity is huge. Liverpool need to get back into the Champions League as soon as possible. This will only be achieved by keeping their best players.
Other financial differences evident between the two clubs is in TV and broadcasting earnings, Manchester United earning £100 million to Liverpool’s £75 million. In both match day income and TV broadcasting, this amounts to an income difference between the two clubs of over £100 million, a massive amount when considering the interest payments of both.
The two clubs stand apart from the rest when it comes to commercial success. Liverpool, it must be said have improved in this area considerably over the last few years, due in part to the work of Ian Ayre and Philip Nash who should recieve some credit. Last year, the commercial efforts of the club contributed £68 million, compared to United’s £70 million.
Smaller clubs than Liverpool and Manchester United would have simply folded given the amount of debt they are carrying, the plight of Portsmouth a current example. Such is the level of both team’s global support and revenue potential however, that money will always come into the club, albeit at this moment to service debts rather than improve the playing squads.
The financial situations of both clubs are due to broken promises from their American owners. Tom Hicks, George Gillett and Malcolm Glazer have not put any of their own money into the clubs since their respective takeovers. Liverpool fans can particularly feel aggrieved after the owners had clearly stated in their first press conference that the takeover did not mirror that of the Glazers. Liverpool supporters will take some comfort in the fact that the owners have finally decided to sell up. However, any new owners will certainly need to have deep pockets to sweep away the financial mess at Anfield. For Manchester United, despite recent protests, the Glazers, as of yet, appear reluctant to also admit defeat.
Things should become clearer over the next few months, when the long term prospects of both clubs will become clearer. Supporters of both clubs will certainly be demanding answers to more questions.
Two great rivals, two great messes. For football in this country, it is crucial it is cleaned up soon.
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