The 'Dubai Effect' Still to be Felt by LFC?

I recently wrote on the potential side step we took in relation to DIC's proposed takeover which fell through. Given the recent goings on in Dubai it is possible that fate dealt us a kind blow during the ownership wrangle. It is unfortunate then that Liverpool FC may still find itself within the turbulence of what is happening in Dubai.

When reading the articles about Dubai last night two notable names kept coming up. Reports suggest that the bank most likely to be affected by the Dubai fall out is our shiny new sponsor Standard Chartered. It is unknown at this juncture as to how indebted the Dubai companies in mention are to Standard Chartered. Worryingly though there is now talk of a second wave to the credit crunch - with our new sponsor at the fore front of it. Standard Chartered fared quite well during the credit crunch, hence their ability to enter into a record breaking (at the time) shirt deal with Liverpool. It is early days with the Dubai 'situation' but Standard Chartered will certainly be a name to keep an eye on.

The other name which has been thrown into the mix of the potentialy affected is RBS. RBS is a different 'kettle of fish' altogether, having been battered by the first wave of the credit crunch. In the blame game part one I put together the timing of their demise and it's impact on Liverpool Football Club. Following the first wave of the credit crunch Liverpool's owners had to pay off £60m of the debt capital. This was despite the club being in a relatively stronger position financially than its competitors (in relation to debt). Is it conceivable that a second wave of bad debts (not from Anfield) to hit the bank could mean they have to impact on their good customers again? It is certainly possible that they will once again have to shore up their own finances. Any more demands for capital repayment will no doubt have an impact on any transfer budget and future growth plans for the club.

On the plus side this may yet all blow over and in a year's time some will be back wishing that DIC had bought us. Many are suggesting that Abu Dhabi will still ride to Dubai's rescue, see it's not what you know...

Premier League Agents - Are LFC Effective at Negotiating?

Unless you have had your head in a cloud over the last couple of days you won't have missed the story about agent's fees in the Premier League. This remains a subject which will continually be revisited over the coming years and will no doubt come under closer scrutiny with each review. A staggering £70.5m has been spent on agent's fees over the past year, which is more turnover than some of the clubs operating in the Premiership.

Now we all have to 'earn our corn' and I doubt anyone will argue that a fair day's work deserves a fair day's pay but at first sight these figures seem high. Especially when you consider that the fees account for a few hundred transactions. Now I'm not going to argue any further over the rights or wrongs of agents as I'm sure they will be dealt with over time.

What did interest me is whether or not the figures can show us anything else. Now before I get to the crux of this entry let me give you the problems with the data I am about to present:

- The figures I have picked up are from Page 56 of the sport section in the Telegraph. While all of the agents' fees are provided, together with total transfer amounts, they do not include figures for player contract renewals. So in our case this would include hefty contracts (and presumably agent fees) for both Gerrard and Torres.

- The data presented also includes some transactions from previous years, presumably because of accounting complexities.

- The data provided doesn't give you the number of transactions involved.

However, as a (very rough) indicator I wondered whether the figures would show how the 'business' performed when negotiating with agents. As a percentage of the transfer fees we should be able to assess how effective the 'haggling' was.

I first of all assessed against player purchases only. This is because I believe the lion's share of the fees will be generated from player purchases rather than the odd occasion of trying to move a player on. While we appear third in the list of fees in the papers (for total fees paid) the picture does change when assessed like this.

Transfer fee as % against player sales only - other notable clubs in bold

1. Chelsea 48.4%

2. Bolton 32.7%

3. West Ham United 27.7%

4. Fulham 24.5%

5. Portsmouth 20.6%

6. Arsenal 16.8%

7. Liverpool 16.5%

8. Wigan 14.3%

9. Blackburn 11.5%

10. Everton 9.1%

11.Tottenham 8.0%

12. Man City 7.4%

13. Burnley 7.0%

14. Hull 6.8%

15. Wolverhampton 6.2%

16. Sunderland 6.1%

17. Birmingham 4.9%

18. Aston Villa 2.8%

19. Man United 3.8%

20. Stoke 2.2%

Chelsea's fees are the interesting ones to me and the reason why I started looking into this. How can they have nearly half of their incoming transfer fees as additional agents fees?

I then went on to look at the fees as a percentage of the entire transfer activity.

Transfer fee as % against all transfer activity - other notable clubs in bold

1. Chelsea 29.2%

2. Bolton 19.8%

3. Fulham 12.5%

4. West Ham United 12.0%

5. Liverpool 7.4%

6. Burnley 7.0%

7. Arsenal 6.9%

8. Man City 6.6%

9.Tottenham 5.9%

10. Wolverhampton 5.8%

11. Wigan 5.3%

12. Birmingham 4.9%

13. Hull 4.8%

14. Everton 4.4%

15. Portsmouth 3.7%

16. Blackburn 3.7%

17. Sunderland 3.3%

18. Aston Villa 2.8%

19. Stoke 2.0%

20. Man United 1.0%

Again Chelsea top the table and we are spot on the average fees as a percentage at 7.4%.

Now of course it can be argued that if agent's fees are capped the greater the amount of transfer activity the greater the 'dilution effect' of those capped fees. But then when you look at clubs with similar spending to our £40.4m, say MUFC (£40.3m) and AVFC (£45.3m) their agent's fees are considerably lower than ours. Are they better at negotiating these fees, or is it the renewals of Gerrard and Torres, or the previous year's transactions maybe distorting the figures?

Without any more data I'm afraid I can't go any further, on what I am sure would be a good indicator / analysis of the cost management of transfer fees for agents. The data indicates (and nothing more) that in relation to player purchases we operate within the industry average. I suspect given the Gerrard and Torres renewals we actually operate better than the average.

If I get chance I may dig around for more data, if anyone has any please mail me or comment below.

In Rafa I Trust on Derby Day

I really liked Rafa's interview earlier in the week when he talked about the lure of Real Madrid. Real Madrid are quite obviously very close to his heart. According to the interview they were offering him more money personally and more money for player transfers. Given the splurge over the summer I don't think anyone can doubt this.

So why stay? Why not leave our club and run back to his HOMELAND, the CLUB HE SUPPORTED AS A YOUNGSTER, with a BIGGER TRANSFER BUDGET and for MORE MONEY?

Well I think there are two reasons. The first is that the job isn't done yet. For anyone who didn't catch the excellent Gerrard interview in Four Four Two he said "He's (Rafa) a perfectionist: he's obsessed with perfection individually and as a team". In a perfectionist mind I believe leaving now would be hard, if not impossible - a failure. Secondly, and more importantly, he quite obviously has a genuine affection for our club. From day one he has surprised. Whether that's winning the champions league or celebrating in a pub with fans. He very quickly worked his way into the hearts of Liverpool fans, which is where he remains for most.

During the blame game posts (which I started because of our recent run of form) I made my feelings on Rafa very clear and I called for some 'peace time'. Now I realise that not all of my wishes will come true in relation to this but for today I would like to see everyone behind our club and behind Rafa. I realise that not everyone shares my thoughts about Rafa but no one should be in any doubt about his dedication to our club. No one should be in any doubt of his track record and

everyone should review the recent 'blip' against his overall record at Anfield. I'm not going to reel off the statistics here as you've probably seen them a million times already. If not, just go look at his record with our club, then sit down and look at the last ten results. Ask yourself honestly... is this in all likelihood a blip, a bad run of results exacerbated by injuries?

I'll be completing every tweet today with #ynwa and #irwt as a thank you to Rafa. He'll probably never know I was doing it. If we all do it he still may never know we're all doing it. But I don't care if he doesn't see, I don't care if no one sees it trending it's quite simply a thank you. I hope the power of Twitter may do the rest.

If you don't have twitter yet please go and get it, follow me @mcdonaldtaf and re-tweet my tweets and follow any other tweets with #ynwa and #irwt. I would also recommend @paul_tomkins, @lfctv, @robbohuyton and @empireofthekop as must have LFC follows.

Why I'm Saying "No to Ground Share"

I have been asked by a few fans about my thoughts on the potential ground share question which has arisen again. Twitter space is so short I thought it best to give some additional information here to back up my 'no' tweets.

Over recent weeks my head has ruled my heart while I have made an analysis of the level of damage being caused by our American owners. I think when you see any Liverpool fans not happy about something, especially given the volume of fans, part of you wants to stand by them. However, as a business minded person and a senior manager myself, I have a degree of empathy for the owners who currently have our club in a relatively healthy position financially.

But when it comes to the ground share I'm afraid I'm going to be all heart. There are many financial and business reasons to ground share. All across the world we are seeing businesses consolidating, especially through these trying credit crunch times. The reason for this is to save on costs and make two businesses operating together more profitable than they would be independently.

For us we would be looking at halving the design, planning and construction costs. Let's be honest we're not talking about chump change here, we are talking hundreds of millions of pounds. We would also see a major acceleration in getting from where we are now to collecting additional revenues. Additional revenues which would help promote the clubs on the pitch success.

Given we are the bigger club and that Everton would surpass their seating expectations (70,000 LFC / 50,000 EFC) I believe we would have a strong negotiation stance to get what we want out of any deal.

So it makes perfect sense, doesn't it? Well no, there are also good reasons from the head why we shouldn't do it. The political fall out would be disastrous should the board of Liverpool even consider this option. There will be no mitigating factors on this one. They gave cast iron guarantees that we would not ground share. Now the world may have changed but to think this is the only option of getting a new Anfield would be wrong in my opinion. I think the owners already know that there would be a major backlash so I don't see it happening anyway. If it does, well I imagine we will see subscriptions for the supporters union increase significantly.

Any organisation has political rumblings inherently built into it. Some are managed very well but there are always conflicts and differences of opinion going on in them. So take our business with its current 'political rumblings' and then add in additional parties from Everton Football Club. Disaster.

Then there's the heart. The biggest problem for anyone looking to make the ground share reality? The fans' hearts. I don't want to ground share, I don't want to share our football club or its property with anyone. I don't want our great football club to have to share with anyone else. We are one of the top clubs in Europe, indeed the world. Why should we have to share? Again, I get angry at the years of mis-management pre-Purslow and I hope he is the man to move us forward commercially. The only rational business decisions for not having a ground share are in the paragraphs above but if you ask me, I can't give you any facts or figures, I just don't want to share.

Politically there is possibly only one way of moving this forward if the board really do want to consider it and after exhausting all other avenues. Early doors they need to set out their reasons why and let others set out their reasons why not. It should be an independently handled vote to the fans and not the board. I would expect a resounding 'no' but stranger things have happened!

Even after typing that last paragraph my LFC loving heart screams 'if it does get built (and it better had) why would we want to share it with anyone, never mind Everton. We are the biggest Merseyside club and its going to stay that way, they are not impinging on our successful image!'

NO TO GROUND SHARE!

Who is this McDonaldTaf idiot?

So who is this idiot mcdonaldtaf? Well now there's a question. You see most people do this as their first blog entry but in true mcdonaldtaf fashion the explanation comes after 17 other entries.

First of all let me dispel some myths:

I am not pro Hicks and Gillette (LFC's owners for non LFC followers)

I am not a writer for liverpool-kop.com, I have had two of my posts re-produced there

I am not Jaimie Kanwar

I am not an idiot because I trust in Rafa

I don't like country music

Ok, ok I do like country music but the rest is true!

I am a 33 year old Operations Director for an SME who provide support services to the lettings industry. I have a strong management background going back 15 years in SME's and among my skills I have strong I.T., finance and general management 'expertise' (loosely speaking).

I have a postgraduate diploma in Management and am on the third and final year of my Masters Degree in Management. Which is quite extraordinary given I left school with very little in the way of qualifications. However, I have been hard working and applied myself well. I have also benefited from working with exceptional Managing Directors throughout my career. All of them have shaped me into the manager I am today - and now I in turn (hopefully) teach the managers of tomorrow.

I do weight training 4 times a week (although I'm not as strong or big as I would like), play squash and football once a week. I generally run every other day. Except this week as I'm having a week off due to several niggling injuries. I am a 'chunky unit' rather than a toned skinny geezer. I was at one stage 22 and half stone and looked like a cartoon character with a big round face. I lost 5 stone a few years ago though and now live in eternal fear that 'bellys gonna get me'!

I have three kids (two I don't live with) Kadon, Kai and Abbie Rose. Abbie Rose is the latest addition and as the girl she is being locked in her room till she is 35! I live with my girlfriend (or life partner as she insists on me saying) Sarah who has changed my life over the last couple of years and made me the happiest I have ever been. Finally settled down!

Urm I guess that's it! Feel free to ask any other questions you have, although if you've read this far I would be surprised.

Liverpool Football Club - On the brink of collapse somewhere!

This morning in an alternative universe Liverpool Football Club woke up to a brand new world. Over the past 24 hours their owners have found themselves in increasing difficulty as the Dubai Government, who own the club through it investment vehicle DIC, find themselves on the brink of collapse. £44bn has been wiped off the stock of Dubai related companies and the credit ratings of its major companies downgraded.

What does this mean for Liverpool Football Club? Well DIC had followed their usual protocols of applying high leverage against the business assets to support it. The club has benefited from major activity in the transfer market and the building of a new stadium, which is 50% complete. If the Dubai government is unable to reach agreement with its companies' creditors then it could effectively collapse.

This would mean disaster for Liverpool Football Club as it is unlikely that anyone will see the opportunity to make a return on such a highly leveraged business. It is inevitable that work on the new stadium will cease and the possibility of a fire sale of its most prized footballing assets including players Fernando Torres, David Villa, David Silva and Steven Gerrard are more likely than ever. Given the debts were placed directly onto the club and guaranteed by DIC rather than through a special investment vehicle (holding company) it is highly likely that Liverpool will face a points deduction from the FA.

One of the truly great clubs of all time woke up this morning and found itself on the brink of falling down a deep black financial hole.

----------------------------------------------------

Back to reality.

What would have DIC done that would have been any different to H&G? In a world where credit was easy companies grew on the back of leverage against assets. What I believe would have been different would have been the sheer level of debts. Much like CFC face destruction if Abramovich fails, so would we.

IF H&G fail then LFC will be bought and we will not (I believe) face any points deduction. The debt levels are more than acceptable to a potential buyer at the moment and the company is run by an effective management team who are delivering its potential after years of neglect. This turnaround will take time and patience is required. Much like it is with Rafa at the moment.

We can't go out and buy players without taking on extra risk. It is a balancing act and one which Christian Purslow and his team is managing very very well!

Please do not comment on this page unless you have evidence of business reasons why H&G are bad for LFC. I don't want emotive comments, I want cold hard facts. Before you do, go do some research. I have done a lot for you and would refer you back to Blame Game Part One.

This morning I woke up and thought, thank god for that!

A response to Henry Winter for his tripe today!

Ok I need to keep this brief, but let me direct you (in response to your article today) in the right direction for some of the answers you think WE need.

Why is Benítez so cautious with Alberto Aquilani?

- why don't you ask the medical staff who will be providing their expertise and knowledge

How can the Italian acquire the match fitness he needs if he is used only a minute here and there?

- good question, look above. He'll be ready when he's ready. Out of interest what article would this be if he had played, got injured and was out for 6 months "Rafa rushes back Aquilani despite medical advice"? Let me guess "Benitez's stubborn streak continues as he defies medial expertise to play a not fully fit...."

Can Martin Skrtel deal with zonal marking?

- No, he gets played there in our system using zonal marking because he can't deal with it. Last season proved that.... oh hang on.... are you being serious?

Can Liverpool hold on to Javier Mascherano next year?

- Ask the board, the club coming in to buy him, Mascherano or his agent.

Can Benítez bring through more home-grown players, stiffening the team’s resolve?

- Ask him when he's had more time with control over the academy - as you refer to within your article.

Why has Ryan Babel got the hump?

- Ask Ryan Babel, he seems happy enough to whinge and moan elsewhere!

Are the finances so bad that Sotiris Kyrgiakos is the best centre-half Benítez could draft in?

- Ask the board.

Does he really believe “100 per cent’’ that Liverpool can finish in the top four when Manchester City have more money and Tottenham Hotspur more goals?

- No it's just a dream, again are you serious? City for all their money couldn't beat our depleted side and Spurs have just had their goals increased by a pretty freakish result by normal standards.

Is Lucas really good enough?

-*yawn* have you actually watched us play this season? Should have been MOTM against United and has been a silver lining during our injury crisis (yes we've had one of those)

Does he regret selling Stephen Warnock?

- Ask the board if he had to sell to buy.

Did he alienate Xabi Alonso by going for Gareth Barry?

- Xabi Alonso has answered this a million times, why does Rafa need to add anthing?

Would he jump ship to Real Madrid if Manuel Pellegrini gets the Bernabeu bullet?

- He himself has answered this a million times. My god you get paid for this, yes?

Questions, questions. And another, who is Benítez accountable to now?

- The board. I just needed common sense for that one Henry

United lose at home in the CL, Everton increase their run to 1 win in 10 but your focus.... Anfield?

Oh and a question for you that I really do need the answer to. If my aunty had balls would that make her my uncle? If you could do a story on my aunty's balls that would be great. It's been bothering me for ages and let's be honest, it would make for a much better article than the one you wrote!