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It's not a case of where Liverpool will finish this season, it is "will Liverpool survive?"
Christian Purslow, MD of that amusing little club up in the north west, has finally admitted that the club can't service the debt. While Kenneth Dalglish MBE (a man whom all football fans must remember as a sensational player, and a man of considerable dignity in the aftermath of Hillsborough) seems now to have wandered off the planet by suggesting last week that Liverpool could win the EPL. Perhaps he was still thinking about wat J Redknapp told us on TV (that Liverpool had £35m fresh money to spend last summer).
But stepping aside from the gibberish, slowly the truth is emerging.
This little bloggette has been claiming for two years that Liverpool are in very very deep financial trouble. Of course the pop press don't want to know by and large because it doesn't fit the image of the club, and Sky don't want to know because they've paid for loads of live games. But the truth is out there.
They are hanging by a thread.
I detect an element of change within the club, however. After all the wild talk in the press of six buyers lining up, (only for them to vanish) the sheer desperation within the club is at last being admitted.
Of course it might be a game of one-upmanship over Man IOU who still deny (against all the evidence) that they have any problems, but more on that in a moment.
Part of the problem with Liverpool is that there is such strife within the company. The bank has installed a Chelsea season ticket holder as chairman, the official owners are talking about refinancing, the rest of the board say they oppose it, and the bank is charging the club £2.5m a week interest surcharge for not paying money back on time.
Purslow remains adamant that Liverpool is not on the edge of being insolvent, and will not sell players, to pay off debt. But such statements have to be taken alongside the statement that "we are highly profitable". Such a statement can only be made by changing the definition of "profit" to exclude interest on debt, rather in the manner that Big Brother changed the definition of "peace", and "plenty" in 1984. As chairman of a company myself, I can tell you what my fellow directors, shareholders and bankers would say if I tried that lie.
So there's still talk of someone coming in and buying – but after all the stuff about the Chinese government taking over the club, (remember that one – everyone was running the story) nothing can be believed.
In the end RBS has an obligation to its owners (the UK government) to get its money back, and it will do that, no matter what. And that's the point. NO MATTER WHAT. The ultimate power-wielder within the club couldn't care a toss about what happens to the club as long as it gets its money out and soon. And that is why things look so desperate. And that's also why statements about the club being profitable should serve as a warning. Only a club on the edge of the precipice would ever say that.
But let's move on for a moment to that other jolly gang of northerners – the Manchester IOU group. Here total denial is the absolute order of the day – but if we look at what the club is doing, once again we can see just how desperate things are getting.
David Gill, resident nutter-in-chief, says the £716m debts and £400m interest a year, are nothing to do with the club, but are Glazer issues. And yet the Glazer's own 100% of the club, and as shown here repeatedly, not a single one of their other businesses is generating any cash to pay that interest. It has to be paid by Man IOU.
So what's the game here? While Liverpool are selling players but denying it, Man IOU have another strategy.
The Glazers have decided to stop offering most players new contracts when the existing deal has two years to run. Instead they have ordered that with just one or two exceptions, contracts will only be renewed when one year is left.
The benefit to the Glazers is that as there is no new contract there is no increase in wages. Of course such a situation means that should any player be sold (or should he decide to walk) the value of the player declines quickly. Think Chamakh for instance, who eventually came on a free.
The Rooney character is excluded from the deal, and Evra could be too. But Berbatov, Fletcher, Carrick and Park look like being left in the cold along with four others whose contract ends in 2012.
And if you think that crazy, try this one. You will remember all the fuss about Wenger only offering one year contracts to players over 30? It was the reason that Pires – that most wonderful, creative and inventive of players, left us. The Glazers have now gone one better and said, "no buying of players for large transfer fees if they are over 25!!!
It seems that the Berbatov deal of £30m for a 27 year old was considered a step too far. Gill has called it the "last of his kind".
Instead (and this will kill you when you read it, so make sure you have an oxygen tank and a nurse nearby), they are looking to "do an Arsenal" and buy in players for low fees whom they can develop. Theoretically Bébé fits into this category, at £7m although since he was available on a free two months before, it doesn't quite fit with the image that the owners are trying to project.
In reality they, like every other club, are seriously looking at the way Arsenal have got Ramsey, Theo, Cesc, Vela, Clichy, Diaby, Van Persie, Denilson, Song, Wilshere, Bendtner, Gibbs… all for nothing, or modest amounts (when the talent is considered).
The lesser beings like Notlobia want to do it because they don't have the mony, and the larger entities like Liverpool and Man IOU want to do it, because they can afford nothing else.
So, Liverpool and Man IOU can deny all they like, and can claim that they are highly profitable enterprises, but both are sinking fast, and a little peek behind the scenery shows not desperation (they've already done that and moved on), but the edge of catastrophe.
Yes, they could come out ok at the end, and another big money man or corporation could move in, at least in the case of Liverpool. But you have to wonder.
For Liverpool, anyone buying now will have to put millions upon millions in to rebuild the team, and that will exclude them from Europe for several years to come. With Man IOU, you really have to start wondering where it will end because the Glazers need Man IOU to pay their interest. Without Man IOU the whole Glazer empire falls and they personally go bankrupt.
Wherever it does end, aren't you glad we didn't go down that route?
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September 23rd, 2010 | Category: Arsenal stories, Finances | 35 comments - (Comments are closed)
35 comments to It's not a case of where Liverpool will finish this season, it is "will Liverpool survive?"
IndianGooner
Just 2 words,
Arsene Knows..
Terence McGovern
Tony is that £2.5 million surcharge thing tongue-in- cheek or exact?
I ask because if exact, then that is definitely the ball game over for Liverpool.
That figure exceeds their match day income. This leave operating expenses, wages and servicing the debt all coming out
of TV money and commercial revenue (which is poor at liverpool)
Jesus they are fkd!
(And I do mean proper fkd)
Once they sell Torres thats it really. Gerard is to old to be worth anything to dispel that popular myth.
Leeds here they come I guess.
For the 2 handballs off the line during the FA cup final and Babel's dive in the CL qtr final.
munawwar
what about chelsea and romans money? they seem to be struggling also.. any stats on them? lets not talk about man city… mirror's quote i liked today… " not even 220mil can buy you a carling cup "… haha..
Dark Prince
I'm still quite skeptical about this. Liverpool and United are both facing problems only with the interest part for the debts. If some billionaire comes and buys them, i.e pays off their debt, then all of the interest part will vanish. And without the interest burden both Liverpool and United earn enough to run the club within its means. So its a good chance that United and Liverpool might eventually come out of this alive.
kiwigooner
£400 M interest?
Is that correct or a slip of the mouse….
What happens if they go into administration Tony?
Dark Prince,
If I'm not wrong, UEFA's Financial Fair Play(FFP) is the limiting factor for any future takeovers. FFP comes into effect in 2 years time and clubs who get taken over now will not be able to compete in Europe for couple of years.
I read this somewhere but can't remember where and when.
The 2.5m a week of penalty charges is correct, RBS are using it as a a way of getting the Yanks to sell up. Unfortunately the Yanks want a silly amount of money, so any buyers are just waiting until the club is repossessed by RBS when they can get it at fire sale prices.
It's bizarre, because operationally Liverpool is a very profitable club. If a buyer could come in and pay off the debt, the club would have circa 20-30m to spend on wages/transfer fees each year. Even without Champions League revenue for the foreseeable future, their excellent commercial revenues stand them in very good stead.
Someone could make a lot of money buying that club and investing in the youth facilites, and then running it sustainably. Sod the new stadium until the credit markets are back to normal, they can make an excellent profit from Anfield.
Wel, i guess, its that time of the yr when we can run the "Arsene Wenger for President (or Prime Minister) " story.
For every one who doubted his vision & his methods its 'pie in your face time' And while at he topic we need to be thankful to the management at the club who recognised his vision & supported him throughout. We keep singing praises of the manager (as rightly we & the footballing world should) the contribution of the board & the management should to be recognised as well. They opted for satbility and adopted a long term vision for the club rather than splashing out millions & running up insurmountable debt. It would have been really simple to do all of that and have managers come & go & criticise them for all the failure!
Being an Arsenal fan is certainly not a walk in the park, what with the ManU & Chelsea & Barcelona brigade drowning us out with sheer numbers & moolah…..but i tell u…its paying off and i'm proud (and glad) to be one!
Richard B
By coincidence (?) at the end of this month Arsenal will be publishing their latest financial results and, I think we can guess, they will be eye-wateringly good. The reaction to them will, of course, be crass. There will be cries of 'so why didn't they spend all that money on Lev Yashin then? – look him up kids.
Such a reaction will completely ignore that one-off money (largely derived from property sales) can only be sensibly spent on investment to derive long term income – which includes paying off debt and thus reducing interest payments. In fact Arsenal will probably also announce investment in local land which they own designed to bring in future income by providing supporters with more opportunities to spend money on matchdays!
Tony's excellent piece highlights what happens when you mortgage your (uncertain) future by spending or borrowing against the wrong things.
'Doing an Arsenal' – a quote that you hear from more and more clubs these days – is just shorthand for being more realistic and acting less like a global corporation and more like a club which ultimately exists for the benefit of its members.
And if the only benefit that a member gets is bragging rights when a trophy is won then they have to realise that they are part of the problem rather than the solution.
Mutually assured destruction looks increasingly close for more than a few of our competitors.
Terence – Phil has already said that the 2.5m is a real figure. You might like to see http://forums.liverpoolfc.tv/showthread.php?t=193226 where a Liverpool fan is facing reality
@IndianGooner – You're misunderstanding UEFA's Financial Fair Play. It doesn't prevent any takeovers from billionaires. It only prevents loads of money spent by that billionaire on transfers/wages and earn break even in the books of accounts. The main objective of UEFA's FFP is of bringing stability to every club's finances.
Great article and after a whole day sitting in dull meetings I needed it to get me awake.
I remember that I had to do a game of the youth team of a second division club and after the game I had a chat with one of the board members. He told me that their club refused to loan money from the banks because it would spell disaster in the end. They also refused to pay money for incoming transfers because prices were not real. It is a club from a little town that has won 3 promotions in the last 7 years based on players who have been there for all those years and only added with players that cost almost nothing (or nothing at all). And they had a manager that had been working there for over 10 years.
It was as if much of the thing we see at Arsenal was put in practice over there.
I have congratulated the guy for the vision of his club and wished them well when I left.
And that same evening on the Dutch TV in a talk show the chairman of FC Twente was talking about how to run a football club. And about them as being a little team from one of the smaller towns in Holland becoming champion and playing in the Champions league. And he also told how important it was to keep the finances healthy. And as Inter came to their stadium the reporter asked if they would feel intimidated by them. He said that wouldn't be the case. But then he went along to tell about how impressed they have been 2 seasons back when they played Arsenal in the qualifing round of the CL. And he said that he admired Arsenal for the way our club is being runned. With not much money to spend but with a long term vision that he truly admired.
So I think maybe a lot of people in the UK really don't realise what an example Arsenal is in the world. Not only for our beautiful football we play. But the admiration in the board rooms in Europe is maybe even bigger. But you hardly will hear people talk about it in England I think. But believe me over here people who care some responsability in football know and admire us.
Thanks for that Tony!
Good Enough for them eh.
Dark Prince In the case of liverpool id there was a white knight out there looking to buy into the EPL and was willing I would expect that they would have shown up by now. If they were not willing to ride in to save the day when Liverpool were a CL team and had better standing, it is highly unlikely that they will do so with a club that is facing a 9 point deduction, out of the CL and can't even beat Northampton at home after being humiliated by man Utd in the league.
In the case of Man Utd, A group of the richest assholes on the planet all got together to 'save' the club ….until they found out the cost of doing so. The bottom line there is that the club is the only possible source of income for the Glazers and should they sell it without grabbing a gigantic bonus for themselves like the £1.5 billion they quoted the Red Knights, they will go broke very soon.
The Glazers are literally stuck with draining the life from Utd until the US economy picks up and their retail holding start yielding incomes again.
that being said they are very VERY good at playing vampirea nd to be honest I am loving every second of it.
Bye Bye Liverpool and bye byeMan Utd. I wouldn't be surprised if Rooney is sold on by 2014 under the guise of "needing a new start to deal with family problems".
Their team are too old and with expensive flops like Anderson and showponies like Nani as their last resort, they will drop down the league soon enough.
Great! I hate those bastards more than anything else on this temporal plane of existence.
Whether or not debts are re-financed could depend on the confidence that banks have in future income streams being boosted by broadband broadcasting rights. If a million people around the world are willing to pay (say) £5 to watch a game at Anfield on their computer screen – and if all that money went to Liverpool – then problem solved. It will happen, but waiting for that day could test the patience and the depth of pocket for too many people.
There will be casualties in the meantime.
ArsenalDubai
Billionairs didn't get their money for free, and they certainly aren't stupid enought to put billions in such a risky venture as Liverpool. It's probably cheaper to buy Everton and build the team from ground up, without the load of trouble Liverpool have. That's what the Sheikhs at ManC are doing, whcih is probably cheaper than buying ManIOU.
BTW, Tony, how can ManIOU be paying 400M interest on 716M debt? Are they paying over 50% interest (I'm sure not)?
I am enjoying this article. I really hope Liverpool will go down the toilet, so that i will never have to see them in the Premier League again.
New AFC financials already leaked tonight I see – and the carping over not spending has already started!
Richard, you got a link to those?
I would imagine there are probably buyers out there for Liverpool just waiting for RBS to call "game over" on Hicks and Gillette. H&G are trying to turn a huge profit on Liverpool and no buyer in their right mind would pay 500m for Liverpool now, not when they could get them for 250m in a few weeks. Especially not with the investment needed in the playing staff. I think it isnt so much Liverpool that are screwed, but H&G and the whole idea of the leveraged buyout.
Liverpool will survive, simple because their brand and fanbase will represent good value for someone with the ability to pay off the RBS debt. However with the Financial Fair Play rules coming into effect, it could be a long, slow climb back to the top-4 for Liverpool and their fans.
Great article… As much as I don't care for Liverpool and ManU, as a football fan, I certainly don't want them to go under. Apparently selling clubs to owners with zero passion or understanding of the game is a bad idea.
Just one quick question: as raised by several visitors already, 400M interest for ManU? Is that a typo?
Common Sensei
I maybe alone here in my thinking, but if the worst does happen to our two (historical) biggest rivals to the league over the last 25 years – United and Liverpool, I will actually feel quite sad to see them leave.
After all this time, seeing these two great clubs in financial trouble breaks my heart; as it is the rivalry between Arsenal and these two that has kept me on the edge of my seat. I feel an attachment towards them both now, especially Liverpool as in the past when I was young, Liverpool ALWAYS used to beat us and in my head I thought "The day we consistently beat Lpool is the day we can consider Arsenal the leagues most successful club".
Obviously things have changed greatly since those days, with United finally equalling their league title record and edging the out in terms of footballing ability. So it saddens me to see these giants of football in such a mess.
I liken it to seeing an ex girlfriend who once cheated on me, years later muddied and drunk in a gutter. I have no reason to feel anything at all for either club; as of course I love the Arsenal and want to see us beat our great rivals … but seeing them torn to shreds by foreign owners and bad management fills me with a sense of disappointment and pity – A sign of the times, and one that leaves a very sour taste in my mouth.
Man City I laughed at since day 1 – even when they beat us 4-2 I never for a second believed they had a squad capable of winning anything or beating us regularly, they just got lucky at a time when our squad was suffering. Spurs of course are still the same old joke club up and down and all-over-the-shop same as ever. These clubs have bigger mouths than they do stomach's to play against teams as good as our own…
But United and Liverpool were legendary to me, I loved seeing us compete against the very best and LOVED seeing us win against them, it really gave me a good feeling to know that we could stick one in the eye of the status quo –
And now it seems the status-quo is changing, and has a rather more eloquent and classy edge to it … Arsenal is the status-quo of the future, and apart from Chelsea (assuming of course the worst happens to United and Lpool) we will not really have ANY footballing rivals capable of getting close to us.
So in a way, the league will lose it's competitiveness if the worst happens and Arsenal will be winning everything in sight 🙂 Which is very very good for me of course, it's just a shame we couldn't have had the chance to show these clubs what Arsenal football looks like whilst they were at full strength themselves.
It's probably karma – Heheh which is another reason I can forsee Arsenal getting a hell of a lot of 'good luck' this seaosn coming (TOUCH WOOD) 😀
mj_gunner
fine post!
i disagree on Bobby; he said himslef that he was pissed with being sustitued in '06 UCL final, hence decided to leave.
(saddest day in my life as an arsenal fan *sigh*)
FinnGooner
This article makes me really happy that a) I support Arsenal (no worries about what will happen to the club) b)Sami Hyypia left Liverpool and slightly happy that Dalla Valle was sold to Fulham so there is no Finns in Liverpool.
Other thing is I remembered that around the time Chinese were first mentioned with Liverpool there was an article in Finnish news paper "should someone warn Liverpool?" because few years ago a Chinise businessman wanted to buy Finnnish footballclub. I can't remember if club was actually sold but in the end Chinise didn't have teh money and well The club does not exist anymore. So that might be future of Liverpool too.
FinnGooner, the club was bought and later disappeared. It was AC Allianssi and the buyer was Ye Zheyun.
He is (or possibly was) the same dude who had all the murky deals in Belgium. Walter Broeckx has written about them in this blog. In fact, he brought in Belgian players and a Belgian manager as well and there was lots of suspicions about match-fixing. I think one player later admitted to it as well.
There is some stuff about it in Wikipedia (also in English and Dutch) if you search for AC Allianssi, Olivier Suray or Ye Zheuyn.
I've thought about mentioning about this to Walter but seem to have forgotten to do it, so I hope Walter notices this too.
Phil, here is a link to Teamtalk about Arsenal Financials:
http://www.teamtalk.com/news/2483/6395714/Gunners-set-to-announce-record-profits
The financial report should be out tomorrow according to this article. The same was said in The Independent.
Clerkenwell Gooner
It's difficult to gloat when so much football history is a stake, particularly for Liverpool. (For SAF's mob, more a sense of sang froid, they are kind of ghastly these days.
I'm also curious what is going on at board level at Arsenal.
Lady Nina's c15% is still in play last thing I read, and is it true that Diamond Danny Fiszman has health problems? So possibly his c16% also in play.
With 31% possibly in play, will Hay-Z and his luvverly Mrs come in and scoop the lot, for a couple of seats on the board? WILL HE MOUNT A TAKEOVER WITH 31%!?! Will we be getting half-time shows by Mr Zee's prodigy, Rhianna (I read somewhere that Cesc is a bit partial)? God, if we arent' the go-to club for the yoot now, we would be after that!
And how does a board operate if it's a three-way split between Wal-Mart Stan, Mr Beyoncé and our friend from the Wild East? And PH-W to steer a course through all that?
Really, at this point, you could not make it up.
I bet Jay is just waiting to see how much bling we win this year, before he makes his move.
@Terence McGovern- i think its quite the opposite. In case of Liverpool, there are already many who have shown interest in buying them. But RBS and the owners played greedily and lost some of them. Even that Chinese Billionaire was ready to buy that club during the summer. But was completely ignored by the decision makers. If you take out the interest burden from the books of Liverpool, then you will see that they are still a healthy company which can earn £20-£30 million profits per season. And all their assets can be easily be of £700 million. So they still are a attracting investment.
In case of United, its kinda the same situation of interest burden, the only difference is that the owners are not in any hurry to sell the club. I think United with all its assets can be valued at around £1 billion. And without the interest burden, they can show profits of £40-£50 million per season. So even they are an attractive investment. But the problem would be the Glazers will not sell the stake till they get around £1.5 billion, which i think is very high priced. So the situation is quite worse at United than at Liverpool. But still they will be eventually sold off.
steww
And still, every close season we get the clamour for Arsenal to spend more money. It beggars belief. Thank you Tony, lone voice of sanity in the wilderness.
Rhys Jaggar
The simple fact is that RBS/Wack me hold shares as collateral for the debt and will exercise their right to seize the shares if the owners default.
LFC football club is highly profitable operationally, in a way that you and your readers would admire. It's just that two cowboys loaded the club with debt in a holding company to buy an asset they couldn't afford.
It simply won't go bust. Because potential purchasers are saying: 'let the banks take it on, then they'll sell it off for a lower price than the Yanks want'.
What's equally possible is that they might sell 25.1% to fans and 74.9% to some new owner.
It's the holding companies for LFC which are bust, not LFC itself.
Anaconda I did read the Wikipedia site after posting, but not before I wrote my comment. I remembered some of it from the small article I had read. I was thinking about posting wikipedia link but I though the English part was not as informative so decided not to. I had forgot the Belgium part.
It happened before I had real intrest in Football (not that I'm that interested in Finnish clubs now). So I never paid any attetion to in until this Liverpool connection.
@common sensei
I agree with you that I wouldn't want either of those clubs to go under, and your analogy of an ex is fitting maybe. But only up to a point. I bet if she called on you at low points of your life to make you feel worse, you wouldn't be so forgiving.. The media darlings ManU and Liverpool should face the consequences of their actions..
And I'm tired of the line saying they are actually profitable enterprises, it's only the owners who have burdened up with debt. The fact is that the owners were invited in in the first place in the hope that they would allow them to compete on an equal footing with Chelsea. No one had the courage to follow their own path and be self sustainable. It was the greed of titles which has led to this situation and for this there really is no one to blame except themselves.
Having said all that, I don't really believe in karma. I'm sure they'll manage to wriggle out of their problems somehow. After all, Chelsea should go under if there really is justice. It does make me proud to be an Arsenal fan though.
Dark Prince:
You can disagree all you like but we don not live in a brothers Grimm magical world where profitability is defined outside of interest payment liabilities.
Defining liverpool's situation as being profitable if you disregard their interest payments is a bit like saying that if you stopped paying the mortgage on your house, your disposable income would be very healthy.Irrelevant in the extreme.
They are a devalued brand.
Their playing staff lacks both quality and numbers.
They have traded down in managers.
Their owners are immersed in hubris.
The have fallen from the CL top table and don't look like getting back there anytime soon.
They have one player who is worth a large transfer fee so even if they start selling there is not much that they can sell and replace for less money.
The bottom line is that history means less than nothing to investors. That is a retarded fallacy that is too often spouted. "They have too much history blah blah fkn blah"
Investors live in the now. What is is worth now? How much can we make now? Is it a good investment now?
Liverpool in terms of value is worth less than the outstanding debts upon it. Their loss in success will no doubt cause a loss in commercial revenue thus reducing their turnover. The loss of CL money for just the group stage will not be made up by The Europa league even if they win it. Even more turnover lost.
Sky and other broadcasters will be less and less interested in showing their games so they will have less exposure leading to again another decrease in turnover.
As they slip down the table each place they drop is another £600,000 spurned.
Football is a business which is not condusive to making profit.
Investing in a football club is purchasing a liscense to spend money.
Even at Arsenal which is massively profitable no profit goes to the owners. The only way they make money is the long term increase in value that their shares gain.
You talk about the chinese investors. They fkd off but quick. DIC? they fkd off too? Why? Let us see. Approximate figures only.
£235ish mil outstanding debts
Penalty of further £60 mil due on default oct6 this year apparently.
penalties of £2.5 mil a week on previous defaults.
Normal Interest still accumulating.
All revenues streams decreasing.
Administration looming with 9 point deduction .
A stadium that is too small for the modern game if you want to be a top level player.
Massive investment required to upgrade the playing staff.
So Investors would need to pay at least £300 mil for the club at least the same for a new stadium assuming they can do it like Arsenal and not The FA and then probably £100 million on players shrewdly bought and STILL there is no guarantee of success or CL football.
What investor in their right mind would touch them?
They are toxic and the word is out.
Even the Chinese who manufacture and produce cheap rubbish won,t buy another piece of cheap rubbish ,Liverpool Football Club ,it figures don,t it ?
She does!!! Lol but I don't hate her for it more pity – she only bothers leaving me ghastly drunken voicemails every night because she knows she will never get it as good again 🙂
So perhaps the analogy was fitting – if Utd and liverpool go down they will forever look up to the Arsenal in the same love/hate manner and wonder how it all went so horribly wrong…
To be honest though all their best players would most likely be spread around the next tier of 'good clubs' (Your City, Spurs, Villas, Evertons etc) so the league would become more competitive – but we would still be owning every other team on a regular basis, it would just shake up the mid league a bit and further pressurise the lower teams …. so even if they both died a dead, the league would continue to improve.
I doubt the FA would ever allow that to happen though now that they (and the evil BSkyB corp) have invested so heavily in them. Chelsea would be the only real rival we would have left!
MikeSA
A simplistic, but fairly accurate method of evaluating the value of a business as an investment is to calculate whether the profits generated by the business can sustain a leveraged buyout.
That would obviously include the interest payments.
That is a measure of value, as whether you borrow the money from a bank or haul it out of your back pocket, an investor will be looking for a return on that money in one way or another (yes, even our own current shareholders).
If, like manusa and pool, a company cannot wash it's face at a debt level equal to it's purchase price, then it is simply not a worthwhile investment.
Yes, I am ignoring possible future value etc (which is debatable), but we are looking at a simple valuation method.
This method also ignores the risk vs reward element in such a calculation as well. Taking on pool at this stage would be a seriously risky endevour, so the rewards from an investor's point of view should be way higher anyway to make it attractive.
A serious investor at this stage will just wait for the collapse, then buy the brand and goodwill at a marked down price.
The banks will also be evaluating their risk.
Just because they're owed an amount of x, doesn't mean they will get it either.
Right now they have to evaluate whether liquidating the assets will allow them to recover the debt, or whether they have to run the club under administration to regain their money through a more profitable sale at a later date, or whether it would be best to just cut their losses and run at this stage.
Sure it will take years to rebuild, but you would have an historic brand to work with, unlike say Citeh, who although they do have a fairly sound history, are not nearly the same brand value as pool.
A shrewd investor will be looking to pick up pool at around 125-175m pounds.