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Liverpool University Professor concerned over Anfield finances

Professor Tom Cannon, who is professor of strategic development at Liverpool University's school of management, believes Liverpool owners Hicks and Gillett must sell off some of their other assets if they are to ease the club's financial woes. He told Sky Sports: "Accountants like KPMG don't use the kind of language they've used here lightly. They've talked about material concerns, they've warned about their ability to continue under the present basis. I don't think I've ever heard accountants talk about a top football club in this way before.

"Fans should be very concerned. In some senses the fans have delivered what they've been expected to do. Turnover and trading profit have both gone up, but I'm afraid the cost of debt and management fees have produced a deficit which is frankly very worrying given the turnover.

"You're talking about a loss of almost £40million on a turnover of £200million. That is very worrying."

The Reds currently have a deficit which is roughly a third of the company in terms of trading, which is a massive difference from Premier League rivals Manchester United, whose figures are in the range of £300million and have a trading deficit of around £20million.

Professor Cannon, cites the interest charges as the most worrying element of Liverpool's plight.

"They've got big debts but they're paying about £35million in interest," he explained. "We all know how interest rates have declined in the past year but Liverpool seem to be paying a rate that is over 10 per cent. This is at a rate where people are borrowing money at rates of around two and three per cent. It just goes to show how hard it has been to renegotiate the extension of their funding. In July they will be under pressure to renegotiate a much better deal.

"I think the pressure on Hicks and Gillett to bring in another investor is too hard to resist. Whether another investor will come in under the type of conditions Hicks and Gillett seem to be asking I don't know.

"It's more likely Hicks will sell some of his interest in the Texas Rangers or the Montreal Canadians. They desperately need new finance, not least to take the burden of this debt and the related interest. They can't seriously think in terms of another six-month extension this July; they need long term secure financing."

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