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RBS - Spirit of Shankly Response

The Spirit of Shankly have responded to the RBS email received by members following our recent letter and email campaign as follows:

From The Spirit of Shankly:

Thank you for your email response, we are grateful for a response but would like to bring the following discrepancies and inaccuracies to your attention:


Thank you for your email expressing concern about RBS' banking arrangements with Liverpool FC and its current owners. We are aware of the strength of feeling of a number of fans on this matter and have corresponded with many during the course of the past year or so.


Perhaps I can start by putting RBS relationship with Liverpool FC in context. RBS is the main banker to the Club including all of its operating accounts, cash management, online banking, automated payments, and credit card processing to facilitate ticket sales and retail merchandising. We also provide a credit facility to support the Club's working capital requirements and a letter of credit facility to facilitate the purchase of players from non-Premiership Clubs, along with a loan facility for design, planning and other preparatory work for the proposed new stadium at Stanley Park. We have set out to establish a long term relationship with the Club, and we look forward to this continuing for many years to come.



It is interesting to note that you wish to establish a "long term relationship" with the Club. We feel it is essential that you note that our current "owners" are custodians of the Club, they were not here four years ago and we doubt they will be here four years from now, while we the fans have been here for over 100 years and will still be here long after they have left. We suggest you pay more attention to us as the long term custodians of the Club rather than those more interested in making money from us and leaving.

We also lent money to the Club's parent, Kop Football Limited, so that it could repay debt which was on the balance sheet of the Club at the time of its acquisition by George Gillett and Tom Hicks. This is the only portion of Kop Football's bank debt for which the Club is legally responsible. We took great care when making our original loan in early 2007 and when refinancing it last January to distinguish between obligations of the Club, primarily those outlined above, and obligations of its parent company, the latter being secured by personal guarantees and collateral from the owners and a pledge of the shares they own in the Club. As a result the Club does not suffer the burden of debt implied by a lot of the recent press reports and, in our view and that of the executive management of the Club, it is financially healthy and able to service comfortably its debt obligations from cash flow generated by its playing and commercial activities. It is in our commercial interest to support the Club in the manner described above so that it can continue to perform successfully on and off the pitch.


It is essential that you recognise that there is some financial sophistication among our members and the Club's fans and this nonsense is quite simply that, nonsense. The only asset that secures the borrowings against both the Club and Holding Company is the Club itself. The Club is also the only source from which cash and profits are generated to service the debt to Banks and our "owners" (who also need a return to pay for the cash they have injected, which was also borrowed, of course).

The most recent set of accounts show that the profits and cash generated by the only source of income were INSUFFICIENT to service the debt and further cash had to be injected by the owners. Current reports suggest that this is also the case at this current re-financing point. This injection will also, no doubt need to be serviced, and while reducing the exposure of RBS it does nothing to alleviate the burden on the Club's finances, in fact due to higher interest rates, no doubt the burden has grown. The result is RBS's exposure may reduce but the Club's exposure stays the same or more likely, increases.



As far as the Government is concerned, they have been very clear that they do not wish to exercise day to day control over RBS or make commercial decisions for us. Indeed they set up an independent body, UKFI, to oversee the Government's shareholding in RBS, so matters such as strategy and governance can be agreed, while they leave commercially related matters to us.


You may consider this to be the case but the work we have done shows this to be little more than posturing by you. The taxpayer owns the majority of your bank and there is no way that elected politicians will allow the bank to make some decisions that will affect them and their future electoral prospects.


RBS attaches a great deal of value to being associated with Liverpool FC. I hope my comments reassures you as to the strength and depth of our relationship with the Club and that we will endeavour to contribute to its long term health and success.


While we appreciate you opening a dialogue with us we are far from reassured. Understandably RBS have to protect their risk first and foremost for the benefit of their shareholders. The majority of those shareholders are the UK public - the current re-financing is clearly driven by RBS wishing to reduce its risk.

The element of risk that is being reduced is not disappearing, it is passing back to the Club and our financially challenged owners who are either borrowing from elsewhere or replacing debt with injected funds that also need to be given a return - that return is coming from an asset that is already stretched and unable to fully service its existing borrowings.

We ask again that RBS should engage with the fans and allow us to take over a manageable proportion of the debt that is charged against the Club - the Club can service a reasonable amount of debt and can also be reorganised in such a way that funding for our new stadium would become more attractive ultimately resulting in a stronger Club and a reasonable and mutually beneficial commercial relationship between RBS and a fan owned Club.

We would ask to meet with representatives of RBS to discuss this in more detail.

No to refinance - No to unmanageable debt.


Yours faithfully

Spirit of Shankly



We will let you know if we receive any response to our email and request to meet. Please feel free to forward this to any MPs you feel may be able to assist our campaign.

We hope to report more at our meeting on the 11th July at Zelig’s, Liverpool One at 1.00pm



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