Liverpool in need of a trophy saviour
When David Moores agreed to sell his shares in Liverpool FC three years ago, it was, according to Rick Parry, chief executive at the time, "the worst day of his life".
Moores did not attend the press conference that announced the arrival of Tom Hicks and George Gillett as the new owners, but he issued a statement in which he asked all other shareholders to follow his lead: "This club is my passion and forms a huge part of my life. After much careful consideration, I have agreed to sell my shares to assist in securing the investment needed for the new stadium and for the playing squad."
Last week marked the beginning of the end of their ownership. Under pressure from their bankers, the two Americans have appointed Martin Broughton, the chairman of British Airways, as Liverpool's new chairman with a remit to sell the club by the end of the year. Broughton's appointment is meant to signal that they are serious: he is an experienced, well-regarded businessman with a good track record in sport (as a former chairman of the British Horseracing Board). He is also a committed Chelsea fan and believes Liverpool's fans will be "big enough" to respect his private passion -- a belief that will be tested to the limit on May 2, when Chelsea visit Anfield.
Liverpool's sale will not be a simple affair, even if there are plenty of offers from the usual suspects in the Middle and Far East. Broughton says that potential owners will have to commit to building the new stadium at Stanley Park and will not be allowed to saddle the club with debts to fund the purchase price.
It's a noble idea, but it sits awkwardly with commitments made by Hicks and Gillett in 2007. "We have purchased the club with no debt on the club," said Gillett, and committed to moving "as quickly as practicable" to build the new stadium. Three years later and the debts at Liverpool are in the region of €300m, its bankers call the shots and the new stadium is a site.
Their ownership has been pockmarked with controversy, on field and off, with fans disillusioned by the team's performances, unsettled by its transfer activity and dismayed by the continuing uncertainty that the Americans have brought.
Hicks and Gillett have acted as lightning rods for the anger that would otherwise have been focused more directly on manager Rafa Benitez, who delivered early European glory but who has failed to deliver a Premier league title. Benitez (right) cannot claim he has been denied the resources to turn Liverpool into genuine contenders -- since his arrival in the summer of 2004 he has spent more than €250m while churning about 70 players through the changing rooms -- but his failings have been partially masked by the presence of Hicks and Gillett as handy bogeymen.
They have taken the abuse, but they will also walk away with substantial profits. Hicks told the American media they hoped to get about €670m for the club, a huge profit on the original purchase price of about €250m (Stg£219m at the time: £174m for the shares, and a further £45m in assumed debt) .
"I've been in private equity for over 30 years, and I believe Liverpool will prove to be one of the most profitable investments I ever made," Hicks told The Dallas Morning News. It will certainly prove more lucrative than his other high-profile sporting ventures. Hicks is also selling his interest in the Dallas Stars ice hockey team and Texas Rangers baseball team and will be lucky if the proceeds clear the debts that have been accumulated at both clubs.
Hicks will profit from Liverpool, but his expectations may yet prove optimistic. The Premier League is considering new rules to strengthen the vetting of 'fit and proper' owners, while there are also doubts about future TV revenues because of the British TV regulator's decision to force Sky to cut the price it charges to rival TV companies. Liverpool's failure to make next year's Champions League starves it of cash and the new stadium will require heavy investment -- though the added capacity is essential if the club hopes to match the spending power of its rivals.
Liverpool's fans can only hope that the uncertainties on future revenues, combined with Broughton's strictures about debt and the new stadium, are enough to scare away private equity companies and any other buyers who just want to repeat the Hicks and Gillett formula of a quick turn profit.
They need a trophy buyer, a billionaire or a consortium of multi-millionaires who want to nurture the club, not strip it, if Liverpool is to reclaim its former glories. Unfortunately for the fans, Hicks, Gillett and their banks just want the highest bid, no matter what they say at the moment. David Moores' worst day may not be over yet.