Liverpool FC’s frail financial performance
Liverpool FC is the most successful club in England as they have won more trophies than any other club in the English Premier League. However, recent times at Anfield have not been very good for the Reds who have constantly struggled against their archrivals Manchester United. Last season proved to be the biggest failure as Liverpool was unable to clinch any of the European spots in the table. If a team runs on heavy finances, then it is expected that the profits are constantly being generated. This is, however, ensured if the club gets more fixtures, by qualifying for European competitions, as it provides the club’s management with an opportunity to earn some money from sponsors, TV rights and ticket sales.
Liverpool, therefore, has lost that edge because of their constant failures. Due to these reasons, the current owners of Liverpool FC, George Gillett and Tom Hicks, have decided to put the club on sale in April this year. The current owners bought the club in 2007 at a price of £219 million. Even at that time, the club was in a financial conundrum, as there were soaring outstanding debts on their account sheets. However, the owners were quite satisfied as Hick declared that this investment would be his most successful one in history, which would earn him around a billion pounds per year. However, this did not prove to be true as the financial situation worsened at Anfield.
Due to this reason, the current owners put the club for sale. However, since April, little interest is being shown in the transaction. A Hong Kong’s billionaire Kenny Huang was in negotiations to take over the club. Huang, Chief Executive of a Chinese sports investment company, QSL, allegedly offered the Royal Bank of Scotland to buy an outstanding loan of the club worth £237 million.
This move is considered to be a hostile move by the Chinese billionaire. He has gone straight to RBS, which would mount pressure on the current owners to speed up the process. Although, this would not give him the direct ownership, but his position would be so strong that he would be able to replace the current owners, sooner or later. Furthermore, Hick and Gillett would not be able to profit anything from this kind of a take-over. The real purpose of this approach is to quicken the process as there is a short time left in the transfer window, while Liverpool is in dire need of investments.
Although Liverpool is the biggest club in England, however, they were always short of a few seats in Anfield. With the club of this stature, they have only a mediocre sized stadium. Consequently, there has been a demand from Liverpool fans to make a new stadium, which is also the first thing on Huang’s agenda. Moreover, the club is going through a crisis which can only be resolved through big transfer budgets. So, with the takeover from the Chinese tycoon, there is a high probability that the club would get these extra finances.
This transaction is not final, as Hick and Gillett are trying to delay the process by stating that they are already in discussion with some Syrian tycoon. However, it is very important for Liverpool that the transaction concludes before time. It would also boost up the confidence of players, as some of them, including Fernando Torres, have already shown their desire for bigger budgets for the club.
It is also very important for the future of the club and the preservation of its legacy. There records are under constant threat by Manchester United, as they have already equalised Liverpool’s record of 18 league titles. With an introduction of a new owner, who is known to possess keen interest in football and Liverpool FC, the situation would definitely improve. He would take extra interest in the club’s affairs which would quickly settle the problems faced by the club.
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