Liverpool turmoil continues despite takeover agreement
The farce that continues to engulf Liverpool Football Club intensified overnight with the news that the Reds board had agreed to a takeover, but that current owners Tom Hicks and George Gillett are not going away quietly.
In a statement on the club’s official website this morning, Chairman Martin Broughton confirmed that he and the board had “successfully concluded the sale process” with New England Sports Ventures [NESV], but buried at the bottom of that brief statement was the revelation that not all members of the board were happy with the deal.
Essentially, three of the five man board – Broughton, managing director Christian Purslow and commercial director Ian Ayre – have outvoted Hicks and Gillett in accepting NESV’s offer, and now the American duo aren’t happy about it, despite them drawing together the five-man collective and giving everyone an equal vote in the first place.
Yesterday’s attempt by the Americans to remove Purslow and Ayre – two former Hicks and Gillett allies – was hugely significant, and it is this that presents the real obstacle in the sale to NESV, the owners of baseball team the Boston Red Sox and headed by multi-millionaire John W. Henry.
Panicking as the club prepared to accept NESV’s offer, which would earn them significantly less money than the only other serious bid on the table – believed to be from Asia – Hicks and Gillett have tried to replace “defectors” Purslow and Ayre with two allies in the form of Mack Hicks, Tom’s son, and Lori Kay McCutcheon, vice president of Hicks Holdings. Such a move would basically change the votes on the Reds board from three to two against accepting Hicks and Gillett’s preferred bid, to four to one in favour.
The dispute will now end with legal action, essentially Liverpool FC versus Hicks and Gillett. It represents one of the most important fixtures in the club’s history.
By accepting NESV’s bid, Broughton, Purslow and Ayre have to be seen to be acting in the best interests of the club, with the desperate credit crunched Hicks and Gillett – already losing money on several of their other assets in America – fighting for as much cash as they can get as their tumultuous reign draws to a close.
With the key issue here concerning the huge debts placed upon the club by their current owners – believed to be around £250million at the latest estimate – there have been no guarantees that Hicks and Gillett’s preferred unnamed buyers would be able to provide the cash to pay off the debts, largely owed to the Royal Bank of Scotland [RBS]. The fact that Broughton mentioned that NESV would be “removing the burden of acquisition debt” in the club statement spoke volumes.
With RBS able to start calling in the debt on October 15th – in just nine days time – the Reds’ parent company Kop Football Holdings faces going into administration on that date, but that would not – as has been reported elsewhere – lead to a nine point Premier League deduction for the club, no doubt a relief to supporters who are currently seeing their team languish in the relegation zone with just six points from seven matches.
Last year West Ham’s Icelandic owners went into administration, but the club were not docked points as they could prove to the Premier League that they were solvent – as Liverpool are. That was not the case with insolvent Portsmouth last season, who were deducted nine points on the way to relegation.
With current and former players Christian Poulsen and Mark Lawrenson admitting this week that Liverpool are “in crisis”, the outcome of the legal proceedings likely to start this week are crucial to the future of the club.
With supporters desperate to see the back of Hicks and Gillett, there will be cautious cheers at the agreement put in place with the Boston-based Henry and NESV.
This saga is far from over though, and it now looks somewhat apt that the most undignified period in Liverpool’s history is drawing to a close with a legal battle.
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