New problems regarding Liverpool’s sale
The troubles at Liverpool football club are far from being over. Although, it seems that a deal has been finalized, but other issues have emerged on the horizon. At this moment, the problems at Liverpool FC are far from being over.
New England Sports Venture, NESV, has declared that they would buy the club directly from Royal Bank of Scotland, if the bank takes control on Friday. RBS has given a deadline of 15 October to Tom Hicks and George Gillett to either repay their loan of £237
million or refinance it. However, it is obvious that they would not be able to fulfil their obligation before the deadline. Also, with the problems being created by these men, to stall the new ownership deal, would mean that NESV would not be in charge before
Friday. Therefore, RBS would take control of Liverpool on the deadline day, which changes the whole scenario.
Hicks and Gillett, the current owners of Liverpool FC, are not happy with the NESV takeover. The deal is worth £300 million, which gives no profit to Hicks and Gillett, making it hard for them to accept the deal. The current American owners feel that the
club has been undervalued by NESV, which prompted them to take matters to the court. So, despite getting a go-ahead from Premier League authorities, the ownership deal is still far from being over.
At this point, the deadline given by RBS plays a very important role. The bank would effectively take charge of the club on Friday, if their loans are not repaid. Due to this problem many other problems would raise their heads. If the club goes into administration,
nine points would be deducted from their current point position. Liverpool is currently in the bottom three, with six points in seven matches. However, with the deduction of nine points, Liverpool would be further down in the doldrums with -3 points. This
would mean that the club would likely face relegation at the end of this season.
Previously there are examples of other clubs, like West Ham United, who faced such problems. In case of West Ham, a parent company went into administration, but no points were deducted. Liverpool was hoping for a similar kind of treatment, but they have
been told that their situation is different. So, they would definitely face a nine point automatic deduction, if the clubs goes into administration on Friday.
Also, with RBS in charge of affairs, there are chances of new negotiation deals. There are more chances that the price would be brought down by RBS who are only interested in the repayment of their loan, an amount lesser than the one being paid by NESV.
Apart from that, there are also chances that a new bidding would start, involving other investors as well. In such a case, the ownership saga would start again, wasting the efforts of NESV during the last week or so.
NESV has kept all these repercussions in mind, as they would proceed cautiously. They have already told that if the club goes into administration and nine points are deducted, they would back out of the deal. According to New England, the better option for
RBS is to take control of the club and effectively go ahead selling it to their company, without going into administration. NESV also seemed shocked with Hicks and Gillett, who were not acting according to the desires of Liverpool board.
In short, the better option for RBS is to keep themselves out of administration for Liverpool and for their own sake. If they do not do so, they would be left in charge of a club falling apart, as no one would be interested in paying a heavy amount for some
club going into relegation battle.
Also, rather than going into further negotiations, RBS should respect the decision of Liverpool’s board and should go ahead with the sale of club to NESV. This is for their good, and it would be good for the club as well. Liverpool fans are hoping that their
problems are solved when the players return from international break.
Tags: