Owners push Liverpool towards points deduction, as Premier League back NESV
The owners of a football club going to court and, in the process, increasing the chances of nine points being deducted from their own team. It sounds like a work of fiction, but this has become the stark reality for Liverpool as their takeover battle heads for the High Court next week.
Despite initial reports that the Reds would not face a Premier League points penalty were they to go into administration on October 15th – when the Royal Bank of Scotland [RBS] can call in the £280million that they are owed by the club – it has now emerged that Liverpool would be likely to lose points should current owners Tom Hicks and George Gillett block the proposed takeover by New England Sports Ventures [NESV], the group that the remaining three members of the club’s board want to sell to, and which have today been judged to be credible owners by the Premier League.
As Liverpool’s debts to RBS are entirely the work of Kop Football Holdings – the parent company that Hicks and Gillett created when they took ownership of the club in February 2007 – the case of West Ham’s Icelandic parent company going into administration had been cited as a precedent. They went into insolvency last year, but West Ham weren’t deducted points.
However, because the Hammers were only one of the business interests in the portfolio of the Icelandic owners and their parent company, the club did not receive the automatic nine point penalty that the Premier League imposes upon administration.
Kop Football Holdings represents – as the name suggests – Liverpool and Liverpool alone, and so the Reds hierarchy would be extremely unlikely to prevent the Premier League from deducing that the parent company’s insolvency was caused by club and their owners.
After their poor start to the season, Liverpool currently sit in the relegation zone of the Premier League with six points from seven matches.
A nine point deduction would place the Reds rock bottom of the league on minus three, nine points adrift of the safety of 17th place, currently inhabited by city rivals Everton, who the Reds ironically – but almost inevitably given the current circumstances surrounding the club – face at Goodison Park next Sunday in their next Premier League match.
There remains the possibility that Hicks and Gillett would immediately sell to their preferred bidder – believed to be from Singapore – should they win the court case, but there has so far been very little information about that bidder, or whether or not they are prepared to pay off the debts in time to avoid the points deduction.
It is widely acknowledged that Gillett still wants to cut his ties with the club – a belief strengthened by the pair’s attempts to get two Hicks allies, his son Mack and Lori Kay McCutcheon, the vice president of Hicks Holdings onto the board – but the 71-year-old doesn’t want to sell to NESV, and will fight alongside Hicks at next week’s High Court case.
Whether or not the pair will be in London to attend the case is still up for debate though, especially after it was revealed that many Liverpool supporters planned to travel to London and gather outside of the courts to make their presence felt and their protests heard.
As more is learnt about NESV and their dealings in America, those fans have warmed to their potential ownership of the club.
The Premier League have given their backing to the group’s proposed takeover after ruling them to be “fit and proper people” for the challenge, and supporters have certainly agreed.
NESV head John W. Henry turned around the fortunes of baseball team the Boston Red Sox when he and the group took over in 2002.
With the club – one of the most famous and traditional names in American sports – struggling to consistently compete the top level, Henry and company helped turn them around, winning a World Series title in 2004, ending an 86 year wait for the club, and a second in 2007.
The fact that Henry kept his team at their old Fenway Park home was seen by many as one of the reasons for the successes, and has led to the belief that he will look to keep Liverpool at Anfield should his takeover go through. Such a decision would be likely to go down well with Reds fans, but lead to a battle with Liverpool City Council, who are determined to see a new facility at Stanley Park.
Such thoughts will have to wait until after the court case though.
Liverpool FC go to war with their owners next week, and the result will be far more important than any that the club have achieved on the pitch in recent years, possibly ever.
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