Premier League Report: Who will end up buying Liverpool Football Club?
It seems that Liverpool Football Club is for sale and has been for some time now. It has become buried in debt and as the bank that it owes money to is asking for the money back, the club needs a new owner. With interest from many parties but no firm offers, it looks like the club will end up being owned by the taxpayer. With the latest pull out of a major Chinese businessman, the fate of the club hangs in the balance. The two American businessmen who own the club at the moment are looking for an outright sale to reduce the club’s huge debt to a more manageable £100 million. Will Liverpool be sold or will it end up being owned by the taxpayer?
Three years ago, two American businessmen, Tom Hicks and George Gillett, bought Liverpool FC. In the entire time they have owned the club, it has seen its debts rise to almost unmanageable levels. At the moment, the debt owed to the main lender, RBS, has gone up to £237 million. One has to ask how such a huge amount of money could have been haemorrhaged over a three year period and that too at a very popular and talented football club. Whatever happened there is a mystery known only to the two owners and the rest of the management team. In the meantime, a few interesting things have been happening with the club. Firstly, it was put up for sale by the owners. Then offers from around the world were received: Kenny Huang from China, the Syrian Yahya Kirdi, the Kuwaiti Kharafi Group, the US private-equity firm Rhône Group, and recently, the Indian conglomerate Sahara. But slowly each of these offers faded away and people at RBS started to get nervous that they would not get their money back. It looks very likely now that RBS, with no firm offers for the club on the table, will oust the Americans from their positions and take over the club and make it a wholly owned subsidiary of the bank.
There are a few issues with anyone buying the club. From a business point of view, it does not look like a good deal. Firstly, the club is in serious debt (£237 million worth), and secondly, the owners are asking for a very steep price. Hicks and Gillett are reportedly asking for between £600 million and £800 million for the club. This price tag comes with an immediate repayment of £100 million to the bank and also comes with the promise that the new owners will put up the money to construct a new stadium for the team. With all these problems and excess baggage attached to the club, it is no wonder that one by one, all the potential buyers are exiting. There might be hope for the football club yet, because Liverpool is a huge brand name and has millions of fans around the world. If a business savvy person can come into the driving seat, they might be able to turn around the club’s fortunes and make it profitable again.
It looks like the two American owners want to exit the sports ownership business. They have claimed that they could not deal with the lack of privacy that they had to endure as owners of the football club over the last three years. However, it would seem that they are not very good at owning and managing sports franchises. Hicks also owns two other sports teams and the first of these, the Texas Rangers baseball team, filed for bankruptcy recently after defaulting on a £360 million debt. His other sports investment is the Dallas Stars ice hockey team and that too is being sold by the businessman. He apparently wants to get back into real estate and private equity which are his main businesses. Liverpool fans could not be happier that he is going and someone new is coming in his place.
The fate of Liverpool hangs in the balance at the moment, and with Kenny Huang also recently backing out from his deal to buy the club, the future looks very uncertain for the premier English side. It might all be salvaged soon with a buyer showing up to save the club, but it does not look likely. What is probably going to happen is that RBS will end up owning the club. That is all we need these days; banks owning even our football clubs.
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