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Liverpool chairman admits, the owners no longer have any control of the club

by Tony Attwood

There is a school of thought that says that no matter what, a club as big as Liverpool will always be able to carry on.   The banks would never foreclose on those irritable little scoucers and besides, they are just too important to go bust.  Someone will buy them.

Quite possibly this is so.  If the bank were to shut the club down, the football-debt rules (now being challenged again in the courts) could well mean that the banks would not get much of their money back.  Besides the negative publicity a bank gets from bringing a club to its knees might make even a bank ponder the consequences of its actions.

(No, actually I have just re-read that last sentence and whichever way I put it, it doesn’t read true.  A bank considering the consequences of its actions…  No, no chance).

But whichever way you look at it the crisis at Liverpool is deep.

The Liverpool chairman is a Chelsea supporter who was brought in by the banks to make sure that the club is sold, and so can repay the debts to the banks.   Being a Chelsea man , Martin Broughton their chair, has no real knowledge of long term success.   Indeed being also chairman of British Airways he must also be fairly away of what life in crisis is all about.  (He’s also been chairman of the British Horseracing Board and British American Tobacco who have a big plant just outside the village where I live – but that’s not actually relevant to this account).

Anyway, his job is to sell Liverpool and so far his success rate is zero.  Not only has he not sold the club, he’s also not had any bids since last April when those chirpy yankies Hicks and Gillett bowed to bank pressure and agreed to flog the place.

Broughton has said the first serious offers will turn up soon, and that he expects to sell the club in August or September.  In terms of the lack of offers he said, ” I wouldn’t have expected there to have been at this stage.  There are a number of interested parties, but there’s no specific deadline on it. We are looking to the middle of July-ish for the first round of bids but that’s not a final stage – that’s a first entry through.”

It shows the level of the problem at Liverpool FC that Broughton has also said that Hicks and Gillett could not veto a sale and no price had been set to sell.  That is quite remarkable – and again reflects the depth of the Liverpool crisis.

The owners have given up control over the price they sell their ownership of the club for!

That is the deal the banks extracted from them in return for allowing the club to continue after it defaulted on the £100m repayment to the banks.  It is quite a heavy price to pay, and the fact that the owners agreed to it means that they are now in a corner, without enough assets to extract themselves from the mire.

The company that owns Liverpool FC lost nearly £55m for the year to 31 July 2009, which was a huge leap on the previous year.  £40m of that loss went on paying RBS and Wachovia (the US bank) interest on the £351m debt – the money that the banks now want back, and for which the £100m due this summer should have been a part payment.

One rather amusing side-affair in the accounts is the fact that that loveable old rascal Rick Parry was paid £3m severance pay – which is a fair sized pay off for introducing Tom Hicks and Georgie Gillett the Lesser to the club and preparing their way for a takeover in 2007.

Quite a good earner: “Hey guys here’s a couple of fellows of dubious business repute who would like to rape your club.  Pay me some money for introducing them, and then another £3m to make me go away.

The man who has to sit by and watch British Airways fly itself into the ground with endless strikes and total customer dissatisfaction said, “The owners can’t block the sale of the club. I read all too frequently numbers being floated about in the media, normally associated with Tom Hicks’ name. I would like to make it clear there is no number. There is no base line.

“This is a willing buyer, willing seller auction. We will do a deal with what we consider to be the best bidder.”

So there we have it.  The chairman works for the creditors (the banks) not the owners, not the club.  He is careful to make noises about the future of the club so as not to risk the supporters ire (he doesn’t want his hub caps nicked) but otherwise, this is a hard-nosed business: RBS want their loan back, and they will sell the club in anyway they can to get it.

But it is clear – if someone offers £351m for the club, and no one else makes a deal, then club can be sold – because all the chairman wants is his £351m back.

Meanwhile, while finance is the subject in hand, Cardiff City have failed to pay their players and others on time, despite having got rid of Ridsdale and having brought in a new rich owner.  Well, that’s how it goes.

What is amazing about the Cardiff situation is how closely it resembles what Ridsdale did to Leeds.  The story allows us to note just how desperate clubs can become to bring in someone, anyone, who might just get them into the big party.

Ridsdale became chairman in October 2006 after Sam Mammam of Wimbledon moved aside.  Ridsdale then borrowed money from future earnings to try and get the club into the EPL, in his last season mortgaging huge amounts of unearned money to bring in players who he hoped we secure promotion.   The club lost in the play off final.

Among his many tricks was to raise money by selling off future season ticket sales (for the year 2010/11 when it was hoped the club would be in the EPL) at half price, on the promise that the club would use the money to buy new players to secure that promotion.   In December 2009 Ridsdale admitted the ploy was a con trick and that the money was used to pay off some of the debts he had run up.

A Malaysian Consortium headed by Dato Chan Tien Ghee took over 30% of the club at that point, for just £6m deal.  Cardiff now have between £10m and £30m of debt (post-Ridsdale you never know) and had a fifth Revenue and Customs winding up order over a £1.9m tax bill on 16 June.  They survived, but the price has now been seen – they couldn’t pay the wages on time.

Untold Arsenal, from here, to there, and then somewhere else

Making the Arsenal: the second edition is just about the same as the first, but it does say second edition inside it.

17 comments to Liverpool chairman admits, the owners no longer have any control of the club

  • walter

    About that Ridsdale fellow: how on earth is it possible that a club takes such a person on board after what he has done at Leeds? It is beyond me. You wouldn’t let him in a football ground even if he would have bought a ticket.

    The Liverpool situation makes me wonder how many big names will be leaving this summer. Torres, Gerard, Kuyt,… If the banks really insist they will have to sell them. And like you explain that the chairman is a Chelsea man so he will not care much about dismantling Liverpool he will not hold back on selling them I think.

  • Rhys Jaggar

    The way the Scousers are going about it isn’t actually that surprising. There’s a company in Newbury who makes a good amount of dosh helping companies to be sold by performing global searches, gradually whittling that down to a manageable number with the owners and then helping them decide on the right buyers.

    When I heard them talk they said that often the owners didn’t take the biggest cash offer, rather the best fit for what they wanted their legacy to be, be that keeping their loyal staff in work, keeping the ethos of the company the same etc etc.

    What was also interesting was the range of bid prices could be enormously different, depending on how strategic the acquisition was for the purchaser.

    Such processes don’t occur in 1 month, they usually take 6 – 12 months. So I’m not the least surprised that no bids are yet forthcoming. Bidders will want to factor in the new manager, whether Gerrard/Torres stays and how they see the club performing in the next 5 years.

    I doubt they lost control of the process. The papers just aren’t printing one story a day as there’s nothing worth printing each day right now. ‘Interest party XXX is into day 40 of initial due diligence’ is hardly going to make your day, is it?

  • munaf

    sorry this is completely off topic but I have scanned the pages and noticed nothing has been mentioned about the recent comments from Cesc. Is it me or is there some kind of positive spin on this? I mean his exact comments are: ““I haven’t said that I will definitely leave Arsenal. Everything is possible. Now I have my head and my focus on the World Cup.” When I read that, my heart sunk. By saying he hasn’t said he is definitely leaving Arsenal – what he is saying – in the same time – is that he is definitely not leaving Arsenal. Previous to this statement, I believed that Barcelona wanted him more than he wanted to move. But now it’s looking likely that he actually was “in two minds” and that is the disappointing thing which changes everything. Can a captain of a European giant such as ourselves be flirting with others club – be it his boyhood one or not – is this not the same if not worse than what Adebayor did 2 summers ago? For me, a player of his calibre, with such a status with fans and club, should be honest and come out with what he wants – if he wants to leave, he wants to leave – if he wants to stay, he wants to stay. He has not said he wants to stay and has not said he wants to go. The statement reads “everything is possible”. I don’t know how you feel about it or how you have reacted to the comment, but all in all, it’s the closest thing he’s said about leaving – as I said earlier, you can read this statement as “I haven’t said that I will definitely be joining Barcelona. Everything is possible.”. Do we really want a player at the club who’s mind is already for the pastures green – this season or the next.

  • walter

    Munaf in short to you last question: I do want him and I will support him for as long as he stays with us and he gives it all on the pitch, which he will as long as he is with us.

  • munaf

    Hey walter having read this as a fan my heart dropped. Knowing he was actually considering leaving really made me upset. As I thought it was more paper talk before

  • Munaf – the reason I don’t keep running the Cesc story is twofold…

    First, I try to stick to the “Untold” part of the name, and cover stories that are not on every other site. Since every other site does cover the story, I just bow out and let them get on with it.

    Second, as with all these stories, there are statements, statements and statements, many of which are made up.

    Remember Arshavin? He’s already left apparently because

    a) He hates Wenger
    b) He doesn’t like English weather
    c) He was never told that he would have to pay 50% tax
    d) He cant get used to driving on the left

    The nonsense of it all was encapsulated for me with the statement from a correspondent on this site…

    “I like Arshavin as a player but I wish he would stop criticising the rest of the team”

    There never was any evidence that he criticised the rest of the team, it was just another newspaper story.

    So, you either think that the media prints reality about football, or you don’t. My personal view is that they don’t. Which means in the Cesc case there is no story, so nothing to write about on untold.

  • Robbie

    What’s the difference between Arsenal and Liverpool’s debt? We had a net debt of around £300M 08/09. I know Arsenal is more profitable than Liverpool and that we perhaps have less interest on the loans. But isn’t Liverpool’s debt manageable, just like ours? I can’t be too hard for them to find a good long term solution. When we moved to Emirates it wasn’t long before Wenger had sold the invincibles and replaced them with kids. In the eyes of other big club supporters, we must have looked like a club in crisis. But, we survived.

  • munaf

    Tony, I agree in principle that a lot of the rubbish in the media is just that – rubbish. But this was spoken by the man himself – heard it on sky sports so its not a fabric of the media but  the intentions of the man To be honest Cesc should consider his future as he has been at arsenal for about 7 years and he hasn’t really achieved. You see other rival teams buying to strengthening their teams and the lower teams playing catch up but your own team have a policy where they don’t buy or buy only one when it it glaring that there are holes in the team and those holes are not being plugged. 

You may argue that the boss gave him a break at a young age but the difference is that it didn’t take him ages to come through. How long will we wait on diaby to scale up ? how long will we wait for denilson ? How long will we keep Silvestre ? How long will we cope with alumina and flappyhandski ? How long will we keep song as our only DM ? Hoping he is fit always and when he is not around make shift replacement in denilson, diaby, ramsey !!!
How long will you want to stay in a team that has B52 as the main striker, missing 9 out of 10 chances when a striker in the mould of Drogba would have taken 9 out of the 10?
There has to be a balance in the team.

Keep Sol if possible, Out with silvestre, out with gallas (Not for playing reasons, but for team unity), out with Flappy , Get a world class keeper to be number 1, alumina number 2 and Manone or szcenzy(spelling ?) as number 3 while the other goes on a on a season long, hart-like type of loan then comes in the following season with alumina Out.
Get a new CB to partner verm while djourou gets back to full fitness, and bring in nordviet (spelling?). Get a new DM, We already have a new striker so if RVP is injured, we dont need to put our hopes in B52 alone. I want to see a 4-1-2-3 formation in the mould of

Team 1

————–New GK——————-

Sagna — New CB — Verminator — Clichy

————- Song ————-

—— Cesc ———– Nasri ——

Chamakh —— RVP —— Arshavin



Team 2

————–Alumina——————-

Ebuoue– Djourou — Nordviet– Gibbs

————- New DM ————-

—— Rambo ———– Rosisky ——

Walcott —— B52 —— Vela

  • munaf

    Furthermore I think if we want to get on the world football map then we need to look at players who are not French, France more than any other nation has plummeted from the dizzy heights of 1998 to becoming a poor,,disorganised team,with a crackpot of a manager. France are in disarray. So why do we continue to seek to buy French players, apart from the obvious that our manager is French.Is it an obsession ? it appears we have just bought Kosnielky, who has very little first team experience in France,which is generally accepted as being a lower level league than the PL. Look at our current crop of French players.Sagna,Clichy,Diaby and Nasri, good on their day but generally have all had an inconsistent season, yet Gallas based purely on form has been the best, and he has now gone.Do any of these of players compare to the likes of Petit,Viera (born in Senegal) or Henry in there hey day.IMO we should be looking perhaps to the eastern block countries to counter balance the lightweight skilful player in the squad.The defence is our priority if we are to maintain a challenge, and I think the penny may have eventually dropped with Wenger, based on his recent comments. To be quite frank i think this obsession with French players is getting ridiculous. Koscielny might be good, who knows,but he’s going to cost £10m at least by all accounts. How quickly will he settle, will he come in and dominate? Vermaelen had Gallas to guide him when he first came over and had a good season, but was found out against the class teams in terms of positioning, covering, marking, heading etc. He still has much to learn and him with Koscielny/ Djourou will not do when we meet the big boys in the League and Europe, I feel. Why didn’t we go the extra mile for Kjaer, who before the World Cup was supposedly open to offers of around £12m? Oh, I know, because he probably didn’t want to come/ wanted £100k a week/ didn’t like London etc. The Wenger supporters will use any pathetic excuse to justify all the errors at this club.

  • walter

    Well, RVP will miss the start of the preparation it seems.

  • Gooner Gal

    Walter, I am happy for Holland as they are one of the remaining teams I am supporting this World Cup (Brazil & Argentina others), but I didn’t enjoy the match as much as I thought I would. Brazil seemed to run out of steam and ideas in the last 10 mins of the game. The flowing football was absent and Holland’s win felt a bit lucky on the balance of play. Brazil seemed to self destruct – I would of thought that this team more than others would of been able to keep cool heads. Can’t help but think what might of been if Dunga had more creativity on the bench like Pato or the ‘Dinho. I doubt he will remain as coach after this performance.

    Every time RVP goes to ground clutching part of his body I get nervous, although he was quite involved in the match, I don’t think its the best I have seen him play. Coming back from injury and playing in an intense tournament is a worry for the start of our season. For Arsenal’s sake I had hoped Brasil would win, RVP needs to be benched – which I doubt will happen as RVP is not happy about being rested. We need to have RVP and Chamakh playing together as soon as possible.

  • walter

    As a member of the Arsenal BeNElux supporters club where the NE stands for Nederland (Netherlands) we feel half Dutch and I also feel half Dutch. So I like the fact that the Dutch go further but the one thing I don’t like is that RVP will play till the end and will miss the start of the preparation. But on the other hand if Holland win it and if RVP scores the winning goal it will give him a massive boost I can imagine.
    I think the Dutch went mad after the game when I look at the pictures on TV. Who wouldn’t?

  • Gooner Gal

    Lol – Walter your dutch identity reminds me of Andy Murray being Scottish when he looses and British when he wins. I am very happy that the Dutch have lived up to their sporting potential as a nation for a change. Even though this team has great team spirit – very unusual, they don’t feel like the ‘vintage’ Holland and that ‘total football brand’ is what I would like to see win the cup.

    I wonder if all those people telling Wenger to buy Melo will go quiet now.

  • Dark Prince

    Liverpool seriously seem to be becoming worse every day. Yossi Benayoun has signed for Chelsea. Tomorrow it might be Torres and Gerrard. Maybe thats the reason why they have brought in Roy Hodgson. He can deliver results even with a mediocre side. So they are expecting him to do the same for a future mediocre liverpool team. So eventually Liverpool are following the footsteps of Leeds United, Newcastle United and Nottingham forest.

  • AaronGSi

    You have to feel a bit sorry for Sir Alex Ferguson. His worst enemy is on it’s knees, doomed to mediocrity for the foreseeable future, and yet he can’t say a thing because it would be the worst case of the pot calling the kettle black. His nose must be as red as it has ever been at the moment, because he can’t even put in a cheeky bid for Torres just to rub it in, because ManIOU don’t have a pot to piss in either. You have to laugh.

  • Rhys Jaggar

    munaf

    If you are a top pro and you say you want to go, but Arsene Wenger doesn’t want you to go, you will be shooting yourself in the foot.

    In stories like this one, you would be extremely wise to think nothing of what is written in the papers. Their job is to create XXX stories a day about football and if there aren’t enough true ones, then they make some up.

    In the media ‘Cesc might be interested in going to Barca’ doesn’t sell. Nor does ‘Barca might be interested at the right price, but that’s not the right price for Arsenal’.

    The standard in football journalism seems to be a bit like a bunch of 21 year old alpha males bragging about how many women they shagged. Anyone with any nous comes to realise that there may be a few telling the truth, but most are bragging because they can’t be seen to be either boring monogamists or losers who can’t pull women or are still repressed due to mummy’s diktat.

    If you wanted to work out the truth, you might need to do a daily analysis of stories for all journalists, log them and tot up each year what percentage turned out to be true.

    Sadly for most of us, we neither enjoy the time nor the inclination to do that. So we either continue to buy into the hype, or we use gut feel to make a call on it. Or, if we are sensible, we take no notice of anything other than the Arsenal FC website printing ‘Arsenal FC can confirm the purchase/sale of XXXX from/to YYYY’.

  • Robbie asked what is the difference between Liverpool’s debt and Arsenal’s. Here’s a quick summary

    Arsenal’s debt was secured to build the stadium, and was guaranteed at a low level of interest, payable month by month over 15 or so years.

    Liverpool’s debt was also secured to build a stadium, but it was not built, and was used instead for the buy out. As such the banks said that they wanted it repaid over a very short time.

    Payment one was made, but payment two (£100m) was demanded by the banks about six months back. Liverpool failed to make the payment, so the banks took over, put in a new chairman, and ordered the club be sold with the first £350m from the sale going to the bank. The current owners can walk off with the rest, leaving Liverpool with zero.

    This is a difference on every level.

    Arsenal have a debt negotiated over a long period of time which they can pay off and are paying off in accordance with the mortgage.

    Liverpool have a debt on which they have defaulted, and now have the banks running the club.