Hicks and Gillette do it for Arsenal

The new consortium looking at Liverpool could back out if the court action currently going on allows Hicks and Gillette to stay in control.   The banks would then take action to put Liverpool in admiistration, and that would result in the club losing nine points.  It is now said that the American buyers would then pull out.

According to the Guardian “the league’s chief executive, Richard Scudamore, believes that the holding company’s administration cannot be entirely separated from the club, and the nine-point penalty would apply.”

“The penalty could be imposed next Friday and, with no further Premier League matches having been played, Liverpool would be bottom on minus three points, eight points behind the two clubs immediately above, Wolves and West Ham United, and nine points from safety.

“That would be a huge setback for a club still aspiring to be in the top four, not fourth from bottom, making it almost certain, at the very least, that they would not qualify for the Champions League for the second successive season. Financially, that would have a major impact, and relegation a catastrophic one, so new owners might have to contemplate spending more than they planned on new players in January to ensure Premier League survival.”

When I say that this would be a benefit for Arsenal I don’t mean this in the sense of Liverpool no longer being a threat, but rather of rich owners from outside the league being put off buying into clubs that are in financial difficulty (Liverpool, Man U etc).  It makes the whole thing look rather messy.

If Liverpool’s current chairman’s Broughton’s court action fails, the £237m owed to Royal Bank of Scotland by Hicks’s and Gillett’s Liverpool holding company, Kop, falls due next Friday, 15 October. Hicks and Gillett, as we wll know, can’t pay, and RBS will then put the club into administration, although the scale of the damage that could do to Liverpool might cause the bank to reassess.

But… “Going into administration needs to be avoided at all costs, as the negative impact would be catastrophic,” Broughton said. “Setting aside the nine-point deduction, it would have an impact on Liverpool’s value and be wide open to predators, whereas we have what we believe is the right new owners to take the club forward.”