BBC BLOGS - Peston's Picks
IN ASSOCIATION WITH
« Previous | Main | Next »

Liverpool takeover becomes soap opera

Robert Peston | 00:14 UK time, Wednesday, 6 October 2010

Let's call it Kopside, the soap opera of Liverpool Football Club's attempts to find a new owner and avoid being placed into administration.

Sign outside Liverpool football club

 

With just 10 days left before Royal Bank of Scotland would seize control of the club as its main creditor, the club has announced that it is negotiating with two bidders it regards as credible, one of which is the owner of the US Boston Red Sox baseball team, John Henry.

These bidders are prepared only to offer between £250m and £300m, enough to pay off Liverpool's bank creditors, led by Royal Bank of Scotland - but not enough to provide any recompense to the club's current owners, Tom Hicks and George Gillett.

So in an apparent attempt to frustrate the takeover, Mr Hicks and Mr Gillett have sought to remove two Liverpool directors, Christian Purslow and Ian Ayre.

But their tactics are dangerous - because Royal Bank of Scotland has made it clear that if no takeover is agreed by next Friday, it will put the club into administration and then sell it to on.

RBS's resolve to do just that will have been reinforced by the disclosure that there are two bidders with the resources to pay off all long term debt.

As I've mentioned before, if Liverpool goes into administration Mr Hicks' and Mr Gillett's investment in the club of £140m or so would be totally wiped out.

Messrs Hicks and Gillett look as though they're perched precariously between the devil and the dark blue water - or are they being squeezed between the inhabitants of the Kop, who detest them, and the occupants of the Anfield Road Stand, who loathe them?

That said, the club's chairman, Martin Broughton, would like to avoid administration if possible - since the automatic deduction of nine points from Liverpool's derisory Premier League tally would make it difficult even for a revitalised Liverpool to break free of the relegation zone.

Update 0751: It now looks pretty certain that New England Sports Ventures will add the Reds to their stable of sporting assets, which include - as luck would have it - the Boston Red Sox.

What is unclear is whether John Henry's US sports conglomerate will buy Liverpool Football Club in a conventional transaction, as a going concern, or whether Liverpool will yet be forced into administration under insolvency procedures - and under those circumstances New England Sports Ventures would buy Liverpool from Royal Bank.

The uncertainty arises from attempts by the current owners, George Gillett and Tom Hicks, to block the deal - which would repay the £280m owed to RBS and the US bank Wachovia, but would deliver nothing to messrs Hicks and Gillett.

Because of the opposition to the deal of Mr Hicks and Mr Gillett, the ignominy of administration - which would see Liverpool lose nine Premier League points - remains very much a live option for this proud club.

Comments

Page 1 of 2

  • Comment number 1.

    They wont succeed. They have no legal powers to remove directors as there has to be a problem and also they need the chairman's permission (Broughton). Could be a long wait.

  • Comment number 2.

    Please clarify the points deduction comment in the article- is that right or just speculation (or just sensationalism as I suspect). Thanks.

  • Comment number 3.

    RBS to seize control of LFC. Who who have the largest wages,the Bankers or the Footballers? How funny.

  • Comment number 4.

    Do the yanks seriously think they'll make profit? All they are saying now is "we want money", hopefully they will even make a HUGE loss.

    Lets just hope the American bidder isn't part of a cunning plan.

  • Comment number 5.

    Would it be possible to elaborate Robert or fellow bloggers on what in our financial system has attracted all the foreign investors to many of our sporting clubs in the first place, they after all are only looking at profit so what is it about the system in this country that makes it so attractive for them to embark on a sporting venture here ???

  • Comment number 6.

    If nationalised RBS takes control does that mean Liverpool's success is in the public interest? A conflict of interest surely violating some Premier League rule.

  • Comment number 7.

    @rushflowerstorres... A 9 point deduction is what is given for going into admin'.. It happened to portsmouth last season dont forget.

    Never realised the chances of going into administration was so soon. Im a Man U fan but as a football fan I say that it will be a Dark day for Football if they do.

  • Comment number 8.

    #2 RushFowlerTorres: yes, that is what is likely to happen. RBS can't technically take control without putting the club into administration - and after Portsmouth last year, the FA can't just waive the 9 point deduction or they'd open themselves up to dreadful lawsuits.

    I'm sure RBS will want to find a way to take control of the club without putting it into administration, so they might be able to negotiate with the current owners - but are they likely to be in the mood to strike a deal?

  • Comment number 9.

    Well here now, the poker game begins in earnest, did some of the players (huang) show there cards too early, or were they just bluffing!
    The owners trying to sack the directors they appointed to sell the club, just before the bank can get control. The players (now this may sound contraversial) getting the club into the relagtion zone, the clubs worth less at the bottom than at the top!
    The bottom line is nobody wants the Yanks to make any money from the sale of the club, fair enough, and apparently Gillet is in the doo doo finacially, but Hicks as we keep getting quoted is a Billionaire, so why the hell does he want to keep hold of LFC so much. I suspect like lot's of so called millionaires/billionaires, he's only worth it if he sells everything he's got, so LFC has given him his ego trip and a few spends, but he does strike me as a man who's never failed, and goddammit he won't be held to ransom by some Limey's who don't even know what football is (Hard hats and Jock straps boys).
    Anyway all I hope is some of the card players were smarter than we thought.
    Dead line day looms, and the outcome will not only affect Liverpool football club, but any club in the hands of owners( I wont say foreign investors) who are out to make a fast buck.
    At the very least, we know there are people who want to invest in LFC, at what price who knows!
    Who has the 3 of a kind, flush or full house, we'll have to wait and see, but maybe there's someone out there with the royal flush,

    here's hoping, YNWA....

  • Comment number 10.

    What happened to these new rules we heard so much about - preventing takeovers that are not in the interests of the UK firm being taken over such as Kraft/Cadbury?

  • Comment number 11.

    I cannot comprehend why Tom wants to gain control of the club. The fans detest him for his lies and putting the club in huge debts. If he owned the club, our fans would boycott the games and all the sponsors and merchandise as to force him out. The club has gone backwards since the 2 Americans took over, so surely it makes logical sense they are worth less than what they paid? They are holding out for reports suggest 600million? I cannot see how they value the club at that, no champions league, the team needs major rebuilding, needs a new stadium, and in serious debt. Any potential investor needs some serious money, pay off the debts, invest large sums in transfers and wages to make the club competitive again over the next 2/3 seasons at minimum, and on top of that a new stadium. We are talking a Man City/Chelsea kind of investment. If a new owner comes in and does not do that, we are back to square 1, and they would also need to sell up. Not only is it our fans who I feel for, but people like Stevie G & J Carragher, they have given there loyalty and sporting lives to our club, and they have been robbed. If the sale, and new owners is not done right, this could be the end of the club being in the top flight of football for maybe a generation. This would be bad for Liverpool, and bad for football. I hope these Americans have some respect finally for our great club and sell up before we are put into administration, and possibly make us fight for our very survival in top flight football.

  • Comment number 12.

    I look forward to Liverpool being the first team in EPL history to have negative points!

  • Comment number 13.

    This is the reward for years of almost comical arrogance.

  • Comment number 14.

    "The problem lies in the fact that Henry’s group was highly leveraged when they bought the Red Sox, so they need to keep the team winning to pay the bills. This is why Theo Epstein once quit the Red Sox. He wanted to step back for a season and regroup to set the franchise up for the long haul. The people who control the money wanted to win each and every year, because that’s how they pay the bills.
    If fans stop buying Red Sox Nation memberships, stop watching NESN, or decide that a few hundred dollars for a couple of good seats is too much, the bubble will quickly burst.
    At this point you run the serious risk that the Red Sox suddenly became worth less than the amount borrowed to purchase the team. It happened to a whole lot of people who bought houses at the peak of that bubble, and it could happen to Boston."

    http://bleacherreport.com/articles/387532-just-when-red-sox-fans-thought-it-was-safe-to-go-back-in-the-water

    Hello ?

  • Comment number 15.

    I'm surprised at the Business Editor mentioning 9 point deduction..

    The debt is held by Kop Holdings (Cayman) Ltd who's only asset is LFC, which is profitable and a going concern.

    If Kop Holdings is declared bankrupt, its one asset, LFC, will be sold as a going concern.

    9 point deductions only happen when a club cannot fulfill its financial commitments, as with Portsmouth and Leeds. The Liverpool board has already received clarification from the Premier League that a bank takeover is within Premier League rules, which means there would be no points deduction.

    AqualungCumbria.. Premier League TV rights are up for grabs in a couple of years and could well go the way of Spain with individual clubs negotiating their own deal - Real Madrid got 1.1bn euros for 7yr deal (£107m/yr). Plus the PL has a massive worldwide following, the potential to make money is huge, but it will require investment for players and a bigger ground (bigger revenue).

  • Comment number 16.

    @10 "What happened to these new rules we heard so much about - preventing takeovers that are not in the interests of the UK firm being taken over such as Kraft/Cadbury?"

    Not sure that Liverpool's interests equate to the national interest?

    Truth is that Liverpool saw big bucks when Hicks and Gillett came along and want everyone's sympathy now it's all turned to custard. They have no more right than Leeds or SHeffield Wednesday to be considered a big club that matters any more.The Championshionship and obscurity beckons!

  • Comment number 17.

    LFC are too big to fail. They need huge state bailouts now. It is only fair that supporters of other clubs and, especially, people how do not like football, are forced to hand over their money, and that of their children. We cannot allow the premier league system to collapse.

  • Comment number 18.

    Wasn't this all the fault of Parry and Moores in the first place? Why doesn't Moores hand over the £93m he made from the deal to the Liverpool fans trust?

  • Comment number 19.

    Liverpool won't go into the administration, the EPL are biased to the top clubs in every way and this situation will be no different.

  • Comment number 20.

    They've done it again. Are they nuts ?

  • Comment number 21.

    I fail to see what New England Sports Ventures would do that is different to what Hicks and Gillet were planning to do. NESV I guess would want to tie up sporting rights and merchandise between the two clubs they own - fine, but I doubt it'll see the revenue it might like to. They lack the capital to build the stadium that is desperately needed to take the club on. What's the betting that we see more debt lumbered onto the club to try and pay for the stadium.

    This takeover is just Hicks and Gillet in another form.

  • Comment number 22.

    Southampton were handed a 10 point deduction, following their parent company going into administration. This deduction meant that Southampton were relegated from the Football League Championship and now play in League One. Although the rules of the Football League state that a 10 point deduction (9 points in Premiership)would only be incurred if the club went into administration, an enquiry reported that the finances of the parent company and the club were linked to an extent that they were practically the same company/club.

    I would suspect that quite a few of the parent/club finances are linked to that extent.

  • Comment number 23.

    No 17 said
    LFC are too big to fail.

    The same thing about banks I believe, and some went down the drain, along with staff.

    I sense a fire sale of players as they really are the only asset of the club. After all the rest is debt is it not?

    Owning a football club has always been the best way to make a large fortune into a small one quickly.

  • Comment number 24.

    10. At 03:14am on 06 Oct 2010, chris911t wrote:
    What happened to these new rules we heard so much about - preventing takeovers that are not in the interests of the UK firm being taken over such as Kraft/Cadbury?
    -------------------------------------------
    Liverpool being taken over by RBS is very much in the interest of the club. Without the debt heaped on them by the yanks, Liverpool makes a reasonably healthy profit every year.
    For the fans the consequences of going into administration are aweful but as a business getting rid of the yanks and the debt makes a lot of sense.

  • Comment number 25.

    Football clubs are the ultimate "bubble company". Overpaid players, overpaid managers and a brand dependent on performance that is too expensive to obtain vs the profits it brings.

    The clubs have done nothing it seems to adjust to the new economic climate, and many will go down the pan.

    I suspect Liverpool will survive as a club, but the present owners have lost their money irretriveably and the club will go down a league. Its not the end of the world, just give a better managed club a chance to come up and try their luck.

  • Comment number 26.

    RE: Post 11

    "Not only is it our fans who I feel for, but people like Stevie G & J Carragher, they have given there loyalty and sporting lives to our club, and they have been robbed."

    Whereas the diehard fan, who uses 15-20%, if not more, of their disposable income to support the club can consider themselves fortunate to have witness such greats, and pity them and their feeling of being robbed...

    If anything it's their property portfolios that will feel like being robbed once house prices start to fall.

  • Comment number 27.

    I dont blame Hicks and Gillett for trying to recoup their losses, but profit? I dont think so. Profit depends on improving an asset or luck of the market. They have neither!

  • Comment number 28.

    Chris911t: What happened to new rules preventing takeovers that are not in the interests of the UK? I believe this was a policy of Labour Party and therefore shelved when the Coalition won the election. These kind of leveraged bids always seem to end in disaster whether it is Man Utd, Liverpool or Cadbury. The culpret is bonkers economics that says that you can buy something by mortgaging the future of that thing you are buying. If you tried to go into a shop and say you were going to use a product as security for a loan to buy that same product they wouldn't give you the time of day yet we allow these things to happen on a bigger scale.

  • Comment number 29.

    "But their tactics are dangerous - because Royal Bank of Scotland has made it clear that if no takeover is agreed by next Friday, it will put the club into administration and then sell it to on."

    That will be the 'risky endeavour' all these capitalists claim is their 'worth' then. Why should they care what happens? - It's business isn't it? - it's not like the fans matter in the process of 'making money' (or is this generating wealth - where you use your position of power to extract the greatest possible return)

    ...no matter, I don't think this takeover will happen - it will probably fizzle out like the China bid did - remember that was a 'done deal' according to the media - and then it wasn't!

    Really though, what are the chances you're going to find a billionaire liverpool fan who doesn't mind losing a few million on a club - because no bank in the world is going to lend against the Hick / Gillete valuation - and billionaires are in decline these days..

  • Comment number 30.

    If the two current owners have no option but to sell, even at a loss, and they know that the fans and the board hate them, then what do they have to lose but to let the club go into administration anyway. The extra lawyers costs would be a drop in the ocean for them against the spiteful pleasure of annoying the people that hate them so much.

  • Comment number 31.

    Football? Who cares? For me it has to be motor racing because it requires more than one ball.

  • Comment number 32.

    how is this worthy of the news? Ever since football clubs become "big business" who cares about them? Use your contacts and give us some real insight into real businesses.

  • Comment number 33.

    > if Liverpool goes into administration Mr Hicks' and Mr
    > Gillett's investment in the club of £140m or so would be
    > totally wiped out.

    Who amongst us would not sacrifice 9 measly points for the chance to see those gray men, Mr Hicks and Mr Gillett, cut down to size? It's worth more than the European Cup! Those "big guys" aren't so tough after all. Next, let's hope we can turn on the fan power at ManU.

  • Comment number 34.

    Would the owners lose any money? the club are in debt because money was borrowed to buy it.

    How much of there own money was actually put into the club I wonder?

  • Comment number 35.

    Come on Robert, you know as well as I do their will be no nine point deduction, the EPL have said (of coarse just ignore that). Please dont taint Liverpool Football Club, the most succesful team in the history of English football with your 'brand' of 'spin journo'.

  • Comment number 36.

    Robert,

    Unrealted to the Liverpool ownership issues. I did not know how else to ask this but how much of the debt that UK plc currently has and which the current coalition is trying to cut is down entirely to baling out the banks.

    With this one can then weigh up how much of the debt is down entirely to bailing out the bank and how much is down to the excesses of the previous Labour government.

    A figure in monetary terms an also as a % of the total national debt will suffice.

    Thanks

  • Comment number 37.

    #32

    Couldn't agree more. Did you know that there are approximately 4,500 companies involved in the UK Motorsport and Performance Engineering Industry with a combined annual turnover of over ₤6 billion of which £3.6 billion is exported!

    Now that's an industry!

  • Comment number 38.

    This debt does not belong to the club. It belongs to an investment vehicle owned by the American jokers.
    The chairman and two other English members of the board have been liaising closely with the Premier League throughout the sale process and have been assured there will be no points deduction. Obviously that's something the sensationalist hacks in the media choose to ignore. Don't let the facts get in the way of a headline.

  • Comment number 39.

    Who cares - this is a prime example of an unsustainable & in my view totally corrupt industry sector where there's more money than sense. It's not sustainable.

    Notwithstanding all that, I seriously question the support of wealthy individuals who purchase clubs.

    Buying a football club - easiest way to launder money.

  • Comment number 40.

    There are two fateful words marching this way ...

    "Leeds United" ...

    As a Newcastle fan, I hope it doesn't come to that, but this is what happens when football clubs are run for profit rather than (curiously-enough) football!

  • Comment number 41.

    As a York City supporter I say again - "Who cares"

    Nobody gave a damn about my clubs (ongoing) plight but this is Liverpool and hell they're so important.

    I don't recall anyone whinging much when Wolverhampton Wanderers fell from grace in the 1980's despite being the best team in England and forerunners of European football for most of the 1950's when Liverpool were a 2nd division side.

  • Comment number 42.

    17. At 07:38am on 06 Oct 2010, truths33k3r wrote:

    "LFC are too big to fail. They need huge state bailouts now. It is only fair that supporters of other clubs and, especially, people how do not like football, are forced to hand over their money, and that of their children. We cannot allow the premier league system to collapse. "

    I have submitted a 3 page 'document' to the Government requesting £850 BILLION pounds to rescue all football clubs in trouble.
    This is to avert a systemic risk - but of course there is nothing wrong with the system.

    We cannot allow foreign investors to see that we're anything other than maleable in our laws and taxes - otherwise they might go and invest elsewhere - I hear the Swiss league is now vying for competition - and the yanks and Arabs don't know the difference between Blackburn and Young boys Berne!

  • Comment number 43.

    @17 truths33k3r Ha Ha Ha!

    For once I agree totally with your sentiments (not your words) :-)

    Premiership football is certainly on a planet I don't understand. Some sports analyst on the Beeb said that IN ADDITION to paying off the debt, there needs to be £400m spent on a new stadium and £150m spent on players. So the club "needs" the best part of a billion. The impending govt created Recession part II makes this a very dodgy "investment".

    If foreign investors want to waste their money so be it, but I hope no British bank will touch it. There are more important things to invest in.

    Actually though this illustrates why there should wealth taxes. A good start would be to extend council tax bands upwards, and introduce short term capital gains taxes to squeeze speculators. Britain is in doo-doo because of debt. The previous owners of LFC were bought out with debt and did well out of it. Many people before the recession became rich by selling assets whose price was artificially high because of the credit bubble, ie bank "created" money which wasn't ever there, but which now needs to be repaid, we are told.

  • Comment number 44.

    John wrote:
    Robert,

    Unrealted to the Liverpool ownership issues. I did not know how else to ask this but how much of the debt that UK plc currently has and which the current coalition is trying to cut is down entirely to baling out the banks.

    With this one can then weigh up how much of the debt is down entirely to bailing out the bank and how much is down to the excesses of the previous Labour government.

    A figure in monetary terms an also as a % of the total national debt will suffice.

    Thanks

    >>>>>>>>

    ONS survey (independent and no lefty journo spin) £1 TRILLION debt on the books (aprox 75% banking crisis) and £3 (three) TRILLION debt off the books. If they last 'government' had acted like this in a private sector company the CEO, CFO and directors would be struck off for life and jailed. Suprise, suprise, I did not see much reporting by the BBC on this, obviously they had the national interests at heart not the Labour Party's

  • Comment number 45.

    so if RBS take control of Liverpool, and RBS is mainly owned by the taxpayer, does this make LFC nationalised? I'm not sure how well that would go down with UEFA.... could we sell torres to reduce the national debt though? As a United fan I never thought I'd have solidarity with the scousers, but there are many other clubs headed down the same path. The PL need to bring in, and enforce, rules which prevent owners saddling clubs with debt.

  • Comment number 46.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 47.

    This is all rather sad given the fact that no football club big or small can survive without a contingent of loyal supporters who are helpless in these situations.

  • Comment number 48.

    Surely NESV would be stupid to let Liverpool be put into Administration, and therefore odds-on for relegation. Purchasing an asset that would go down in value by dropping into the Championship (God forbid!) would be business suicide.

    Far better to do what they seem to be doing and trying to force through a 'cheap' sale, clearing the debt and then being able to refinance the club internally. Hicks & Gillett are the ones "not acting in the best interests of Liverpool FC".

  • Comment number 49.

    #15

    Robert is quite right to include the 9 point deduction in his report.

    If the business is declared bankrupt an administator is appointed and the 9 point deducted. This deduction will then influence the percieved value of the business, presumably now lower.

    The 9 point deduction is a deterent, to try and prevent clubs taking advantage of bankruptcy and starting up again to stay in a league from which they would otherwise be expelled from.

  • Comment number 50.

    Look Liverpool will not be deducted 9 points like this article says could happen. The article is wrong in that since.

    Even if Liverpool do go into adminstartion the club is not solvent and therefore cannot be deducted 9 points. When west ham icelandic owners went bust they did not get docked 9 points because the club itself was not solvent.

    The premier league have already stated this

  • Comment number 51.

    #45 totally-bill-hicks

    As a United fan I never thought I'd have solidarity with the scousers, but there are many other clubs headed down the same path. The PL need to bring in, and enforce, rules which prevent owners saddling clubs with debt.
    -----------------------------------------------------------------

    Not getting worried about Man U by any chance?

  • Comment number 52.

    #42 wotw

    How ironic that RBS might end up owning LFC, I bet the clever people who bailed out the banks never thought they would end up with a football club.

    It might be possible that they might end up owning a Lap Dancing establishment, the govt might have to nationalise the whole industry, what then? Will I be able to see a dancer in my clubs colours?

  • Comment number 53.

    If Liverpool do go into administration, will they be booted out of the UEFA cup, a la when Portsmouth were unable to enter this year due to the admin situation?

  • Comment number 54.

    Quote from SOS:

    "There are only eight big badges in the world; there are only eight clubs on the global bus," he told Radio Five Live.

    "There's two in Spain, three in Italy, one in Germany, two in England.

    "The reality is Manchester United go 25 years without a pot worth peeing in; Madrid don't win anything in Europe for 20 years.

    "They never stop being Real Madrid, they never stop being Manchester United.

    "And Liverpool will never stop being Liverpool FC.

    "The global reach of these badges is tremendous.

    "And hard times is nothing new for football fans; we're built for this stuff." - end quote

    Truth is is if LFC goes down, it WILL impact your club and the whole of the EPL and English Football League. LFC are not Leeds, or Portsmouth, etc. They are THE most succesful team in the history of the English game with worldwide support only matched by Man Utd. Get over your green enviness, as Arnold said 'We'll be back'

  • Comment number 55.

    Tom and George have already made a large profit on the club, when they purchased the club the invested about £220 million into the club and then took a £500 million loan out on the club with very little of that money going back into the club, add the directors fees, wages and dividends they have taken from the club for themselves and theirs sons, they have already taken over £100 million each form the club in their short time, so if they make no profit it on the sale they should still be happy with what they have bleed out of the club already and go quietly.

  • Comment number 56.

    Oh what a beautiful morning.......

    Selling out to another bunch of yanks - LOL, PMSL, LMAO and anything else you can think of. Attempted coups in the Boardroom. It just gets better and better and long may it continue.

    Keith Mc
    EFC

    P.S. Thanks for all the great work Tom and George, it’s been great knowing you.

    P.P.S. Wonder how long before there’s another protest march from the Sandon by the Sons of Nessie Shankly?

  • Comment number 57.

    I don't know much about football or Americans, but I have been involved in a not too dissimilar situation in a different industry.

    Even if LFC's owners are a Cayman Holding Company there's little or no chance the bank debt isn't secured on the shareholding and subject to cross guarantees. There's been chatter about the debt being on LFC's balance sheet too. Whatever the position it's more than likely that whatever happens to the Holding Company the Club will have a liability too. Remember the debt is repayable in cash - you can't repay a debt with players or stadia - they have to be sold and I don't think there's sufficient cash in the Club.

    Failing to meet a liability under a cross guarantee will incur the 9 point penalty reducing the value of the club even further.

    So, despite what the Americans may think the directors of the Club's interest are very closely aligned to theirs. That's not to say the offers on the table are the best that will be obtained (although the way this is being played out a less than honourable bidder would withdraw their bid now and rebid lower next week). Unless the Americans actually have a bidder the Club board don't know about and who would pass muster at the FA (that doesn't seem to be much of a challenge) Administration is inevitable unless a deal is done pronto.

    Irrespective of the identity of the bidder the banks only interest is to have their debts repaid. The Americans can posture all they like but in a week or so they will control nothing and a bidder will be facing the prospect of buying a Club playing in the Championship next year.

    Against that background a deal before the deadline is most likely but the first thing that has to happen is for the Americans to stop leaning on the "Self Destruct" button and "get real" changing the board at this time won't achieve anything. It is however the shareholders right and its hard to see a Court stopping it on a legal basis, maybe the FA have a blocking power?

  • Comment number 58.

    I believe the author needs to post another update to this retracting half the article - its been stated clearly by the premier league that Liverpool will NOT be docked 9 Points. A need for a story shouldn't overlook facts.

    http://www.guardian.co.uk/football/2010/oct/06/liverpool-fc-sale-tom-hicks

  • Comment number 59.

    Although a Jock, it would nevertheless seem to me to be a national disaster on the scale of the recent near collapse of certain UK banks if there were to be a demise of the great wealth-generating institution of LFC.

    It should be nationalised, in order that the salaries, bonuses and commercial contracts of its players and directors (whether such earnings are subject to UK tax or not) continue to be paid, by the taxpayer. This will reinforce overseas confidence in the UK sense of fair play, most important in the sports sphere. And football is one of the most efficient avenues available, apart from the financial sector, to ensure that the customary extraction of wealth from the poor the rich continues, and indeed that many of those rich are able to avoid payment of UK taxes on that income and wealth.

    Bail-outs should not be confined to the Square Mile.

  • Comment number 60.

    writingsonthewall said "Football will be in crisis" - and now it is.

    Don't think because the media don't report the gory details that 60% of the premier league have somehow 'rectified their financial crises' over the course of this season (because they haven't)

    My brother is a season ticket holder for a premier league team - last year it was very hard to get a ticket for any home game - this season there are regular gaps in the seating and tickets are available on the day - and they're growing in number. You see eventually the crisis reaches us all - and people go to a few less matches a year - and when you run a football club on 'negative margins' in the hope the assets will rise in value (as the yank clowns have done) - then small changes in income like this create exponentially falling profits......and no mention of a 'half world' depression impacting merchandise sales (the core component of any EPL club's balance sheet) - as this will upset the oligarths and stop them investing!

    I'm sure there will be plenty of Capitalist sympathisers lining up to apologise to me for accusing my inaccurate predictions in the world of football (I mean we've only seen 1 EPL team fold this year - one swallow not making a summer etc) - or maybe they won't, because you see when the brown stuff is on the fan, up the wall and all over your face - the Capitalist's will strangely vanish - as will all their unfounded beliefs about a sharp recovery from the worst credit crunch for 90 years - possibly ever.

    I've said it so many times now - it's probably boring most of you - but once again, for the deluded "You cannot lie your way out of depression"

    ...although they did give it their best shot...

  • Comment number 61.

    I can't believe we've had a 'it's Gerrard & Carragher I feel sorry for ...' comment, the millions they've picked up in wages takes the sting out of it! After all Gerrard tends to wait until no-one has attempted to buy him before his annual confirmation of undying loyalty.

  • Comment number 62.

    54. At 11:56am on 06 Oct 2010, AuntieLeft wrote:

    "Truth is is if LFC goes down, it WILL impact your club and the whole of the EPL and English Football League. LFC are not Leeds, or Portsmouth, etc. They are THE most succesful team in the history of the English game with worldwide support only matched by Man Utd. Get over your green enviness, as Arnold said 'We'll be back'"

    Truth is that NR was 'The most successful bank' in the UK with it's rapid growth - historical achievements are not guarantee of future success (or liquidity)

    The point is that in 2 days time they will be Leeds, Portsmouth, Darlington, Sheffield Wednesday etc.

  • Comment number 63.

    Thanks Robert. The two owners have never put a penny of their own money into the club and only ever taken money out. For example, according to the club accounts, they claim to have spent £50m on the new stadium. This consists of a set of plans. The takeover was funded completely on debt. They claim to have loaned £140m to the club via a Cayman Islands account - requiring the payment of 10% annual interest. It is just another money making scam by the two cowboys. Getting a price of £300m for the £224m they paid for the club is a good return in these circumstances. They should have the good grace to go now.

  • Comment number 64.

    Hubristyc wrote:
    I believe the author needs to post another update to this retracting half the article - its been stated clearly by the premier league that Liverpool will NOT be docked 9 Points. A need for a story shouldn't overlook facts.

    http://www.guardian.co.uk/football/2010/oct/06/liverpool-fc-sale-tom-hicks

    >>>>>>>>>

    Not a chance mate, those champagne socialist journo's ego's wont allow it. They are NEVER wrong as no one puts THEM under scrutiny

  • Comment number 65.

    ...who will be the first blogger to blame Liverpool's financial catastrophe on the management of the Economy by Gordon Brown?

    I mean it's all the rage these days. I got stopped by a policeman this morning for riding my bike through a red light - "It was Gordon Brown's handling of the Economy wot made me do it" - I professed.

    ....he accepted that as a valid reason and sent me on my way....

    http://www.bbc.co.uk/news/uk-politics-11483771

  • Comment number 66.

    Let the club go into administration!!
    The Football League have said that the club will not face a 9 point deduction as they are solvent - like West Ham.

    I want to see those idiots walk away with nothing. Thats what they have given us - nothing but trouble.

    Im not overly fond of the idea of swapping one set of idiot Yanks for another set of Yanks, who, admittedly make good business, but dont seem to grasp what the game of football is about.

    Its not all about making money. If the most successful club in the UK at the moment (Man Utd) are making a loss, then what hope is there for the rest of the teams.

    Will this new lot give us the money we need to buy players?
    Will they actually spend the money to build a new stadium?

    I dont really care as long as we get rid of Tweedle Dum and Tweedle Dummer!!!

  • Comment number 67.

    Liverpool ... were put up for sale by Hicks and Gillett in April with debts of £351.4m. ...

    The owners paid £174.1m to buy the club in 2007, while also agreeing to take on the club's debt of £44.8m.
    =========================================================================
    Can someone please explain why the club's debts have gone from £44.8 million in 2007 to £351.4 million in 2010?

  • Comment number 68.

    What's going on?

    Are the IMF literally reading my posts and issuing them as their own analysis - 6 months later?

    http://www.reuters.com/article/idUSTRE69520P20101006

    My goodness, if they mention a commodity war then I'm going to speak to my solicitor about legal action for intellectual theft.

  • Comment number 69.

    Why is this showing as a story in the NEWS section of the front page? There is a dedicated SPORT section that has been forced on users put it there.

  • Comment number 70.

    Oh dear, what a pity, never mind.

  • Comment number 71.

    When's Gazza gonna turn up with his fishing rod?

  • Comment number 72.

    ...and this is why the markets keep rising - they're pricing in further stimulation by the BoE.

    http://www.reuters.com/article/idUSLDE6950L020101006

    Best not disappont them Merv - don't give up now, we've got to beat the Japanese, Europeans and US to the bottom of the currency markets.

    You wouldn't want to be holding a lot of debt in a foreign country right now with such fluctuations - say a football club.

    ...never mind, you can always lock in your rate to prevent fluctuations bringing you down....

    http://www.bbc.co.uk/news/uk-england-cornwall-11477663

  • Comment number 73.

    I've noticed that a lot of supporters claim Liverpool will not suffer a 9 point deduction. Is this more of a hope than a reality? If someone can explain the difference between Liverpools situation and what happened to Southampton. The clubs were/are owned by companies that which did/could go in to administration. Would Southampton have a claim they were unfairly treated if Liverpool do not lose 9pts. Southamptons owners must be watching this with interest and with a billionaire owner now would easily be able to finance a court case.

    The impact would surely be serious if they are not treated equally, after all Southampton were also a big club, not quite the same but still a large club, in fact wouldn't any club that has lost points due to administration feel mistreated. The legal repercussions would be huge. West Ham had to pay a considerable compensation for employing Tevez and avoiding relegation.

    The precedents have already been set and I understand these are everything in common law and if Liverpool did not lose the points this would surely result in court via other clubs.

    As a rugby supporter its a curiosity, similar to rugby, football needs to put a cap on money available and also as an anside use cameras.

    Liverpool are still just a football club and business, whatever their record and history is. Therefore my question is can the FA take the chance of ending in court if they do not deduct the points?

  • Comment number 74.

    I for one cannot wait for Liverpool to go into administration and (hopefully) get relegated - this will have the effect of reining in some football supporters' unrealistic beliefs inthe 'supremacy of their club.
    As with Leeds and Shef. Wed. before, its time for the scoucers to realise that they have no right to be in the prem and their position must be earned not based on their history.

    Liverpool FC welcomed the leveraged takeover by the americans and more fool them if they replace like for like. The club and fans must now reap what they sowed.
    Liverpool = the new Newcastle

    Who knows a year in the basement might actually do them some good

  • Comment number 75.

    ......talk about a club being knocked off its perch! Looks like xmas has come early for Fergie.

  • Comment number 76.

    As any investor knows: "Watch football, don't invest in it!"

  • Comment number 77.

    64. At 12:25pm on 06 Oct 2010, AuntieLeft wrote:

    "Not a chance mate, those champagne socialist journo's ego's wont allow it. They are NEVER wrong as no one puts THEM under scrutiny "


    ...but is it wrong?

    As I undertsand it the parent company goes into Administration - then the administrators are free to do what they like with the sub-company (liverpool FC) - which may include a sale to pay back the debts owned by the parent - or more likely a transfer of debt to the club (as the parent company doesn't actually have an income) - which will no doubt result in administration further down the line. The connection between parent and sub-comapny is not severed if the parent goes into administration.

    You mention west Ham, well they did avoid administration - and now they have new owners - but there it's certainly not the case that the Gold brother won't take West Ham into administration anyway - especially if they get relegated too! Their plan is to sell every asset at the club (except Scott Parker) and try to rebuild a new and cheaper squad - this would be the same fate for Liverpool if they avoided administration.

    I suspect the future of administration rests very much on Liverpool's league position - if they look likely to go down anyway (and if they sell Torres) - then the new owners will take administration like Portsmouth did - towards the end of a dreadful season.

    I also wouldn't hold much stock with what the Premier league quote either - I mean they have a rule which says clubs must be run by a 'fit and proper person' - and yet look at some of the con men and crooks who own the EPL clubs now - which is how Liverpool got into this mess in the first place!

  • Comment number 78.

    15. At 06:35am on 06 Oct 2010, Heathr21 wrote:
    I'm surprised at the Business Editor mentioning 9 point deduction..

    The debt is held by Kop Holdings (Cayman) Ltd who's only asset is LFC, which is profitable and a going concern.

    If Kop Holdings is declared bankrupt, its one asset, LFC, will be sold as a going concern.

    9 point deductions only happen when a club cannot fulfill its financial commitments, as with Portsmouth and Leeds. The Liverpool board has already received clarification from the Premier League that a bank takeover is within Premier League rules, which means there would be no points deduction.

    -----------------------------------------------------

    Not too sure about that , Southampton tried this 'its the holding company that is insolvent' dodge and it did not work then - but maybe the Premier League are more generous than the Football League


  • Comment number 79.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 80.

    ...and beware of 'white knights' riding in to save the day - this guy is 'only' worth £540 Million (and that was Pre credit crunch)

    With Liverpool's debts at a staggering £280 Million to the bank - just paying off that debt is going to take half this guy's fortune! (and remember that will include his illiquid assets too)

    http://www.guardian.co.uk/football/2010/oct/06/john-w-henry-liverpool-owner

    Sounds like another 'leveraged buyout' to me - except on a scale greater than the last one!

  • Comment number 81.

    Mr Peston,

    I'm afraid the part of your article that talks about administration and the potential 9 point deduction is inaccurate.

    The 9 point deduction only applies if the club is insolvent and debts are either written down or written off. The 9 point penalty is to avoid clubs gaining an advantage over their rivals by running up debts and getting them written off through bancrupcy proceedings.

    A football club can go into administration and NOT be deducted 9 points. This happened to West Ham last year. The club's Icelandic owners went into administration, but the club itself was solvent. By contrast, Portsmouth incurred the penalty because the club was unable to pay it's creditors.

    Liverpool is solvent. It is functioning normally as a business. RBS taking possession of the collateral against which the loans were borrowed (i.e. the club) does not involve the writing off of debts.

    It has been reported that the Liverpool board have been in touch with the Premier League regarding such implications and have been assured that in Liverpool's particular circumstances the 9 point penalty clause should not apply should RBS be forced to take control.

    I'm sure that if you have a further look into this issue, Robert, that you will find what I've posted here is reasonably accurate.

    Kindest regards

  • Comment number 82.

    who will be the first blogger to blame Liverpool's financial catastrophe on the management of the Economy by Gordon Brown?

    What I would say is that if you did an analysis you might find that a large number of particularly mid week football spectators were benefit junkies.

  • Comment number 83.

    As a Liverpool fan and a committed socialist like many other Liverpool fans, I would like to see the club at least part owned by the fans and the players. The former would bring stability to the club's direction while the players would be playing for more than just the shirts on their backs. Player power would be tempered by more than just managerial talent and participation by all would mean no one would be a scapegoat.

    A less utopian vision is set out by ShareLiverpoolFC's fan ownership proposal. Why isn't this getting more coverage as a potential share-holding? It's not as though this would be unprecedented - even in English leagues. C'mon Andy Burnham - make some noise! You championed it once now stand up for your fellow Merseysiders!

    http://www.shareliverpoolfc.co.uk/

    YNWA

  • Comment number 84.

    So what we can deduce from this is that it appears that the EPL and the FA will collude where necessary to protect "certain" teams from their own rules and regulations to stop themselves from getting egg on their faces - whilst other teams can go whistle - It may be intersting now, to see if teams that have previously suffered points deductions, under very simillar circumstances, will now possibly get together and look at taking an action aginst the EPL/FA

  • Comment number 85.

    And the moaning about the americans buying up our country goes on and on.
    We do have a choice in that we could all get together and buy up the club. Take out the money under the mattresses and run its ourselves.

    A radical idea and it may have worked in this country before so why not a foote club? What is to be lost?

    9 points down but the players should at the very least stay up to get the TV money, so there is a starting point for the true fans.

  • Comment number 86.

    83. At 1:05pm on 06 Oct 2010, quickafix

    Have you seen the St Pauli model in Germany?

    http://www.fcstpauli.com/

  • Comment number 87.

    The real shame about this sorry saga is that Hicks and Gillett have never had any interest in LFC as a business. They are essentially a pair of old-style asset strippers who saw their investment in the club as a route to a fast buck. Only a few months ago they were boasting in the US press about how they expected to make a killing on this investment by seeling the club at a price in excess of £700 million. It would be proper justice if RBS now took the club into admin and Hicks and Gillett lost their stake.

  • Comment number 88.

    Why do people keep referring to Hicks and Gillett as yanks? Tom Hicks is from Dallas, calling him a yank is like calling Steve Gerrard a cockney.

    However i do agree they are without skill and aptitude for the job and need to go.

  • Comment number 89.

    There is a big world outside the premership and no club whatever their history is immune from falling into it. If it appears that Liverpool will gain from administration, then despite the Premier leagues statement about the point deduction, they would be exposoing themselves to legal challenges. I am glad that this story is generating so much interest as it might go some way to exposing football finances for the sham they are. in 2006 Luton were a championship side (and played Liverpool in the FA cup) now we are in Blus sq Prem because of dodgy chairman, appalling treatment by the FA and FL and us being not sufficiently big to generate a news story.

    But hey even in the Blue Sq prem finance and bankrolling is an issue. Crawley Town with an Ave attendance of 1100 are spending 6 figure sums on players and have a reputed £1 million transfer budget or January.

  • Comment number 90.

    "9. At 01:44am on 06 Oct 2010, Rusky68 wrote:
    he does strike me as a man who's never failed, and goddammit he won't be held to ransom by some Limey's who don't even know what football is (Hard hats and Jock straps boys)."

    I always thought American excuse for football was a soft version of Rugby with all that namby pamby padding.

    Back on topic a as someone who grew up at the time when Liverpool were the club to support although I have been a lifelong Arsenal fan, I would be sorry to see a great club go down or suffer loss because a failed bunch of directors/pwners don't know when to wake up and smell the coffee.

  • Comment number 91.

    Why do people keep referring to Hicks and Gillett as yanks? Tom Hicks is from Dallas, calling him a yank is like calling Steve Gerrard a cockney.

    Shermans, Septics its all the same - when it comes to football Xenophobia will always win out over reasonsed thinking

  • Comment number 92.

    Martin Broughton was appointed almost a year ago by the bank. His official title was "Chairman" but his sole role has been to get the bank its money back.

    Today he claims to have sold the club from underneath the owners.

    Martin Broughton is an administrator.

    If that doesn't mean Liverpool FC is/was in administration I don't know what does.

    It stinks. And whatever is said about LFC "being a going concern", or "Kop Holdings owing the debt", these are arguments that have been used before by other clubs in their unsuccessful battles against administration.

    Liverpool Football Club isn't a stranger to having the rules bent/rewritten in its favour, but the legal ramifications this time could be far-reaching and hugely damaging to English football.

  • Comment number 93.

    If the deal to sell to new England Sports Ventures does fall through - and let's be honest given the conduct of Hicks and Gillett up to this point, there is a fairly high chance that this will be the outcome - RBS taking over and placing the club into administration with undoubtedly disappointing, though at the same time well before time.
    Premier League clubs have been operating well above their means for years, running up large debts yet still offering outlandish contracts to it's prima donna 'stars'. All the while, those underwriting the clubs' massive overdrafts have stood by and let the clubs spend themselves into oblivion. The rest of the world has to 'tighten their belts' yet at the same time the Premier League acts like the global meltdown didn't even happen.
    If Liverpool did fall into administration, sad news for sports fans but those fed up of football's financial irresponsibility, very welcome news and hopefully a wake up call for those involved that they need to join the real world!

  • Comment number 94.

    would happily take the nine point deduction just to get rid of these 2 idiots

  • Comment number 95.

    From the BBCs own article....
    "However, the Premier League has confirmed that the club would not suffer a nine-point penalty if it were to enter administration as the club would remain fully solvent.
    "The aim of the regulations is primarily to capture clubs who have gone into insolvency. This is manifestly not the case with Liverpool Football Club," a Premier League source told PA Sport."

  • Comment number 96.

    You talk about Higgs and Gillet investing 140 million when in fact they have taken out over 300 million. LFC had about 40 million of debt when they bought the club and even they admit that the club is profitable!! They are just asset strippers who have done nothing for the club or fans.

  • Comment number 97.

    Nice try robavo but it simply doesn't mean anything so precise anymore.

    ...unless The Simpsons writers also got it wrong when they referred to Millhouse and Bart as a couple of 'Yankee-Doodles' in the episode when they were in Canada.

    Yanks is just a general term for Americans now, whatever the historical context.

    You're pedantry is about 180 years out of date.

  • Comment number 98.

    I'm surprised that the illustrious and well respected Mr Peston hasn't availed himself of the fact that the Premier League has already confirmed that LFC will not fall foul of the 9 point deduction for a club in administration, as the club is considered to be totally solvent (as opposed to being insolvent - recognise the difference?). I'm sorry to disappoint you Mr Peston but perhaps now you wil have to move onto another perceived weak target!?

  • Comment number 99.

    Creditunion, archie and all the others mentioning Southampton, again, as with Portsmouth and Leeds, it's NOT the same situation.

    LFC is solvent, profitable and a going concern, Southampton was not, they tried to use the rule as a loop hole. With LFC there is a clear distinction between the club and the holding company, with Southampton it was one in the same.

    For example, Southampton couldn't afford their own ground, LFC can, Southampton's wage bill alone was 81% of turnover, LFC's total operating costs is 80% of turnover. Southampton had dwindling attendance, LFC had increased revenues and its most profitable year.

    If LFC didn't have to service the debt incurred when the owners borrowed money to buy the club it would be the most profitable club in the PL. All profit is being taken out to service the debt and massive penalties (incurred by Kop Holdings to buy the club) the debt wasn't incurred to buy players or build a new ground. Southampton incurred unsustainable debt to buy its ground.

  • Comment number 100.

    What a day!

    Liverpool being bought by a rounders team, and Brooking saying that McClaren could have his job back for England.

    I think I'll take up long distance tiddly winks!

 

Page 1 of 2

BBC iD

Sign in

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.