Liverpool supporters wake every morning hoping today will bring some firm news on the future direction of the ownership of the club. Sooner or later we’ll get that breaking news ticker on one of the sports news channels. It’s just hard to say when, and more to the point hard to say how, or who.
Reading between the lines of the various statements and leaked media reports, only two certainties show through consistently. George Gillett wants out. Dubai International Capital want in.
The uncertainty comes from Tom Hicks’ position. Publicly he maintains the image of being intent on staying on at the club and having no interest in selling to DIC. He tries to give the impression that he wants to keep at least what he’s got now, and maybe even get a little bit of George Gillett’s share. But more than one source, in more than one country, says he’s been talking to DIC recently.
George Gillett arrived at Anfield a year ago wanting to be a hero, hoping to get amongst the fans on the Kop and to dishing out the high-fives. Instead he’s getting two fingers from the Kop, alongside his co-owner Hicks, to songs like “You lying b******s, get out of our club.”
Gillett had fallen out with Hicks, according to reports, on a number of occasions over the past year, but being blown up by Hicks for his part in offering Klinsmann the manager’s job for non-footballing reasons upset him quite a lot, as did Hicks’ decision to reveal publicly the details of their credit agreement. Perhaps Gillett still thought at that point that he could get the fans to love him. Instead it was becoming clear to supporters that “Snoogy Doogy” could never have happened in the first place. In fact just about everything that had been promised, and everything that seemed to have been promised, was a sham.
With little scope to make any kind of annual profit from the club, with the loss of his dreamed-of hero-status chances, and with a massive rift with his partner showing no signs of ever healing, there’s nothing left at Anfield now for Gillett. His son Foster has cleared out for good from Melwood, this was partly because of the situation Gillett was in, but he will have hardly needed to be asked twice if his wife’s reported dislike for the city of Liverpool was true.
Gillett had to offer Tom Hicks first refusal on his half of the club under the terms of their original agreement, but Hicks hasn’t got the ability to buy that half on his own. Gillett was then free to allow DIC a chance to buy it, which they will almost certainly take up just as soon as they’ve inspected the accounts.
The ultimate boss of DIC is Sheikh Mohammed, the ruler of Dubai and also Prime Minister and Vice President of the United Arab Emirates. The day-to-day running of DIC is a task that falls to founder and chairman Sameer al-Ansari. It was well publicised at the time of the first DIC takeover attempt that al-Ansari was a Liverpool supporter. But what only emerged very recently, first revealed by Tony Barrett of the Echo, is that the Sheikh has also been a Liverpool fan dating back to his teens.
It sounds too good to be true, especially given similar claims were once attributed to former suitor Thaksin Shinawatra who had also been photographed in a Manchester United shirt. It’s also often said of new signings, to help them endear themselves with supporters a little more from the off. The performances of Fernando Torres are what endear him to fans now, but it did him no harm ahead of his move that he was seen wearing a captain’s armband that seemed to read “You’ll Never Walk Alone.” (Later stories said the first word was “We’ll”, and it was something he and his friends often said to each other, but the love was already there by then.)
But just because it sounds too good to be true doesn’t mean that it isn’t true. And from what can be gathered it most definitely is true – and would Tony Barrett, with access to a multitude of sources, allow himself to be duped like that? It’s safe to say that the claim has been checked, just to make sure that there were no crossed wires.
This little piece of information, that the two most influential people in an organisation about to try and buy Liverpool FC are actually supporters, is one that is key to working out what drives them on in their pursuit of the club, and how far they might go to get what they want.
DIC have access to a phenomenal amount of money. It’s such a large amount that it’s actually quite difficult to grasp the concept of. But they don’t throw it around for the sake of it. They spend it wisely, hoping to make it grow, and trying to diversify in terms of where their money is invested, avoiding being over-reliant on one particular commodity or market. It’s this side of their nature that makes it a worry for some fans about just how far they’ll go in securing Liverpool FC.
To simplify events, they were offered the chance to buy Liverpool FC just over a year ago, for under £200m. They pulled out, in disgust effectively, after finding that the club had been negotiating with the Americans behind their backs. Now a year on they are willing to pay between £400m and £500m. How can they be willing to pay at least twice what they could have paid a year ago? The truth is, according at least to their side of the story, that they never stopped wanting to buy into the club. It was a matter of honour that saw them drop out a year ago – they genuinely found it to be bad-mannered and disrespectful to be treated the way Moores and Parry treated them.
If they do buy into the club, it will be based on a strong business case for doing so – but their support of the club is such that the business case may not be quite as strong as other investments they go for. They’ll still expect to make money, eventually, and certainly won’t be another Roman Abramovich, but they will be buying the club as football fans as much as wealthy investors if they succeed.
They do seem to be resigned to having to take over in two stages however. The first stage is to buy Gillett’s half, but they also want to buy Hicks out at a later stage. The situation with the banks is one big obstacle they face – the £350m of debt is not a small amount, the structure of the deal makes it expensive too. But they are believed to have got things moving in terms of getting the banks to look at releasing the club from those debt commitments should they take over. They are hoping to find a way of buying at least a small amount of the club from Hicks too, which would give them the majority shareholding in the club and in turn more power to get things back on track. But Hicks is another obstacle in front of them.
At the moment Hicks owns half of the club and is telling the public that he won’t be selling that half. The family line is they are here for the long term and are not willing to sell. Yet they have been talking to DIC, more than one source saying that Hicks was in Dubai last week, and reports this week saying he followed that visit with one to London to talk with the British-based DIC representatives dealing with the details of the possible takeover.
He is as much a target for the abuse from fans as Gillett is, if not more. At first Gillett’s silence was interpreted as a sign that he was being bullied into acting along with Hicks’ plans, but he’s had more than enough time to indicate if that’s true or otherwise.
Hicks is the one out of the two owners that has made most of the statements, or has done most of the interviews, from last autumn until yesterday. As a result, it’s his comments that were thrown up as having been in contradiction of each other. He told the US media that the UK press had made up stories he was going to fire Rafa – then later admitted that Klinsmann had been lined up to replace Rafa. Rafa was to be sacked if he didn’t make the group stages of the Champions League. He denied having spoken to DIC before Christmas – then admitted to having spoken to DIC before Christmas about a minority shareholding, which would give the club money to play with, and less reliance on debt.
The owners almost ran out of time in securing the new finance deal. Without doing so they’d have been in trouble because their existing one-year deal was due to run out in days. DIC had been hopeful of securing a chance to buy into the club then, amidst the panic the owners would clearly have been in, but the owners got their deal. It bought them some time, financially at least, and so DIC have to try harder.
Hicks feels he can still make something of an improvement at the club. But it’s hard to see how. Many fans will say that Hicks has no other interest in the club than making as much money as possible out it. That as soon as DIC made a high-enough offer he’d be out like a shot. This may be true, but even giving the family the benefit of the doubt it’s hard to see how their staying on at the club could be better than DIC taking over in full.
It’s the root of all evil, but also what every club needs if they’re to get on in the football world: LFC needs more money to invest in its squad and to build a stadium.
DIC have money and access to more people with money. Hicks has money – but nowhere near as much. Gillett has even less.
The current owners bought the club with a 100% loan a year ago, in fact more than 100% because it included a little extra to pay for other expenditure related to the club. They’ve just borrowed a whole load more, to pay that loan off and to give them some more money for expenditure related to the club. The interest will have to be paid by the club, and estimated at £30m it leaves very little at all for Rafa to spend on players. Worse still, there are genuine fears that failure to qualify for the Champions League next season would leave a shortfall. The loan interest could not be paid unless the owners paid it out of their own pocket. Or unless the club sold players – and as Leeds found out just before their slide into near obscurity, as soon as word gets out that the club is in crisis, transfer fees will be much lower than they would have been.
Even a relatively successful season – a good run in the Champions League and a top four finish – just about keeps the club ticking over.
They struggled to get the £350m finance so far – and by all accounts will struggle as much to borrow the stadium building costs. A lot of the money they’ve borrowed seems to have gone down a black hole – but the banks don’t arrange loans for free, and this kind of loan at those kind of amounts attracts Torres-sized arrangement fees. And that’s before interest is paid. The money that was supposedly left over from that £350m – to spend on players and getting the stadium underway – isn’t perhaps as great as we’d previously been lead to believe.
Of course, without being able to release details just yet, the Hicks family may well have the plans in place to get the stadium moving along, and may have a way of allowing the club to survive if it doesn’t qualify for the Champions League. All the other clubs fighting for fourth this season will improve their squads in the summer, so Liverpool can’t afford to stand still if they want to finish at least fourth next season. But of course Liverpool fans wanted far more than that from a takeover, far more.
The Hicks family are trying to give the impression of wanting to see success at the club – but it remains difficult to see how they can do this without outside help. The money borrowed recently supposedly included money for players. But what happens next summer? The interest is already higher than Rafa’s net spend for last year, so how can he buy players in each of the summers between 2009 and 2011 when the stadium supposedly opens? We needed big money signings to boost us to a squad at the same level as Manchester United – but then we need investment every year to keep us at the same level. The current situation just does not seem to have that as a possibility.
In fact this may prove to the way in for DIC. If they can buy Gillett’s half, paying off his loans, and buy a portion of Hicks’ share, paying off his loans in part at least, the club no longer needs to find ridiculous amounts of interest. DIC originally intended to buy the club and fund the stadium with a mixture of borrowed money and their own equity. They were looking at a long-term returns, and were looking at the investment as a whole – to include the stadium costs as well as the purchase costs. It’s hard to see how the current model can be profitable, and hard to see how Hicks can change the current model without the help of someone like DIC.
Hicks seems to have been offered a choice of a guaranteed profit now by getting out now, or a potentially higher profit later by sticking around to see if DIC’s investment gives the club the breathing room to improve on and off the field.
So we’re now left with a number of possible outcomes and nothing seems to have happened since the first time we heard DIC were back in for the club again. But that’s because DIC don’t publicise their actions too much. Yes, the press have been getting occasional briefings, yes we’ve read reports – but we’ve not had any quotes, and this leaves us all unsure as to what the facts are, and what has been added to a report to juice it up a little.
DIC’s desire to buy the club is much stronger than it perhaps seems to be. They’ll not discuss the deal in public until it’s done or given up on, which gives the impression that not much is happening, that they’re only half-hearted in their attempts – but this isn’t how it actually is. The Sheikh’s personal involvement is significant, as is the story that he was a Red from being a teenager, making the two most significant members of DIC fans of the club. Look at past deals they’ve been involved in and they’ve never allowed talks to take this long. They waited to see what the reaction from Liverpool supporters would be before taking talks further – the response they saw on the banners at Anfield is said to have encouraged them enormously, smashing their expectations of the kind of response they’d get. They’ve turned down what might have been an easy option to get into football by knocking back a reported offer from Newcastle to buy their current owner out. And that’s not the first time they’ve declined the opportunity to get into another club. Obviously Liverpool fans learned thanks to the last takeover not to take anyone’s word for anything – and until a takeover is successful by DIC and we see their actions take shape we can’t be sure they are the right people for the club. But it goes without saying that it’s hard to imagine a situation any worse than the one we’re in now. DIC’s desire to become a part of the club is partly to make a profit, and partly out of a desire to own a club they support, no doubt mixed with the prestige that comes from being in charge of a top football team.
Hicks seems intent on staying, his son’s appearance at the game on Saturday and his perhaps ill-advised decision to go into the Sandon show that they aren’t willing to quit with an easy profit now. Something is driving them on, and although it could just be money it may be more than that. They’d be lying if they said they were childhood Reds, or that they even watched much soccer before arriving at Anfield, but the passion for the team can be catching. Perhaps it’s a desire to prove the critics wrong. In Texas the word is getting out that they made a mess of things in England. In Texas they’re quite well respected, especially with Hicks being a pal of Bush. Word did start to spread to the US press, and maybe they feel a need to prove that they can make a success of this venture. Image is important, and banners reading “If it ain’t broke don’t Hicks it” aren’t good for their image. They are claiming privately that they’ve got ideas in place that will allow Liverpool to compete – but until those ideas kick in it remains a case of having to take their word – and even they’ll admit that this would be expecting a little too much. We need actions, not words. Until then we can’t be sure what the Hicks family’s desire is – but it’s hard to deny that the desire is there.
It looks most likely that the next phase of Liverpool’s history will be under joint US-Dubai ownership, and the biggest fear here is that this will be as bad as the current regime: two parties who don’t get on having an equal say in the club’s future. Compromises need to be made now and agreements need to be put in place before the ownership changes hands. Somebody needs the casting vote.
All of that will go on, behind the scenes, with little being revealed in public. It’s hard to put a realistic timescale on it, despite talk of mid-March deadlines, but the longer the current state of limbo drags on the worse it gets for the club. Players want to talk about contracts, agents want to offer their clients, and clubs want to speak about our fringe players. But talking is about all that can be done – because nobody is there to make a final decision.
The talking must stop, and soon – we need to see action. That’s not to say hasty decisions need to be made – but it has to be a priority now to close the various deals that will mark the next era in the club’s history.