Melia trusts Hicks, but still too many questions

A former Liverpool player who was around at Anfield both before and after Bill Shankly arrived to start his revolution at the club has been giving the local press his views on one half of the club’s current ownership.

Jimmy Melia, now 70, was eventually let go by Shanks in 1964, but had done enough in his final season to collect a league winner’s medal. He currently works in Texas as a coach with FC Dallas Youth and has been spending time with the Hicks family in recent weeks.

Melia seems to have been taken in by what the Hicks family have been telling him, and is almost certainly the only ex-Liverpool player to speak in support of the current joint-owners in recent times. He was a guest of the Hicks family at the weekend, joining Tommy Jnr at Anfield and later on during their visits to a couple of watering holes. He says that he was first introduced to the Hicks family through Tom Snr’s brother, Bill: “It’s the first time I’ve been back to Liverpool in four years and it all came about because Bill Hicks is friends with the father of a lad who played for my football team in Dallas. Bill heard I had been a Liverpool player for 12 years and asked me whether I would be interested in coming over to watch a game and it went from there.”

Although there’s no suggestion that Jimmy has been getting anything more out of his relationship with the Hicks than a free trip home with a bit of entertainment thrown in, he talks in his Echo interview like he’s some kind of ambassador for the family: “I first met Tom Junior about two weeks ago and then spoke with Tom Senior last week. It’s been an opportunity for me to get to know them and I’ve been very impressed. From speaking to them it’s clear the Hicks love the game and they love the club. I wouldn’t have come all this way and spent time with them if I didn’t think that.”

It’s certainly an impression that the Hicks camp want to be heard. Their background has nothing at all to do with football, save one venture they’d rather forget, they only got onto the idea of buying into Liverpool when George Gillett approached them when in desperate need of someone to help him buy into the club. It happened at an alarmingly fast rate too, from Gillett’s first meaningful approach to Hicks until the bid had been put in. That bid was way above the bid already in place from DIC and their lack of any in-depth due diligence suggests that the pair genuinely thought they’d found something nobody else had spotted. And if it hadn’t been for that pesky credit crunch who knows, maybe it would have been as easy as it seemed back then to make money out of the club.

Both owners showed their lack of knowledge of the game when they seemed to fail to realise how important investment in the squad was, but especially when they tried to hire Jurgen Klinsmann to replace Rafael Benítez, who at the time was in the middle of a winning run in what had so far been an unbeaten season in the league. Jurgen Klinsmann had only coached for six competitive fixtures, all internationals on home turf. He’d never managed a club, never had to deal with what is an entirely different type of job. In time maybe he’ll become a highly-sought-after coach, but he certainly isn’t at the moment.

Both owners were present in November when that offer was made to Klinsmann, both owners seeming happy enough with each other despite earlier differences. Not any more. The two have fallen out by all accounts, Gillett having refused to put his name to any statement relating to the club for some time now. His last interview where the club was mentioned came before Christmas.

The fact Melia has spent so much time with the Hicks camp means his statement on Gillett adds more weight, more proof perhaps, to the undisputed claims that Gillett is about to sell up: “Gillett looks like he’s going to sell his share,” said Melia, “but I know Tom Hicks is going to hang in there and make it work.” Hicks has maintained this stance for some time now, and Melia’s clearly been told this too.

Hicks makes a nice bit of money from his two sports franchises in the US, and despite a lack of any real ambition – according to fans – he still seems to be fairly popular as an owner. It seems to be more acceptable, certainly to baseball fans, to just turn up, pay for your ticket, buy the merchandise, eat the food, drink the drink and watch the game. Winning is a bonus, or so it seems. So he’s rarely had any pressure from the supporters, and nothing at all like he’s had – and will continue to get – from Liverpool fans.

Melia says Hicks told him he’s planning to stay on board at Anfield: “He has owned Dallas Stars ice hockey team for 12 years and Texas Rangers baseball team for 10 years. He has stuck with them and says he’s going to stay with Liverpool. It would be easy for him to sell now and make a big profit but he’s not a quitter.”

That perhaps tells us more about what is driving Hicks on than anything else. “He’s not a quitter.” Has Melia said that himself, or is that what he’s been told? Does Hicks consider the idea of looking like a failure to be so bad that he’s going to fight and try and salvage something from his disastrous first year at the club? He’s failed before; his time in South American football is something he’s unlikely to boast about. There’s little evidence of the club being able to progress on the field and at the same time deal with the £350m debt it’s now in, alongside the £300m or more debt it needs to go into before it can build a new stadium.

The current owners borrowed that £350m in the main to pay off the loan they needed to buy the club a year ago. Liverpool FC will have to pay all the interest on the loan, but in the end only £105m was actually put onto the club’s books. That was supposedly going to be split between transfer funds and work to get the stadium underway, but some of it was eaten up by bank arrangement fees, incurred when the loan was signed up to. Enough money to buy Fernando Torres has gone on those fees, and that’s before the interest payments are brought into consideration.

One report at the time of the refinancing deal said that £60m of that £105m was to go on getting the new stadium started, the rest on players. That leaves around £25m after the bank fees have been taken out. Last year the club spent around £20m net on players, but last year the club didn’t have to find around £30m in interest payments. The owners are understood to have negotiated their original loan in such a way that they didn’t even need to start paying back the interest during the twelve months it ran for – but interest was still building on it. In effect the initial loan cost them nothing, because a year after taking it out they’d not paid a penny off the capital or interest. The £350m loan covered that, and the £350m loan is now of course the responsibility of the club.

We already know that the £350m loan could be used to buy players, as long as there’s enough left by the summer, but Melia believes that Hicks will still be able to get the money in place for the stadium: “He’s going to get the stadium built and find money for players in the summer. I can see him being at Anfield for 15 years.” Considering the troubles Gillett and Hicks faced together when trying to borrow £350m, it’s hard to see how Hicks can be so confident he can raise a similar amount for the actual stadium. To buy Gillett out Hicks would need at least £200m, which would represent a £25m profit for Gillett. Assuming he was able to do this by in effect taking on the existing finance agreement – but alone rather than with Gillett – it would raise the amount owing to £375m. Hicks would have to more than double the personal guarantees he put into the finance deal when it was taken out in January. The stadium needs close to another £300m, bringing the total Hicks would need to persuade the banks to lend him to a massive £675m, or $1.3billion in US terms.

So to become Liverpool’s sole owner and build the new stadium, Hicks needs to borrow 1.3 billion US dollars. Coincidentally that is the exact amount that Forbes magazine reported that Hicks was worth in their 2007 ‘Forbes 400′ listings. He needs to borrow the same amount as the whole of his net worth, just to cover the current debts, give Gillett a basic £25m profit, and to build the stadium.

It’s pretty safe to say that unless Hicks finds another party to come in and help him, Gillett has only one choice when it comes to selling his share – and that’s DIC.

Melia also tried to defend Hicks for his part in the owners’ Klinsmann gaffe. “When it came out they had held talks with Klinsmann the fans were angry but Tom was very honest about it. After having a bit of a fall out, the fear was that Benitez might leave and they had to have a top manager in place in case that happened.”

This contradicts Hicks’ reasons for the Klinsmann approach, the ones he gave when he originally owned up to the plan. At the time he said it was because of poor results (yet Liverpool were unbeaten and in the middle of a run of wins when it happened) and also because of stories in the press linking Rafa with Real Madrid (even though no such stories had appeared for months, and even though Hicks had repeatedly told supporters not to listen to the press). Melia’s just spent time with the Hicks family and now tells us that they went to Klinsmann because of a fall out. Who told him that? The answer’s obvious.

The saddest part of that whole incident is that fans already knew the reasons, and admitting the truth wouldn’t have changed anything the fans believed. The reasons given didn’t stand up to scrutiny, and expecting fans to believe showed a massive lack of respect.

Is it possible Melia was the advisor to Gillett and Hicks back in November? It’s far from accurate to describe Klinsmann as a “top manager”, and very few people would do so.

To be fair to the Hicks camp, they do now seem to be making an effort with Rafa. Rafa himself seems happy enough with the communication these days, which along with being mislead about transfer budgets, was one of the main problems in the relationship before. Melia said: “Communication between Tom and Rafa back then was a problem but I know it’s much improved now. Tom likes Rafa, he believes in him and he wants stability at the club.”

Again being fair to the Hicks camp, they know they’ve made mistakes during their first year at the club. Melia told the Echo that the family have admitted this to him, and that Tommy now feels his Sandon visit was a mistake: “Tommy made the wrong decision and it was a bad move on his part. After a game, when the drinks are flowing, passions run high. Bill Hicks had told him not to go in there. They had all had a good day with no hassle at the ground. But Tommy wanted to feel the atmosphere in the Sandon and see how the fans felt about things – he certainly found out!”

It wasn’t just Bill Hicks who warned him against the visit, the security staff with him also advised him against it. In many ways it was a good idea, and in some circumstances could have been constructive. But not immediately after a game and not when no public efforts had been made previously to calm the anger felt by fans following the streams of lies, broken promises and general misleading of supporters by the owners.

Melia says that his new friends have found it difficult to get their heads around just how much Reds fans’ lives integrate with their support for their club: “The thing is Liverpool supporters are so passionate and that’s something the Americans have struggled to understand. The club is their life, it’s all Scousers talk about and they are desperate to see the team do well.”

He says this passion has seen the family get strongly into the sport: “You don’t get sports fans in America in love with the game like people are here. That’s one of the reasons why the Hicks’ like it so much but it has taken a lot of getting used to.”

Melia’s also been listening to the owners’ views on how investments are made in business: “I’m no expert but nobody in business puts all their own cash into something – they use the banks’ money to get investments going.” In fact this does contrast with the way DIC would want to buy into the club. Loans would be used to fund some of the investment, but nothing like all of it. The stadium may be funded by a loan, but the actual purchase would be made on the whole by using their own equity.

One point Melia made that was true is that there aren’t queues of investors waiting to get Liverpool out of the mess: “There aren’t many Abramovichs about and nobody is going to come in and just throw money at it. It’s not easy to find people prepared to come in and do what needs to be done at Liverpool.”

Liverpool fans don’t want an Abramovich, a rich man who could get bored tomorrow and leave his club with nothing. They don’t want an owner who has to borrow everything and then has nothing left to use for improvements. They want an owner who can see that by putting some money in now, and waiting patiently, they’ll get a good return on their money. They want an owner who will leave the club in a position where it is self-sufficient, bringing in enough money to keep moving whilst making its owners some money each year.

With Gillett wanting out, it’s hard to see how Hicks can be this kind of owner. No matter how much he really does want success, and many fans doubt he actually does, has he actually got the means to bring that success? Without help it seems unlikely. DIC can obviously afford to buy into the club and allow it to grow into that self-sufficient entity. Hicks can’t, not alone, given the amount of money needed to kick-start that process, an amount equal to the whole of his personal wealth. But Hicks has a lot of wealthy associates – and with their help perhaps could find himself in a position to take control of the club.

Melia at least sees how important it is that the club competes in the transfer market. Instead of the promised funds to compete with the likes of Manchester United, Liverpool found themselves spending no more than those now battling with them for fourth place. Melia wants to help the owners work this out: “The most important thing for me is signings because the club is on the verge of losing their place in the top four. There are a lot of teams fighting for fourth place and it’s vital Liverpool strengthen for next season. I know what the Americans need to do on the football side and I’m more than happy to help them with advice on that.”

Again, with Melia suggesting Klinsmann was a “top manager”, it can only be hoped that his advice wouldn’t stretch as far as actually putting player names forward.

It’s early days in the relationship yet, Melia has only spoken on the phone to Hicks Snr, but he wants to try and help Rafa and the only owner currently showing any interest in the club to speak to each other: “If I can help communication between the two parties then great. Now I’ve had the chance to come over and see things for myself I’m hoping to meet up with Tom Senior soon. They might want me to come back a bit more often and I’d certainly be interested in that.”

If Hicks is about to pull a rabbit out of the hat in the shape of an investor not considered before, he needs to do it soon. He needs to show us how he plans to overcome what look like insurmountable obstacles to his stated desires of bringing success to the club. Are we talking about him sacrificing Texas Rangers or Dallas Stars to enable him to make a move for control of the club?

Actions speak louder than words, even if the words are coming from one of the first men to play for Bill Shankly’s Liverpool.