Liverpool co-owner George Gillett has spoken about Liverpool FC for the first time this year, and talks almost as if nothing has happened. Gillett has effectively been in hiding the last two months following Tom Hicks’ decision in January to publicly admit November talks with Jurgen Klinsmann resulting in him being offered the manager’s job. Their relationship was already suffering, but that was pretty much the last straw for Gillett. The admission confirmed rumours that had already been spreading, and contradicted earlier denials, but also ended any idea Gillett was as nice a guy as many had thought when he first arrived.
Gillett hated the idea of word spreading that he was nothing like the loveable little rich guy and wannabe-Kopite that he tried to have us believe. He recalled son Foster from his Anfield duties, much to the delight of Foster whose wife was rumoured to hate England and Liverpool in particular. At around the same time the refinancing of loans used to purchase the club was being negotiated.
Gillett wasn’t keen on Liverpool supporters realising how the reality of January 2008 was unlike the promises of February 2007. They’d borrowed just under £300m initially to cover a purchase cost of around £220m including debt. Now they needed £350m, and after being unable to put that full amount onto the club had to settle for £105m on the club’s books, the rest on Kop Football’s books and guaranteed by non-LFC assets and cash. They had no choice, there were no other options open to them, especially given Gillett’s financial position by then, but Gillett didn’t want it to come out officially that they’d now massively increased the club’s debt. His name didn’t appear on the official statement from Hicks that refinancing had been done.
The next two months were filled with claim after claim that Hicks, Gillett, or both were selling to DIC. It’s been “imminent” pretty much all that time, but there has still been no sale. Gillett had reportedly resisted all DIC’s offers until a package worth £80m in profit was put in front of him, but Hicks was unwilling to allow DIC any control in the club. Face-to-face talks on Monday between DIC and Hicks’ representatives were terminated when the Dubai group insisted that if they bought 49% of the club they would still expect 50% control. Gillett’s hopes of a massive profit were dashed for time being, as Hicks insisted there were other investors waiting in the wings.
After that came claims in the papers that talks had broken down when DIC said they wanted a representative of the fans with a voting board position. Tom Hicks strenuously denied the claims and despite calls to DIC to put an official statement out confirming this sweetener was a real intention and not just some phoney PR exercise the Hicks denial is the only official word on it. If it was true then DIC would have no reason not to issue a statement, after all if that really was the reason talks broke down it would put massive pressure on Hicks. Instead we hear Gillett-like silence on the matter, and that silence speaks volumes.
Throughout this period of uncertainty very little has actually been said openly by either co-owner about their relationship with each other. The opportunity to blame each other for all the ills of recent months has been resisted but alleged emails to fans from Hicks have finally shown some public ‘evidence’ of how the Texan saw his relationship with Gillett.
The emails first appeared on internet forums and how deeply the journalist checked their validity (it’s very easy to fake an email but quite easy in most cases to prove a fake) is unclear. That said they just confirm what has been spoken about privately for some time. They said: “I have a large investment and plan to make a bigger one. Gillett has held us back financially, but that will change. In the end, one person must have responsibility for making decisions. It has been very difficult for George and me to agree on things (Klinsmann) and DIC wanted their people to have an equal vote on things like keeping Rafa (I will), signing players and managing the business.” After seeing so many of these issues take an age to resolve, or to not be resolved at all, Hicks was reluctant to enter into another 50-50 arrangement with people he trusted even less than Gillett.
He accepted the club wasn’t being run as well as it could be, something that he hinted pre-dates his arrival: “The club has not been run very well for a long time now. I intend to fix the problems,” he pledged.
Despite the claims that Hicks has put none of his own money into the club actual details of how the current finance is set up haven’t been revealed in great detail. However there are now huge chunks of Hicks’ personal fortune being used as security on the club, and although he could prevent it being used if Liverpool did hit the rocks he still feels he’s taken a risk by tying it up in this way: “I have taken huge risks because I believe our club can be the best in the world again.”
Klinsmann was interviewed by both, and Hicks wasn’t forced to agree the job offer to him, but it’s been suggested for some time he was far from the driving force to get Rafa out of the club. And he seems to have taken Gillett’s word on just how good Klinsmann was: “Gillett knew Klinsmann from Vail [Colorado]. In hindsight, it was a big mistake, but I have publicly, and privately, backed Rafa since our meeting December 16th.” Hicks trusted, if this is to be believed, Gillett’s judgement due to his superior knowledge of soccer, a mistake he’ll not make again.
The alleged emails also echoed a high level of confidence in the Hicks camp that they can end the troubles of the past months without DIC’s involvement: “The finances will be fine. We are playing much better. DIC has been playing the press like a drum. Our new stadium will be the best in the world.”
If that level of confidence can be converted into facts then DIC being taken out of the picture would be less of a disaster than it currently seems to most. If Hicks really is prepared to fight to do the right thing then getting rid of Gillett is the main issue. But there is more ‘evidence’ against Hicks than for him, and so he needs to prove those intentions soon before protests become unstoppable.
In the wake of those emails came Gillett’s comments, his silence finally broken. Reluctant to blame the credit crunch for his financial difficulties, given that sends out a message within the US that he’s not a good person to join forces with right now, Gillett instead blamed the exchange rate between the US dollar and other currencies. “We’ve invested internationally with Liverpool and with Montreal in Canada,” he said, “and it’s had a very positive effect on both of them from the standpoint of strengthening the value.” What he means is that having turned £45m of debt into £350m of debt, the minimum price to buy the club without either owner getting a profit or making a loss has shot up to £350m, compared to the £220m paid a year ago. The club hasn’t benefitted from the extra borrowing, the owners wouldn’t benefit from a sale at £350m, the only winners are RBS and Wachovia. Yet Gillett is proud! Obviously there are always going to be additional changes in value related to currency fluctuations, to raise £350m needs more dollars now than it did ten years ago, but the single reason LFC has gone up in price is because of the debt related to it.
In fact reading Gillett’s comments it was easy to assume that the dollar had plummeted compared to the pound in the 13 months or so since he part-bought Liverpool. But a quick check of rates in early 2007 compared to early 2008 show little difference. The exchange rate at the beginning of this month was 1.985 dollars to the pound. The exchange rate at the beginning of February last year, the time of the takeover announcements, was 1.969. Less than two cents difference, and although that two cents multiplies out quite a bit when you’re talking hundreds of millions of dollars it’s unbelievably deceitful for Gillett to blame exchange rates in this way for his broken promises on transfers. But that’s what he does: “On the other hand, it’s made it more difficult in terms of investing in those businesses because the dollar is really tremendously weak compared to where we started. It just costs us more to send money to those franchises, those business.”
The dollar dropped to a new low against the Euro yesterday, but it’s hardly been healthy for the last year compared to European currency, and every obvious lie calls into question every debatable truth.
Gillett spent money he probably couldn’t afford buying into a sport he does understand when he took a majority share of what is now called the Gillett Evernham Motorsports team in NASCAR. He claims, despite having not been near the club this year for his “speak Scouse to me” demands, that he likes all of his sports interests, including the Canadiens hockey team: “I’m really enjoying all three, but for different reasons. In Liverpool, it’s a long distance away and there’s been a fair amount of controversy over there.”
At least he’s noticed. Even if he’s not acknowledged his part in it. This makes the next comment so annoying: “In spite of that, the boys are playing very well and I’m proud of them.” George, they’re not something for you to be proud of. Your desertion of the club means they are not really your boys to be proud of. You can be pleased for them, perhaps, but they’ve done much better without you on the scene than on it, just as soon as it was made clear you were no longer in touch with the manager.
Tomorrow is the next meeting of Spirit of Shankly, the Liverpool supporters’ union, at the Olympia at 12 noon. The union want what’s best for the club, and whatever Hicks and DIC have up their respective sleeves in terms of Liverpool’s future, it’s clear that Gillett has nothing at all up his. Instead his hands are sticking out from those sleeves, palms up in readiness for up to £80m of easy profit so he can disappear into the sunset ready for his next victim.