How that great mind must have ticked over all day and all night as the day grew closer to Chelsea’s latest semi-final with Liverpool.
The two sides have been drawn together in Champions League semi-finals for three out of the four seasons Rafa Benítez has been in charge. In the other season they met at the group stage instead, and also had an FA Cup semi-final.
But the Champions League semi-finals have been particularly heartbreaking for Chelsea. In 2005 Luis Garcia scored a goal that to this day haunts the then manager Jose Mourinho. He mentioned it just about every time they played Liverpool, claiming it was never goal. He said it hadn’t crossed the line, and even though no replay exists to show if it had or hadn’t, he kept insisting it had been kept out. He kept quiet about the other option the referee had – had he not awarded the goal he’d have sent off goalkeeper Petr Cech and awarded a penalty.
In 2007 it went to penalties, and Liverpool went through.
So now, with two days to go, it was time to try and unsettle the Liverpool squad, manager, and fans. After all, we’ve nothing else on our minds.
And what a masterstroke it was. Surely nobody would see through it. The job fell to Joe Lovejoy, of The Sunday Times, ably assisted by the headline writer.
The headline was a masterstroke: “Chelsea line up summer bid to snatch Steven Gerrard from Liverpool.”
Already the smiles from Saturday’s win were starting to fade. Surely not?
The article began: “Chelsea will make a third attempt to sign Steven Gerrard from Liverpool if, as expected, Frank Lampard leaves at the end of the season.”
Oh no! Here we are about to play Chelsea, and now we find our captain’s off to join them in the summer again. He had a bit more: “Jose Mourinho, Chelsea’s former manager, was twice out of luck when he tried to buy the Liverpool captain. However, fortune may well smile on his successor, Avram Grant.”
Maybe there’s something in it though. Look at how much his value goes up per year: “Gerrard almost joined Chelsea in June 2004 for £20m, and again 12 months later, for £32m, after the Anfield captain reacted to the interest by submitting a transfer request.” So, we’re talking about his value going up by £12m a year, so the £72m is going to come in handy.
Hang on, can we stop him leaving? Joe has a clue for us: “He only changed his mind after his family received death threats and a fan burned his replica shirt live on Sky TV.”
And actually, Joe says, Avram Grant might not even be manager by then anyway: “Now Grant will try to make it third time lucky, if he survives in the job beyond the end of the season and, as seems likely, Lampard leaves to take on a fresh challenge.” Oh, and it depends on the departure of the slender Lampard too.
Lovejoy actually quoted Grant, talking about Gerrard: “Gerrard is a great player and a great person. For me, he is the player of the year in England, and maybe in Europe, because of the influence he has on the team. I like him very much as a player and I know him. He is a nice guy and an example to others. He plays against me, but he’s still my favourite player.” That’s it then. Never has a sign been so clear.
But just in case, Lovejoy had a bit more to add: “Grant added that he greatly admired the England midfielder’s versatility, pointing to his success in a new role, playing off Fernando Torres, Liverpool’s main striker. He said: ‘I’m not surprised; he has the quality to play in any position. In the one he is in now he probably feels more free.'”
As we speak, fans are digging out last year’s Gerrard’s shirts and a box of matches in readiness for the Sky Sports News cameras arriving at Anfield.
Lovejoy wanted to make sure they’d have some fans outside Melwood too, just in case the Sky cameras went there instead: “Reminded that Mourinho had tried to sign him twice, Grant said: “If you can bring him to me, I will be happy.”‘
We’ve already done the transfer fee Joe: “In terms of market value, Gerrard has the edge, if only because he is still only 27. Lampard will turn 30 in June.”
And the turmoil off the Anfield pitch is as good a way as any to add credibility to an incredible story: “Rebuffed twice, Chelsea believe they could get their man this time because Gerrard is known to be unhappy about Liverpool’s continued failure in the Premier League, and is appalled by the boardroom feud at Anfield and what the chief executive, Rick Parry, has called the washing of dirty linen in public.”
But just in case someone thought they’d take the shirt along to Anfield without matches, hoping someone from Sky had a lighter, Joe thought some out of context and old quotes would help matters: “It has also been noted at Stamford Bridge that in his autobiography, Gerrard admits to ‘looking long, and jealously, at Chelsea’. Grant’s comments are sure to add extra spice to Tuesday’s clash at Anfield.”
You can read more of Joe’s work here – http://www.timesonline.co.uk/tol/sport/football/article732476.ece
In fact the story in the Sunday Times appeared on the web version of the paper on the same day Rick Parry blasted a story in the daily version. Showing some of the drive that he’s been accused of lacking he refuted quite clearly the claim that the club would have to sell Fernando Torres and Ryan Babel to pay debts.
The story appeared on Thursday night in the internet, Friday morning in print, and Parry issued a statement on the official website about it. He said: “The story in Friday’s Times newspaper was garbage.
“I want to make it clear in the simplest and most straightforward terms that the purchases of Fernando and Ryan were funded in the same way as every other transfer.
“The scope for any other interpretation is nil.”
Whether he’s been put up to it by one or other of the club’s management committee – co-owners Tom Hicks and George Gillett – or if he’s decided to act under his own steam isn’t clear. It’s a difficult act when it comes to finding a balance when denying stories in the media. As we’ve seen before, deny one story and a lack of a denial to the next one often suggests there is some truth. Often this is not the case of course, but it does raise suspicion.
And how he denied it. Perhaps he was wary of leaving anything open, like when he made the stadium downgrading “denial” in December. Not this time: “The scope for any other interpretation is nil”.
It would make an excellent slogan for a t-shirt in the club’s stores. But probably best we gloss over the stock in the club’s shops.
The story in the Times had said: “Liverpool must repay £31.5 million to banking institutions in little more than a year or risk having to sell Fernando Torres and Ryan Babel.
“The Times has learnt that Liverpool borrowed the money to sign Torres, the Spain forward who has scored 30 goals this season and has already become a firm favourite on the Kop, from Atlético Madrid last summer. The club then refinanced that debt on January 25, at the same time as they secured a £350 million refinancing package.
“Liverpool entered into an 18-month loan agreement with interest of 9 per cent – £2.8 million a year – with a letter of credit to pay back the £31.5 million at the end of the period.”
It went on to say that this would be an issue should the club be unable to either pay back or refinance the loan because, the banks “could” force them to sell Torres and Babel.
It had all the hallmarks of a muddled version of a story that has been being spun for a while now.
The figure of £31.5m happened to be exactly 9% of £350m. It seems some wires were crossed in communication.
The Torres fee was £18m, rising to something like £23m depending on various factors, and is complicated by the inclusion of Luis Garcia in the figures. He certainly didn’t cost £26.5m, a myth that still shows up in many reports, and probably started when someone saw the £18m fee quoted in Euros and assumed it was sterling. Babel cost around £11.5m.
The day this story was written was the day that many Liverpool fans’ anger had gone off the scale in the wake of a Tom Hicks piece on Sky Sports, He drank from a very new-looking LFC mug, in front of an open fire, with yawning children watching the Blackburn game with him, after which he commented on how Liverpool’s victory would upset Everton. It was seen by the majority of supporters – still opposed to Hicks – as nothing more than a stunt. Anger already simmering under the surface came out almost uncontrollably for many.
And it was in that atmosphere of renewed anger and mistrust that the article, headlined: “Fernando Torres future under threat as banks keep watchful eye on Liverpool“, written by Gary Jacobs and Oliver Kay, appeared.
It also claimed that it was “unusual for Barclays Premier League clubs to buy players in this way. Deals are normally funded using television income.” This seemed an odd claim to make, as clubs have numerous revenue streams that all go into the pot to pay out for whatever has to be paid out for. Whether that’s for star players or for shortfalls in souvenir mug takings, clubs will spend based on what comes in altogether.
The figure of £30m a year for the interest payments on the £350m loan first started to be aired back in December, when the Telegraph’s David Bond wrote an article which appeared under the headline of “Liverpool face funding crisis“. He certainly seems to have been well informed on the amount borrowed, because of course £350m is the exact figure that was eventually loaned out. He reported: “…they are now looking to borrow £350m to pay off a two-year loan with RBS worth around £270m, inject £60m of working capital for the ground and cover £25m of credit notes used to finance the summer purchases of Fernando Torres and Ryan Babel, again provided by RBS.”
That £60m figure for the stadium work also turned out to match what was official announced five weeks later, but the other figures did not. The RBS loan had already been stated quite publicly 9 months or so earlier as being for £298m, not £270m, and a figure of £45m was given for working capital and transfers in the statement Hicks made at the end of January this year.
But for this £30m annual interest amount to be true, LFC would need to be paying over 8.5% interest.
The original loan, of £298m, was payable at 1.5% above inter-bank base rates, and around the time of the takeover this was worked out as being 7.24%, an annual cost of £21.5m.
Using the same rate, the interest on £350m is £25.3m per year.
Back to the Times, and it said: “There was no official comment from the club last night.” There is now.
The PR people working for DIC have been claiming for a while now that there’s a deadline in place for Hicks to buy Gillett, or he loses his chance to block Hicks. While it’s possible proof has been seen, it remains the case that the only source for this claim seems to be the “source” working for DIC. The Times report commented on the Hicks interview that was so heavily attacked by masses of Liverpool fans the world over, and casually threw in the ‘fact’ that Hicks is running out of time: “The revelations came on a day when the turmoil at Anfield reached a nadir after Tom Hicks attempted to strengthen his grip on the club during an interview in which he demonised his enemies inside and outside Anfield. However, the Liverpool co-owner has only six weeks to raise the funds he needs if he is to achieve his goal of buying the club outright.”
Gillett had said amongst other things in response to Hick’s interview claims: “Tom needs to understand that I will not sell my shares to him.”
There was a slight acknowledgement of how Hicks is aiming to fund Gillett’s exit from Anfield: “Hicks was typically bullish about his prospects of raising the money – or, perhaps more realistically, finding the financial backing – but while he continues to explore his options with Merrill Lynch, his latest financial adviser, the clock is ticking.” The Texan’s aim is not so much borrowing the money to make himself 100% owner, but finding other investors to become minority shareholders. This seems to be the way Hicks intends to eventually take the debt off the club, a “goal” he spoke of on Thursday.
The same types of sources maintain that Hicks is due to hit troubles, with loans on his US sporting interests due for renewal, but this seems to be yet more of an attempt to raise the hopes, falsely, of those who want Hicks gone: “Hicks has denied rumours in the City that he is under pressure to refinance his Hicks Sports Group, which holds his stakes in various sports franchises in the United States, but a deadline is looming to buy Gillett’s stake, which is the subject of a rival bid from Dubai International Capital, the private-equity investment arm of the Dubai Government.”
It’s interesting to note that in the year between their abandoned first bid for LFC and the start of this latest attempt that the “private-equity investment arm” have had a website facelift. But at the same time, no doubt purely as a coincidence, they’ve rewritten the way they talk about themselves.
It’s not a good idea to have the fear-bringing words and abbreviations like “Leveraged Buy Out” or “LBO” in any description of a company who want the fans of the sport outfit they are trying to buy to like them.
“Direct Private Equity Investments
Dubai International Capital selectively leads or co-leads Mid/Large Cap private equity transactions.
With a preference for Leveraged Buy Outs in Europe and North America , DIC focuses on opportunities where it can add value to the deal, and subsequently, the business. DIC has a particular interest in working as co-lead with or buying from top tier private equity managers.
Our first such investment was Tussauds Group, which we acquired in a £800 million secondary LBO in May 2005…
Dubai International Capital Private Equity is focused on secondary buy-outs and acquisitions of market leading companies in Europe and North America with a proven strategy and a robust management team.
Some of this division’s major investments include:
* The acquisition of Tussauds Group for £800 million, a leading operator of visitor attraction and theme parks, which was later merged with Blackstone’s Merlin Entertainments Group in 2007. Dubai International Capital retains a 20 percent shareholding in the combined Tussauds-Merlin Group…
So, where has that awful “LBO” term gone?
As for their acquisition for Tussauds, they bought it in 2005, as it says on their site for £800m. Two years later they sold it, in fact they just sold 80% of it, for £1028m. That’s a massive profit in two years on what many see as quite a significant name in the UK. £228m profit in two years. And, that’s on just 80% of it. They’ve still got 20%.
DIC are an investment company, who include Leveraged Buy-outs as part of one of their ways of doing business. They took Tussauds and made massive profit from it.
That doesn’t mean they’ll be looking to buy LFC for £400m purely with the aim of selling for much bigger money in a couple of years. But basing hopes they see LFC as more than just another money-making investment on an unproven claim that Sheikh Mohammed is a boyhood Red is dangerous. Assuming that known Red Sameer al-Ansari will be allowed to veer too far away from DIC’s rules on how they treat investments is again dangerous. DIC is not a hobby for the Dubai ruler. DIC don’t own his prestigious Godolphin racehorse operation, which is pretty much like a hobby for him.
There isn’t even any evidence he likes football, never mind LFC.
The Times also reported something about the pre-emption agreement that is said to have enabled Tom Hicks to block a sale by Gillett to DIC, but which would also be expected to have some kind of deadline. It said the “option is understood to expire 90 days after he [Hicks] was informed of DIC’s £200 million offer to Gillett, which was made on February 27. That period would expire on May 27, six days after the Champions League final in Moscow.”
It’s a claim that is repeated with regularity, and a massive amount of supporters are pinning hopes on it being true. It has come from DIC’s PR team, which doesn’t mean it’s false, but puts it into the category of claims that need to be taken with a pinch of salt. What goes against it being true is the way Gillett spoke of Hicks having merely “threatened to” invoke his veto. He said that in March, after the supposed February 27th offer. Time will tell. If Hicks hasn’t managed to get sole ownership by May 27th we’ll surely see signs of DIC taking Gillett’s half immediately. But if Hicks has the means to buy Gillett out as claimed then DIC could either already be gone, or facing a legal battle with Hicks to override any pre-emption clauses they feel they can fight.
So it remains to be seen just who the task of stopping Gerrard moving to Chelsea will fall to. Unless of course the whole story was designed purely to unsettle everyone ahead of Tuesday.