Liverpool Is Next

Living in denial is a recipe for disaster. Take former LBO king Tom Hicks, whose sports properties—Texas Rangers, Dallas Stars, Liverpool—have accumulated piles of debt. Hicks should have raised equity or cashed out of these teams months ago but obviously refused to acknowledge the depth of the financial crises. Now he will pay a steep price.

Last week Hicks reportedly defaulted on more than $525 million in bank loans tied to the Stars and Rangers and is making a mad dash for cash to avoid foreclosure. That means he will likely have to sell his interest in the teams, previously worth $270 million and $400 million, respectively, at steep discounts. Shame on the NHL and MLB for allowing Hicks to saddle his teams with so much debt—their bad balance sheets could have a domino effect on the two leagues.

Next up is Liverpool, the famed English soccer club worth $1 billion. Liverpool has $600 million of debt and a big chunk of it must be paid off or refinanced withing the next three months. Hicks will probably sell his 50% interest for much less than $500 million.