By Tom Wilson
Liverpool have a new chairman, Martin Broughton, a highly-respected businessman with a reputation that suggests he’s not going to make a mess of his new role at Anfield. Which begs the question – how did Liverpool’s current owners – Tom Hicks and George Gillett – persuade him to take the job?
It’s just a matter of weeks since Spirit of Shankly posters went up around Liverpool describing Hicks and Gillett as cowboys, around the same time as meeting notes were being released that suggested Christian Purslow and Royal Bank of Scotland shared similar views of the much-despised duo. Although Purslow wouldn’t approve the original version of the minutes, he never denied anything attributed to him in that version.
And in that version was the claim that RBS were tired of Hicks and Gillett, tired of how they’d run the club since they arrived in 2007.
They were demanding an investment of at least £100m to reduce the debt the club and its owners had got into, and although details were never really released as to what would happen if the investment wasn’t forthcoming, the suggestion was that it wouldn’t be nice for the owners.
The only serious offer reported was from the Rhone Group, a bid of little over £100m for a larger percentage of the club than either owner wanted to give them. But with the messages being sent out by RBS, through Purslow, it didn’t seem like the owners had much choice really.
But the Rhone offer was allowed to expire, and an Easter deadline from RBS became a summer deadline.
And then the whole situation changed.
The owners found help in the shape of a very highly-respected name from Wall Street. Michael Klein, former vice-chairman of Citi Group and advisor to Barclays Capital on their takeover of Lehman Brothers. The Rhone Group offer was knocked back, the owners were no longer worried about the banks. Not in terms of their Liverpool FC interests anyway. And Purslow went very quiet indeed; has he had his wings clipped?
Suggestions were made that Barclays had refinanced the LFC debts, giving the owners a package worth £300m to replace the £237m already in place. Later on came suggestions that RBS had offered to extend the finance on terms the owners were very happy with because of the risk they’d lose that business to Barclays.
As it was the Barclays’ involvement was officially announced on Friday – their investment arm Barclays Capital were to find the club new owners, with Martin Broughton appointed chairman to oversee that process, and the existing bankers providing finance on terms that would ensure that sale process wouldn’t be hindered.
Klein had introduced Hicks and Gillett to Broughton. The owners were extremely impressed with what they saw, and Broughton was very much willing to do the job he’d been offered. He feels sure he’ll find a buyer for the club, and although he won’t confirm the price publicly it’s believed to be in the region of £300m (excluding debt), a significant rise on the purchase price paid of £175m (excluding the club’s debt at that time). This does seem to contradict comments by Hicks published earlier today where he suggested he’d get four times his investment back. Perhaps the issue is just how big his investment actually was.
But what about the new stadium? The whole reason the club was sold in the first place was so that Anfield could be replaced by something far larger that would bring in far larger revenues from each match.
Is it possible that Klein has agreed £300m worth of finance for the club with Barclays after all? Not in the sense of a straight loan for £300m, but as part of a deal to sell the naming rights for the new stadium.
The two largest deals ever struck in the US for stadium naming rights featured companies linked to Klein.
His former bosses Citi Group paid $400m to sponsor the new home of the MLB’s New York Mets. Now known as “Citi Field”, the stadium opened last year.
And Barclays paid a reported $400m to become the named sponsors of the new stadium in Brooklyn for the New Jersey Nets basketball outfit. To be called the Barclays Center, construction is still under way. The first shovels were in the ground last month.
The Liverpool announcement on Friday made it clear that efforts were to be made to get the stadium project back underway. Is that going to come about through finance made available independently of any sale?
As always with the soap-opera surrounding the governance of Liverpool, nothing should ever be taken at face value.