By David Maddock
October 6. Put this date in your diary. It is the day
when the very destiny of Liverpool Football Club will be
decided.
If that sounds dramatic, then it is meant to be so, because on
that day there is a real danger that one of the most famous and
historic clubs in world football could be brought to its knees.
Let me say now, that Liverpool are actually a well-run, well
managed club, which, even with its current commercial performance
and before stadium development, could be among the most profitable
in the English game.
They are broke though, for one very good reason: The burden of
acquisition interest that is place directly on the club. Or in
simple terms for those who prefer their information in English,
Liverpool are paying millions every month for the dubious pleasure
of Tom Hicks and George Gillett owning them.
If that is allowed to continue, if Tom Hicks and George Gillett
are allowed to continue with their ownership under its current
format, then it spells disaster for Liverpool. It could even see
them go bust.
It really could happen. Hicks and Gillett want to sell their
‘soccer franchise’, but they also want to make a profit out of it.
Indeed, they want – and need – to make a big profit.
At the moment it is clear there are no takers at their asking
price. Rather than sell, they are now desperately trying to
refinance to ensure they can hold on to the business until they CAN
sell it at their valuation.
But to do that, they will probably have to borrow even more
money at even higher rates, and use the club’s assets to underwrite
those loans. And we all know what that means. If you don’t, just
ask Portsmouth or Leeds fans.
So October 6 becomes vitally important. That is the date that
the Americans’ current lenders, the Royal Bank of Scotland, have
set for repayment of loans totalling around £285million at the last
count.
By then, the Yanks must have either sold Liverpool, or raised
the funds to replace that existing debt with new debt. Or – and
here is an intriguing third possibility – have persuaded the RBS to
extend those loans once more.
Every single Liverpool fan the world over now recognises the
danger of that happening, because it will merely extend an
essentially unsustainable financial structure at Anfield. It will
merely extend the threat of the club collapsing.
Even the much-maligned board at Anfield recognises it.
Apparently, Chairman Martin Broughton and MD Christian Purslow,
along with commercial director Ian Ayre, have already resisted one
attempt by the Americans to use the club’s assets against new
loans.
They know Liverpool could well be doomed if the Yanks hold on to
power, and they seem to understand that the best interests of the
club certainly aren’t served by that nightmare scenario.
I say seem to understand, because Broughton seems to have
decided that the fans don’t deserve any information about what the
hell is going on through the Merseyside media. He seems only to be
prepared to talk to obscure business sources.
Purslow too, seems to have gone into hiding, bizarrely breaking
off all contact with the fans, through the media, for the past six
months. Attempts to ask him questions – as fans on a popular
Liverpool website have tried to do recently – are met with silence,
as are all interview requests.
But credit to them both and to Ayre, there is no question they
are trying to resist the Americans’ attempts to retain control. For
all the criticism aimed their way, much of it justified, they are
trying to do what the fans so desperately want. They are trying to
do the right thing, and fans shouldn’t forget that.
Without wishing to be too pessimistic though, there are no
guarantees they will succeed. Already there are rumours of a legal
challenge to the three directors blocking the two Americans on the
board.
And who amongst us doesn’t believe that after decades of the
most cunning business dealings that have made them both
billionaires, that Gillett and Hicks aren’t stealthy enough to
somehow pull off their latest despicable plan.
They are ruthless enough, after a combined ten decades in the
leveraged buy-out business, that is for sure. Don’t think for one
second they are going to roll over and simply accept that Liverpool
will be taken from them and sold at a loss.
Which is why October 6 is so important. Let’s get real again
here for a second. The RBS are making millions of pounds of profit
from Liverpool, who so far have had no trouble at all meeting the
repayments. In that sense, it is a gilt-edged investment for
them.
So they will be reluctant to let it go easily, and still –
possibly – open to persuasion from the Americans to extend, if yet
more guarantees are proferred.
Other banks may well feel the same, that there is easy, unrisky
profit to be made from extending credit to Hicks and Gillett,
because the club will meet the liability. And that is the true
danger to Liverpool as a storied club.
It is where the fans must come in, because it is down to them to
stop either the RBS or any other bank perpetuating the current
nightmare that has engulfed Anfield and threatened its very
future.
Supporters are already responding in their thousands. I have
highlighted here before the work of Kopfaithful, who are actively
campaigning to ensure the RBS realise the risks of a massive
backlash if they are to extend the Americans’ loans.
They have an intelligent, well-organised campaign which has
spoken to MPs in the House of Commons, to major financial
institutions in the UK and to major media outlets in the U.S.,
explaining the feelings of millions of worried Liverpool
supporters.
They discovered that the Americans have approached at least 10
different institutions for refinance funding, and are now fervently
trying to block that possibility, by orchestrating an email
campaign to the likes of the Wall St Journal and NYTimes.
They are also making it clear to the RBS that there will be
massive opposition if they don’t act in the best interests of
Liverpool fans. The bank’s HQ in Edinburgh will allow access to
vistors as part of an open house scheme on September 25, and guess
who plans to be there?!
Kopfaithful want to talk to RBS Chief Executive Stephen Hester,
to make clear the opposition to the Americans.
They are backed by several fans’ groups too, who are all aware
of the dangers facing Liverpool right now. Influential websites
such as Red and White Kop and You’ll Never Walk Alone are meeting
along with several others this very evening, to discuss tactics.
They are planning protests that will highlight the depth of
feeling, and the potential power of such a massive body of
committed support.
And that’s where you can help if you are a true Liverpool fan.
October 6 is D-Day, and the more supporters make clear their
opposition to any institution offering finance to the Americans,
the less chance of it happening.
Back Kopfaithful, back Red and White Kop, back all the other
fans’ groups who love Liverpool and are desperate to save the club.
Do it calmly, nicely, but back them.
There is a chance that the Americans’ plans to refinance can be
blocked, and if that happens, then there is a real chance the RBS
can assume temporary control as they seek to sell the club to a
responsible buyer.
If that can happen, then Liverpool can be great again. They
already make an operating profit because they are operating
efficiently without the Americans’ debt.
Without ownership debt on the club they can build a new stadium
and turn profits – which can be invested in playing assets – that
will make most Premiership MDs’ eyes water. So it is D-Day at
Anfield on October 6, and you, the fan, can have a massive say in
what happens.
