http://soccernet.espn.go.com/news/story?id=781604&sec=england&cc=3888
Liverpool's asking price for a takeover may be as much as an
inflated £800 million, according to analysis from a leading City
expert in football finance.
And David Bick, Chairman of Square 1 Consulting, argues that
Liverpool are in urgent need of a "rescue" package rather than a
takeover, as the club need to move from their crumbling Anfield to
a new stadium, and are in danger of losing star players such as
Fernando Torres and Steven Gerrard.
Bick is an advisor to Keith Harris, who has been behind two
abortive takeover bids for the stricken club in the recent past,
and says City sources have informed him that even the reduced price
the two American owners Tom Hicks and George Gillett might accept,
£500 million, is far too high, saying: "Rumours abound of a price
being asked from £500 million up to an incredible £800
million."
While Harris is a leading light in the 'Red Knights' group
heavily linked with trying to buy out the Glazers at Manchester
United, Bick has focused on their North-West rivals and warns of an
impending £10 million fee to be imposed by the Royal Bank of
Scotland to extend bank-loan facilities for a further six
months.
And Bick suggests that, while the club is due to publish and
publicise a £35 million profit, there are huge similarities with
the recent Manchester United bond issue launched after a similar
posting of a putative financial gain.
As part of their bond prospectus, United were able to claim a
£48.2 million profit, having sold Cristiano Ronaldo for £80 million
while Liverpool sold Xabi Alonso for £35 million to Real Madrid
last summer - almost the exact amount Bick believes will be
trumpeted as this year's profit.
In a damning indictment of financial affairs and long-standing
neglect at Liverpool, Bick writes in an open letter: "Liverpool has
potentially reached its most important historic point. The club has
now gone 20 years without winning the English League title. It has
never won the Premier League. It was drummed out earlier than
expected from this year's Champions League and now, as one of the
world's biggest clubs, faces the ignominy and reality of failing to
qualify for next season's premier European competition.
"To my mind, the people running the club over the last two
decades must bear the bulk of the responsibility and the brunt of
the criticism. On a recent visit to Anfield to watch my team, West
Ham, play like a pub team with a Force 10 hangover, one had only to
look at the stadium to see the years of dreadful neglect at first
hand. Unbelievably, there are still pillars holding up one
roof!
"Whether it comes down to incompetence or thoughtless arrogance
at Liverpool, we have seen the club left behind by the other great
clubs like Arsenal, Manchester United, Manchester City, Chelsea and
Spurs. They have rebuilt their stadia to high standards and,
largely speaking, to capacities that accommodate their substantial
fan bases. Yet all Liverpool fans have heard is talk and a string
of broken promises.
"The other clubs have built their revenue streams or attracted
owners that have given them the wherewithal to compete effectively
at the top of the modern game. It seems to me that the Liverpool
fans are being treated to a 'product' that is rooted in the 1970s.
Sadly, in very recent times, Liverpool has also been owned by
people who have said much and delivered little of the stated
vision. Replacing them is a very urgent imperative.
"Liverpool claimed in a recent statement that it has 'overseen a
significant improvement in the financial performance of the club
since 2007'. Well, that's difficult to assess. The management has
not published accounts for Kop Football (Holdings) Limited - the
main trading company - since the filing for the year to 31 July
2008 and, in that year, the business showed net losses of over £42
million and net interest payments on debt of £35 million not
covered at all (let alone adequately) by operating profit -
pre-player amortisation and trading - of £25 million.
"Debt remains stubbornly near a reported £240 million, so what
profits are produced do not leave much, if anything, for the
manager to work with, even if we believe rumours of a £35 million
profit for the year that will end this 31 July. In short,
Liverpool's financial structure can't work in my opinion and, since
the sale of the club in 2007, it was never going to.
"If the manager cannot operate competitively in the transfer
market, he has no chance of competing regularly in the top four. We
have now seen the first concrete sign of this with the failure to
even stay in the top four. Manchester United, a club manfully
trying to cope with a similarly onerous financial structure will
also, I believe, start to experience similar problems, although
their state of decline is nowhere near as advanced as
Liverpool's.
"It seems axiomatic to me that Liverpool needs new, responsible
owners and new top-flight, football-experienced executive
management. It will not be beyond the wit of man, the new well
regarded chairman included, to find such a new owner. But first of
all, Liverpool needs to stop spinning silly numbers. Rumours abound
of a price being asked from £500 million up to an incredible £800
million, the lower of which is, in my view, way over the top for a
club in its current condition and by any sensible comparison with
Arsenal or Manchester United.
Bick pinpoints the burning issue of a new stadium, a project
that has stalled during over three years of American ownership, and
says that this can only make any takeover more complicated.
"Financially at least, Liverpool must have a new stadium if it
is to have any hope of restoring past glories," he writes. "But the
finance for that, and any subsequent financial benefit to owners,
must accrue to those who put up the money. In any case, this will
not be a conventional acquisition of a football asset - it is more
likely now to be a rescue.
"The new owners will need to be people of high calibre. They
will need to have access to very large sums of money to build the
new stadium, revitalise the management and allow for a well
thought-through strengthening of the playing squad."
On the current and much-debated issue of Rafael Benitez's future
as Liverpool manager, Bick expresses the pressing need for
stability to be restored or else the club could face a doomsday
scenario. "Right now, Liverpool is at risk of losing its manager
and some of its best players, demoralised by a recent Europa Cup
semi-final defeat and a poor season. While no-one is irreplaceable,
such an exodus will leave a new owner with an even more difficult
task. Therefore, the new chairman of Liverpool needs to act with
some swiftness.
"Once decline becomes precipitous, even money may not prevent
the decline spiralling into permanency."
Bick's open letter, headed 'Rescuing Liverpool', seen by
Soccernet, may well cause shock waves among the Premier
League community and not just at Anfield.