Liverpool’s Day Of Reckoning

By on Oct 13, 2010 in English League Football, Finance, Latest | 1 comment

So, farewell then, Thomas O Hicks and George Gillett Junior (H&G) – pending appeal. And what have we learned this last week? Well, to misquote Kipling, “if you can keep your head, while all around are losing theirs… you haven’t assessed the situation properly.” And there was plenty of that in and around Liverpool Football Club lately. There was future-ex-owner, pending appeal, Hicks “sacking the electorate” in boardroom vote-rigging that would have made Elbridge Gerry himself blanch. There was the execrable Piers Morgan in the Mail on Sunday to ask “what have Hicks and Gillett actually done wrong?” Oh yes he did.

Liverpool’s nearly-ex-MD Christian Purslow claimed “nobody should be” contemplating administration, despite Liverpool’s then-un-repayable debt to RBS and Wachovia – the latter hardly getting a mention despite the 1,001 journalists willing themselves to believe that New England Sports Ventures (NESV) will be as successful with Liverpool as they are/were with the Boston Red Sox. Because neither side had won a trophy for a bit before John William Henry came along with his Stan Kroenke wig and perspective-busting Groucho Marx cigar – looking too much like that mock-scientist in the car ad who discovers that “seven is bigger than three.” Thankfully, however, the court ruling proved a dollop of common sense on a cake of boardroom nonsense. As I was typing, Mr Justice Floyd in London’s High Court was systematically destroying H&G’s efforts to stave off their Anfield departure, and demanding that they pay for the privilege.

The details of his judgement will be clearer by the time most of you have read this far. But even Chris de Burgh (album out next week, apparently) was “delighted,” according to reports in the Guardian, whose legal commentators were evidently at lunch. Yet, while the past will soon be past, key aspects of the future have been relegated to the background, or avoided entirely, because they don’t fit everyone’s preferred narrative – apart from the most rabid anti-Liverpool-ites (Manchester postcodes, mainly). Don’t get me wrong. Overall, I don’t doubt that NESV could be “a good thing.” And I understand that a lot of the cynicism about them from supporters groups and others is borne more of Hicks and Gillett’s failings than anything NESV have (not) done. But the desire to parallel Liverpool’s situation with Boston Red Sox and others in has not helped understanding.

In the latest When Saturday Comes, Liverpool’s on-field woes are paralleled with Newcastle, with Sam Allardyce’s managerial fate forecast for Roy Hodgson. Allardyce was replaced by “fans’ favourite” and former incumbent Kevin Keegan, ending in tears, Alan Shearer and relegation. Hodgson could be replaced by “fans favourite” and former incumbent Kenny Dalglish. But the parallels are misleading because, as we now know, Allardyce was simply marking time at Newcastle until the Barcelona job came up…

The most popular comparison is that of NESV frontman Henry in Boston in 2002 and in Liverpool now. Henry and his co-investors awoke the sleeping giant that was the Red Sox, won them their first major trophy since my jokes were fresh (1918) and made a profit. Watch him do the same at Anfield, runs the narrative. The parallels are far from parallel, however. The Red Sox were not really at the low ebb in Major League Baseball in the years straddling the turn of the century that Liverpool have been since their Champions League group stage exit last season. And, of course, there isn’t the glass ceiling in baseball which said Champions League provides for our wonderfully competitive “best league in the world”. Henry’s task at Liverpool in 2010 will be significantly harder than at the Red Sox in 2002.

But the most misleading parallel has been drawn on stadium redevelopment, which is the fundamental beef with NESV. NESV were one of a number of bidders for the Red Sox in 2002, with rivals saying they would move from the 90-year-old “iconic” Fenway Park. NESV redeveloped Fenway instead, heavily revamping the hospitality facilities – the biggest moneymaker. Now, they are faced with a “parallel” choice – add 14,638 to Anfield’s capacity, or move elsewhere. Chairman Martin Broughton assured fans, ingenuously, that there “will be stadium development” and “we will finish up with a 60,000-seat capacity stadium.” But NESV “haven’t finished their view” as to the location.

In other words, NESV want to redevelop Anfield. After all, everyone else concerned with Liverpool Football Club had long since “finished their view” as to the location, and settled on Stanley Park. If the club’s future location is a matter of debate again, it can only be because NESV made it so. Despite Christian Purslow’s protestations that “a bit too much” has been made of their redevelopmental tendencies (“the same ownership group built new stadia in Baltimore and San Diego”), he called it “extremely reasonable” that NESV should “look in fine-tune detail at what we’re proposing.” Well…no.

Liverpool’s ownership since 2007 has been about moving to Stanley Park. Hicks and Gillett were chosen because of the move to Stanley Park. And we wouldn’t even have heard of them but for their commitment to build on Stanley Park. That is why their failure to put the proverbial “spade in the ground within 60 days” is still regarded as second only to “not doing a Glazer” in the Hicks and Gillett Lie League. The desirability of Stanley Park for football club and city alike is based on the Anfield regeneration project of which it is an important part. Even last week, senior council representatives were keen to “encourage (NESV) to stick to the commitment that is already in place.”

This is about more than football. It is, if you pardon the melodrama, about real life. The Anfield area of Liverpool is reportedly one of the more rundown in the country. And although the concept of “Anfield Plaza” sounds a bit middle-class for some tastes, the regeneration is necessary. Hicks and Gillett got stick from all sides for breaking their promises to build the ground. If one of NSV’s first moves is to smash those promises into tiny pieces, what price the rest of their promises to do the right thing by the club and the city? Decisions and commitments on Liverpool’s new stadium at Stanley Park have been made. Those decisions and commitments should, and I choose my verb advisedly, be honoured.

All of the above assumed that NESV were going to get as far as a takeover, an assumption it is probably only now safe to make. Some commentators queried NESV’s commitment if, as reported, they threatened to pull out of the deal if Liverpool were docked nine points for entering administration. Such a stance sat uncomfortably with NESV’s wish “to create a long-term financially solid foundation for Liverpool FC… ensuring the club has the resources to build for the future.” It has been passed off as a “negotiating position,” like a practical joker with temporary misjudgement issues saying “only joking.” Not everyone is convinced, but it was still a huge relief to hear the systematic destruction of H&G’s court defence.

My years on a national trade union committee taught me that any proper analysis of any situation could be flipped on its head by the smallest of facts, especially in court cases. And the contrast between the hopelessness of H&G’s case and their bullishness in defending it was huge – suggesting their defence involved a few proverbial “spanners in the works” which could flip the situation. The “bids” from a Singapore Manchester United fan and one of Gillett’s financial associates certainly looked spanner-shaped. And they must have been serious bids… from a Manchester United fan and one of George Gillett’s funders who were not just H&G placemen. Oh no.

And what often gets overlooked in legal analysis by non-legal people is that the moral and ethical positions of the protagonists take a distant joint second-place to the straight-down-the-line legal position. My union held an election for the post of general secretary. Its rules said such an election is held “in the event of a vacancy.” There was no vacancy. But the legal position was that even if the union’s national committee misinterpreted its own rules – wilfully or otherwise – they had the right to do so. And the election was deemed valid. So, “Not Welcome” though Hicks and Gillett may be in Liverpool, preposterous though the notion might be that they deserve a penny or a cent profit for their three years of Anfield failure is, those issues are non-issues for the legal system. If someone said day was night and didn’t break the law, judgement could be in their favour, even if it was dark outside.

Thankfully, the hopelessness of Hicks’ and Gillett’s case won the day. And it appears that the only two spanners in these works were H&G themselves. There may, of course, be a far less complex reason for Tom Hicks’ particular bullishness. He might simply be skint, as his modestly-titled Hicks Sports Group (HSG) has had an even worse run of recent form than Fernando Torres.

In April 2009, HSG defaulted on a $10m loan payment, which was passed off at the time by Hicks as a deliberate tactic in loan re-structuring negotiations. “We’re doing this to get everyone’s attention,” he told the Fort Worth Star newspaper. To that extent, it worked. But a month later he was selling HSG’s rodeo interests – a wrench for a cowboy like him, ho-ho. His subsequent efforts to hang on to a role at the Texas Rangers baseball team – and here the parallels with Liverpool are valid – ended in costly failure. And, according to an excellent feature by Richard Adams in the Guardian last week, Hicks recently sold a “luxury chalet in Aspen for $18.5m.” His version of “the dog ate my homework” on this occasion was that “his family preferred to go on holiday elsewhere.”  Whether that meant they preferred to holiday elsewhere to him, or that their visits to the North-West of England had given them a fondness for Fleetwood, isn’t clear. Much of Hicks’ financial dealings are private, or “secret”, if you prefer. But if he and his family book into a guesthouse on the Lancashire coast anytime soon…

So, what lessons will the Premier League learn from H&G’s Liverpool tenure? The way the Premier League have rushed through their approval of NESV, without even NESV fully knowing what their future plans are for Liverpool, suggests the PL will learn FA. For Liverpool, the fact that Sunday’s derby has the appearance of a relegation six-pointer suggests that things can only get up or the only way is better, or something. As for H&G, while there’s a court to which to appeal, their attempts to cling on will continue. But they look destined to fail. And if and when their Liverpool reign ends, it must be hoped that another football financing fad ends with them.

In the 1990s, stock market flotation was the business orthodoxy in English top-flight football. And the thought of what the next decade might bring still sends shivers down the sturdiest of spines. But with H&G gone and the Glazers frankly relying on luck to get away with their risky financial strategy at Manchester United, leveraged buy-outs in football have surely had their day. Or am I just “keeping my head while all around are losing theirs?”

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    1 Comment

  1. You can bet that this latest false Messiah will not be buying the club with his own money either.

    Martin

    October 14, 2010

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