Well it’s been a hectic 12 hours for any supporter of Liverpool Football Club. The controversy over Liverpool’s official statement last night that Hicks and Gillett tried to remove Managing Director Christian Purslow and Commerical Director Ian Ayre from the board in last ditch attempt to prevent a sale was over shadowed by the news this morning that the Reds had indeed agreed a £300m deal to sell the club to New England Sports Ventures (NESV). The deal is still subject to legal review though which complicates matters for the sale.
Here is the current situation: because the American owners would not get a dime from the deal with NESV, they attempted to prevent a board meeting yesterday which would have seen Christian Purslow, Ian Ayre and Martyn Broughton agree to the deal. They attempted to remove Ayre and Purslow and replace them with Hicks’ son Mack Hicks and Tom Hicks’ business partner Lori Kay McCutcheon, so as to reject the deal and continue to look for refinancing before the RBS deadline in 10 days. The chairman Martin Broughton however believes that the American owners cannot legally remove Ayre and Purslow for the following reasons:
“We don’t think it was valid to do it. Essentially when I took the role they gave a couple of written undertakings to Royal Bank of Scotland. Those written undertakings included that I was the only person entitled to change the board and that was written into the articles of the covenants, and also that they would take no action to frustrate any reasonable sale. And I think they flagrantly abused both of those written undertakings.”
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Don’t want to rain on any parade but lets be cautious about all this. One of the official buying clauses states that a new stadium is “an option” – this is a chilling reminder to us all. Let’s reserve judgement as I for one was wanting to know the Far Eastern set up.
Nick Harris of SportingIntelligence writes of the clauses mentioned on their site.
quote quote quote……….
* New England Sports Ventures (NESV), owners of the Boston Red Sox, were the preferred bidders of RBS bank, which was owed a large chunk of £237m by Hicks / Gillett / Liverpool. The other “credible” bidder’s identity remains unconfirmed.
* The former Arsenal managing director, Keith Edelman, has been working on the deal as an advisor to RBS, but solely for his knowledge of football finance, and will have no role at Liverpool.
* NESV has promised £240m in cash to wipe out the majority of the monies owed to RBS and Wachovia. This is cash, not borrowed money, and therefore not to be leveraged against any Liverpool assets, sources say.
* Some £60m of debt will remain in the club (guaranteed by NESV), with approximately £40m of that earmarked for stadium redevelopment, and £20m for cashflow.
* The £240m debt clearance plus assuming responsibility for the other £60m gives the £300m valuation for the deal.
* NESV has “an open mind” on whether it will build a new stadium. The Red Sox’s Fenway Park was redeveloped rather than the Sox being relocated, for example.
* Executives from NESV have already had at least one “clearance” meeting with the Premier League to discuss meeting “fit and proper” owners requirements, say sources Stateside. The Premier League is expected to release a statement later today to make the general point it is undertaking its own checks.
* Sportingintelligence understands NESV has already provided the Premier League with proof of funds and a sustainable business plan and the League should be able to “green light” the sale from its own point of view by Friday. 2pm update, UK time, statement from Premier League just dropped: “The Board of the Premier League has been kept fully informed of developments regarding the potential sale of Liverpool FC by the Chairman and senior Executives of the Club and has, accordingly, been made aware of a number of potential prospective owners in recent weeks. We can confirm that Liverpool FC has formally notified the Premier League of an intended change of control and that the Board has undertaken to complete all the necessary processes by Friday 8 October so that the sale of the Club can proceed.” Update ends
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Notice that “an open mind” on the stadium
building??? Gives pause for thought hey?
.
We may have owners who will reduce the debt. I am not sure if we will have the finances to compete with some of the richer PL clubs but anything must be better than these two leeches and the near enough £300 million debt which has been bleeding the club dry. The best part is that not only will they get nothing from the sale but they also stand to lose £140 million of their own cash. Hicks must be ruing the day he set foot on Anfield.
The Premier League doing its own checks means absolutely nothing. The same organisation that let leveraged buyouts for us in the first place and also Man U(£700 million debt). My main concern is that we won’t have funds like City and Chelski and so really need a big stadium to generate the finances to compete. Anfield apparently has only a limited capacity for expansion.
Jack, the point is surely that without the Hicks and Gillette debt we are actually a VERY profitable club. So that should leave money for investment in players. They haven’t ruled out a new stadium- the commitment is that we will have a 60000 seat stadium but that it might be a refurbishment of Anfield rather than an actual stadium. I suspect they will also explore the option of ground-sharing with Everton. So whilst we probably should not reach for the champagne yet the thought of Hicks and Gillette leaving with nothing is very heart-warming.
Agree with Jack, and lets hope H&G are bankrupted as a result of all of this! I also honestly think that fan power has had a big influence in how things are turning out (Hicks not being able to refinance), which is a big surprise and fantastic (no pun intended)! We may just be the little guys, but there are lots of us and together we obviously have a big voice!
i could feel a little sorry for gillett who must rue the day he got involved with big licks hicks, he could have got out on top but hicks stopped him, yes i could feel a little sorry for gillett but i dont.
what did they think they could achieve by hanging on to the club, if they had or even do the protests to date would be as nothing and the financial loss through merchandise etc would finish them.
i was at the blackpool match a lot of people were slagging off christian purslow and martin broughton shame on you now christian is a true red martin an honourable man stop looking for conspircys in there camp hicks and the get are the baddies
Well said Stan – just in case some crazy banker had any thoughts of loaning Hicks – we will cripple them with debt and an empty Anfied next year
It’s not time to point fingers at those who did this or that, it’s time to realise that one of the most important things to happen was Martin Broughton preventing the change to the make-up of the board. If Hicks and Gillette had had their way, and they had succeeded in getting the majority vote, there was nothing to stop them putting our ground and other assets (including players) up as collateral and security to secure finances to pay back their creditors and then asset strip Liverpool and then walk away – defaulting with a smile upon their faces and the knowledge that they had wreaked revenge for every protest march and email that the fans had employed. Presuming that they are successful, these 3 guys may not have just got rid of H & G and their leveraged debts, they may just have saved Liverpool F.C..
Shanks’ Holy Trinity has turned into the fans, the team, the manager plus one; the board [majority], three guys who appear to be holding their nerve.
My thanks, too, to every Liverpool fan who has taken positive, not threatening or aggressive, action and has made the difference. Each march, each email, each press article [and so forth] has obviously hit the target. Indeed, to those who have criticised the campaigns and said that they would put investers off. The New York Times was one of the first to publish regarding the emails about H & G. The New York Times, if I understand it correctly, own a 15% stake in the Red Sox group. Doesn’t appear to have put them off.
Keeping my fingers crossed. Oh, by the way Mr. Broughton, it’s been good watching pictures of such an avid Chelsea fan wearing a Liverpool tie :O)
Power to the people ;O)
YNWA