Monday, 18 January 2010

It's not just Rafa Benitez that could cost LIVERPOOL FC a Champions League place

Liverpool Football Club Confirms Takeover Bid

AS the cries for Rafa Benitez to be sacked by Liverpool get ever louder, there’s a certain irony in some of the criteria being applied to opinion about his future at Anfield.

For many, top of the list for calling time on the Spaniard’s six-year spell at the club is failure to finish in the top four, the argument being that missing out on Champions League football would be disastrous for a club which, even with money from the pot of the continent’s biggest competition, is struggling to cling to the coat-tails of its richer rivals.

Many say a top four finish is out of reach already, and therefore the writing is on the wall for the former Valencia boss.

Ignoring that it is Benitez himself who has drove expectations to a level were Champions qualification is regarded as the norm, and that with Liverpool just four points off fourth spot predictions are premature, the irony lies in giving the manager his cards based on putting the club in a position where participation in the European Cup is under threat.

Because that’s exactly the position Tom Hicks and George Gillett have put the club in – yet still the focus remains elsewhere for a lot of fans, with many happy to turn a blind eye to the ownership of the club and others, incredibly, even willing to argue for its apparent merits.

"We have purchased the club with no debt on the club" George Gillett, November 2007

If Liverpool FC continues to be run in the same way as it has been since Hicks and Gillett took over in November 2007 the club will not be allowed to participate in the Champions League – no matter who the manager is.

New UEFA rules due to be introduced at the start of the 2013 season will mean loss-making clubs – which Liverpool now is due to the interest payments on the mountain of debt loaded on to the club by its co-owners – will be excluded from the Champions League and Europa League.

UEFA announced the Fair Play Initiative last August “to improve the financial fairness in European competitions and the long term stability of club football across Europe.”

The first measure stated clubs “cannot repeatedly spend more than the generated revenues.”

It’s no empty promise either, judging by the reaction of the big spenders. Chelsea announced last month that Roman Abramovich had converted the full £700m of his investment from loans to shares. Sheikh Mansour, who has put in £395m in 16 months at Manchester City, has done similar.

Both clubs acknowledged, according to The Observer, that this was with the UEFA rule change in mind.

So Liverpool needs to start breaking even again – and fast. Yet the club, £44.8million in debt when Hicks and Gillett took over, £237m in debt now – still plan to build a new stadium in Stanley Park…at least that’s what managing director Christian Purslow told Liverpool fans via the Liverpool Echo (or should that be his unchallenged mouthpiece?).

In some quarters, it seems Purslow can do no wrong and far too many fans were accepting of an interview that screamed PR and came just days after Tom Hicks Jnr had resigned after his infamous “Blow me fuck face” email to Liverpool fan, Steve Horner.

For some Purslow is the white knight, the season ticket holder turned executive, who has the club’s best interests at heart.

He is hailed for securing commercial deals that every supporter to a man knew was possible for a club with one of, if not the, biggest support in the world.

"The Hicks family and the Gillett family are extremely excited about continuing the club's legacy and tradition." Joint statement, Nov 2007

But Purslow is the corporate face of a club shaking at its foundation, a highly-paid businessman who benefits from the worst of situations being presented in the best of light.

He therefore starts from a position of mistrust, and should have to convince downtrodden Liverpool supporters otherwise.

He should be faced with the toughest of questions - probed about the debt, the non-existent new stadium, the promise by Hicks and Gillett to compete at the top end of the transfer market.

Instead, he did an interview with Echo sports editor, John Thompson.

The publication and the journalist, like the timing of the interview (or should that be press release?) are no coincidence.

The Echo swallowed the Purslow PR pill whole, without a cough. No surprise when it shares commercial activities with the club, including the matchday programme.

What happened to journalists representing the people? Asking the questions the fans wanted answered - the difficult ones?

No sign of that amongst the Purslow spin.

Predictably, he kicked off by talking about players – the thing at the forefront of the majority of fans’ minds, attempting to stem the tide of speculation that top players will be sold to balance the books should the team not manage to turn its season around:

“Nothing could be further from the truth than reports which suggested the club would choose to sell its star footballers. Full stop. The idea that we would ever wish to sell our top players is completely against the interests of this club.”

“Choose” to sell. “Wish” to sell. Those two words alone should set the alarm bells ringing. If top players ARE sold, all Purslow has to say is it was a financial necessity. So the club didn’t choose to sell, or wish to sell – they HAD to sell.

Purslow goes on to tackle another worry amongst supporters – that players could be sold to service debt:

Premier League: Liverpool Loss At Middlesborough“Any proceeds we generate from the sale of players can only go into our player account for the recruitment of new players.”

So why after breaking even in two transfer windows was Benitez forced to visit the bargain basement for Sotirios Kyrgiakos when in dire need of a central defender? Why were the players he really wanted – Michael Turner, Matthew Upson, Ryan Shawcross – not brought to Anfield, particularly as co-owner Gillett had already told the world Benitez could have whoever he wanted (even Snoogy Doogy)?

The stock line is potential transfer spending was eaten up by contract renewals - a concept that came hand-in-hand with the Hicks and Gillett era and had seemingly never affected a manager at Liverpool in the history of the club before their arrival.

Purslow went on: “It’s in the public domain that the owners have been looking to bring new investors in to the club to pay down the club’s existing debts – which are today about £237m – by way of issuing new shares which would dilute their shareholding in the club. That process is ongoing.

“The debt we have today is obviously serviced by the club in terms of interest and bank fees and if we reduce our debt then clearly those interest charges and bank fees will reduce.”

Yes, it is in the public domain. Watching Gillett being filmed in a Liverpool tie in various Far East airports was hardly subtle was it? If anything, it made the club, and the owners, look desperate. It would be no surprise if, behind the charade, they are desperate - because how likely is a return on their disingenuous plan looking now? Purslow said:  

“Inevitably when you run an investment process of this kind in the early stages many, many people have a look.

“Much of the challenge in these processes is to sort out the serious and the real interest from people who are unlikely to make an investment.

“I think it’s fair to say as we now move into the New Year that we are whittling down the interest to a smaller number – maybe a handful of serious groups who are interested in investing in Liverpool. And in the coming couple of months our job is to sort those into ultimately an investor that makes sense for everyone concerned.

“Provided all goes well, there is a serious possibility of new fresh investment into Liverpool Football Club within the foreseeable future."

Remember the false dawns under the administration led by Rick Parry? Report after report of potential investors, all of whom fell by the wayside as the club sought the cash that would take the club on to the 'next level', fund a new stadium and buy the top-end players that Liverpool's rivals regularly recruit. 

Instead, Hicks and Gillett took over the club.

Purslow is saying nothing - it's all ifs, buts and maybes with indefinite timescales. Tellingly, he says himself in the Echo piece: "There are no guarantees."

So he does his best to tell fans everything is rosy in the garden but in reality there's a very real chance that, to use another loose gardening analogy, the club is knee deep in the shit.

No investor, no chance of meeting the financial regulations, no Champions League, no transfer budget, sell to buy...and the downward spiral continues.

And what about the stadium? The new Anfield. The futuristic ground that would put Liverpool at the head of the pack, on and off the pitch.

Purslow said: “The stadium is absolutely central to the club’s strategic development because with a new stadium comes a transformation in the financial resources of Liverpool that can be ploughed back into the core of our activity - which is our playing squad.

“The good news is that all potential investors are attracted to Liverpool by the prospect of building a new stadium and participating in the transformation in the value of the club associated with that project.

“Also positive is the fact that late last year, the bank market was essentially shut. It’s now very much open for business and a number of banks are very interested in financing our new stadium.

“However, a condition of all those banks’ interest is that in the first instance, we have brought new investment into the club"

So, no new investor, no new stadium. Maybe these potential investors exist, maybe they don't. But ask yourself this, who would want to climb into bed with Hicks and Gillett? A pairing that cares so little about the club that they are yet to attend a board meeting at Anfield - in three years.

A pairing that can't agree with each other and has now gone to ground, refuses to do interviews and refuses to speak to fans - unless it's by email, of course.

And a pairing, that knows NOTHING about football. This is often overlooked. And if Benitez does go - whether he jumps or is pushed - do supporters trust these men to recuit the next manager?

Leading football financial consultant Harry Philp told the Sunday Times: "The cost of buying Liverpool and building a new stadium is £800m before you start on players. Given Arsenal, who already have the Emirates, are worth £800m, that doesn’t seem great value.

“Twenty-five per cent of Liverpool is on offer but I don’t see why anyone would buy that minority stake. You’d pay £100m into getting one quarter of a dysfunctional football club and your money would go straight to the bank, to service Hicks and Gillett’s debt."

Let's say an investor does want to put in £100m, then what? Borrow more, that's the plan. Purslow admits the club could borrow enough now to build the stadium but they are being held back by the debt laid onto the club by the owners.

It's been said many times, but what benefits have Hicks and Gillett brought to the club? If anything, they've taken us backwards.

Hindsight is a wonderful thing, but if the previous administration had simply gone to the banks, borrowed the cash and built the stadium we would be in no worse postion now.

Now, think about the future. If you're not worried, you're not a fan. It's that simple. Some people care about Liverpool Football Club. Others - and that includes Tom Hicks, George Gillett and the 'fans' who shrug off the off-field embarrassment, don't.

Purslow added: "I hope to be able to give people more of an update in the next month or two.”

Hope? There's precious little of that while the Americans remain in charge.