Chick Counterfly said:
The market has contracted for all but one club of course but David Villa can hardly be considered the barometer when we are about to pay £25m for James Milner. City would pay £50m + for Torres and Chelsea would probably stretch to it. Sure they are the only 2 buyers in the world but such a fee really isn't that wild - certainly pre-World Cup people wouldn't have blinked.
If, and its a huge if, his injuries are under control the guy is the most complete striker in the world. Why wouldn't we pay £50m+ for him?
In terms of weakening the team, we are beyond that. Of course there is a balancing act with the owners and RBS keeping the squad strong as possible but a £50m+ striker is a luxury too far. I would bet that in RBS' models Champions League is the optimistic upside as opposed to the likely base case. Any cautious banker will see that his base assumption has to be that City and or Spurs make CL qualification tough. If RBS are resigned to the team even with Torres probably not making CL in 2011, then they would be very keen to sell especially when there is cash now from City but may well not be in 6 or 12 months. BTW merchandising is a massive red herring as always. Even if you sold 500k Torres shirts (they don't) per annum the net profits would be immaterial in the scheme of things. As for perception of Liverpool fans, RBS need to protect their money first rather the emotions of 200k Scousers.
As for how RBS get the money. If a sale is not happening, refinancing talks loom large and RBS' hand strengthens unless H&G can refinance elsewhere (unlikely). At that point, RBS could well agree to roll the debt for another 6 months or maybe to January but on the condition that the position is reduced to, say £180m. The only way I can H&G/the club being able to do this is by selling Torres (I agree there are no substantial buyers for Gerrard, although I think Arsenal would find £20m for Reina). This changes their risk profile and could make them more comfortable. Remember the bank will also need comfort on where the funding for this year is coming from. Liverpool will need at least £30m of additional finance just to pay the bills.
Much depends on their view of the realistic value of the business and therefore their perception of how at risk they are. This, and how the team performs this season, are the only variables - revenues and costs for the next 12 months are very predictable given the nature of football revenues and costs.