Re: Liverpool Takeover Imminent?
Peston predicts administration, albeit fleeting.
[quote
Broughton: 'I have the power to sell Liverpool'
Robert Peston | 14:08 UK time, Wednesday, 6 October 2010
I've just interviewed Martin Broughton, chairman of Liverpool since April.
And what struck me was his confidence that he can sell the club from under its owners, Tom Hicks and George Gillett.
He told me that when he took the post of chairman, he received explicit undertakings that he was in charge of selling the club - and that Mr Hicks and Mr Gillett surrendered any right to block a sale to a bidder he deemed most suitable.
Those undertakings will now be tested in court, probably in the middle of next week.
But bankers tell me that if the courts rule against the transfer of Liverpool FC to the new ownership of John Henry and New England Sports Ventures, the sale will still probably go through - although via the ungainly mechanism of Royal Bank of Scotland putting Liverpool into administration (see my earlier post on how this would work).
So it looks like the parent company of the Boston Red Sox will be the proprietor of the Liverpool FC.
It is proposing to pay £300m, of which £200m would pay off the longer term bank debt provided by Royal Bank of Scotland and Wachovia of the US (three quarters of that £200m goes to RBS).
Another £40m would pay off other creditors, such as the local council.
And £60m would stay in the business as debt secured on the stadium plus working capital facilities.
Not even a brass farthing will go to messrs Hicks and Gillett, which means they stand to lose the £140m they've put into the club - and it's why they will do all they can to frustrate the deal.
If, as seems likely, the deal goes through one way or another, Liverpool will once again have relatively modest debts - around £60m -which, as I've said, should feel like something of a liberation.
And Mr Broughton told me he was confident that the new owner wouldn't simply take money out by foisting new borrowings on the club as and when financial markets recover sufficiently - though there aren't any cast iron guarantees to that effect.
Nor has he extracted a binding commitment to build the new Stanley Park stadium. But Mr Broughton pointed to the track record of John Henry in developing sporting facilities in an imaginative way.
Mr Broughton believes that Mr Henry wants to own Liverpool for what the Kop would see as the right reasons - namely to turn it again into a winning club on the field, as the sine qua non of commercial success.
Mr Henry's record at the Boston Red Sox - which has won two World Series under his ownership after decades of ignominy and failure - would make that a plausible assertion.
But although globalisation is increasingly a phenomenon in sport as well in finance, there are still huge cultural differences between sports clubs in different countries. Mr Henry will find much about Liverpool FC unfamiliar, even alien.
So perhaps astutely, Mr Broughton refused to make any prediction of when silverware would once more grace the Liverpool trophy cabinet, to follow the silver raining into Royal Bank of Scotland's coffers.[/quote]
