Liverpool patience runs out with Hicks and Gillett

Liverpool's current owners have made a desperate attempt to block the club's sale - but they have already run out of options.

Liverpool patience runs out with Hicks and Gillett

The Scouse accent is said to be notoriously difficult for Americans to understand, but the sentiment must have been clear. One after another, notable Liverpool fans stepped in front of the camera to register their disgust at the tenure of Tom Hicks and George Gillett.

In a YouTube video created by Hollywood director Mike Jefferies and titled “Dear Mr Hicks”, the message was repeated time and again – sometimes articulately, sometimes hyperbolically, but always with undoubted sincerity – that patience with the Liverpool FC owners had run out. Now, that call has spread to the boardroom, with chairman Martin Broughton and his board taking it upon themselves to accept a UK£300 million bid – rejected by Hicks and Gillett – from Tom W. Henry’s New England Sports Ventures (NESV).
 
An extraordinary sequence of events then transpired, with a desperate attempt made the owners to block the sale by replacing managing director Christian Purslow and commercial director Ian Ayre on the board with Hicks’ son Mack and Lori Kay McCutcheon. Those attempts were resisted and, Broughton told fans on Liverpool’s official website on Tuesday, executed without legal authority.
 
“We don't think it was valid to do it,” said Broughton. “Essentially when I took the role they gave a couple of written undertakings to [major creditor] 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.”
 
The board have made it explicitly clear through their actions that they will work in the interests of the club and its creditors rather than those of Hicks and Gillett. The Americans, quite frankly, have nowhere left to turn. With a bid now accepted at UK£300m, they will now find it impossible to attract bids anywhere close to their own valuation. No further creditors are likely to step in to refinance Hicks’ loans so close to the October 15th deadline imposed by RBS, not least given that it is so apparent that Hicks’ overriding interest is in covering losses incurred through the sale of his other sports franchises.
"Essentially when I took the role they gave a couple of written undertakings to Royal Bank of Scotland... And I think they flagrantly abused both of those written undertakings.”
 
The Premier League has already announced that it has been working with Liverpool in conducting a “fit and proper persons” test on Henry and NESV, with the green light expected on Friday. Hicks and Gillett’s last hope rests with its writ against the club, claiming that the sale has been enacted unlawfully, but Broughton is bullish about his prospects of winning the case. “We should,” he said, “get a declaratory judgement I would have thought probably by the end of next week, in short order. There is an appeal process but that is also very fast.”
 
Hicks admitted in May that he would need to recoup “a couple of hundred million dollars” after filing for Chapter 11 bankruptcy with the Texas Rangers. His chances of making that money back through the sale of Liverpool now look very slim indeed.
 
Hicks and Gillett arrived at Liverpool in early 2007, with memories still fresh of Malcolm Glazer’s enormously contentious takeover of rivals Manchester United, and moved swiftly to assure supporters that theirs would be a different style of ownership. Yet as time has progressed, those claims have appeared ever less compatible with reality. Debts incurred in the purchase of the club have mounted, while plans for a new 60,000 capacity stadium in Stanley Park have come to nothing.
"We should get a declaratory judgement I would have thought probably by the end of next week, in short order."
 
Such is the hostility towards Hicks and Gillett among the Liverpool faithful that some of their number have been openly enthusiastic about the prospect of a seizure of the club by RBS. Truthfully, such an outcome would not be of too much benefit to anyone, and with the state-backed bank under serious pressure to recoup its loans, could have landed the club with another set of owners unconcerned about loading it with debt, potentially locking it into a cycle of decline.
 
In the event, Broughton and Purslow appear to have found a suitable set of backers. With the odd reservation, NESV are regarded in American sporting circles as responsive and responsible owners. In their time at the Boston Red Sox, they have invested steadily in the team and paid for a much-needed schedule of refurbishments to the revered Fenway Park. Most importantly to Red Sox fans, they also saw off the "Curse of the Bambino", with the team delivering its first World Series win since 1918 - and the sale of the legendary "Babe" Ruth to the New York Yankees  - under their watch. Still, several vital questions remain, not least about their plans for Liverpool’s future home and the manner in which they intend to pay for their takeover of the club.
 
Nevertheless, if Broughton is to be believed, and the club’s debts will be eliminated by the sale, with no further burden taken on, then there are serious grounds for optimism. Liverpool’s commercial department, choked by the club’s current financial situation, is among the most potent in the sport and a record sponsorship deal with Standard Chartered will make sustainable expansion into Asian and American markets a reality. There may be more disappointment on the field this season, but funds could soon start flowing back manager Roy Hodgson’s way to pay for further player recruitment.
 
Many associated with England’s most famous team will embrace a sense of relief today. That may give way to hope before too long.