For what it’s worth, here’s my “take” on the recent takeover of ownership of my favoured football team.
To me it looks pretty straight forward. Especially after watching Mr. Hick’s “interview” with Sky last night. All they (the previous owners) are guilty of is exhibiting poor business practice. Put simply, promising the earth and not being able to do their sums financially. I’m quite sure they didn’t buy the club because of their love for it, it was a business venture that went horribly wrong.
Sure, they’ve put money into it, maybe even some of their own, but the bulk was using borrowed money. If you’ve got money, for financial reasons, it’s often better to borrow against that money for the new venture, but these guys never had their own money to fall back on. In taking loans to purchase the club without their own, they took a punt. That punt backfired, badly.
It’s the same as me taking out a mortgage for a house priced at £250k (since that’s what I have to pay for it now), only to find the house market crashes and in a years’ time, and it’s then only worth £200k. If I have to sell, I’ll lose money. Simple. By the same arguement, I could “invest” a further £50k of my own money converting a loft or adding an conservatory. The house now stands me £300k, but if all I can get for it when I sell it is still £250k, it’s me who’s lost the fifty grand.
In stating they’ll sue over the “being swindled by an epic swindle” is simply preposterous. Damn it, LFC have been looking for a buyer for nearly a year. There were only two bids, each for around £300m, in the absence of any greater offer, how the hell can that be classed as selling on the cheap?
As per the previous arguements, if the building society regard me as a risk, and withdraw my mortage, or I default on payment, they’ll want to recover what ever they can, but they’ll only get what the house will fetch on the open market. Clearly RBS regarded Hicks and Gillett as a massive risk, and wanted some cash back before the whole thing imploded.
I watched the first interviews that Hicks and Gillett gave when they purchased the club, waving wads of cash around and promising all sorts. That all looks a little silly now. The new owner’s first interview was far more measured, no empty promises as such, just a committment that there’s no real debt on the club now, and that everyone is going to work very hard at this great challenge to get the club back where it belongs.
No, I’m not suggesting all at Liverpool is now well, and yes, I still remain sceptical, but it appears to me we may have a least decided to travel down the right road this time. Time will tell.
M.