Thursday, 7 May 2009
If Liverpool Lose On Saturday They May Take a 10 Point Deduction!
It's kind of ironic that this story about BG's financial woes comes out when we face into the biggest game in the history of the club. It's true that a win this Saturday would mean we are odds on for Europe but that's not why. Its true that Rob Green is closing in on the best season by a West Ham keeper in the the last 10 years but that's not it either. In fact it really has nothing to do with us apart from how this game will go down in history.
If we beat Liverpool and ManU win then their title push is over. Now when you look at this in the context of what is going on behind the scenes at Liverpool then you realise why this is more important than other game in the long history of the two clubs.
Liverpool are currently over £350M in debt. That debt was due to be refinanced in January of this year but principle bankers RBS and Wachovia refused to take on the loan for another term. This was partly due to the fact that the club's owners Hicks and Gillett withdrew the assets that had been used to secure the initial loan to buy the Merseysiders. I would point out that this was more likely due to more pressing concerns within their business empire.
There were some stories doing the rounds in January that Keane was sold as it was the only way the club could raise the money to pay the balance on the Torres transfer. These, like all stories that paint the top 4 in a bad light, quickly disappeared.
Some things that were not so easy to hush up are the stories from the States that Hicks recently defaulted on a £10M payment on the loan he took out to buy the Texas Rangers and the Dallas Stars. He has claimed that it was a negotiating tactic with his creditors but it's not one I would recommend you try with your mortgage advisor. It has also recently come out that both Hicks and Gillet are both attempting to sell other assets in the US and some are saying that it is to raise some capital to help refinance the club. Hicks is selling a rodeo he owns in Mesquite Texas to a group of investors headed by Mike McCall. McCall told the Dallas News that the figure was considerably less than the $10M Hicks paid for the rodeo. This seems like a drop in the bucked when compared to LFCs debts. More likely it is being sold to help clear the arrears with his American lenders of the loan for his baseball and ice hockey teams.
When he and Gillet asked for an extension to find new investors or backers for the club they were top of the table, challenging in Europe and in the hunt for the FA cup. With all of these potentially lucrative competitions still a possibility they still couldn't find any new money.
Now with Europe gone, the Premiership hanging by a thread and their owners in the middle of some serious financial issues, a loss to us on Saturday could change the fate of Liverpool Football Club for ever. Any prospective buyer, who refused to meet the half a billion pound asking price when things looked a lot more promising, must now be thinking they can force the owners to sell the club on the cheap. The problem with this is that even if they get the club for a knockdown price they still have to shoulder the £350M debt.
However, if the June deadline to refinance passes without new investment and the club is put into administration, it would cost a good deal less to buy the club. Given the current squad of players at the club a 10 point penalty would not spell disaster for Liverpool. There is no chance of them being relegated and even with a ten point penalty, they could still make a Champions League spot. This may seem cynical but if the new buyers were my clients this is exactly what I would tell them to do.
One thing that is clear is that Liverpool can not continue to meet their operating costs and service the debt their owners have saddled them with.
Submitted by Celtic Hammer.
(The Blog Administrator has accepted this submission in good faith and cannot testify to the veracity of the content.)
Posted by Hammersfan at 07:24