Liverpool board agrees sale to Red Sox group; legal fight looms with current ownersBy Rob Harris, AP
Wednesday, October 6, 2010
Liverpool agrees to sell club to Red Sox owners
LONDON — Liverpool’s board agreed to sell the debt-riddled English Premier League club to the owners of the Boston Red Sox on Wednesday, although legal action may be needed to force the existing American owners out.
Current co-owners Tom Hicks and George Gillett Jr. said Tuesday they would resist the bid from New England Sports Ventures, which owns the Red Sox, and a separate bid from Asia because both “dramatically undervalue” the 18-time English champions.
The Red Sox owners offered to pay about 300 million pounds ($477 million) for a club with debts of 285 million pounds ($453 million) that must be repaid by Oct. 15, a person familiar with the situation said. The person spoke on condition of anonymity because financial details aren’t being discussed publicly.
Despite the opposition of Hicks and Gillett, who own all the shares in Liverpool, Boston’s offer was accepted by the non-owner board members: Liverpool chairman Martin Broughton, who was hired by Hicks and Gillett in April to sell the club; managing director Christian Purslow; and commercial director Ian Ayre.
“I am delighted that we have been able to successfully conclude the sale process which has been thorough and extensive,” Broughton said. “By removing the burden of acquisition debt, this offer allows us to focus on investment in the team.
“I am only disappointed that the owners have tried everything to prevent the deal from happening and that we need to go through legal proceedings in order to complete the sale.”
Broughton said that New England Sports Ventures “best met the criteria we set out originally for a suitable new owner.”
“NESV’s philosophy is all about winning and they have fully demonstrated that (with the) Red Sox,” Broughton said. “We’ve met them in Boston, London and Liverpool over several weeks and I am immensely impressed with what they have achieved and with their vision for Liverpool.”
Before a board meeting Tuesday to discuss the offer — as well as the bid from Asia — the current owners unsuccessfully tried to remove Purslow and Ayre from the board and install one of Hicks’ sons and a financial controller from his company.
Hicks wants to sell for about 600 million pounds, a figure that has forced several investors to end their interest. The owners bought the club for 174 million pounds, taking on 44.8 million pounds of liabilities.
“The owners have invested more than $270 million in cash into the club. And during their tenure, revenues have nearly doubled, investment in players has increased and the club is one of the most profitable in the (Premier League),” Hicks and Gillett said in a statement. “As such, the board has been presented with offers that we believe dramatically undervalue the club.
“To be clear, there is no change in our commitment to finding a buyer for Liverpool Football Club at a fair price that reflects the very significant investment we’ve made. We will, however, resist any attempt to sell the club without due process or agreement by the owners.”
The turmoil comes after Liverpool lost to Blackpool on Sunday, continuing the club’s worst start to a league season since 1953. Liverpool hasn’t won in five matches in all competitions and is currently in the Premier League’s relegation zone. The team was also recently knocked out of the League Cup by Northampton, a club struggling in the fourth tier of English soccer.
The Red Sox ownership signaled its soccer interest last summer by hosting an exhibition match between Celtic and Sporting Lisbon at Boston’s Fenway Park.
The Red Sox ownership group, which bought the MLB team for $660 million in 2002, is headed by financial trader John Henry, with two other principals: Tom Werner, who made his money producing hit shows on U.S. television; and Larry Lucchino, a longtime baseball executive.
While the Red Sox won the World Series in 2004 and 2007 — its first titles since 1918 — this season the team was decimated by injuries, finished third in the AL East and failed to make the playoffs.
One of the priorities at Liverpool will be to replace the crumbling 45,000-capacity Anfield with a newer and bigger stadium.
Fenway Park is the oldest ballpark in the major leagues, having opened in 1912, and has the smallest capacity at 37,000.
But rather than push for a new ballpark, which would be difficult to construct in downtown Boston, ownership has spent millions in renovations and added about 4,000 seats since buying the team.
Tags: Boston, England, Europe, London, Massachusetts, North America, Ownership Changes, Personnel, Professional Baseball, Sports Business, United Kingdom, United States, Western Europe