Red Sox owners pledge to remove Liverpool’s debt if takeover bid for English club succeedsBy Rob Harris, AP
Wednesday, October 6, 2010
Red Sox owners pledge to remove Liverpool’s debt
LONDON — The owners of the Boston Red Sox got approval from Liverpool’s board Wednesday to buy the storied but struggling Premier League club, pledging to wipe out the team’s debts if their bid withstands a court challenge.
Liverpool chairman Martin Broughton said the Red Sox owners have offered to pay $477 million, which is likely to cover the debts and bank charges stemming from the leveraged 2007 takeover by Tom Hicks and George Gillett Jr. but no more.
Despite the opposition of Hicks and Gillett, who own all the shares in Liverpool, Boston’s offer was accepted by the three non-owner board members: Broughton — who was hired by Hicks and Gillett in April to sell the club — plus managing director Christian Purslow and commercial director Ian Ayre.
The Premier League said in a statement it should be ready to approve the takeover by Friday.
Broughton is set to go to court next week to reinforce his authority over the sale and challenge the owners’ attempts to remove Purslow and Ayre from the board. Broughton said he expects the sale to be completed in about a week.
Hicks and Gillett say the Red Sox group’s offer “dramatically undervalues” the 18-time English champions.
The prospective Boston owners, meanwhile, already are planning for the future of a team languishing in the relegation zone.
“NESV wants to create a long-term financially solid foundation for Liverpool FC and is dedicated to ensuring that the club has the resources to build for the future, including the removal of all acquisition debt,” the company said in a statement. “Our objective is to stabilize the club and ultimately return Liverpool FC to its rightful place in English and European football, successfully competing for and winning trophies.”
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 near the bottom of the Premier League’s standings. The team also was recently knocked out of the League Cup by Northampton, a club struggling in the fourth tier of English football.
“NESV wants to help bring back the culture of winning to Liverpool,” the company statement said. “We have a proven track record, shown clearly with the Boston Red Sox. The team has won two World Series championships over the past six years. We will bring the same kind of openness, passion, dedication and professionalism to Liverpool FC.”
Liverpool is one of four Premier League clubs currently under American ownership, along with Manchester United, Aston Villa and Sunderland. Most prominent are Malcolm Glazer and his sons, owners of the Tampa Bay Buccaneers, who took over Manchester United in 2005 in a leveraged buyout worth $1.4 billion.
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 ownership group 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.
Reached late Tuesday night, Lucchino declined comment. Henry has not responded to e-mail messages left by The Associated Press.
Hicks wants to sell for about $951 million, a figure that has forced several investors to end their interest. The owners bought the club for $275 million, taking on $71 million 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.”
Broughton is encouraged by how the Red Sox ownership group revived the baseball club’s fortunes after buying it in 2002 for $660 million.
The Red Sox won the World Series in 2004 and 2007 — their first since 1918. Liverpool won its 18th English championship crown in 1990 and its fifth European Cup in 2005.
One of the priorities at Liverpool will be to replace the 45,000-capacity Anfield with a newer and bigger stadium, but Broughton says the Merseyside club could emulate the Red Sox by refurbishing an existing ground.
“At Fenway they chose not to build a new stadium — they will want to make sure that they do the right thing, (but) we will have a stadium which holds 60-odd thousand,” Broughton said. “Whether that is the new stadium as designed or not, that is not a commitment, but will we have stadium development? Yes.”
Broughton acknowledged the ownership turmoil has affected the squad.
“You can see one or two of the players playing with the world on their shoulder — there will be money for investment in the squad,” Broughton said. “There has been this huge amount of negativity around Liverpool — the fans demonstrating against the owners.”
Those protests have been led by the Spirit of Shankly, a fan group named after legendary Liverpool manager Bill Shankly, who won three league titles, two FA Cups and the UEFA Cup from 1959-1974.
“It’s just another part of the ongoing soap opera at Liverpool,” Shankly spokesman James McKenna said. “We just want a resolution to it sooner rather than later. It leaves fans wondering what’s going to happen next.”
Tags: Boston, England, Europe, London, Manchester, Massachusetts, North America, Ownership Changes, Professional Baseball, Sports Business, United Kingdom, United States, Western Europe