25 January 2008

The deal is “done”

Naturally, a little more than 12 hours after I post something about my confusion over refinancing et al, they announce it’s completed. Unsurprisingly, Hicks has also released the new stadium designs at the same time. Yes, we’re all just blinded by shiny objects and forget what was bothering us before we saw them.

So what do Hicks and Gillett have to do besides actually build the stadium before I’ll have any faith at all in them (Gillett has been very noticeable in his absence from today’s events by the way)?

1) Sign Mascherano.
I’ve seen the talk about how he’ll be a “gift” to the Liverpool fans (how delightfully patronizing!). Just get it done. Now.

1a) Sign Benitez to a new deal.
Yeah, it probably wouldn’t be worth the paper it was written on and I know he’s still got a couple of years left on his current deal, but in signing it there would be a sign that Benitez feels he could continue in his position.

2) Either fire Rick Parry or tie Foster Gillett to his desk.
Preferably both if Gillett’s still insistent on having his son Tommy Boy stick it out, but here’s hoping Foster’s not happy on the Mersey. There cannot be a breakdown in communication between owners and manager again, and I blame Parry for much of it.

3) Use money from the refinancing to spend on players in the summer.
Again, I’m awful at finance, but according to Barrett (who also included the Masch “news”) £350m breaks down as follows: “£105m will be saddled on Liverpool, with £185m secured on Hicks and Gillett's holding company Kop Investment.” I don’t know where the remaining £60m is supposed to go (absorb the previous debt?), but I assume the £185m on Kop Investment is for the purchase of the club last year, so in a way they can say they bought the club without putting the debt on the club (which is exactly what Glazer did). Which would mean the £105m is for starting the stadium, operating costs, and more players. Please buy more players; this season’s proved the need for it.

4) Be fiscally smart enough to keep Liverpool from doing a Leeds.
Liverpool could be on very thin ice if they fail to make the Champions League or similarly struggle in the league. Revenue to keep up interest payments will be crucial. This is the price of doing business like this: failure could mean serious trouble. Hicks and Gillett have to be smart businessmen, or at least have some around, while providing and allowing for success on the field. Which means they’ll have to stay the hell out of on-field matters and give full reins to the manager.

5) Remember Shankly.
The great man would be spinning in his grave. “At a football club, there's a holy trinity - the players, the manager and the supporters. Directors don't come into it. They are only there to sign the cheques.” Remember it. Put it on those office motivational posters and hang them around Melwood. Tattoo it on the faces of both Hicks and Gillett. Do not break this rule ever, EVER, again.

I am still utterly furious at the owners, for the fiasco in the media and the lies. I will never forgive Hicks for the Klinsmann news hitting the papers.

But I also remember Arsenal taking out multiple loans and refinancing them at least twice more during the building of the Emirates. And while United under Glazer as a comparison doesn’t warm my heart in the slightest, their success has proven that if the business is run right and coupled with success on the field, a borrowed takeover and debt repayments won’t sink the club. There are a lot of ifs, but at least there’s some precedence for this type of refinancing/building plan working.

It’s still a sad time for the club, and by no means are Liverpool and the fans out of the woods, but at least there’s the beginning of a possible light at the end of the tunnel.


Ace Cowboy said...

Well said, Nate. Well said. I'll just respond to #1 -- if they don't sign Mascherano, they're dead.

Mike Georger said...

would anyone be upset if parry got fired? he just seems to be a bumbling idiot

"With this weekend's FA Cup clash with Havant and Waterlooville not being screened on live TV and unlikely to be the main focus of national radio, make sure you tune in to listen to full match commentary on Liverpoolfc.tv."

laaaame, guess that means there wont even be anything on sopcast. guess ill have to follow soccernet's KILLER 'live' coverage where every goal is 'impressive'

Jeff said...

On point 3 - the press release on the club site is a bit different than the Echo. It also states 105 on the club for stadium start-up and working capital. But it puts the remaining 245 on Kop. I believe they bought shares for 175 and assumed 45 in debt, so thats 220. The other 25 must be interest, initial stadium expenditures and working capital.......or Fernando Torres.

Love your blog Nate.


nate said...

Jeff, I think you may be right in saying that £25m accounts for part of Torres fee (and the rest of the summer dealing), as well as (or solely) interest and bridging loans.

I'd be very surprised if initial stadium start-up or working capital was placed on the holding company. Seems like Hicks, the lovely gent he is, would put that money on the club.

iskoppa said...

So no one is showing the game tomorrow live...........!says it all really, the oldest football cup game in the world and we wonder whats becoming of the game we love & cherish! sounds a bit like the complete and utter twaddle that H&g put out through there "holding" Ltd company (Kop Football) now there's audacity for you! the name alone there using does not sit well with me at all! what parallel universe do thay thnk thay live in? especially Hicks! gillett being the silent("silent" being the optimum word here!) partner is doing a very good impression of being a blind and deaf ostrich with his head stuck up where the sun don't shine!! to say the least thay have queer'ed some ones pitch! perhaps thay both think were all giant mushrooms kept in the dark and fed on °°°°°°°°!! you do the maths. LFCFL-FTY-SYOTOS