Liverpool sold to Red Sox owners
Liverpool’s drawn-out sale to the owners of the Boston Red Sox was completed Friday after a bitter trans-Atlantic court fight over English football’s most successful club with the previous American owners.
The 300 million pound ($476 million) deal with New England Sports Ventures ends the turbulent three-year ownership by Tom Hicks and George Gillett Jr., which saw the Premier League giants saddled with crippling debts and falling into relegation danger this season.
"We are committed first and foremost to winning," said John Henry, the financier who heads NESV. "We have a history of winning, and today we want LFC supporters to know that this approach is what we intend to bring to this great club."
The sale finally went through after Hicks and Gillett withdrew the temporary restraining order blocking the sale they had obtained in a Texas court. Later, they also dropped their claim for $1.6 billion in damages.
"As every Liverpool fan knows, the most nerve-racking way to win a match is by a penalty shootout," said club chairman Martin Broughton, referring to Liverpool’s fifth European Cup triumph against AC Milan in 2005.
The deal came on the day set as the deadline for repayment of the club’s debts to the Royal Bank of Scotland and Wells Fargo, which had risen to around 285 million pounds including penalty fees.
Henry insisted that NESV’s deal wasn’t a leveraged buyout. The 200 million-pound acquisition debt has been eliminated and the cost of servicing the club’s debt has slumped from between 25 and 30 million pounds a year to between 2 and 3 million pounds.
"The most important thing is that NESV have cleared us of all the debts which, frankly, shouldn’t have been on the club in the first place," managing director Christian Purslow said. "All that huge amount of money that our fans spend supporting our team, coming to games and all the other activities is now available for what it should be available for, to invest."
Amid the takeover turmoil, Liverpool is mired in the relegation zone after its worst start to a league season since 1953.
Henry said it was too early to decide on specific plans, but noted the Red Sox are the second-highest spending club in baseball.
Liverpool manager Roy Hodgson expects to have cash to spend in the January transfer window to strengthen the struggling team.
"In future we can invest in players in a different way to what has happened in the last transfer window," Hodgson said. "Then money was in short supply and we weren’t even certain there would be any money to spend or even if the club would be there. The mere fact the debts are wiped off immediately puts us into a different financial position."
Liverpool went to the High Court in London twice this week to win approval for the sale over the objections of Hicks and Gillett, who claimed NSV’s winning bid undervalued the 18-time English champions.
"It’s been pretty stressful but we’ve been confident all the way through that we’d get there," said Broughton, who will stay at Liverpool in a transitional role.
Henry reached out to Liverpool fans in a bid to break with the deeply unpopular Hicks and Gillett, but was short on promises after the previous owners failed to deliver the new stadium they pledged to build.
"We’re not going to have a lot to say," he said. "We are going to do a lot of listening. We have a lot to learn. Our actions will hopefully speak for words."
Henry indicated he won’t attend Sunday’s away match against city rival Everton at Goodison Park – with his first match set to be the home clash with Blackburn on Oct. 24.
"I think it’s better for our first experience with the supporters to be at home," he said. "We are here to win."
NESV was represented in the deal by Inner Circle Sports, a New York-based financial company.
Hicks and Gillett claimed the takeover was "illegal" and an "extraordinary swindle," adding that Royal Bank of Scotland refused to allow them to repay Liverpool’s debts to prevent the sale.
"This was a conspiracy of the British Establishment – Royal Bank of Scotland – our chairman (Broughton) and our highly compensated employees," Hicks told The Associated Press.
RBS was partly nationalized in 2008, with the British government taking an 84 percent stake after it was brought to the brink of collapse by the global economic crisis.
"This outcome not only devalues the club but it also will result in long-term uncertainty for the fans, players and everyone who loves this sport because all legal recourses will be pursued," said Steve Stodghill, one of the Texas attorneys representing Hicks and Gillett. "Mr. Hicks and Mr. Gillett pledged to pay the debt to RBS so that the Club could avoid administration that was threatened by RBS. That offer was rejected.
"It is a tragic development that others will claim as a victory. This means it won’t be resolved the way it should be resolved. My clients worked tirelessly to resolve these issues but RBS would not listen to any reasonable solution and the directors acted selfishly and illegally."
Hicks and Gillett said earlier that, even though they were withdrawing the restraining order, they would pursue a claim for $1.6 billion in damages. However, later in the day their attorney said they were dropping the claim to comply with an English court order.
But they suggested the fight isn’t over, saying, "We believe that once the English court finally has a chance to hear all the facts a very different picture will be painted."
RBS said that any further claims against the bank will be "vigorously opposed."