Liverpool could be forced into bankruptcy protection next week if its debt-ridden owners still oppose the takeover bid from the owners of the Boston Red Sox that is supported by the rest of the football club's board.
Co-owners Tom Hicks and George Gillett Jr. have until Oct. 15 to repay debts of about 285 million pounds ($452 million) or the club could enter financial administration, a form of bankruptcy protection. Another possibility is it being taken over by the Royal Bank of Scotland.
A 300 million pound bid from New England Sports Ventures has been accepted by three members of Liverpool's board, but it is being blocked by the American owners because they say the offer "dramatically undervalues" the club.
The bid is only enough to clear the club's debts and would leave Hicks and Gillett, who took over in 2007, with a loss of about 140 million pounds, Liverpool chairman Martin Broughton told The Associated Press on Wednesday.
Broughton and the other two board members are now issuing legal action against Hicks and Gillet to force the sale through before the deadline.
"They are getting nothing back in return. They are losing that 140 million pounds," Broughton said. "This is not a good deal for the money - the owners lose on the investment. But it's not all bad. If the club goes into administration, which is staring us in the face next week because of the liabilities which we can't meet, the owners owe personal guarantees of 110 million pounds (to the banks).
"The sale route as opposed to administration saves them from those personal guarantees."
The crisis at Anfield escalated when Hicks and Gillett tried to replace managing director Christian Purslow and commercial director Ian Ayre on Liverpool's board on Tuesday with one of Hicks' sons and a vice president from his company.
That attempted coup came just before the three members accepted the bid from the Boston Red Sox at a board meeting.
The Boston investors are pledging to wipe out all Liverpool's debts and revitalize the team, which is languishing in the Premier League relegation zone.
Liverpool was bought for 174 million pounds in 2007, taking on 44.8 million pounds of liabilities. Liverpool's acquisition debt, which relates to loans from the takeover, is about 200 million pounds. The club has since accrued bank charges, penalty fees and debts to other groups that bring the combined liabilities to around the 300 million pounds offered by New England Sports Ventures.
"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."
That will require more money to redevelop the 45,000-capacity Anfield, or possibly fund a new stadium, and also recruit new players.
"This isn't 300 million pounds to buy a club, end of story," Broughton said. "We're looking at somebody who will buy the club, invest in the players and invest in stadium development. You are talking about 6 or 700 million (pounds) - that's big money."
Broughton said the Merseyside club could emulate the Red Sox by refurbishing an existing ground rather than replacing Anfield with a new stadium on the adjacent Stanley Park, as Hicks and Gillett had planned.
Broughton is encouraged by how the Red Sox ownership group revived the baseball club's fortunes after taking over in 2002 for $660 million.
The Red Sox won the World Series in 2004 - their first since 1918 - and 2007. Liverpool won its 18th and last English league title in 1990 and its fifth European Cup in 2005.
"The Red Sox represent almost a parallel case of an iconic brand that's seen better days, capable of resuscitation," Broughton said. "It's very important to understand they are not a leveraged outfit. There is no leverage in the top company.
"They have about 17 investors. It's a whole broad group of investors and it's very professionally run organization."
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.
Broughton expects the club will still have some debt, but at a manageable level.
"You only have to look at the New England balance sheet to see that they can afford to go into debt," he said. "It will be a sensible level of mixture of debt to equity at the holding company level."
NESV said it wants to "help bring back the culture of winning to Liverpool."
"We have a proven track record, shown clearly with the Boston Red Sox," a statement said. "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.
"We are hopeful with regard to the pending legal and English Premier League procedures now under way."
The Premier League said it should be ready to approve the takeover by Friday.
The fresh 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 football.
"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," said Broughton, who discussed the situation with manager Roy Hodgson on Wednesday.
"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."
