No new stadium. A huge debt. Despite their promises, Hicks and Gillett have 'done a Glazers'Tom Hicks and George Gillett claimed they were different to Manchester United's owners, but they have betrayed their promises to Liverpool's fans
When contemplating the hideous financial figures released yesterday by Liverpool Football Club and the owners' holding company, Kop Football, memories drift instinctively back to the promises Tom Hicks and George Gillett made when they swept into the club triumphantly two years ago. Then, it was all smiles, scarves, and warm words. The pair gushed about Liverpool's marvellous heritage; the Kop, which, clearly, they had been carefully briefed to namecheck, and out there on the Anfield pitch they did pretty well to restrain themselves from calling the great English football club a franchise.
Nothing was straightforwardly said about the blatant fact that the pair were financing their £185m takeover with borrowed money, or that the club itself would then be made to pay off those loans. The pair did, however, tell fans they were not going to "do a Glazers". Yet as these accounts now confirm, that is exactly what they did.
The Glazer family bought Manchester United in 2005 in the teeth of bitter opposition from fans who understood that their club would be laden with the debts the new owners had borrowed to take it over. At Liverpool, the fans, desperate for success and change, largely accepted the patter and the assurances that the pair were different from the Americans who bought United, and Hicks and Gillett were welcomed into the boss seats at Anfield.
It is vital to remember why Liverpool was for sale in the first place. It was done solely so that the club could build a new stadium of a size to compete with Manchester United, who have 76,000 paying fans at Old Trafford, Arsenal, who make packets at the 60,000-seat Emirates Stadium, and Chelsea, who have Roman Abramovich's wallet. Liverpool's chairman, David Moores, and chief executive, Rick Parry, believed they could not borrow the necessary money to build a new stadium without a rich backer standing behind the club.
Moores personally made £90m from selling to Hicks and Gillett the majority shareholding he bought for very much less, back in the days when the Kop was a terrace and young people from the local area could afford to stand on it. Around Anfield, an economically blighted neighbourhood marked by rows of boarded up streets, regeneration plans are based around the proposed new stadium. Yet there is no sight nor sound of the money to build it, and that is the deepest betrayal of the tenure of these two owners.
The accounts, in some ways, confirmed what we already knew. Hicks and Gillett did "do a Glazers"; they have taken out a £350m loan to cover their initial takeover, fund player signings and running costs, and by January this year had spent £313m of it. The club itself, which enjoyed a bumper year in 2007-08, had to provide £36.5m to pay the interest on that. With so much money already borrowed, nobody believes another £400m will be available from banks to fund the new Anfield.
Despite what appears a stark warning from the auditors, KPMG, of "material uncertainty" casting "significant doubt" on Liverpool's ability to stay in business, the prospects are not in reality that dire. Hicks is confident the Royal Bank of Scotland will simply extend the £350m loan when it falls for renewal next month, and in the current climate a customer able to pay £36.5m in interest a year looks good business for any bank.
Insiders point out that the club did invest in players during the year to July 2008 covered by the accounts, notably buying Albert Riera, Andrea Dossena and £20m Robbie Keane, and Liverpool finished second in the Premier League last season which will make them significantly more money. Hicks and Gillett provided £58m funding to the club in 2007-08, and they are committed to providing Rafael BenÃtez with £20m to spend this summer, whether from the club's increased income, further borrowing, or more of their own funds.
So Liverpool are not facing imminent collapse, but they are in £313m debt, still at Anfield, and nowhere near where they are supposed to be, two years after Hicks and Gillett walked on to the Anfield pitch, with red scarves round their necks, and painted a rosy red picture of the benefactors they would be.
