As much as any diehard LFC fan I desperately want to see the club under new ownership. Immediately. But only new ownership which is as responsible as it is ambitious, and with as much integrity as it is sincerely and significantly well enough resourced to compete in the long term.
History is there to learn from. But LFC’s Club Secretary clearly hasn’t when he claimed this week that we’d never played Trabzonspor before… Excuse me…?
When Hicks and Gillett arrived in L4 we were told that they satisfied all of the above forms of safe-hands-criteria by Moores and Parry. Uh uh. They either lied or they were just hoping. Either way, they did not do (enough) due diligence. And we all know what happened next. The club was the subject of a wretched LBO and is consequently currently financially screwed.
As WELL RED reported Well Red - a Liverpool FC blog: New owners at LIVERPOOL FC? Well just Huang on a minute... in an article entitled “New owners at LIVERPOOL FC? Well just Huang on a minute...†published on Friday “George Benson had it right, hindsight gives us 20/20 vision. And if we'd had that benefit, the throng of Liverpool fans that prevented Tom Hicks from entering Anfield the last time we faced Arsenal would have been present in even bigger numbers when, three and a half years ago, he first ventured into the vicinity of the postal district of L4.â€
Now... we’re led to believe Tom and Jerry will be – mercifully - heading back west again very soon, so alls well that ends well. Well sort of. Cue the possible entry of sparkly new owners who all claim to want to revitalize LFC rather like Sheik Mansour has done for Citeh. Great!
And this week there has been rampant speculation that the cavalry is this time coming from – of all places – China… Which I have to say, initially excited me.
But then I did some digging around. Some due diligence if you like. Because I don’t want to see us once again just blindly embracing bold Snoogy-Doogy claims with blind faith - which if we're honest - we did last time round.
As WELL RED further commented: “After the lies, the politics, the broken promises and our unwelcome crash course in accountancy, not to mention of the suffocating blanket of debt that has accompanied the American's time in charge, it's easy to see why many fans will look at prospective owners and say, 'They'll do'. Some fans are poised to unfurl their China flags and declare that Kenny's from heaven. Well just Huang on a minute.â€
And on that note, let’s get on to Kenny Huang!
Back on 24th April the Daily Mirror broke an Exclusive: “Chinese businessman Kenneth Huang has revealed he is in talks to buy Liverpool – and Rafa Benitez is at the heart of his £500million masterplan†[]Chinese bidder says he wants to keep Rafa Benitez as Liverpool boss if he buys the club - Exclusive - News - MirrorFootball.co.uk
Never happened!
Huang then very recently re-emerged supposedly preparing an offer of £450M - of which £300 would pay off the club’s debts and £150M would go to the players and stadium (would be some stadium). But at least none of the cash would go to Tom and Jerry.
So what of Huang? Well, The Wall Street Journal describes him as “an avid self-promoter†and “sports entrepreneur who runs a youth baseball league in China and is starting the country’s second basketball leagueâ€. []Does CIC Really Want to Own Liverpool? - China Real Time Report - WSJ
We were also told this week – presumably by Huang – that he was apparently working in tandem with three other parties:
(1) Guang Yang, a VP of investment bank Franklin Templeton. He and Huang would apparently operate as co-heads of QSL Sports - the vehicle which would supposedly own Liverpool if the bid was successful.
(2) Mark Ganis, an American who owns a Chicago based sports consulting firm called Sportscorp.
And, cue drum roll…
(3) CIC (China Investment Corporation) China’s sovereign wealth fund which has more than $300 BN in assets.
$300BILLION!!!!
Wow! Cue more than a little excitement...
But then as fast as “wow†came “whoa†with Ganis immediately contradicting all this by suggesting that CIC might merely only become a “passive investor†if the consortium is successful in buying the club.
And word on the street was that that a 20% interest might be the biggest stake that CIC might take.
So why the supposed immediate backpedal? Maybe because (a) it wasn’t true, (b) CIC don’t want to be in the spotlight until any deal is done, or (c) because a CIC connection with LFC doesn’t make much any sense on a few levels (despite some journalists best efforts to fan the flames of hope here).
As the WSJ reported: “Some of what’s been reported in the breathless coverage of the possible deal is simply off the mark. One article [
http://gu.com/p/2tzm8/tw] posits that CIC has been raising money for its Liverpool purchase by selling part of its stake in Morgan Stanley…. equating to £351.4mâ€
Utter nonsense! CIC had $18.6 BN in cash at the end of last year, plus another $20.7BN in ‘cash management products’.
As the WSJ continued, CIC “probably has plenty of cash on hand to fund a relatively small deal like the Liverpool one–and if it needed cash, it could certainly raise it in a less high-profile way than selling down its single most prominent holding.â€
Then there’s the very conservative nature of CIC who have always tended to shy away from controversy and negative publicity, which as (again) the WSJ says: “are not things that foreign buyers of English Premier League teams can expect to avoid. It’s far from clear why CIC would want to involve itself in such a potentially dicey endeavor so it can deploy a measly $558 million.â€
And the chirping started immediately - Henry Winter tweeted on Thursday: “Liverpool cannot be owned by the Chinese Government. Or by any government.â€
But let’s get back to Huang. According to Sporting Intelligence []Kenny Huang denies any ‘formal bid’ for Liverpool; plot thickens amid rival claims « Sporting Intelligence “Huang owns a company in Hong Kong, QSL Sports, which describes itself as a “sports investment companyâ€. Its simple website hasn’t been updated in several months, and isn’t working at the time of writing. Adrian Cheng was Huang’s former partner is this enterprise, a vehicle mainly for development of youth sport.â€
Further ‘The Sport Briefing’’– a subsidiary of the UK’s Press Association – along with several other sources, [
http://www.chinadaily.com.cn/cndy/20...t_9249893.htm] “continue to repeat that Huang owns a 15 per cent stake in the NBA basketball team, the Cleveland Cavaliers. This is simply not true.â€
So what of this supposed deal with the Cavs, because it’s pretty relevant to what Huang is proposing for LFC.
As David Tully wrote on [
http://live4liverpool.com/2010/08/vi...epeat-itself?] “To promote ties between China and the Cavaliers further, it was rumoured last year that QSL were to buy a 15% stake in the NBA team. It was hoped that the strengthening of ties between China an the NBA could improve the profile of the sport in the Asian country, and NBA commissioner David Stern believed Huang’s 15% stake would be a “modest step†into worldwide investment for Basketball and a “logical second step†in promoting the sport in China. Marc Ganis at the time, who was not involved in the deal said that Huang’s attempt to buy a stake in the Cavaliers was “creating a platform in sports and entertainment that will include investments in the United States and business activities in China. If this deal is approved, there will be much more attention paid to the Cavaliers in China.†The motivation for the deal at the time was to keep Le Bron James at the Cavaliers to help improve the player’s individual marketability in China.â€
Sound familiar?
Tully: “The deal, like the Cavaliers attempts to keep James however, fell through and no such stake was acquired by QSL, despite the Associated Press stating the deal had been done. In a statement in April, QSL stated that they had not acquired the 15% stake in the Cavaliers and a month later Huang’s partner Adrian Cheng left the company to be replaced by Guang Yang.â€
There have also been some reports that Huang owns a share of the New York Yankees. But as Sporting Intelligence again reported: “This is untrue too. He does not and never has ever owned any share of the Yankees. One of his companies, the vehicle apparently for some of his Sino-US ventures, is the Aspen Infrastructure Investment Corporation, but the telephone number listed for its New York HQ is not in service.â€
Hardly inspiring stuff is it? So what’s Huang all about then? Why is Broughton taking him seriously?
SI: “From talking to people who have worked with Kenny Huang in America, in sport and business, and who know him via Chinese sport, Sporting Intelligence has been told he is a “nice guyâ€, a “deal makerâ€, and “well-connectedâ€. But there is no hard evidence he has substantial funds of his own, and there is skepticism within China that he has a Chinese sovereign wealth fund behind him. The notion that CIC, for example, is backing him is fanciful as can be established by reading the company’s own stated policies. Profit is essential for CIC; and football does not guarantee profit. [8.30pm update, 4 Aug: Huang is, we understand, telling Liverpool that CIC is the sovereign fund behind him but NO interested party in Liverpool has yet to provide proof of funds.]â€
David Tully also commented on SportsCorps association with another NBA team, the Houston Rockets: “Owned by Les Alexander, a business partner of Huang in investment company Rocket Capital, SportCorps helped the Rockets attain a sponsorship deal with leading Chinese Sports manufacturer Anta Sports Group. Alexander was advised by Mark Ganis†who subsequently said to the New York Times: “I wind up being a bridge for those activities there (in China) for people in the U.S. who want be more involved.â€
Hmmmmmm…..
Then there’s the matter of David Bick’s company Square One Consulting which just last week on August 2nd announced: “Square1 Consulting is acting on behalf of Mr Kenny Huang on all media matters in respect of his interest in Liverpool Football Club.â€
PR Week reported: “Bick is one of the leading names in football finance and has considerable experience of foreign takeovers of England’s top clubs. Square 1 also has past involvement in Liverpool itself, having worked on Dubai International Capital’s (DIC) unsuccessful pursuit of the club in 2008 via the agency’s association with Amanda Staveley of PCP Capital Partners who led DIC’s bid. Towards the end of last season Bick even wrote an article on Square 1’s website titled ‘Liverpool FC must act now or face permanent decline.†[]Rescuing Liverpool « Square1 Consulting
And here is where it gets interesting: Bick is also interviewed in the upcoming documentary about Liverpools plight called “The Potemkin League†which staunchly highlights the dire risks (and perils) of attempting to buy football clubs through risky LBO’s.
YouTube - ?The Potemkin league teaser??
Unfortunately for Huang, no more than a few days later, Bick was GONE. Why? Perhaps he came to the determination that what Huang was simply putting together nothing more than an LBO, and walked. Your guess is as good as mine...
Back to David Tully who concluded in his article: “So what can we conclude from all of these business dealings? Huang and Ganis are most likely intermediaries. For who we don’t know, but let’s hope it doesn’t turn out to be a charade like the deal for the Cleveland Cavaliers.â€
HEAR HEAR! And so please let’s hear it for those two magic little words again please Mr Broughton: Due diligence!
If CIC are really behind this deal with their $350Billion, and long term investment approach, then all well and good. I hope they are!
But if they are not, then who the heck is?
Because at the moment, this sniffs to me like just another potential LBO aimed at picking at Hicks and Gilletts financially crippled carcasses. Not that they don’t deserve to get picked to pieces. But WE don’t. Not again. Please!
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