Re: LFC Sold to NESV (New England Sports Ventures)
Broughton keeps 'Plan B' up sleeve to try to ensure Anfield sale goes ahead
By Nick Harris
Monday, 11 October 2010
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Liverpool's chairman Martin Broughton has an as yet undisclosed "Plan B" to ensure that the club's sale to New England Sports Ventures (NESV) goes through without Liverpool going into administration, and that is one reason for confidence that the club will avoid a nine-point penalty, a source close to the situation has told The Independent.
The development comes after Liverpool's managing director, Christian Purslow, said he was "not even contemplating administration and nobody should be" in an interview on Radio 5 Live yesterday. Purslow said he was "completely focused on the sale" to NESV, and even outlined how the new potential owners would consider a supporters' stake in the club, and how they remain open to building a new stadium.
Broughton agreed a £300m sale deal last week with NESV, which is headed by John W Henry and which owns the Boston Red Sox, only for the sale's legitimacy to be questioned by the club's incumbent owners, Tom Hicks and George Gillett. Broughton argues that he is within his rights to sell Liverpool under conditions ultimately agreed by Hicks and Gillett, who counter that Broughton is wrong. A High Court hearing this week, probably as early as tomorrow, will decide which party is right.
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If Broughton's legal advice proves correct, the sale to NESV will go through quickly, pending what would be a swiftly handled appeal, and Hicks and Gillett will be left with losses of around £144m from their time at Anfield. If, however, Broughton fails in court, it has been suggested that administration is imminent for Liverpool, and that they would have nine points deducted by the Premier League. Briefings over the weekend from the NESV camp also suggested it would walk away from Liverpool if the club was hit with a nine-point penalty.
But in all likelihood, the club won't get anywhere close to administration. One reason is that Broughton has what are being described as "fallback" options ("a Plan B and Plan C", says a source), which he believes can force through a sale to NESV without administration. The details of these are not known but would involve convoluted legal mechanisms, with Royal Bank of Scotland probably extending its nominal 15 October deadline while they were being played out. These would only come into play if Broughton loses.
In any case, given that RBS would ultimately trigger administration, and that there is no logical benefit to RBS of Liverpool going into administration, it is hard to see that Liverpool will end up there.
Why? Because, with Liverpool in administration, RBS would no longer be guaranteed to get all its money back; it would lose control of the situation. Theoretically, it could end up with 20p in the pound or similar.
Also, the bank now knows administration will trigger a points penalty, and that a penalty will increase the chances of the club being relegated, and therefore slash the club's value, decreasing the chance of RBS getting its money back via a post-administration sale.
NESV's briefings insist a points penalty would result in the company walking away, although it is unclear whether this stance is a genuine one. A nine-point penalty would make Liverpool less attractive, but on the other hand it would drive the price down, setting up even more of a bargain for a potential buyer.
Purslow reiterated that he is not contemplating administration – he has not even discussed it as a possibility with NESV – and believes NESV's "winning mentality" will be good for the club.
"They're deadly serious about wanting to succeed," he said, adding NESV were "really serious about the importance of engaging with their fans... So I've asked them to consider a scheme at our club that will give our fans a real sense of ownership, a real sense of inclusion, the kind of voice, if you like, that frankly they deserve. And NESV have told us they'll look at this very seriously if they complete [the deal]."
Purslow added that Hicks and Gillett now have an "opportunity" to stop opposing the NESV deal. "That might enable them to leave with some dignity and some peace rather than precipitating a messy dispute," he said.
A quiet week ahead is not being anticipated.
