from soccernet: http://soccernet.espn.go.com/news/story?id=781604&sec=england&cc=4716
Liverpool's asking price for a takeover may be as much as an inflated £800 million, according to analysis from a leading City expert in football finance.
The replacement or refurbishment of Anfield is a key issue in any takeover.
And David Bick, Chairman of Square 1 Consulting, argues that Liverpool are in urgent need of a "rescue" package rather than a takeover, as the club need to move from their crumbling Anfield to a new stadium, and are in danger of losing star players such as Fernando Torres and Steven Gerrard.
Bick is an advisor to Keith Harris, who has been behind two abortive takeover bids for the stricken club in the recent past, and says City sources have informed him that even the reduced price the two American owners Tom Hicks and George Gillett might accept, £500 million, is far too high, saying: "Rumours abound of a price being asked from £500 million up to an incredible £800 million."
While Harris is a leading light in the 'Red Knights' group heavily linked with trying to buy out the Glazers at Manchester United, Bick has focused on their North-West rivals and warns of an impending £10 million fee to be imposed by the Royal Bank of Scotland to extend bank-loan facilities for a further six months.
And Bick suggests that, while the club is due to publish and publicise a £35 million profit, there are huge similarities with the recent Manchester United bond issue launched after a similar posting of a putative financial gain.
As part of their bond prospectus, United were able to claim a £48.2 million profit, having sold Cristiano Ronaldo for £80 million while Liverpool sold Xabi Alonso for £35 million to Real Madrid last summer - almost the exact amount Bick believes will be trumpeted as this year's profit.
In a damning indictment of financial affairs and long-standing neglect at Liverpool, Bick writes in an open letter: "Liverpool has potentially reached its most important historic point. The club has now gone 20 years without winning the English League title. It has never won the Premier League. It was drummed out earlier than expected from this year's Champions League and now, as one of the world's biggest clubs, faces the ignominy and reality of failing to qualify for next season's premier European competition.
"To my mind, the people running the club over the last two decades must bear the bulk of the responsibility and the brunt of the criticism. On a recent visit to Anfield to watch my team, West Ham, play like a pub team with a Force 10 hangover, one had only to look at the stadium to see the years of dreadful neglect at first hand. Unbelievably, there are still pillars holding up one roof!
"Whether it comes down to incompetence or thoughtless arrogance at Liverpool, we have seen the club left behind by the other great clubs like Arsenal, Manchester United, Manchester City, Chelsea and Spurs. They have rebuilt their stadia to high standards and, largely speaking, to capacities that accommodate their substantial fan bases. Yet all Liverpool fans have heard is talk and a string of broken promises.
"The other clubs have built their revenue streams or attracted owners that have given them the wherewithal to compete effectively at the top of the modern game. It seems to me that the Liverpool fans are being treated to a 'product' that is rooted in the 1970s. Sadly, in very recent times, Liverpool has also been owned by people who have said much and delivered little of the stated vision. Replacing them is a very urgent imperative.
"Liverpool claimed in a recent statement that it has 'overseen a significant improvement in the financial performance of the club since 2007'. Well, that's difficult to assess. The management has not published accounts for Kop Football (Holdings) Limited - the main trading company - since the filing for the year to 31 July 2008 and, in that year, the business showed net losses of over £42 million and net interest payments on debt of £35 million not covered at all (let alone adequately) by operating profit - pre-player amortisation and trading - of £25 million.
"Debt remains stubbornly near a reported £240 million, so what profits are produced do not leave much, if anything, for the manager to work with, even if we believe rumours of a £35 million profit for the year that will end this 31 July. In short, Liverpool's financial structure can't work in my opinion and, since the sale of the club in 2007, it was never going to.
"If the manager cannot operate competitively in the transfer market, he has no chance of competing regularly in the top four. We have now seen the first concrete sign of this with the failure to even stay in the top four. Manchester United, a club manfully trying to cope with a similarly onerous financial structure will also, I believe, start to experience similar problems, although their state of decline is nowhere near as advanced as Liverpool's.
"It seems axiomatic to me that Liverpool needs new, responsible owners and new top-flight, football-experienced executive management. It will not be beyond the wit of man, the new well regarded chairman included, to find such a new owner. But first of all, Liverpool needs to stop spinning silly numbers. Rumours abound of a price being asked from £500 million up to an incredible £800 million, the lower of which is, in my view, way over the top for a club in its current condition and by any sensible comparison with Arsenal or Manchester United.
Bick pinpoints the burning issue of a new stadium, a project that has stalled during over three years of American ownership, and says that this can only make any takeover more complicated.
"Financially at least, Liverpool must have a new stadium if it is to have any hope of restoring past glories," he writes. "But the finance for that, and any subsequent financial benefit to owners, must accrue to those who put up the money. In any case, this will not be a conventional acquisition of a football asset - it is more likely now to be a rescue.
"The new owners will need to be people of high calibre. They will need to have access to very large sums of money to build the new stadium, revitalise the management and allow for a well thought-through strengthening of the playing squad."
On the current and much-debated issue of Rafael Benitez's future as Liverpool manager, Bick expresses the pressing need for stability to be restored or else the club could face a doomsday scenario. "Right now, Liverpool is at risk of losing its manager and some of its best players, demoralised by a recent Europa Cup semi-final defeat and a poor season. While no-one is irreplaceable, such an exodus will leave a new owner with an even more difficult task. Therefore, the new chairman of Liverpool needs to act with some swiftness.
"Once decline becomes precipitous, even money may not prevent the decline spiralling into permanency."
Bick's open letter, headed 'Rescuing Liverpool', seen by Soccernet, may well cause shock waves among the Premier League community and not just at Anfield.
Liverpool's asking price for a takeover may be as much as an inflated £800 million, according to analysis from a leading City expert in football finance.
The replacement or refurbishment of Anfield is a key issue in any takeover.
And David Bick, Chairman of Square 1 Consulting, argues that Liverpool are in urgent need of a "rescue" package rather than a takeover, as the club need to move from their crumbling Anfield to a new stadium, and are in danger of losing star players such as Fernando Torres and Steven Gerrard.
Bick is an advisor to Keith Harris, who has been behind two abortive takeover bids for the stricken club in the recent past, and says City sources have informed him that even the reduced price the two American owners Tom Hicks and George Gillett might accept, £500 million, is far too high, saying: "Rumours abound of a price being asked from £500 million up to an incredible £800 million."
While Harris is a leading light in the 'Red Knights' group heavily linked with trying to buy out the Glazers at Manchester United, Bick has focused on their North-West rivals and warns of an impending £10 million fee to be imposed by the Royal Bank of Scotland to extend bank-loan facilities for a further six months.
And Bick suggests that, while the club is due to publish and publicise a £35 million profit, there are huge similarities with the recent Manchester United bond issue launched after a similar posting of a putative financial gain.
As part of their bond prospectus, United were able to claim a £48.2 million profit, having sold Cristiano Ronaldo for £80 million while Liverpool sold Xabi Alonso for £35 million to Real Madrid last summer - almost the exact amount Bick believes will be trumpeted as this year's profit.
In a damning indictment of financial affairs and long-standing neglect at Liverpool, Bick writes in an open letter: "Liverpool has potentially reached its most important historic point. The club has now gone 20 years without winning the English League title. It has never won the Premier League. It was drummed out earlier than expected from this year's Champions League and now, as one of the world's biggest clubs, faces the ignominy and reality of failing to qualify for next season's premier European competition.
"To my mind, the people running the club over the last two decades must bear the bulk of the responsibility and the brunt of the criticism. On a recent visit to Anfield to watch my team, West Ham, play like a pub team with a Force 10 hangover, one had only to look at the stadium to see the years of dreadful neglect at first hand. Unbelievably, there are still pillars holding up one roof!
"Whether it comes down to incompetence or thoughtless arrogance at Liverpool, we have seen the club left behind by the other great clubs like Arsenal, Manchester United, Manchester City, Chelsea and Spurs. They have rebuilt their stadia to high standards and, largely speaking, to capacities that accommodate their substantial fan bases. Yet all Liverpool fans have heard is talk and a string of broken promises.
"The other clubs have built their revenue streams or attracted owners that have given them the wherewithal to compete effectively at the top of the modern game. It seems to me that the Liverpool fans are being treated to a 'product' that is rooted in the 1970s. Sadly, in very recent times, Liverpool has also been owned by people who have said much and delivered little of the stated vision. Replacing them is a very urgent imperative.
"Liverpool claimed in a recent statement that it has 'overseen a significant improvement in the financial performance of the club since 2007'. Well, that's difficult to assess. The management has not published accounts for Kop Football (Holdings) Limited - the main trading company - since the filing for the year to 31 July 2008 and, in that year, the business showed net losses of over £42 million and net interest payments on debt of £35 million not covered at all (let alone adequately) by operating profit - pre-player amortisation and trading - of £25 million.
"Debt remains stubbornly near a reported £240 million, so what profits are produced do not leave much, if anything, for the manager to work with, even if we believe rumours of a £35 million profit for the year that will end this 31 July. In short, Liverpool's financial structure can't work in my opinion and, since the sale of the club in 2007, it was never going to.
"If the manager cannot operate competitively in the transfer market, he has no chance of competing regularly in the top four. We have now seen the first concrete sign of this with the failure to even stay in the top four. Manchester United, a club manfully trying to cope with a similarly onerous financial structure will also, I believe, start to experience similar problems, although their state of decline is nowhere near as advanced as Liverpool's.
"It seems axiomatic to me that Liverpool needs new, responsible owners and new top-flight, football-experienced executive management. It will not be beyond the wit of man, the new well regarded chairman included, to find such a new owner. But first of all, Liverpool needs to stop spinning silly numbers. Rumours abound of a price being asked from £500 million up to an incredible £800 million, the lower of which is, in my view, way over the top for a club in its current condition and by any sensible comparison with Arsenal or Manchester United.
Bick pinpoints the burning issue of a new stadium, a project that has stalled during over three years of American ownership, and says that this can only make any takeover more complicated.
"Financially at least, Liverpool must have a new stadium if it is to have any hope of restoring past glories," he writes. "But the finance for that, and any subsequent financial benefit to owners, must accrue to those who put up the money. In any case, this will not be a conventional acquisition of a football asset - it is more likely now to be a rescue.
"The new owners will need to be people of high calibre. They will need to have access to very large sums of money to build the new stadium, revitalise the management and allow for a well thought-through strengthening of the playing squad."
On the current and much-debated issue of Rafael Benitez's future as Liverpool manager, Bick expresses the pressing need for stability to be restored or else the club could face a doomsday scenario. "Right now, Liverpool is at risk of losing its manager and some of its best players, demoralised by a recent Europa Cup semi-final defeat and a poor season. While no-one is irreplaceable, such an exodus will leave a new owner with an even more difficult task. Therefore, the new chairman of Liverpool needs to act with some swiftness.
"Once decline becomes precipitous, even money may not prevent the decline spiralling into permanency."
Bick's open letter, headed 'Rescuing Liverpool', seen by Soccernet, may well cause shock waves among the Premier League community and not just at Anfield.
