Sunday, April 11, 2010

Liverpool Face Crucial Phase

Liverpool face a crucial phase in their history on and off the pitch. Qualifying for the Champions League next season is a key target, not just for the fans, but for financial reasons. Without the revenue the Champions League provides, servicing the interest on the club's debt payment may become difficult.

The American owners, Tom Hicks and George Gillett, have been in the country together, of itself quite unusual, and it is evident that important discussions have been taking place. One idea that has been floated is the appointment of a high-profile independent chairman, whether or not anyone takes a minority stake in the club.

The £237m debt needs to be re-financed in the summer. The principal lender, the Royal Bank of Scotland, would like to see the outstanding amount paid down by £100m. But the Bank seems to be taking a conciliatory stance. The option of them finding their own purchaser for the club does not seem to be being considered at the moment.

The offer by the American-based Rhone Group of taking a 40% stake is no longer available. Some sources close to the club think that this is a negotiating tactic and that discussions are just at their first stage, but most analysts think this is unlikely. There are five or six possible purchasers, but the real sticking point is the price. Gillett and Hicks think that it should factor in the boost to the club's revenues and values that would result from the construction of the new Anfield. But as the new owners would have to find the funds to build it, that sounds a bit like being asked to pay twice.

Radio 5 had a live (and lively) discussion from Liverpool involving supporters from the red and blue parts of the city at lunchtime today. The conventional assumption is that very few supporters favour a shared stadium and that those who do are Blues. However, when a speaker raised this possibility he got a loud round of applause.

One speaker said football is about emotion not economics. That is how it is experienced by the fans. But the reality of the situation is that economics and money matters and not least on Merseyside.

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