Tuesday, October 26, 2010

The Inner Circle Behind Liverpool's Takeover

No fans would have recognized him.

None would have known to thank him.

But as Philip Hall took his seat in the Anfield Directors' Box for the match against Blackburn, he allowed himself a smile of satisfaction.

As the man who brokered NESV's dramatic takeover of Liverpool, the Senior Partner of American investment bank Inner Circle Sports knows better than most what went in to the club's change of ownership. For months, Hall worked tirelessly, desperately scouring the world for somebody who would buy the club from Tom Hicks and George Gillett. Now, finally, he could reflect on the fruits of his labour.

For NESV chairman Tom Werner and the other new Anfield directors David Ginsberg and Michael Gordon, the match against Blackburn was their first experience of Anfield since the deal was completed 10 days ago, and for Hall it was extra special too.

"It felt like the end of a journey for me," the Harvard MBA graduate says in his soft Manhattan accent.

"Anfield is always a very special place to take in a match. It was good to see familiar faces and most importantly for the club to get three points. Gerry Marsden's rendition of You'll Never Walk Alone in person was particularly moving. Tom and the other attendees from NESV were in awe of the atmosphere. They spent a few minutes with manager Roy Hodgson after the match to congratulate him on the victory and to get his take on how it went."

Back in 2007 it was Inner Circle themselves who had introduced Hicks and Gillett to Liverpool as the men to carry the club forward. Some would suggest that Hall and his colleagues had a responsibility to help bring an end to the controversial regime they had helped put in place in the first place. But, with the threat of a $1.6bn lawsuit hanging over the club and the takeover, Hall is understandably diplomatic and sympathetic towards the former owners.

"George and Tom were well-intentioned and wanted the best for club but a number of events conspired to not allow them to follow through" says Hall.

"The relationship between both themselves and with former Liverpool boss Rafa Benitez was difficult."

Inner Circle are effectively a football finance 'dating service', bringing clubs and potential investors together, not only in the US but increasingly in Europe. Having overseen the sale of Liverpool to Hicks and Gillett, the company then focused on arranging Ellis Short's takeover of Sunderland and began work on finding a new buyer for Sheffield Wednesday. But even though Hall stopped working for Hicks and Gillett in 2008, he maintained key relationships with senior figures at Anfield, constantly looking out for someone with the money to buy the club.

"I kept working talking and working behind the scenes" he commented. "I always hoped this day would come. It's a huge sense of accomplishment. I had a good relationship with NESV and three months ago I started talking to them seriously about the possibility of a deal. Three weeks ago we came to London to agree a purchase with the club's board. A lot of people played key roles, including the team from Shearman & Sterling (the corporate lawyers advising NESV), but then obviously things got delayed."

Hicks and Gillett's opposition to the £300m sale to NESV meant that the purchase Hall had brokered went down to the wire as the drawn-out dispute was dragged through courtrooms in London and Dallas.

"It was very difficult, hearing about all this back in the US" he says.

"I was waking up at 2am to read reports in the media. It was an emotional rollercoaster but in the end it was a great result. This was the culmination of two years hard work, of countless meetings and phone calls. It tugs at you a little bit because I knew how much Liverpool fans wanted this to be done."

Hall, whose interest in European football stems originally from his Leeds-born father, understands the reservations of Liverpool fans who are wary of another American, introduced and advised by the same company that brought about the previous regime, but he insists Henry and his associates can be trusted.

"This is not some fantasy. NESV is a very strong business which underpins their investment. NESV are fiercely competitive, they want to win and understand the frustration of Liverpool's fans. They will do the right thing.

"They won't be a Sheikh Mansour or Roman Abramovich, they'll take a more holistic approach, applying sound business judgement on all aspects of the club, including what to do about a stadium. It's not going to be easy but they're here for the long-haul. They're not interested in a 'quick flip' sale in a year or two. They want to turn this around, right the ship and win. Debt will not be an issue, they do not believe in building brands with leverage."

Hall believes the new owners will give Hodgson time and listen and take a long-term perspective as they seek to usher in a revival at Anfield - but should Liverpool supporters expect an influx of signings in January?

"They should be patient" says Hall.

"The summer is when there may be a surge, rather than the new year. These are well-intentioned individuals but above all they are winners. Look at what they've done at the Boston Red Sox. They are intensely competitive."

With Liverpool, Manchester United, Sunderland and Aston Villa all owned by Americans, and Stanley Kroenke hovering just short of the shareholding level which will force him to make an offer for all other Arsenal shares, the influence of the United States over the Premier League is growing. So does Hall believe the trend will continue?

"The challenge is that only a few of the Premier League clubs have the global brands and international resonance that US investors are looking for.

"However, the game in England is still 10 to 15 years behind the US when it comes to the commercialization of sports so the Premier League remains an intriguing proposition."

According to Hall, in Liverpool NESV saw a similar "unpolished diamond" that the Boston Red Sox represented when they were bought in 2002. Two world titles, a renovated stadium and a reinvigorated business swiftly followed. If the same can be achieved at Anfield, Liverpool supporters might spare a thought for Hall and the 'inner circle' behind John W Henry's arrival.

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