George Gillett and Tom Hicks £470m takeover of Liverpool saved the Merseyside club from sure embarrassment when Dubai International Capital (DIC) pulled out after Liverpool management dragged their feet over their takeover bid. Gillett and Hicks offer was sweeter by £20m and it put £8m more into Liverpool chairman David Moores pocket.
Gillett's previous buyout bid collapsed when Rick Parry, Liverpool's CEO and David Moores all but sealed the deal with DIC in December last year. He was bolstered by teaming up with Tom Hicks in their new offer. Gillett and Hicks experience with sports teams was a big factor in convincing Liverpool. Gillett owns the Montreal Canadiens, NHL's premier franchise and Tom Hicks is the owner of rival ice hockey team, Dallas Stars and the MLB's Texas Rangers. Gillett and Hicks will split the £470m takeover on a 50-50 basis with £215m of that earmarked for a new stadium.
From all accounts Gillett is a low key businessman who has not imposed himself on the Montreal Canadiens, a hallowed team much beloved by the Canadian fans. He respects the traditions of his club whose success is synonymous with Canada's status as an ice hockey power. In his ownership tenure he has brought in new management and acquired new talent that has made the Canadiens a better team. Gillett's unobtrusive style will probably sit well with Liverpool and its fans who are equally passionate about their club's quintessential English character. Like that of Randy Lerner, owner of Aston Villa and the chairman of the US investment company MBNA, whose buyout of Villa was met by universal apporoval.
His partner, Tom Hicks is a totally different kettle of fish. Hicks is a master of leveraged buyouts and a founding partner at the legendary firm of Hicks, Muse, Tate, and Furst. One his biggest leveraged acquisitions resulted in the 1995 $2.5 billion sale of Dr Pepper/Seven Up. In 1985, he and then partner Robert Haas bought a bottling plant for $88 million and then parlayed that into subsequent successful investments in Dr Pepper/ Seven Up eventually buying out the entire company. Hicks continues to make news with his frenetic high powered acquisitions in the US and more recently in developing markets.
This is where it gets murky. Hicks is also an old buddy of President George W. Bush while he was governor of Texas and contributed thousands of dollars to Bush's gubernatorial campaign. In 1998 he bought the Texas Rangers for $250 million from a group headed by Bush, the principal owner of the Rangers and the then governor of Texas. His buyout of the Rangers made Bush a millionaire many times over. He also contributed $200,000 to the 2000 and 2004 Bush presidential campaign making him a Bush Pioneer (a rarified group of Bush campaign contributors who raise $100,000 or more).
Hicks has benefited from being a Bush loyalist and campaign contributor. He was appointed to head the University of Texas Investment Management Company (UTIMCO) in 1996 following Bush election as governor and promptly diverted public funds of the university into private equity. UTIMCO's board consisted of Bush Pioneers and Yale University connections. UTIMCO operated without any disclosure and public scrutiny until the Texas Legistlature intervened. By then it was too late, UTIMCO had lost almost $1 billion in failed investments in Enron and WorldCom stock. Investigations revealed a pattern of cronyism with substantial investments going to a clubby group of companies run by GOP donors and patrons with close ties to Bush and Hicks, including the Carlyle Group. In 1999, Hicks was forced to resign after the Houston Chronicle exposed these insider dealings. Hicks and brother Steven also founded AMFM, a communication company that ran radio stations before being bought out in 1999 by Clear Channel which now virtually monopolizes radio with 1200 radio stations all over the USA. Hicks was made the vice-chairman of Clear Channel. In an all too familiar pattern of cronyism, Lowry Mays, Clear Channel's chairman was also on the board of UTIMCO. Clear Channel was the Bush administration's biggest shillers of the war on Iraq organizing pro-war rallies under the aegis of Rally for America and banning songs sungs by dissenting artists including the Dixie Chicks who criticized Bush in a London concert.
For Liverpool supporters who could care less where Tom Hicks gets his money from and who care even less about his politics, more relevantly his track record as a sports team owner is abysmal. Under Hicks stewardship, the good news is that the Texas Rangers went to the playoffs twice and lost both times in a clean sweep. Since then they have been scraping the bottom of the barrel. Hicks has a reputation for being beholden to Scott Boras, one of baseball's superagents and a super nice guy who foists expensive players first on Tom Hicks and facetiously calls the Rangers owner the best recruiter in baseball. This after a Scott Boras deal, in which Hicks earned the dubious distinction of making the most expensive blunder in sporting history, the obscene 10 year $252 million signing of Alex Rodriguez from the Seattle Mariners in 2001 in lieu of good pitching which was what the Rangers actually needed. Despite Rodriguez's outstanding contribution, the Rangers finished last for the fourth year in a row. Rodriguez was traded to the NY Yankees before his contract was up which forces Hicks to pay him $9 million not to play for them. But it seems that Hicks has not learned from this fiasco and continues to fritter money away.
So here it is good folks at the Kop: Tom Hicks with all his warts. Now Pini Zahavi can cuddle upto Hicks and dangle some really expensive soccer player. He might find a willing sucker.