What else can you say? It is tempting to say, I told you so. Liverpool’s buyout by Tom Hicks and George Gillett always had this fly by night quality. Hicks style of doing business, buying cheap and piecemeal and then trading up is coming home to roost.
Hicks takes risks as long as it is someone else’s money. His less than transparent MO refusing to say how much debt he wants to put on Liverpool’s books mirrors the way he did business managing UTIMCO. The university lost a billion dollars as Hicks diverted public money on the sly into bad investments managed by cronies. Its a bit medieval when you think of the number of revised write downs taking place in this unsettled global economy.
So Gillett, apparently the good guy in this case, feigns anger at his partner for disclosing that they approached Jurgen Klinsimann to replace Rafa, promising that he will buyout Hicks stake in a DIC deal, but now it appears like his partner, he too is biding his time trying to use the RBS and Wachovia loan to leverage a better deal from DIC. They can walk away with a £50m profit without a single penny paid out of pocket if they accept DIC’s current £300m offer. They stand to gain more if DIC goes bigger. It is no surprise that DIC now doubts his word that he is determined to oust his business partner.
If one did not know better, the talk of Gillett and Hicks bailing out could be carefully manipulated by a PR firm intent on boosting DIC’s image. Here come the knights in shining robes who should not have been spurned by David Moores in the first place. They are a diversified and successful investing arm of the Dubai government and their foray into budget hotels, financial services, and private equity have given them deep pockets. With the Maktoums personally interested in the deal and at $100 an oil barrel, cash flow should be an inconsequential factor. And even though this might be an investment and less a labour of love, the X factor is that Dubai and the ME are soccer savvy, they know Anfield and its history. They can dissect Babel and Voronin. It is a bit different than dressing up your ignorance in a Liverpool shirt.
The bottom line is that RBS officials are deeply worried that Hicks and Gillett will be too strapped to repay the loan with annual £30m interest re-payments. This is what worries fans too these huge repayments could potentially undercut any major investments in new players and infrastructure. With future cash flow a major problem, the pressure to win CL titles could become unbearable. The sceptre of a Leeds like bankruptcy looms over all these dealings.
Meanwhile, Liverpool meets Aston Villa today, a club owned by Randy Lerner, another American businessman and owner of the Cleveland Browns. Whereas, Liverpool fans might bring pitchforks and torches to the match, the Villa fans are heaping praise at Lerner, as a model owner using his money to finance the club, enjoying a salubrious relationship with Martin O’Neill and the fans, and indulging his passion for the game, a taste he developed while studying in England. In short, there is nothing fly by night about Randy Lerner.