Tom Hicks has given an interview with The Guardian that raises the worst aspects of their takeover at Anfield,
Hopefully the club will have extra cash flow so they can pay us a dividend to do that…If they don’t, then it will come from our pockets. But the club will have to have profits sufficient to pay those dividends.When I was in the leverage buy-out business we bought Weetabix and we leveraged it up to make our return. You could say that anyone who was eating Weetabix was paying for our purchase of Weetabix. It was just business. It is the same for Liverpool; revenues come in from whatever source and go out to whatever source and, if there is money left over, it is profit.
Hicks went on to admit that the Glazers were the role models for how not to conduct a hostile takeover of the club,
They were the first. There were fans who honestly believed that, if an American owner came in and borrowed some of the purchase price, it could be the end of the club’s success. I think things changed when people saw that the Glazers didn’t necessarily turn out to be the end of Manchester football
Apparently this is the first time that either Gillet or Hicks have admitted that their blueprint involves using the Revenues for interest and capital repayments, although why that would surprise anyone is beyond me.
Closer to home though is PHW’s visit to the US to meet with Kroenke. A number of comments have been passed about how me may know more but the one I saw that hit the nail on the head is how the shareholders will be passed minimal information but the general support will know even less. Whatever is said at their meeting will be commercially sensitive, subject to the rules of The Takeover Panel.
Arsene Wenger has been interviewed in the official magazine – does anyone actually buy it? – and such is the paucity of news, The Daily Mirror has picked up on it,
I believe that at the moment our fans think we have fantastic potential, but that they also have the anxiety of whether or not they will deliver
Which is absolutely correct
And I tell our fans that they will deliver. They will. They have to continue to believe in the team. At the moment that is the only question mark. Nobody questions the quality in our team, the potential we have. But everybody is asking: Will they deliver? Well they have to trust us
It’s a strong comment to make on several levels. Firstly, he is a sensible man so he knows that there are doubters, players who people, for whatever reason, don’t believe will cut the mustard at the Club. What is apparent though is that he is trading on some of the Goodwill he has built up and he knows it. Now I am not for one second advocating a change in manager, far from it. But I get the feeling that should 2007-08 descend into the same pattern as 2005-07 then there is going to be a growing disquiet about the squad and where Wenger is taking them. Given that his contract is up at the end of next season, will he want to commit himself to another five years against a backdrop of disgruntlement in the support and uncertainty in the Boardroom? My own view is that I hope he does. I don’t have blind faith in him – he is fallible – but given what he has delivered to the Club in his decade in charge, I believe he should be allowed to trade on that Goodwill he has built up. Some perspective needs to be taken; yes, it was not a good season last time around but by what standards? The ones that Arsene has created.
’til Tomorrow.
I’ve bought the magazine… whenever I can find it. I live in the East End (E1) and can’t ever find the magazine at my newsagents. Apparently he only gets 1 a month and it gets sold within a day!
By: Franny Jeffers on May 22, 2007
at 11:07 am
The issue of Stadler and Waldorf using revenues for interest and capital repayments, is not new news. The Guardian trotted this story out earlier in the year and have rehashed it with fresh quotes from Hicks.
It didn’t surprise me then and doesn’t now. Unless you are a Russian with untold wealth there will be borrowing and repayments. That is the nature of takeovers.
Also it is not unreasonable to expect the Americans to want to make a return on their investment. Althuogh how all this will be squared with the year on year player investment needs remains to be seen.
What does concern me is the ramblings of Hicks. He is fast becoming something of a lose cannon. His words at this important stage of the season do not help. Doesn’t he realise that Chairmen are supposed to be quiet and just sign the cheques!!
By: redfloyd on May 22, 2007
at 11:27 am
“And I tell our fans that they will deliver. They will. They have to continue to believe in the team. At the moment that is the only question mark. Nobody questions the quality in our team, the potential we have. But everybody is asking: Will they deliver? Well they have to trust us”
This is what a lot of us have been saying for most of the season.
I am confident that everything is possible next season, IF all goes well. That is a big if so my worry is will enough of us remain patient?
KLV’s comment yesterday regarding the experience thread will be very relevant – will they be experienced enough to dig in & win at all costs?
By: ROS on May 22, 2007
at 11:32 am
None of us know now whether the debts being taken on by Man U & Liverpool etc will make or break those clubs.
It will only be after 10+ years, or a downturn, that we will know the true significance of it all.
Are you becoming a little bit more sceptical now YW ?
The team with 1 or 2 adjustments will be able to challenge on all fronts within 2 season – provided Arsene is happy himself.
By: Flint McCullough on May 22, 2007
at 11:47 am
The ‘Invincibles’ could have been dogged by injury, but they were not. They also had a fair slice of luck, which to mind is always necessary. Last season we had crippling injuries and the other 3 top clubs would not have achieved what they did with similar absentees. So, it all boils down to luck -and if we are fortunate with players keeping out of the treatment room then the squad we have, should be good enough to really challenge next time out. Fingers, toes and eyes crossed.
AND don’t believe in transfer rumours until they actually materialise!
By: Emkay on May 22, 2007
at 12:01 pm
Flint
Not sceptical as such because I think that they can deliver another improvement next season. I am not sure that it will be a full blown challenge for the title.
However, the whole ‘we will deliver’ mantra needs to be dropped now. The season is over, we need a couple of players to be signed before pre-season training commences and to get on with it.
YW
By: Yogi's Warrior on May 22, 2007
at 12:08 pm
I don’t know anyone who buys the official mag but they used to give it free to bond holders, such as my Dad.
It was pretty crap, but always had cool big posters in the centre-fold that my friend’s son enjoyed immensley.
By: DBT on May 22, 2007
at 12:13 pm
The last time wenger said “trust me” was when he sold Vierra and the rest is history as they say. Without commiting his own future to the club it is hard to see how he is going to sign the calibre of players required to get us competative again.
By: dan on May 22, 2007
at 12:46 pm
I meant sceptical about the takeover but you make a v good point that it must be about “what we have done” & not “what we will do”.
Dan – the situation is really no different to the other times leading up to a new AW contract, in terms of getting players in. My guess is that, if the DD thing can be got over, his intention would be to take it up to when he is 60 & then see how he feels.
I think we will be much more competitive next season, with a bit of the luck Emkay talks about, with or without new signings. It would be surprising however if there were not 2/3 changes to the squad.
Without DD it may be interesting to see if there is any difference to way the deals are conducted, ie quicker but less of a bargain perhaps.
By: Flint McCullough on May 22, 2007
at 1:28 pm
Flint
I am to be honest. I have a feeling that Kroenke is sitting on the shares hoping that someone else will come in and try to buy the club in much the same way that Magnier and McManus did at United.
YW
By: Yogi's Warrior on May 22, 2007
at 2:07 pm
We’ll definitely be more competitive next season. AW is not going out on a limb in saying that. (Not least b/c Manure and Chelsea cannot get much better in real life as opposed to one’s video game imagination.)
We lacked two fit top strikers; we were hit by injuries; we lacked experience; we lacked goals from midfield; we lacked potent finishing; we lacked width; we lacked a steely defense. Eveyone knows these things. If only one of these gets sorted that’s possibly a net 3 games we don’t draw (which comes to 6 points); if two gets sorted, that’s net one game we don’t lose and another one we don’t draw (5 more points). I won’t ask for much more, but even that is possible.
11 points, still not enough in the end to win the league, but enough to “improve” on this year, keep things exciting, keep up with Liverpool if they sign Tevez, get some self respect back, build the fear factor back up, build up the self belief, and enough perhaps to go further in the cup competitions (which however also loses a team points in the premier league). Then we look and see where we need to go from there.
By: Nicky on May 22, 2007
at 2:11 pm
what you have to realize is that the other three are all going to spend serious money and improve, so we are not even talking about closing the gap but maintaining the gap as it is. No doubt spuds, villa and newcastle will all also spend big.
By: dan on May 22, 2007
at 2:59 pm
Flint,
Apropos of debt funded takeovers making or breaking a club:
Given that a part of the revenues will inevitably be diverted towards interest and capital repayments, I guess the pressure is immense to finish as high as possible, ideally win, in all the competitions one participates in, even after accounting for the increased TV money, given the effect on revenues that has.
Man Utd. have won the league this season, and Liverpool, at worst, will finish second in Europe, so this season’s cash flows shouldn’t be a problem for either. But one poor season, and the strain will start to tell, transfer funds will have to be curtailed, or, at a pinch, a player or two might have to be sold to raise funds to repay the creditors. That’s when a vicious cycle could set in.
Like any leveraged game, this is high risk: If things go to plan it could be a fairy tale; but one spanner in the works, and one never knows.
Should either of them have a season like the one we’ve just endured at Arsenal, things could be far more painful for them than it has been for us fiscally, even after accounting for our stadium debt.
Though I’ve not been amused at all at PHW’s blatherings on the takeover, one thing has to be conceded: Not all takeovers are unalloyed blessings.
By: Karthic on May 22, 2007
at 3:06 pm
The thing with leveraged buyout’s is that i resent our club paying the montly payments on someone else’s debt. It just doesn’t sit well with me because it turns it into a no lose situation for the buyer. There is no risk for him as far as i can see it. The fact that he’s got bundles of personal wealth doesn’t ever come into it, because he never has to touch a penny of his own cash. … I mean i could do that if i was able to raise the finance!
By: Jimmy on May 22, 2007
at 3:31 pm
Karthic – you have hit the nail on the head.
Only 1 team can win the EPL per season. A good CL run is always hit or miss.
There could be about 10 clubs in a franchise situation with huge debts.
We are supposed to have had a terrible season yet finished 4th, with a significant number of “fans” crying like babies. So that is considered by many (mistakenly in my opinion) as failure.
By my poor maths that is going to be a failure rate of minimum 60-80% (let’s say top 2 EPL or FA Cup winner as success).
We have a manageable debt with a new stadium with a young talented team set up for 4/5 years. Why take the risk ?
The blogs have proved how fickle a lot of the newer “fans” are, a lot of clubs could be sitting on a debt timebomb.
By: Flint McCullough on May 22, 2007
at 4:00 pm
The thing about this is that only a very small handful of teams can generate success consistently at the levels necessary to justify the investment.
By: Root on May 22, 2007
at 5:09 pm
[...] PHW’s Off To The US & Arsene Speaks Tom Hicks has given an interview with The Guardian that raises the worst aspects of their takeover at […] [...]
By: Top Posts « WordPress.com on May 22, 2007
at 11:59 pm
Flint,
“We are supposed to have had a terrible season yet finished 4th, with a significant number of “fans” crying like babies. So that is considered by many (mistakenly in my opinion) as failure.”
I second your opinion.
So long as there’s obvious intent, and potential, to improve, I’ll happily take a fourth place finish, which could easily have been third had Dame Fortune not been so cruel in the West Ham game, as the end result of a frustrating, nay “horrible”, season.
In my opinion, we need two, at a stretch three, key signings, and better luck with injuries that enables a settled first team to play together for the larger part of the season, to improve on our position.
I can’t see why we need Stan Kroenke for either, given that we’ll inevitably be selling a couple of players.
If ever we needed Arsene’s ability to land a bargain, it is now, in this transfer window.
Whenever I hear cries for, say, a Samuel Eto’o, I wonder if life really is that simple. Yes, a talented squad is a must, but surely a cost-benefit analysis is warranted before the wallet is opened?
Arsene’s transfer activity will reveal his thinking, and I for one, watch avidly, with stoic optimism.
By: Karthic on May 23, 2007
at 2:50 am