Liverpool's Tom Hicks Denies Former Owner Moores's Claims on Club's Debt
Liverpool co-owner Tom Hicks denied claims by his predecessor David Moores that the Texan and his partner George Gillett misled the club by funding their purchase of the 18-time English soccer champion with debt.
“In our agreement with the seller, no representation was made that the new ownership group would be debt-free,” Hicks said in a telephone interview. He was responding to claims made by Moores about the 2007 takeover in a letter published May 26 by the London-based Times.
Moores, who according to media reports made 89 million pounds ($129.5 million) from the deal, said the terms had been “unambiguous” and that investment bank NM Rothschild & Sons Ltd., representing Hicks and Gillett, told the club that the pair was “good for the money.”
Gillett and Hicks put Liverpool up for sale in April. They paid 175 million pounds for the five-time European champion and assumed 45 million pounds of debt. The debt has grown to 351 million pounds, according to club accounts published earlier this month, which showed interest payments of 42 million pounds for the year ending July 31, 2009. Fans have protested against the owners because of concerns over the club’s finances.
Liverpool’s former chairman said he was speaking out to correct “hearsay, mistruth and malicious gossip regarding my decision to sell the club.”
Hicks said in the May 26 interview that the letter was a “weak attempt to deflect attention from the prior owner.”
The sale of Liverpool is part of Hicks’s program to unwind a sports empire that also includes baseball’s Texas Rangers and the Dallas Stars hockey team. The baseball team filed for bankruptcy on May 24, some 13 months after its parent, HSG Sports Group LLC, defaulted on $525 million of debt.
This season Liverpool finished seventh in the Premier League, the club’s worst position in 11 years and out of the qualification places for Europe’s Champions League.
Absence from that competition next season will mean a loss of as much as 30 million pounds of potential revenue, fueling fans’ concerns that players such as striker Fernando Torres and captain Steven Gerrard will be sold to balance the books. New chairman Martin Broughton said in an April interview the players won’t be sold.
The club’s parent company, Kop Football (Holdings) Ltd., posted a loss of 52.8 million pounds in its last published accounts. Accountant KPMG LLP questioned the “company’s ability to continue as a going concern” because of its need to refinance bank debts. The club owes 237 million pounds to Royal Bank of Scotland Plc and Wachovia Corp. KPMG made the same note in the previous year’s audited accounts.
Hicks said the team’s finances make it “one of the top clubs in the world,” adding that sponsorship revenue has grown from 40 million pounds to 100 million pounds during the pair’s tenure. A new shirt deal with Standard Chartered Plc worth up to 81 million pounds over four years starts next season.
“Liverpool has been a tremendous financial success,” he said.
The owners have also been criticized for not following through on a pledge to complete work on a new stadium. They announced a “short-term delay” because of financing problems in August 2008. The issue with financing the stadium was “not internal but the global credit crisis,” Hicks said.
“Financing for Liverpool stadium is now available but we decided that we wanted to sell and allow the new owner to build the stadium,” Hicks said. “We believe the fact the design and the permitting process is complete should be reflected in the value we receive in the sale.”
He said Liverpool has a “really big universe” of interested buyers, and a number of wealthy people all over the world are “enormous Liverpool fans,” particularly in the Middle East and Asia.
The owners value the team at between 600 million and 800 million pounds, Hicks told Sky Sports News two days ago.
Liverpool said it couldn’t provide contact details for Moores when contacted by Bloomberg News.
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