Wednesday, February 07, 2007

Americans Buy Liverpool FC

I am very optimistic about the prognosis of this move. Fresh finance should help the Reds.

LIVERPOOL, England -- Two storied franchises -- the Montreal Canadiens and Liverpool soccer club -- are coming under the same roof.
Chairman David Moores said yesterday he will sell his 51% stake in the 18-time English champions to George Gillett Jr., owner of the Canadiens, and Tom Hicks, who owns the Dallas Stars. It leaves Liverpool on the verge of becoming the third Premier League club owned by Americans.
The 218.9 million pound (C$509.8 million) offer from Gillett and Hicks includes an agreement to pay off about 45 million pounds (C$104.3 million) of club debt and pledges to build a 60,000-seat stadium.
"I believe this is a great step forward for Liverpool, its shareholders and its fans," said Moores.
NHL commissioner Gary Bettman welcomed the move, saying he saw no problem in rival owners sharing an asset.
"There are plenty of owners in sports who have various business interests together outside of their teams," Bettman said. "We scrutinize all transactions and obviously if there are any transactions between the Stars and Canadiens they will have to be thoroughly scrutinized to make sure that we don't think there are any issues."
"We don't see this as a problem."
"This club is my passion and forms a huge part of my life. After much careful consideration, I have agreed to sell my shares to assist in securing the investment needed for the new stadium and for the playing squad."
Broadcaster ITV said it would also sell its 9.9 per cent stake, and Gillett and Hicks said they had received acceptances from 62.2 per cent of Liverpool's shareholders under the deal worth 5,000 pounds (C$11,644) per share.
The pair need to acquire 90 per cent of the shares through Kop Football Ltd., the British company they formed to launch the bid, before they can compulsorily acquire the rest and assume full control.
If Gillett and Hicks succeed in taking full control, Liverpool would become the third American-owned Premier League club. Malcolm Glazer, who owns the NFL's Tampa Bay Buccaneers, won control of Manchester United in 2005, while Cleveland Browns owner Randy Lerner took over Aston Villa in September.
However, Gillett stressed that the proposed takeover differed from that of Manchester United by Glazer, who borrowed heavily against future earnings to fund his purchase.
"Owning this great franchise is special," he added. "We want to add to that lustre, not detract from that lustre."
The pair would be the co-chairmen of the club, with a son from each man's family on the board. Rick Parry will stay as chief executive and Moores, who has been chairman since 1991, will become lifetime president.
Gillett and Hicks committed themselves to maintaining an annual budget for player transfers, suggesting they may even exceed it, but declined to provide a figure.
Hicks also said they planned to invest in the club's youth academy.
"You need to keep your star players but also develop your young players," Hicks said.
Liverpool said the proposed takeover would be a "great step forward" for a club that has been European champion five times -- more than any other English team -- but last won the league in 1990.
"I feel very excited, it has been a long process," Parry said. "It is about three years since we started so I'm very excited to be bringing it to a conclusion."
The deal announced Tuesday comes a week after a Dubai-based consortium pulled out of a proposed takeover when it discovered that Liverpool was listening to the rival bid.
A solo bid from Gillett was turned down in November in favour of the approach from Dubai International Capital, owned by the ruler of Dubai, Sheik Mohammed bin Rashid al-Maktoum.
Gillett renewed his overtures after persuading Hicks to join him when the pair talked at the NHL all-star game on Jan. 24 in Dallas.
Liverpool received clearance from Liverpool City Council in September to build a new 60,000-seat stadium in the city, moving it closer to an exit from the 45,000-capacity Anfield it has used since 1892.
The club confirmed that Gillett and Hicks would finance the move, without giving financial details.

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