Money problems continue to dog Liverpool
19/12/2005 - 15:42:19
Manager Rafael Benitez may have gone some way to restoring Liverpool’s fortunes on the pitch but chairman David Moores still faces the same financial problems off it he did 12 months ago.
An unexpected Champions League victory, an improved performance in the Barclays Premiership and an unfortunate defeat in the Club World Championship have all raised Benitez’s stock in the last seven months.
As a result Moores is coming under increasing pressure to find the capital to support his impressive manager as well as fund a new stadium.
These are the issues which Moores will be confronted with when he decides to call the club’s annual meeting.
Last time around it was held in early December but so far there has been no no notification of this term’s date and, with the need to give 21 days’ notice, it now will not be held until at least mid-January.
And despite the team’s success, shareholders will want to know about the club’s finances, the rumoured debt of over £50m (€73.5m) and what progress has been made in establishing the vast amount of external investment needed to continue with a new ground scheme which has seen costs rise from £80m (€117.7m) to around £200m (€294.2m).
Sources close to third largest shareholder Steve Morgan – Moores’ long-term antagonist – claim the former building and hotel tycoon will not be making a major statement at the AGM, having locked horns with Moores on several occasions in increasingly embarrassing public debates.
And those sources suggest Morgan is now no longer interested in a place on the board or making his own personal investment in the club.
The reason is clear. Moores wants a good return for his own shares, Benitez needs £100m (€147m) to really take Liverpool to a higher level and £200m (€294.2m)-plus is required to salvage the new stadium objectives.
A major investor would need to find close on £500m (€735.2m) to make a significant impact.
Football finance experts are united in accepting the problems facing Moores and his obvious determination not to want to give up his family control of the club.
Professor Tom Cannon, a football cash expert from the Kingston Business School, said: “This may be as good a chance as Liverpool have had to attract money following their European success but they want a very particular solution.
“Basically there are not many incredibly rich men – certainly not big business – around who want to become involved.
“Liverpool have had one incredibly rich man, Steve Morgan, willing to invest and with his sort of money any other club in the country would be giving him the red-carpet treatment.
“But he is not getting that because of the criteria of the Moores regime. It seems (David) Moores wants a big premium on his shares, Benitez will need transfer funds and the new ground looks likely to be costing over £200m (€294.2m) now.
“And trying to attract big money to one of the poorest big cities in the UK - this is not central London – is very difficult. This isn’t Manchester, which is experiencing a boom, it’s Liverpool, which is relatively a poor area.
“Liverpool do not have a huge debt, relatively. It’s not going to be another Leeds, nothing like that, but finding what Liverpool want has clearly not been easy and won’t get any easier.”
Vinay Bedi, a football expert with Brewin Dolphin, said: “This is not a PLC, it is a different animal.
“You are depending on the whims of the Moores family and you do not have to make the same cold-headed decisions that a PLC has to make.
“There are not the massive external pressures on a board that come from being a PLC.”
Henk Potts, football expert with Barclays Stockbrokers, agrees and feels being a private company in football is now the better option.
“A PLC has become something of a poison chalice. It is better to run as a private company now, you are not so vulnerable because a PLC is run in a totally different way,” he said.
So Moores holds all the cards.
Morgan will not get his way and unless chief executive Rick Parry can produce a rabbit out of the hat in time for the AGM - talks are still in progress with the America-based Kraft family – the Anfield chairman will go to the shareholders talking mainly of the vast improvement on the field and Benitez’s growing prominence in English and European football.
With Chelsea out of range in the financial stakes the target is second place in the Premiership – an aim Cannon sees as attainable.
He said: “Neither Arsenal or Manchester United are improving. Liverpool are, and second place would certainly please everyone at Anfield now.”
Mendacity...the art of being mendacious.- John Gotti 1985