Why doesn’t this man want to buy Liverpool?

Apparently, the richest man in India doesn’t want to buy Liverpool. The ‘why’ (or why not in this case) is a tricky one – yes, there’s plenty of room to improve in terms of performances on the pitch, international profile, etc etc – and therefore good money to be made.

On the other hand, seeing how Liverpool are financially in a worse position than they were at the time of the first takeover, anyone investing into the club will be putting in a lot of their own money to fix someone else’s mistakes. There are rewards, but there are also risks and given that Hicks and Gillett had planned a resale after building the new stadium which still hasn’t started, the risks may be scaring off investors in a volatile climate.

But logically, Liverpool right now are a much better investment than, let’s say, Manchester United or Arsenal. Significantly, there’s room to improve the same way there was / is room to improve for Chelsea and Manchester City. There’s a new stadium to be built, there are improvements that can be made in footballing terms and there’s a lot that can be done to build up the ‘global brand’ as well.

So why not invest in Liverpool?

There are two possible reasons:

  • Any buyer would want to own the club outright and not be the investor for Hicks’s and Gillett’s plans. It’s the major flaw in their plan and it seems that they haven’t been able to offer potential investors anything lucrative enough to overcome this downside.
  • Investors are waiting for Liverpool’s price tag to go down, which to be fair hasn’t budged since they first started hawking their club out to potential investors. The asking price – for loading the club with debt and not leaving it better than it was before – would reportedly leave the current owners with a $100m collective profit on a 50% sale.

Essentially, Hicks and Gillett, having loaded the club with debt, now want investors to fund their plan for building a new stadium at an exorbitant price so that they can then sell their remaining share for even more money, maximising what they could possibly squeeze out of the club.

It would work great for those two, but it doesn’t leave the investor with much if he has to overpay at the start and then be ransom to someone else’s plans.

Also See: 20 Billionaires you want buying your football club.

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  1. westy 9 February, 2010
  2. Ben 9 February, 2010
  3. Tim 9 February, 2010
  4. ts01305 10 February, 2010
  5. Blindside 10 February, 2010
  6. Red Barron 10 February, 2010