By Paul Nicholson
March 4 – The five-year long New York court case following the sale of Liverpool Football Club to Fenway Sports Group revealed this week former owner George Gillett Jr is still paying £125,000 a month in debt repayments for a loan secured against the club, and that the new owners felt that due to the aging playing squad the £295 million price was in fact an overpayment for the asset.
All this came ironically in a week that the club announced a record £60 million profit in the year to May 2014, its first profit in seven years and £59 million more than the previous year.
The US dispute is between Mill Financial who are suing Gillett and Royal Bank of Scotland. Mill lent Gillette $70m (£50m) so he could meet RBS repayments (the loan from RBS was for £270 million). The legal papers claim Mill Financial were pledged 50% “membership interest in LFC” as security against the loan. But the RBS loan was also secured against the club,
In the end RBS forced the sale of the club to get their loan repaid – New England Sports Ventures, now called Fenway Sports Group, was the buyer. Mill claim that the club was deliberately undersold and that they had a share in the club via their securitised loan to Gillett.
In a court case that has seen multiple depositions from Liverpool executives it has now been revealed that Fenway Sports Group, far from believing they had bought a valuable sports asset, rapidly came to the belief they had overpaid and that their way of running sports franchises needed to be rethought.
Former general counsel for Fenway Sports Group, Edward Weiss, aid they had “underestimated” the strength of playing squad actually was and were “overconfident” about rebuilding.
” I think we underestimated how poor the playing quality of the (Liverpool) squad was, and frankly, we underestimated how difficult it was going to be to stabilise the asset,” Weiss said.
“We were overconfident in assuming that many of the things that we had done in Boston at Fenway (with the baseball franchise Boston Red Sox) would translate naturally to the Premier League, and they just didn’t all translate…”
“What we came to know was that the playing squad was poor. While we had a few top players like Steven Gerrard, other players like Fernando Torres and Pepe Reina were probably beyond their prime,” Weiss said.
FSG, who took over in 2010, have seen a League Cup win in 2012 and a second place Premier League finish in 2014, but not yet the return to glory that the fans crave. However, a redevelopment of the Anfield stadium and surround, strong international sales and generally improving performances under new manager Jurgen Klopp have established the club on a much firmer financial and management base.
Contact the writer of this story at moc.l1734847054labto1734847054ofdlr1734847054owedi1734847054sni@n1734847054osloh1734847054cin.l1734847054uap1734847054