For Liverpool fans of a certain vintage 22 February 1991 counts as one of the darkest days of their lives as football supporters. And with good reason. It is the day on which Kenny Dalglish seemed to have ended a glorious association with the club.
Just over a decade spent as a player - he officially hung up his boots on the eve of the 1990-91 campaign by allowing his registration to lapse rather than make an announcement - then a four and a half year spell as player/manager was brought to a close at a hastily arranged press conference.
There had been largely unfounded murmurings of discontent in the dressing room and letters had recently appeared in the local media about some team selections. However, there was no question of the manager’s position coming under pressure.
A few signings had been made over the previous month. It was expected journalists had been gathered to have another new recruit unveiled.
During a ring around newsdesks only a guarded comment from club secretary, Peter Robinson, to those who said they would pick up wire copy and photos that they may want to be there hinted at the gravity of matters.
Even then the opening statement by chairman Noel White rocked even seasoned hackss to the core.
His words were quickly relayed across Merseyside, the rest of the country and then the world. The impact was so big it could be likened to the day Bill Shankly retired in 1974.
There was a refusal to believe it from most fans when told.
Not even having reached his 40th birthday there was still an expectation of a long and successful reign. Twenty years as a minimum. Ideally more. But what no one appreciated at that time nor for many years later is that when King Kenny walked out the door his crown may have stayed in place but the Reds effectively lost their place at football’s top table.
Questions as to why Anfield has continued to wait since 1990 for a 19th league title have been posed almost since the trophy was not retained a few months after Dalglish's departure.
All roads lead back to that fateful day 20 years ago.
In terms of league position it’s irrefutable that a descent from the summit began when the Glaswegian left.
On the morning of his resignation the Reds were three points clear of Arsenal. Between that and the appointment of Graeme Souness in mid-April Ronnie Moran’s nine game tenure at the helm yielded just four wins and as many defeats.
Three of those reverses were suffered in the first trio of games under the caretaker and a 4-0 hammering of Crystal Palace on the same day as that short reign began allowed Arsenal to go top on goal difference. They beat Liverpool at Anfield to stretch further away and extended their advantage by maintaining that run as the defending champions floundered.
Liverpool enjoyed three wins while Arsenal could only gain a couple of stalemates, and, though a 7-1 rout at Derby County got the Reds back on top after the Gunners could only muster a goalless draw at Norwich the Easter period proved pivotal.
Defeat by a Les Ferdinand inspired Queens Park Rangers at Anfield and then Southampton finding the only goal of the game down at The Dell gave Arsenal a vital edge. A home draw with Coventry City yielded the ground made up.
Even after a topsy-turvy 5-4 win at Elland Road - Liverpool led 4-0 into the final quarter - Arsenal held a five point advantage and with George Graham’s side back in a confident stride there was little prospect of the lead being hauled back.
The penultimate game ended mathematical hopes. The champions had abdicated and their successors kicking off later in the day before the TV cameras celebrated with a 3-1 victory over Manchester United at Highbury. When the 38th and final fixture was played the gap had grown to seven points.
Souness, a former club captain, had an outstanding record during his five years with Rangers having not only arrested a slump at Ibrox but concluded his first term at the helm by ending a championship famine. He had since claimed a couple more and The Gers were well on their way to another triumph.
The sole battle of note Souness lost in Scotland was with St. Johnstone tea-lady Aggie Moffat over the state of the away dressing room at McDiramid Park after a Rangers visit.
They had already claimed the last of four Scottish League Cups won by the manager who had lifted the Old Firm side out of the doldrums and whose friendship with the club’s majority shareholder, David Murray, plus a rumoured financial stake in the club suggested he would be unlikely to leave.
That was until the Liverpool job unexpectedly came up for grabs and was offered to him. It was possibly the only post which could have tempted him away.
There was every expectation of normal service being resumed at Anfield following the appointment and albeit with a penalty shoot out against Division Two Portsmouth at the semi-final stage, then a win against more second tier opposition at Wembley the FA Cup had been lifted at the end of his first full season.
However, that masked a poor league campaign. Leeds United had taken Arsenal’s mantel with the Reds trailing sixth.
Liverpool fans could only experience vicarious joy with a defeat of runners-up Manchester United ensuring Old Trafford remained waiting for title glory under a manager who had bought time by winning a cup but couldn‘t quite seem to get things right in the league.
The title had not been absent from the Anfield trophy cabinet for more than two seasons since the early 1970s and despite a low finish Liverpool were expected to be would be challengers for the inaugural Premiership campaign.
Aside from the cup win there was no small measure of controversy about the Souness era’s beginnings.
His dealings with a newspaper reviled on Merseyside lowered his esteem for many and as had been the case north of the border there was plenty of discord between the man at the helm and his players.
Some who had been the bedrock of the championship winning sides of the late 1980s were deemed past their prime and sold. Others came close to leaving at various times over the immediate future. Fees were agreed with clubs and in at least one instance personal terms had also been established. Only a last minute change of heart by the long serving player in question scuppered a deal.
Since the 1960s Liverpool had slotted players into their system. It restricted the amount of major surgery required to teams and kept things ticking over nicely as well as maintaining a dynasty of supremacy which endured. Shankly was forced to take an axe rather than a scalpel to his squad on one occasion which contributed to seven trophyless campaigns.
It was a harsh lesson but far from being maintained under someone who prospered under the tradition it was scrapped. Souness decided that different times called for different methods and highly influenced by his time in Italy the new brush decided to sweep clean establishing a more continental approach to fitness and regimes away from the pitch or training. He maintained professional athletes could no longer thrive in the culture he had played in.
Though the lieutenants trusted since the ‘Bootroom Tradition’ was established remained the institution itself withered. The most symbolic feature - the actual Bootroom - demolished to improve facilities for members of the press.
Though planned by the directors before Souness took over many felt an aloof nature to the wise counsel that would have gathered in there and desire to make his own decisions was a weakness rather than strength.
Despite the talent still available following the cull too much mediocrity signed for inflated fees and players who saw pulling on a Liverpool jersey plus banking the cheque which came with it were signed.
There were only one or two success stories.
Silverware wasn’t the measure this new breed of professional gauged success against. It came down to more material matters as a game which was doing well for itself in any case prospered further due to a commercial independence from the traditional authorities of the Football League - which shared its pie 92 ways even if that was in very unequal slices - but also the Football Association which distributed amounts down to the grassroots.
A change was not only clamoured for by a growing number it was required but David Moores couldn’t bring himself to act standing by the manager until results descended so low that Souness’s position became untenable.
The decline was hastened by Manchester United’s ascendancy who suffered only a year’s delay on their quarter of a century wait for that seemingly elusive title. By luck and some degree of business acumen the Old Trafford club found itself with a model of operation suited the new order while in some regards the Liverpool Way stood in the Reds’ way of halting a very obvious not to say alarming decline.
At that time only three years had passed since Liverpool ended the season top dogs but events meant that spell as a sleeping giant may as well have been doubled if not trebled as the club, playing squad and the increasing profitability Premiership football brought were not fully capitalised on.
League placings were so low that European football a staple of Anfield diets from the mid-1960s until the ban which followed Heysel were missed out on. The 1993-94 season during which Souness resigned was a strictly domestic one.
Roy Evans attempting to fight back from a severely retrenched position though backed with funds which would have turned many of his peers green didn’t have sufficient to bridge the gap quickly enough. There was one opportunity to land the top prize in 1996-97 season which even then was taking on the lustre of a holy grail.
Liverpool led at New Year but were reeled back by a Manchester United side who not only believed they were on a roll but knew they had the experience of closing out a season from that point.
There were still lingering hopes in the first flushes of April but a vital home game against Coventry was lost in the closing minutes which gave Manchester United who surprisingly lost to Derby County a reprieve.
It could have all been so different but the next home match - against the Red Devils - also ended in defeat.
Going top may have seen Liverpool gain confidence about staying there which could have helped find the win against their challengers. Any tenuous hopes which remained buoyed by a win in the final home game against Spurs were finally killed off on the road by defeat to Wimbledon. A 1-1 draw at Sheffield Wednesday capped it all as Liverpool finished fourth in what seemed a two horsed race due to the slump.
Evans too eventually paid with his job initially with the always ill-fated joint managerial endeavour with Gerard Houllier. By that time the best part of a decade had passed.
Boards tend to lurch from one extreme to the next in a quest to find the right man.
The autocratic Souness was replaced by the more avuncular Evans. In turn he was deemed too player friendly and not the man to control young professionals under his charge who if not already millionaires were likely to achieve that status soon.
Alex Ferguson’s famed hairdryer treatment kept his players the right side of the line. Houllier whose reputation as a technically minded coach came as a result of leading Paris St Germain to a title and being technical director of the 1998 French World Cup winning side marked another huge departure.
He had dropped mercurial and popular David Ginola from the national side when manager after an error stopped France reaching the World Cup finals in 1994 and wielded the axe at PSG and RC Lens.
Other than a spell spent watching Liverpool during the 1969-70 season while on a placement at a city comprehensive school during his degree course he was an outsider to the club. The first appointed since Bill Shankly arrived.
Liverpool followed a treble cup winning season with a sustained charge for the Premiership crown in 2001-02. They only denied by the excellence of Arsenal. The points tally of 80 was relatively low for a title win but had been enough on many occasions during the 1990s. A whisker away from reaching the Champions League semi-finals there seemed grounds for optimism and the achievement was made in spite of the manager being admitted to hospital for heart surgery in October and spending almost half the season away from the dugout.
After a dozen matches unbeaten and a run featuring nine wins in the season which followed it seemed the Houllier era may reach its zenith. The 13th game - a defeat at Middlesbrough - proved if not the nadir then certainly its start.
Another three points could not be found for nine weeks. This type of run had not been seen since Liverpool were relegated from the top flight in the early 1950s and encompassed 11 games. With 33 points up for grabs the field pulled away while the Reds limped along.
Signings made the previous summer amidst a fanfare which seemed justified in one particular case by the 2002 World Cup not only failed to deliver they looked less than ordinary. And the football on show was not just occasionally but regularly dire.
Due to limitations behind the top three - Manchester United, Arsenal and Newcastle - there was still a chance of Champions League qualification in the final league game but defeat at Stamford Bridge in a head to head for a seat on the gravy train yielded only a place in the UEFA Cup.
That competition may have proved a useful springboard three years previously but the landscape and expectation was totally different now. It took another lurch when it became clear Chelsea‘s win not only saved them from certain administration but was the factor which brought Roman Abramovich‘s riches to Stamford Bridge and skewed the balance of spending power.
A year later stumbling into the fourth and final qualifying berth for the Champions League proved insufficient.
More players bought for significant amounts failed to make the impact expected of them. Failings on the field and in the transfer market convinced even David Moores, who had stood stoically by every manager employed during his chairmanship always giving more time than was necessary, it was time to pull the trigger.
In football all empires eventually crumble. Just how long a team spends in the doldrums depends in no small measure on outside factors but mostly on decisions made and reactions to them.
Kenny Dalglish’s resignation came during a hard fought and ultimately unsuccessful FA Cup encounter with Everton. Liverpool were challenging for a 19th title at the time and had all but seen a useful lead disappear.
Like statistics circumstances can be used to prove points or even hide a number of sins.
One undeniable statement is that Kenny Dalglish had roughly the same amount of time at the helm as Rafael Benitez had enjoyed as manager of Liverpool as the 2008-09 campaign fizzled towards a gripping yet ultimately unsuccessful climax.
The club was still trying to catch up for some errors made two decades ago which were compounded by a lack of decision in the 1990s as others took advantage of the new era.
There were some more contemporary mistakes. Selling the family silver to George Gillett and Tom Hicks was supposed to equip Liverpool in a Premier League arms race which had changed complexion due Chelsea's quickly found wealth and that accumulated by Manchester United over more than a decade and a half prior to the Glazer family taking root at Old Trafford.
Getting back to the point where Liverpool are regarded as genuine hopefuls was a hard slog and one more about being competitive enough to provide a title challenge worthy of the name.
For varyaing reasons Roy Evans, Gerard Houllier and Rafael Benitez made noises but their best efforts were isolated high points.
Each had teams which appeared useful works in progress but which for various reasons never reached the status of finished article. Consequently matters regressed on all fronts. The Reds' championship charges have proved an exception rather than an expectation.
Even if the game and Liverpool Football Club are different to their early 1990s contemporaries Kenny Dalglish has so far suggested he has no problem rehabilitating to life as a top flight manager over ten years since he last held the reigns at that level.
Though categorised as a man from a old era who perhaps wouldn't respond let alone contrast favourably in the modern era Dalglish has done more than bring matters back to a very basic level that sufficed during his first stint at the helm. Nor does he just survive on the vapours of sentiment plus good wishes.
He may not have been in a managerial hotseat for some time but his instinct and ability to analyse a game not to mention players has not waned over his time away.
Vitally Kenny has continued to watch football and maintain an involvement rather than turn his back on the game.
An unsurpassed knowledge of the reserve and increasingly impressive youth ranks is another powerful tool in his armoury. Pass and move is still as effective as it was almost half a century ago. Goals - including key ones - have come from crafting moves from defencsive positions. Attacking with options to the man in possession continues to demonstrate its potency.
But these old fashioned values are mixed with very modern views on tactics and systems.
That in itself may suggest Dalglish's 'second coming' will last longer than the May deadline previously set.
No matter how long this reign lasts it may not bring another league title. Progress to that goal is expected to remain slow but built on firm foundations that will allow any success acheived to be lasting rather than fleeting.
As both a player and manager in his first reign Dalglish profited from that diligent approach. It seems fitting that he should be given the chance to at least begin rebuilding work.
Showing posts with label Tom Hicks. Show all posts
Showing posts with label Tom Hicks. Show all posts
Tuesday, 22 February 2011
Sunday, 17 January 2010
Squaring vicious circles
Few would have expected to have been comparing the final months of Gerard Houllier’s reign with that of his successor when Rafa Benitez was appointed - now given last season’s achievement but possibly at any point of the Spaniard’s tenure.
The Reds were going backwards under Houllier while at the same time Benitez had taken Valencia - a side without much recent pedigree and who so often threatened to succeed but never quite managed it - to domestic and European glory.
The latter achieved despite the might of Barcelona albeit that the Catalan club were in a rebuilding phase after decline under Joan Gaspart’s presidency and Real Madrid were in their first ‘Galatico‘ era.
In the circumstances Benitez seemed tailored made for the Anfield job.
Manchester United were already cash laden courtesy of their soon to end 15 year status as a Plc while Chelsea had attracted the attentions of a 36 year old Russian oligarch. Estimated to be worth £5.5 billion he had pumped money into both club infrastructure but also over £200 million into the playing staff. Recouping less than 10% of that in sales.
Arsenal were also happy to spend big money on exceptional talents - far more than many tend to remember now Arsene Wenger has a reputation for being frugal with his transfer kitty. They also had a heavy investment in youth which was brought to North London from all corners of the globe at significant cost.
Though without a benevolent owner and run in the same “old fashioned way” Liverpool were also organised - a low number of high value shares in private hands - the Gunners had a new stadium not just on the drawing board or an architect’s computer screen but actively being put into bricks and mortar. Set to earn millions of pounds a year more than their Highbury home could.
Liverpool who had planning permission for a new home had little more than a bog standard design of a bowled stadium. Somewhat out of the box though one which needed funding and one the Anfield board needed to attract substantial investment to if they were to do so and appointed companies to assess likely suitors.
Arsenal would receive money from the sale of their old home but borrowed heavily against the revenue a 60,000 stadium would generate but the £470 million cost was not easily garnered with tools going down soon after very early work commenced. A consortium of banks provided just more than half the means.
The remainder came through sponsorship, exclusive contractual agreements and lending through the bond market - which would take 25 years to repay. Instalments would be due at prescribed times. In return for this backing lenders received equity in the project.
Essentially placing the club in debt for hundreds of millions of pounds for more than a generation.
Then Liverpool chairman David Moores was open to selling his holding in order to ensure investment of the type he nor the club through its turnover just couldn’t foot.
However, apart from what often seemed nothing more than publicity stunts, politicians who had an eye on a general election in a country besotted with English football particularly Liverpool FC and would source the purchase price through other people’s money little seemed to move.
A fully underwritten £73 million cash bid from another board member was on the table but deemed derisory.
There was for whatever reason hope of billionaires not just plain millionaires riding in. Bottom pits of funding. Outside of financial circles and the world of venture capitalism few had considered or even heard the term leveraged buy out.
Over the five and a half years Rafael Benitez at been at Liverpool’s helm the game and other clubs including those who already had the jump on Liverpool has moved forward.
Some at an rapid pace due to the interest of not just industrialists but sovereign wealth funds.
At that same stage Gerard Houllier was placing his pot plants into a box and heading to Lyon Sheik Mansour bin Zayed Al Nahyan had possibly never heard of Manchester City. Dish-dashes had yet to enter the consciousness of those at Eastlands as a match day accessory.
Abu Dhabi’s hydrocarbon wealth makes the emirate and its ruling family one of the richest in the Middle East. Somewhere in the region of £500 million of that affluence has been ploughed into playing staff and £304.9 million converted from shareholder loan to equity.
The purchase of a further £89.6 million means City’s on paper debt is far too minimal to cause Michel Platini any worries about debt levels.
Just as it was in 2004 Liverpool are spluttering and the fans seem split about the man in charge, though not perhaps 50/50, between those who support the manager. Though they possibly look at the players when analysing reasons for the malaise want to get behind each and every man in a red shirt even the ones who could at best be described as below par.
Typically those of that persuasion will lay blame away from the coaches and though they may point a finger towards the pitch there’s no desire to rock the boat or even cause further problems by doing anything other than backing the team to the hilt.
There has been a tide against Rafa for longer than the past few months and those who had already turned against him prior to this current season may criticise the players for under-achieving but place most ills squarely at coach’s door.
This category also tend to not only shout louder but also ring the phone-ins and other fans forums - not all solely Liverpool Football Club related. Events in the FA Cup give them that extra oxygen as producers and editors scrabble to put them on air.
Those who are still behind the manager suffer but do so silently ignoring the various interactions available to them. So for some, the laziest in the media included, the dissenters appear to be the majority. However, even though their ranks have swelled in recent weeks anecdotal evidence still suggests they are not.
While debate focuses on the ownership, funding and future direction of the club events on the pitch can often seem secondary but with the club’s financial situation sorted in the short term, albeit via the equivalent of an elastoplast that are refinanced loans with huge demands for capital payment when renewed, attention inevitably moves from Gillett and Hicks to a man who has tended to feature in many off field dramas as well as the on field disappointments - Rafael Benitez.
For all the abusive e-mails, assurances about the manager’s tenure and possibility of further investment reports cannot go beyond quotes from sources close to proposed deals but the prodigious generation of column inches about the club can continue as the team struggles to claim points or progress in other arenas.
There is no shortage of opinion from writers, pundits and those who have previously served the club which means the manager especially can be kept in the crosshairs while pot shots of mud are aimed in his direction.
One of those courtesy of Charlie Nicholas on Sky’s Soccer Saturday who suggested to his colleague Phil Thompson that the side he presided over alongside Gerard Houllier was better than the one now assembled.
It makes comparisons that will keep coming inevitable.
On the surface appraisals of the Houllier and Benitez periods are fair. Take the team’s set up.
Despite attempts to introduce it there is little true width in the side and for some strange reason little movement plus less creativity despite a team brimming with ability in that department.
There are similarities other than what is said to be a one dimensional style. Results and form are as poor as the final knockings under the Frenchman. Confidence is at rock bottom and players who are much better than they look can sometimes barely keep possession at stages of the game. When it is retained even comfortably often they struggle to do much with it.
Some signings who promised much have failed to blossom.
However, under Houllier the players drafted in got progressively worse and never looked like improving. There was so little coming through the reserve ranks who with the exception of finishing top in 2000 trundled along in the Premiership Reserves North.
If that wasn’t bleak enough the playing style was not so much careful as bubble wrapped in fear.
When an advantage was found it would be nursed and the shop closed. There was an over-dependence on long balls to exploit Michael Owen’s pace but not a lot else. The Reds simply could go no further under his guidance.
The team reflected the manager perfectly who suffered from something bordering on paranoia during the final months of his stewardship. Be that people linked with his job and all manner of opinion being submitted from an important constituent of the Liverpool family ex-players.
Links with other managers are being made and courted by journalists who realise that no one touted as a successor will rule themselves out.
Despite of the paltry funds which would be at their disposal and bickering above their heads being mentioned in the same breath as the Anfield hotseat does their career prospects no harm at all.
For Martin O’Neill now read Jurgen Klinsmann and if some reports are to be believed Martin O’Neill again. Guus Hiddink and Jose Mourinho are also mentioned but the current Russia and Inter Milan managers are - well - nothing more than wild Guus chases. The former earns over £6 million in his current role and a further well remunerated role with Chelsea as a technical directory. No bad return for a 63 year old.
Mourinho may have enjoyed seeing his favourite emergency striker Robert Huth grab a late equaliser against the Reds but will not, according to sources close to the Portuguese, join any club in a state of financial volatility. Nor will he join one which stable or not has no money to fund his inevitably expensive tastes.
Unlike Benitez Houllier allowed it all to creep under his skin.
Does everything but reaction to those critiques from old boys ring true today?
A striking contrast its that Gerard Houllier’s sides were roughly playing to their level. The current side is not as good as it could be and capable of so much better.
Regardless of who left during the summer it should certainly have pretensions of a title challenge after the last campaign. Even if efforts are to be in vain that chance of claiming the trophy has to be on well into the spring.
The worst factor of the current situation is that players who are far better than their current showings and world class performers are retreating within themselves because they seem too scared to make an error.
It could even be ventured that they have no faith in the manager - but that is purely speculative as are claims that either the whole or certain portions of the dressing room have to coin that oft quoted phrase been lost. Reading between the lines suggestions revolve around the non-Spanish or those for whom Spanish is not the first language.
Frankly many performances including the one at the Britannia Stadium on Saturday belie the claim.
Rafa has a very different relationship with his players than most managers. In essence he may never have had the dressing room - just the respect rather than admiration of many members of his squad for his achievements. Steven Gerrard has openly spoke about the situation and that distance is purposeful.
He is perhaps as every manager should be not a friend but a man in charge who may have to drop them or let them know that their time at Anfield has come to an end. He rarely singles any specific individual for praise preferring to talk about the team as a whole and pour over what could have gone better. Even when he should be basking in victory.
Some whose names need not be repeated now are living on borrowed time, past reputation or could simply do with a change of scene. This includes those who have been acquired by Benitez for sizeable fees but there are buys Rafa has made who may not form the core of club but do show potential and have every chance of a successful career in L4. As for the quality of signings. They have certainly improved as time has gone on but regardless of the source of funds being borrowings the money available has increased.
The Reading result has seen many of those who considered themselves somewhere in the middle of the debate jump to one side but it’s only the knee-jerk reaction to the result rather than the manager’s tactics and decisions.
A positive result against Stoke would not have sated their ire but no blame can be heaped on Rafa or the players not putting the Potters away.
The simple fact is that a strong team not one that could be considered in any way weakened below an unacceptable point took to the field. They were set up correctly for the task of defending the inevitable bombardment as well as holding and attacking. If they had not more time would have been spent within a narrow midfield corridor.
Of course with one exception - goals scored - statistics do not decide games. Unfortunately Gerard Houllier based his after match press conferences around them when under pressure. They were straws he would clutch at but all too often they were the irrelevant ones.
Rafa has always tended to take a different tack analysing the play and whether his team held control of matters. The Opta sheets are rarely grasped.
These things happen to every club which has ever taken to a football field be that in a knock-out tournament or league and at any level.
Liverpool are creating opportunities in most games played and evidence gathered from eyes alone demonstrates that Rafa’s sides while often careful produce a better brand of football now than most sides have since he took charge.
Almost every analysis proves that the majority of opponents are heavily beaten in key areas but it’s the inability to put the chances this creates away which is costing dear.
However, there is no escaping that at times some unconfident and lifeless football is being played and though a plan B is surely suggested like so many teams when the A game is frustrated Liverpool can play under a huge amount of fear and look to pick off chances where they can rather than rip at the jugular.
The manager’s style is essentially cautious but only in the respect that regardless of the phase of play he would prefer to have his team acting as one. If the opposition has the ball everyone in their own way will defend - from front to back. If the ball is forward the team should line up in support ready to win the second and third balls if the first is lost.
Last season when confidence was high this produced the type of performances witnessed against Derby County, Newcastle United, Manchester United, Real Madrid and others. This term the displays against Hull City, Manchester United again and Everton have been exceptions rather than something approaching the rule.
All too often in recent times this had only led to the creation pretty patterns of play and slick movement until the vital point when someone is expected to pull the trigger. When that killer touch or cutting edge is missing. In many games it has all looked so fruitless.
For a number of weeks when a goal has been scored the Reds have done everything but add to it - be that before or after the net is found. At one stage that would have been enough to achieve the minimum required for a win but the normally solid backline has had its wobbles and that unusual vulnerability has cost dear.
Liverpool have often had more than enough chances to win handsomely but a failure to exploit them has yielded many of the 28 points so far dropped.
With those in the bank the Reds would still not be muscling for pole position but in a league no other team seems keen to win would have a chance. They would certainly be as handily placed as any of the other challengers.
However, there are clearly problems at the club and within the dressing room.
As previously stated the exact cause remains a matter of conjecture - often depending where you stand on the manager’s future - but if players do not seem bothered and enjoy a joke immediately after a poor result, no longer believe in the manager or his methods well that will only usually end one way - a new man taking over.
That is part of the situation which did for Houllier
Claims that the current ownership situation and the fact that the fans have marshalled against the rule of Gillett and Hicks also has its comparison. The rows, emails and sidling up to Klinsmann were thought to have made Rafa fire proof. In the same way that Houllier’s heart surgery in late 2001 and then subsequent return five months later on the night a 2-0 win over Roma secured progress to the quarter-finals of the Champions League for the first time. But that highly charged evening along with the treble cup win the previous season proved to be the pinnacle of his six year stay as despite going a dozen games without defeat from the start of the next season that was followed by a sequence of 11 more league matches during which a win could not be bought. The situation went down hill from there on in.
A worry is that if Rafa is dismissed then Liverpool fall back and set the same standards which saw Manchester United spiral away for years until a decade or so down the line somebody suggested they should show a little patience in the man charged with guiding the club. Just as they did at Everton who despite dipping after the high of Champions League qualification showed a little restraint in keeping David Moyes even when league form faltered and their European adventure ended in humiliation.
Whether he lifts the only piece of silverware now available or fails to qualify for the Champions League it’s not the end for Rafa but these days could certainly mark its beginnings if things don’t start to look up.
That was certainly the case for Houllier who didn’t have the boardroom unrest or fans drawing battle lines over the club’s soul to contend with only a focus that included on field matters.
Rafa quite rightly can point to his exploits in Europe which rivals every Liverpool manager but Bob Paisley and Joe Fagan who reached three and two European Cup finals respectively and in successive seasons. Two in three years and one win represents a better record than any current manager other than Carlo Ancelotti.
Considering no side has ever defended the trophy in the Champions League era it’s more than just the knock-out cup often portrayed and at the business end Europe’s elite are usually waiting. Each trying to land a knock-out blow on their fellow behemoths.
Reaching the final two years out of three is not the same as guiding your charges to a similar number of League Cups in as many terms.
Has Rafa taken the club as far as he can? Almost certainly not rather than probably not. Nor has he created the same type of side he had at Valencia. Though he has tried due to financial constraints and the time to hand in which matters need to be melded together the job is still in hand.
He deserves more time as well as an adequate amount of financial backing but seems likely to be left short on at least one if not both of these commodities.
At stages it has seemed things were progressing well but now the side is struggling for confidence as well as results. It makes a review of his position inevitable regardless of who owns the club and whether the fans become as vocal in opposition as they are and have been in his defence. That will only happen come May rather than on Monday or even Thursday morning.
However, hands are tied when an overwhelming debt generated by owners who sought to milk a cash cow they never believed would fail to produce the cream. At least until a global downturn stunted the borrowing and loan markets they had previously exploited to great effect.
That economic climate means those same owners who have remained unable to move the club or its plans forward virtually since the day they have arrived need to see the comparatively little commercial revenue, substantial broadcast rights money and cash from player sales service the interest they have placed squarely on the clubs shoulders.
It should be added that significant sums of money have been raised from players who, like the club in general, Rafael Benitez has more often than not made better than when they arrived.
Until these particularly thorny issues can be ironed out some rather vicious circles cannot be squared and Liverpool will be left continually hoping that someone can help them punch above their collective weight.
The Reds were going backwards under Houllier while at the same time Benitez had taken Valencia - a side without much recent pedigree and who so often threatened to succeed but never quite managed it - to domestic and European glory.
The latter achieved despite the might of Barcelona albeit that the Catalan club were in a rebuilding phase after decline under Joan Gaspart’s presidency and Real Madrid were in their first ‘Galatico‘ era.
In the circumstances Benitez seemed tailored made for the Anfield job.
Manchester United were already cash laden courtesy of their soon to end 15 year status as a Plc while Chelsea had attracted the attentions of a 36 year old Russian oligarch. Estimated to be worth £5.5 billion he had pumped money into both club infrastructure but also over £200 million into the playing staff. Recouping less than 10% of that in sales.
Arsenal were also happy to spend big money on exceptional talents - far more than many tend to remember now Arsene Wenger has a reputation for being frugal with his transfer kitty. They also had a heavy investment in youth which was brought to North London from all corners of the globe at significant cost.
Though without a benevolent owner and run in the same “old fashioned way” Liverpool were also organised - a low number of high value shares in private hands - the Gunners had a new stadium not just on the drawing board or an architect’s computer screen but actively being put into bricks and mortar. Set to earn millions of pounds a year more than their Highbury home could.
Liverpool who had planning permission for a new home had little more than a bog standard design of a bowled stadium. Somewhat out of the box though one which needed funding and one the Anfield board needed to attract substantial investment to if they were to do so and appointed companies to assess likely suitors.
Arsenal would receive money from the sale of their old home but borrowed heavily against the revenue a 60,000 stadium would generate but the £470 million cost was not easily garnered with tools going down soon after very early work commenced. A consortium of banks provided just more than half the means.
The remainder came through sponsorship, exclusive contractual agreements and lending through the bond market - which would take 25 years to repay. Instalments would be due at prescribed times. In return for this backing lenders received equity in the project.
Essentially placing the club in debt for hundreds of millions of pounds for more than a generation.
Then Liverpool chairman David Moores was open to selling his holding in order to ensure investment of the type he nor the club through its turnover just couldn’t foot.
However, apart from what often seemed nothing more than publicity stunts, politicians who had an eye on a general election in a country besotted with English football particularly Liverpool FC and would source the purchase price through other people’s money little seemed to move.
A fully underwritten £73 million cash bid from another board member was on the table but deemed derisory.
There was for whatever reason hope of billionaires not just plain millionaires riding in. Bottom pits of funding. Outside of financial circles and the world of venture capitalism few had considered or even heard the term leveraged buy out.
Over the five and a half years Rafael Benitez at been at Liverpool’s helm the game and other clubs including those who already had the jump on Liverpool has moved forward.
Some at an rapid pace due to the interest of not just industrialists but sovereign wealth funds.
At that same stage Gerard Houllier was placing his pot plants into a box and heading to Lyon Sheik Mansour bin Zayed Al Nahyan had possibly never heard of Manchester City. Dish-dashes had yet to enter the consciousness of those at Eastlands as a match day accessory.
Abu Dhabi’s hydrocarbon wealth makes the emirate and its ruling family one of the richest in the Middle East. Somewhere in the region of £500 million of that affluence has been ploughed into playing staff and £304.9 million converted from shareholder loan to equity.
The purchase of a further £89.6 million means City’s on paper debt is far too minimal to cause Michel Platini any worries about debt levels.
Just as it was in 2004 Liverpool are spluttering and the fans seem split about the man in charge, though not perhaps 50/50, between those who support the manager. Though they possibly look at the players when analysing reasons for the malaise want to get behind each and every man in a red shirt even the ones who could at best be described as below par.
Typically those of that persuasion will lay blame away from the coaches and though they may point a finger towards the pitch there’s no desire to rock the boat or even cause further problems by doing anything other than backing the team to the hilt.
There has been a tide against Rafa for longer than the past few months and those who had already turned against him prior to this current season may criticise the players for under-achieving but place most ills squarely at coach’s door.
This category also tend to not only shout louder but also ring the phone-ins and other fans forums - not all solely Liverpool Football Club related. Events in the FA Cup give them that extra oxygen as producers and editors scrabble to put them on air.
Those who are still behind the manager suffer but do so silently ignoring the various interactions available to them. So for some, the laziest in the media included, the dissenters appear to be the majority. However, even though their ranks have swelled in recent weeks anecdotal evidence still suggests they are not.
While debate focuses on the ownership, funding and future direction of the club events on the pitch can often seem secondary but with the club’s financial situation sorted in the short term, albeit via the equivalent of an elastoplast that are refinanced loans with huge demands for capital payment when renewed, attention inevitably moves from Gillett and Hicks to a man who has tended to feature in many off field dramas as well as the on field disappointments - Rafael Benitez.
For all the abusive e-mails, assurances about the manager’s tenure and possibility of further investment reports cannot go beyond quotes from sources close to proposed deals but the prodigious generation of column inches about the club can continue as the team struggles to claim points or progress in other arenas.
There is no shortage of opinion from writers, pundits and those who have previously served the club which means the manager especially can be kept in the crosshairs while pot shots of mud are aimed in his direction.
One of those courtesy of Charlie Nicholas on Sky’s Soccer Saturday who suggested to his colleague Phil Thompson that the side he presided over alongside Gerard Houllier was better than the one now assembled.
It makes comparisons that will keep coming inevitable.
On the surface appraisals of the Houllier and Benitez periods are fair. Take the team’s set up.
Despite attempts to introduce it there is little true width in the side and for some strange reason little movement plus less creativity despite a team brimming with ability in that department.
There are similarities other than what is said to be a one dimensional style. Results and form are as poor as the final knockings under the Frenchman. Confidence is at rock bottom and players who are much better than they look can sometimes barely keep possession at stages of the game. When it is retained even comfortably often they struggle to do much with it.
Some signings who promised much have failed to blossom.
However, under Houllier the players drafted in got progressively worse and never looked like improving. There was so little coming through the reserve ranks who with the exception of finishing top in 2000 trundled along in the Premiership Reserves North.
If that wasn’t bleak enough the playing style was not so much careful as bubble wrapped in fear.
When an advantage was found it would be nursed and the shop closed. There was an over-dependence on long balls to exploit Michael Owen’s pace but not a lot else. The Reds simply could go no further under his guidance.
The team reflected the manager perfectly who suffered from something bordering on paranoia during the final months of his stewardship. Be that people linked with his job and all manner of opinion being submitted from an important constituent of the Liverpool family ex-players.
Links with other managers are being made and courted by journalists who realise that no one touted as a successor will rule themselves out.
Despite of the paltry funds which would be at their disposal and bickering above their heads being mentioned in the same breath as the Anfield hotseat does their career prospects no harm at all.
For Martin O’Neill now read Jurgen Klinsmann and if some reports are to be believed Martin O’Neill again. Guus Hiddink and Jose Mourinho are also mentioned but the current Russia and Inter Milan managers are - well - nothing more than wild Guus chases. The former earns over £6 million in his current role and a further well remunerated role with Chelsea as a technical directory. No bad return for a 63 year old.
Mourinho may have enjoyed seeing his favourite emergency striker Robert Huth grab a late equaliser against the Reds but will not, according to sources close to the Portuguese, join any club in a state of financial volatility. Nor will he join one which stable or not has no money to fund his inevitably expensive tastes.
Unlike Benitez Houllier allowed it all to creep under his skin.
Does everything but reaction to those critiques from old boys ring true today?
A striking contrast its that Gerard Houllier’s sides were roughly playing to their level. The current side is not as good as it could be and capable of so much better.
Regardless of who left during the summer it should certainly have pretensions of a title challenge after the last campaign. Even if efforts are to be in vain that chance of claiming the trophy has to be on well into the spring.
The worst factor of the current situation is that players who are far better than their current showings and world class performers are retreating within themselves because they seem too scared to make an error.
It could even be ventured that they have no faith in the manager - but that is purely speculative as are claims that either the whole or certain portions of the dressing room have to coin that oft quoted phrase been lost. Reading between the lines suggestions revolve around the non-Spanish or those for whom Spanish is not the first language.
Frankly many performances including the one at the Britannia Stadium on Saturday belie the claim.
Rafa has a very different relationship with his players than most managers. In essence he may never have had the dressing room - just the respect rather than admiration of many members of his squad for his achievements. Steven Gerrard has openly spoke about the situation and that distance is purposeful.
He is perhaps as every manager should be not a friend but a man in charge who may have to drop them or let them know that their time at Anfield has come to an end. He rarely singles any specific individual for praise preferring to talk about the team as a whole and pour over what could have gone better. Even when he should be basking in victory.
Some whose names need not be repeated now are living on borrowed time, past reputation or could simply do with a change of scene. This includes those who have been acquired by Benitez for sizeable fees but there are buys Rafa has made who may not form the core of club but do show potential and have every chance of a successful career in L4. As for the quality of signings. They have certainly improved as time has gone on but regardless of the source of funds being borrowings the money available has increased.
The Reading result has seen many of those who considered themselves somewhere in the middle of the debate jump to one side but it’s only the knee-jerk reaction to the result rather than the manager’s tactics and decisions.
A positive result against Stoke would not have sated their ire but no blame can be heaped on Rafa or the players not putting the Potters away.
The simple fact is that a strong team not one that could be considered in any way weakened below an unacceptable point took to the field. They were set up correctly for the task of defending the inevitable bombardment as well as holding and attacking. If they had not more time would have been spent within a narrow midfield corridor.
Of course with one exception - goals scored - statistics do not decide games. Unfortunately Gerard Houllier based his after match press conferences around them when under pressure. They were straws he would clutch at but all too often they were the irrelevant ones.
Rafa has always tended to take a different tack analysing the play and whether his team held control of matters. The Opta sheets are rarely grasped.
These things happen to every club which has ever taken to a football field be that in a knock-out tournament or league and at any level.
Liverpool are creating opportunities in most games played and evidence gathered from eyes alone demonstrates that Rafa’s sides while often careful produce a better brand of football now than most sides have since he took charge.
Almost every analysis proves that the majority of opponents are heavily beaten in key areas but it’s the inability to put the chances this creates away which is costing dear.
However, there is no escaping that at times some unconfident and lifeless football is being played and though a plan B is surely suggested like so many teams when the A game is frustrated Liverpool can play under a huge amount of fear and look to pick off chances where they can rather than rip at the jugular.
The manager’s style is essentially cautious but only in the respect that regardless of the phase of play he would prefer to have his team acting as one. If the opposition has the ball everyone in their own way will defend - from front to back. If the ball is forward the team should line up in support ready to win the second and third balls if the first is lost.
Last season when confidence was high this produced the type of performances witnessed against Derby County, Newcastle United, Manchester United, Real Madrid and others. This term the displays against Hull City, Manchester United again and Everton have been exceptions rather than something approaching the rule.
All too often in recent times this had only led to the creation pretty patterns of play and slick movement until the vital point when someone is expected to pull the trigger. When that killer touch or cutting edge is missing. In many games it has all looked so fruitless.
For a number of weeks when a goal has been scored the Reds have done everything but add to it - be that before or after the net is found. At one stage that would have been enough to achieve the minimum required for a win but the normally solid backline has had its wobbles and that unusual vulnerability has cost dear.
Liverpool have often had more than enough chances to win handsomely but a failure to exploit them has yielded many of the 28 points so far dropped.
With those in the bank the Reds would still not be muscling for pole position but in a league no other team seems keen to win would have a chance. They would certainly be as handily placed as any of the other challengers.
However, there are clearly problems at the club and within the dressing room.
As previously stated the exact cause remains a matter of conjecture - often depending where you stand on the manager’s future - but if players do not seem bothered and enjoy a joke immediately after a poor result, no longer believe in the manager or his methods well that will only usually end one way - a new man taking over.
That is part of the situation which did for Houllier
Claims that the current ownership situation and the fact that the fans have marshalled against the rule of Gillett and Hicks also has its comparison. The rows, emails and sidling up to Klinsmann were thought to have made Rafa fire proof. In the same way that Houllier’s heart surgery in late 2001 and then subsequent return five months later on the night a 2-0 win over Roma secured progress to the quarter-finals of the Champions League for the first time. But that highly charged evening along with the treble cup win the previous season proved to be the pinnacle of his six year stay as despite going a dozen games without defeat from the start of the next season that was followed by a sequence of 11 more league matches during which a win could not be bought. The situation went down hill from there on in.
A worry is that if Rafa is dismissed then Liverpool fall back and set the same standards which saw Manchester United spiral away for years until a decade or so down the line somebody suggested they should show a little patience in the man charged with guiding the club. Just as they did at Everton who despite dipping after the high of Champions League qualification showed a little restraint in keeping David Moyes even when league form faltered and their European adventure ended in humiliation.
Whether he lifts the only piece of silverware now available or fails to qualify for the Champions League it’s not the end for Rafa but these days could certainly mark its beginnings if things don’t start to look up.
That was certainly the case for Houllier who didn’t have the boardroom unrest or fans drawing battle lines over the club’s soul to contend with only a focus that included on field matters.
Rafa quite rightly can point to his exploits in Europe which rivals every Liverpool manager but Bob Paisley and Joe Fagan who reached three and two European Cup finals respectively and in successive seasons. Two in three years and one win represents a better record than any current manager other than Carlo Ancelotti.
Considering no side has ever defended the trophy in the Champions League era it’s more than just the knock-out cup often portrayed and at the business end Europe’s elite are usually waiting. Each trying to land a knock-out blow on their fellow behemoths.
Reaching the final two years out of three is not the same as guiding your charges to a similar number of League Cups in as many terms.
Has Rafa taken the club as far as he can? Almost certainly not rather than probably not. Nor has he created the same type of side he had at Valencia. Though he has tried due to financial constraints and the time to hand in which matters need to be melded together the job is still in hand.
He deserves more time as well as an adequate amount of financial backing but seems likely to be left short on at least one if not both of these commodities.
At stages it has seemed things were progressing well but now the side is struggling for confidence as well as results. It makes a review of his position inevitable regardless of who owns the club and whether the fans become as vocal in opposition as they are and have been in his defence. That will only happen come May rather than on Monday or even Thursday morning.
However, hands are tied when an overwhelming debt generated by owners who sought to milk a cash cow they never believed would fail to produce the cream. At least until a global downturn stunted the borrowing and loan markets they had previously exploited to great effect.
That economic climate means those same owners who have remained unable to move the club or its plans forward virtually since the day they have arrived need to see the comparatively little commercial revenue, substantial broadcast rights money and cash from player sales service the interest they have placed squarely on the clubs shoulders.
It should be added that significant sums of money have been raised from players who, like the club in general, Rafael Benitez has more often than not made better than when they arrived.
Until these particularly thorny issues can be ironed out some rather vicious circles cannot be squared and Liverpool will be left continually hoping that someone can help them punch above their collective weight.
Wednesday, 14 October 2009
Fit and proper for the family silver
Earlier this week the government announced a sale of some £16 billion worth of public assets to reduce the nation’s deficit and mitigate the spending cuts which will be needed to reverse the country’s economic downturn.
Albeit in his later guise as Lord Stockton commenting on the privatisations of the Thatcher government one of Gordon Brown’s predecessors in the office of Prime Minister Harold Macmillan once warned against selling the family silver. Intoning that it could only be done once.
Maybe it can be done at least twice.
Another notable sale seems in the offing with the family silver that was Liverpool Football Club likely to see another investor coming in.
Tom Hicks and George Gillett always had an exit strategy in mind. Anybody borrowing money from banks to fund a purchase has to - it is written in the plans presented to any financial institution and informs part of their decision.
It requires a time and a price when the asset bought has reached a value at which sell on becomes not just profitable but because of the nature of leveraged buy out inevitable.
Banks and those they funded make a huge profit and move on to the next deal. It is their measure of success.
A similar mention of possible strategies in their leaked proposals saw DICs bid create no small measure of concern outside the Anfield boardroom then rejected. Though the Dubai based sovereign wealth fund would not have been relying on banks they need such plans laid out to their shareholders and other financial partners.
The American duo - carpetbaggers with intentions and principles so low that they could make their way under a snake’s belly with Stetsons on - somehow managed to escape that same scrutiny.
They were at the time of their arrival embraced by an overwhelming majority who believed their presence not to mention dollars would be welcome and help the club catch up with title contenders who were disappearing into the distance.
However, just as when Manchester United gained Plc status once Liverpool were put up as a going concern by David Moores they, like that team from the other end of the East Lancs, were and remain on sale.
Talks with Prince Faisal bin Fahd bin Abdullah al-Saud’s F6 group may only be with one of the joint owners and may only concern up to half of the club but no one should be under any illusion that each and every percent of ownership is up for grabs.
Also Hicks may have lifted his veto against Gillett bailing out with his pockets stuffed but no one should believe the Texan will necessarily make things easy for his prospective new partner or anyone else.
His ability to prohibit, limit and make things as difficult as he wants them to be remains huge.
A fit and proper person test may only see the Premier League check whether you may have the wherewithal and no outstanding parking tickets - though it’s probably not even that stringent judging by some who have passed - but for Liverpool Football Club a fit and proper person needs to make the grade in a more rigorous test and the very fact that Prince Faisal is neither Hicks nor Gillett is not sufficient.
Nor, though Tom and George especially may differ, is the level of his wealth.
It is his ability to be a fit and proper custodian of Liverpool FC which is the most important and as it should be demanding assessment
The consequences of our club - in whole or even part - being passed into more bad hands doesn’t bear thinking about.
Albeit in his later guise as Lord Stockton commenting on the privatisations of the Thatcher government one of Gordon Brown’s predecessors in the office of Prime Minister Harold Macmillan once warned against selling the family silver. Intoning that it could only be done once.
Maybe it can be done at least twice.
Another notable sale seems in the offing with the family silver that was Liverpool Football Club likely to see another investor coming in.
Tom Hicks and George Gillett always had an exit strategy in mind. Anybody borrowing money from banks to fund a purchase has to - it is written in the plans presented to any financial institution and informs part of their decision.
It requires a time and a price when the asset bought has reached a value at which sell on becomes not just profitable but because of the nature of leveraged buy out inevitable.
Banks and those they funded make a huge profit and move on to the next deal. It is their measure of success.
A similar mention of possible strategies in their leaked proposals saw DICs bid create no small measure of concern outside the Anfield boardroom then rejected. Though the Dubai based sovereign wealth fund would not have been relying on banks they need such plans laid out to their shareholders and other financial partners.
The American duo - carpetbaggers with intentions and principles so low that they could make their way under a snake’s belly with Stetsons on - somehow managed to escape that same scrutiny.
They were at the time of their arrival embraced by an overwhelming majority who believed their presence not to mention dollars would be welcome and help the club catch up with title contenders who were disappearing into the distance.
However, just as when Manchester United gained Plc status once Liverpool were put up as a going concern by David Moores they, like that team from the other end of the East Lancs, were and remain on sale.
Talks with Prince Faisal bin Fahd bin Abdullah al-Saud’s F6 group may only be with one of the joint owners and may only concern up to half of the club but no one should be under any illusion that each and every percent of ownership is up for grabs.
Also Hicks may have lifted his veto against Gillett bailing out with his pockets stuffed but no one should believe the Texan will necessarily make things easy for his prospective new partner or anyone else.
His ability to prohibit, limit and make things as difficult as he wants them to be remains huge.
A fit and proper person test may only see the Premier League check whether you may have the wherewithal and no outstanding parking tickets - though it’s probably not even that stringent judging by some who have passed - but for Liverpool Football Club a fit and proper person needs to make the grade in a more rigorous test and the very fact that Prince Faisal is neither Hicks nor Gillett is not sufficient.
Nor, though Tom and George especially may differ, is the level of his wealth.
It is his ability to be a fit and proper custodian of Liverpool FC which is the most important and as it should be demanding assessment
The consequences of our club - in whole or even part - being passed into more bad hands doesn’t bear thinking about.
Tuesday, 13 October 2009
PIK a number
Like spades, or as George Gillett certainly said back in February 2007, shovels in the ground within 60 days there was an awful lot of hyperbole when two Americans pitched up and took “custodianship” of Liverpool Football Club.
At that same time their compatriots the Glazer family were held up as an example of how not to do things when arriving in a Premiership boardroom.
Yet it seems every note and move dreamed up by the Old Trafford hierarchy has been followed.
Well there is of course one possible exception. Sir Alex Ferguson has been relatively unhindered in the transfer market even if the fans have seen increases in their ticket prices and other methods of squeezing the pennies out of pockets from Stretford to Singapore.
At the same time that details of 8% ticket prices rises were leaked the world was also informed that Rafael Benitez could possibly, for the next five years at least, receive less than his current annual net spend of £20 million. This sum would include not only transfer fees but wage increases.
A little deeper in the reports our dysfunctional duo had drawn up separately by investment bankers Merrill Lynch and Rothschilds during the spring was something a little harder to explain within newspaper columns and broadcasts - payment in kind loans. PIKs for short.
If no extension of their borrowings could be negotiated a further debt of £50 million would be placed not on each owner or the Kop Football Holdings company they set up to purchase the club. They would like much of the £350 million debt they used to leverage the purchase be placed squarely and firmly on the shoulders of the club.
Manchester United’s £680 million worth when they were taken out of Plc status attracted a massive interest or service charge. It is now even higher than initially projected and PIKs were largely responsible.
They also meant that even when the Champions League and Premiership trophies were secured in 2008 and all the riches those two competitions bestow upon the winners were tallied up the Red Devils reported huge losses.
A PIK arranged in the summer of 2006 - two years earlier - totalling £138 million with annual interest of 14.25% was responsible. And it has kept on running as the loan needs to be either repaid or the debt it relates to - that original purchase cost - refinanced.
Liverpool’s £50 million over its projected five years course would have seen the debt double and then some as interest is charged on a compound basis.
Imagine a sum running on a mortgage or credit card debt which if you structure a plan to pay nothing in return for higher rates of interest over half a decade and there is a practical idea of how it would constrict finances.
Hicks and Gillett who have a lesser burden than their fellow countrymen were able to extend their arrangement with Royal Bank of Scotland and Wachovia so the PIK road was never travelled down.
However, if city sources are to be believed there is no chance of a further refinancing unless additional funds from whatever source are injected. But with the level of debt scaring off potential investors it’s a vicious circle.
Despite reporting a record turnover for the year up to 31 July 2008 of £159.1 million and a pre-tax profits of £30.2 million there simply is not enough money coming into the club to cover the interest already accruing.
Hikes in admission prices, further constraint of transfer and other budgets plus PIKs could be the tip of a very big iceberg.
At that same time their compatriots the Glazer family were held up as an example of how not to do things when arriving in a Premiership boardroom.
Yet it seems every note and move dreamed up by the Old Trafford hierarchy has been followed.
Well there is of course one possible exception. Sir Alex Ferguson has been relatively unhindered in the transfer market even if the fans have seen increases in their ticket prices and other methods of squeezing the pennies out of pockets from Stretford to Singapore.
At the same time that details of 8% ticket prices rises were leaked the world was also informed that Rafael Benitez could possibly, for the next five years at least, receive less than his current annual net spend of £20 million. This sum would include not only transfer fees but wage increases.
A little deeper in the reports our dysfunctional duo had drawn up separately by investment bankers Merrill Lynch and Rothschilds during the spring was something a little harder to explain within newspaper columns and broadcasts - payment in kind loans. PIKs for short.
If no extension of their borrowings could be negotiated a further debt of £50 million would be placed not on each owner or the Kop Football Holdings company they set up to purchase the club. They would like much of the £350 million debt they used to leverage the purchase be placed squarely and firmly on the shoulders of the club.
Manchester United’s £680 million worth when they were taken out of Plc status attracted a massive interest or service charge. It is now even higher than initially projected and PIKs were largely responsible.
They also meant that even when the Champions League and Premiership trophies were secured in 2008 and all the riches those two competitions bestow upon the winners were tallied up the Red Devils reported huge losses.
A PIK arranged in the summer of 2006 - two years earlier - totalling £138 million with annual interest of 14.25% was responsible. And it has kept on running as the loan needs to be either repaid or the debt it relates to - that original purchase cost - refinanced.
Liverpool’s £50 million over its projected five years course would have seen the debt double and then some as interest is charged on a compound basis.
Imagine a sum running on a mortgage or credit card debt which if you structure a plan to pay nothing in return for higher rates of interest over half a decade and there is a practical idea of how it would constrict finances.
Hicks and Gillett who have a lesser burden than their fellow countrymen were able to extend their arrangement with Royal Bank of Scotland and Wachovia so the PIK road was never travelled down.
However, if city sources are to be believed there is no chance of a further refinancing unless additional funds from whatever source are injected. But with the level of debt scaring off potential investors it’s a vicious circle.
Despite reporting a record turnover for the year up to 31 July 2008 of £159.1 million and a pre-tax profits of £30.2 million there simply is not enough money coming into the club to cover the interest already accruing.
Hikes in admission prices, further constraint of transfer and other budgets plus PIKs could be the tip of a very big iceberg.
Wednesday, 23 September 2009
Money spinning
Recently signed sponsorship deals have it seems buoyed the owners’ spirits about the financial vitality of Liverpool Football club and their ability to make good on their long overdue promises from February 2007.
A spade in the ground maybe even the arrival of Snoogy Doogy.
Standard Chartered £80 million spread over four years is however unlikely to see digging implement arrive in Stanley Park any time soon. Also promises to plough (every pun intended) substantial amounts of the newly acquired bounty into the team will need to be realised if Messrs. Hicks and Gillett are to so much as start earning any credibility.
Debt levels may be defined as manageable by the Americans but will still exist and remain substantial and in no small part levied against the club rather than their own assets.
A telling comment from Christian Purslow is that windfalls such as this will be reinvested in including salaries - a suggestion that much of the limited war chest Rafael Benitez had available during the summer just gone was swallowed up by pay increases for those who penned and the new season’s bonus structure.
Chances are another round of rises would limit the pot for January, summer 2010 and so on.
There was and remains a need for Liverpool to do better and as well as their contemporaries in raking additional finance in which is why the current shirt sponsors had to come up with more or be replaced from a host of possible suitors.
Carlsberg have enjoyed a long and fairly fruitful relationship for much of the past 18 years but over the past half decade or so the deal has worked better for one party than the other. The brewer’s flagship brand has seen prolonged and extensive exposure across every continent of the globe through the clamour for Champions League and Premiership football.
It led to saturation across all markets. £7.2 million per year was hardly the going rate and paled into insignificance when compared with the riches Manchester United, Chelsea, Arsenal and many other clubs in the top flight enjoyed.
Not all commercial deals struck under the reign of Hicks and Gillett have been so profitable. Thomas Cook receive a significant percentage of the tickets for all home games in exchange for a mere £1.5 million which are retailed at a mark up which includes hotel stays.
Tourists to the city and corporate clients may be an intended market but no small number of fans who live in the city are resorting to it as a method of gaining tickets which are getting as valuable to hold as gold dust.
Deals for a host of away games including European ones such as the one to come with Fiorentina next week mixing admission with an overnight stay or just a flight there and back attract an equally attractive fee and mean fewer and fewer tickets make it into the hands of those fans who had previously been able to obtain them. The attractiveness of the match allowing higher prices to be charged.
To expect Standard Chartered to be so generous without clauses based on performance and trophy wins is was always naive. Even though the money which will come in is a huge improvement it seems certain that there are such clauses.
A minority investor is said to be looked for but again this possibly hides a true agenda. Along with the recent quotes of £240 million naming rights for the new stadium it smacks of an alternative strategy and it can only be concluded that the optimism and talk is merely aimed at flagging any possible sale and hyping up the price.
A spade in the ground maybe even the arrival of Snoogy Doogy.
Standard Chartered £80 million spread over four years is however unlikely to see digging implement arrive in Stanley Park any time soon. Also promises to plough (every pun intended) substantial amounts of the newly acquired bounty into the team will need to be realised if Messrs. Hicks and Gillett are to so much as start earning any credibility.
Debt levels may be defined as manageable by the Americans but will still exist and remain substantial and in no small part levied against the club rather than their own assets.
A telling comment from Christian Purslow is that windfalls such as this will be reinvested in including salaries - a suggestion that much of the limited war chest Rafael Benitez had available during the summer just gone was swallowed up by pay increases for those who penned and the new season’s bonus structure.
Chances are another round of rises would limit the pot for January, summer 2010 and so on.
There was and remains a need for Liverpool to do better and as well as their contemporaries in raking additional finance in which is why the current shirt sponsors had to come up with more or be replaced from a host of possible suitors.
Carlsberg have enjoyed a long and fairly fruitful relationship for much of the past 18 years but over the past half decade or so the deal has worked better for one party than the other. The brewer’s flagship brand has seen prolonged and extensive exposure across every continent of the globe through the clamour for Champions League and Premiership football.
It led to saturation across all markets. £7.2 million per year was hardly the going rate and paled into insignificance when compared with the riches Manchester United, Chelsea, Arsenal and many other clubs in the top flight enjoyed.
Not all commercial deals struck under the reign of Hicks and Gillett have been so profitable. Thomas Cook receive a significant percentage of the tickets for all home games in exchange for a mere £1.5 million which are retailed at a mark up which includes hotel stays.
Tourists to the city and corporate clients may be an intended market but no small number of fans who live in the city are resorting to it as a method of gaining tickets which are getting as valuable to hold as gold dust.
Deals for a host of away games including European ones such as the one to come with Fiorentina next week mixing admission with an overnight stay or just a flight there and back attract an equally attractive fee and mean fewer and fewer tickets make it into the hands of those fans who had previously been able to obtain them. The attractiveness of the match allowing higher prices to be charged.
To expect Standard Chartered to be so generous without clauses based on performance and trophy wins is was always naive. Even though the money which will come in is a huge improvement it seems certain that there are such clauses.
A minority investor is said to be looked for but again this possibly hides a true agenda. Along with the recent quotes of £240 million naming rights for the new stadium it smacks of an alternative strategy and it can only be concluded that the optimism and talk is merely aimed at flagging any possible sale and hyping up the price.
Monday, 10 August 2009
When he got there the cupboard was bare
At the end of last season the general consensus was that the Liverpool team which had gone so close to ending a title drought needed a few tweaks to not just remain competitive - as rivals with far more economic muscle seemed almost certain to strengthen - but reach that higher spot on the ladder.
The areas identified were defence - as a centre half would be needed along with additional options at full back. Wing backs had been signed the previous season in Philip Degen and Andrea Dossena but through either injury, a struggle to take to Premiership football or both neither had too much success. Alvaro Arbeloa though content with life on Merseyside was said to want a return to Spain sooner rather than later and with the 5+6 rule set to be introduced by UEFA there was a wish to recruit an English player.
Glen Johnson who fitted that criterion of birth and pushed himself heavily as one of the best attacking full backs in the top flight was a name touted heavily but courtesy of a contract extension from Portsmouth his price became somewhat steeper.
Another position was an attacking player - not necessarily an out an out forward in the mould of Fernando Torres - but someone who could share the goalscoring burden even deputise for Torres or Gerrard possibly allow another player to be pushed on from a deeper position.
Speculation was that Valencia’ David Silva was an option. He certainly peaked interest but the initial fee quoted was far too high to contemplate.
When Rafael Benitez signed his new contract in March amongst the many promises made was the provision of a £20 million war chest which could only be increased by any raised by sales during the coming summer.
Champions League and that for matter Premiership prize money along with the substantial sums from broadcast rights and other receipts would not be available.
Not long after Rafa became aware Xabi Alonso was likely to leave. Real Madrid were in essence the only bidder and a fee of €30 million (somewhere between £25 and £26 million depending on the exchange rate) was agreed as acceptable compensation by the owners and manager.
Every single penny based on the promise made back in the spring going into the kitty.
Finding a suitable replacement for Alonso as a metronomic influence in midfield would of course take a chunk of that sum but there would be a surplus along with additional funds.
Adding the other receipts in should see the fund standing at:
Xabi Alonso £25,500,000
Alvaro Arbeloa £ 3,500,000
Sebastian Leto £ 3,000.000
Jack Hobbs £ 800,000
Adam Hammill £ 500,000
Paul Anderson £ 250,000
Astrit Ajdarević free
Sami Hyypia free
Jermain Pennant free
Total £33,550,000
Added to the funds promised the total plus a surplus £10 million from Robbie Keane’s transfer back to Spurs the amount to hand should tip just over £63 million.
Notionally there is more as the balance of Peter Crouch's transfer to Portsmouth - somewhere in the region of £7 million - was written off meaning Johnson actualy cost £10 million in real terms.
Though three players have brought no funds in their salaries are savings but along with loan fees due for Ryan Flynn and Nikolay Mihaylov have been excluded. These sums are far from nominal and likely to show a surplus if the figures were to hand additions to the squad plus a number of players from across the ranks receiving increments to their pay will account for some of this resource.
However, contrasted to the £36 million so far spent - Johnson £17 million plus Alberto Aquiline £19 million - leads to a simple equation. After taking a few million out for the signings of Aaron King and Chris Mavinga it seems £25 million or thereabouts should be left.
A £6 million bid for Michael Turner suggests the reserves may well be lower and that a marquee signing to add weight to the front line is unlikely.
Hull could well be offered a little more but with Sylvain Distin remaining an alternative and Stoke’s Ryan Shawcross now touted as an option chances are Turner will no longer be an option.
Speaking after the weekend’s game with Athletico Madrid Benitez was coy when asked about his transfer plans and just how much he had to hand saying:
"We have to work with the players we have at this moment and keep working with the scouting department. We had some money but I will not talk about figures. When you talk about the figures I think it is clear. I will not say anything. I don't have the answer.”
Adding: “We are working hard with the players we have and the money we have. Always it is difficult to compete in the Premier League with clubs who have more money."
Matters could well have changed since the debt which allowed Tom Hicks and George Gillett to buy the club was refinanced roughly a fortnight ago.
An essential clause of the new agreement is that the loan must be serviced by the payment of £40 million within 12 months and though some funds came from personal guarantees of £60 million the owners provide by previous restructuring a fair sum falls squarely on the club’s shoulders.
Whatever the rights and wrongs of the set up other sources were earmarked for that purpose. Not the transfer balance sheet.
Asked directly about any new constraints from Hicks and Gillett there was a diplomatic answer from the Liverpool boss but possibly one which suggested new targets: "We are talking about these things. We are working always. We try to be ready just in case [a new player can be brought in], but you never know. It depends on the prices. It is something I have to talk with the club about. We have some ideas and we have to discuss these ideas."
Discretion continued to be shown as did the prospect of no one else arriving before the end of August: "To sign better players than we have now is not easy. If you analyse it you have to spend big, big money to sign these players. We have to manage with the players we have and I am pleased with them and hopefully with the experience of last season they will be better” Benitez said.
"I think we have some young players who need to improve San Jose, Ayala, but also Ngog, Nabil, Babel and Lucas; young players with quality. The priority was to extend the contract of the senior players to make sure we kept the spine of the team. Alonso decided he wanted to go. He told me in May he wanted to leave. We had to keep working and I think the price at the end was good. With this money we have brought in Aquilani.
“We knew he had an operation, but we wanted to change a little bit the games at home when the opposition is deep and it is not easy to give the final pass. Aquilani will be good there. The other players we have to wait and see how they progress in the season."
Liverpool are the jewel in the crown of Hicks and Gillett's sporting portfolios. So much so that stakes in other "franchises" have been put up for sale.
The club, the current ground and that long promised new stadium are all able to generate huge amounts of money but in the current climate the preferred leverage deals come with multiple strings attached. They also attract great expense which it seems has to be met from coffers which were supposed to be sacrosanct.
The areas identified were defence - as a centre half would be needed along with additional options at full back. Wing backs had been signed the previous season in Philip Degen and Andrea Dossena but through either injury, a struggle to take to Premiership football or both neither had too much success. Alvaro Arbeloa though content with life on Merseyside was said to want a return to Spain sooner rather than later and with the 5+6 rule set to be introduced by UEFA there was a wish to recruit an English player.
Glen Johnson who fitted that criterion of birth and pushed himself heavily as one of the best attacking full backs in the top flight was a name touted heavily but courtesy of a contract extension from Portsmouth his price became somewhat steeper.
Another position was an attacking player - not necessarily an out an out forward in the mould of Fernando Torres - but someone who could share the goalscoring burden even deputise for Torres or Gerrard possibly allow another player to be pushed on from a deeper position.
Speculation was that Valencia’ David Silva was an option. He certainly peaked interest but the initial fee quoted was far too high to contemplate.
When Rafael Benitez signed his new contract in March amongst the many promises made was the provision of a £20 million war chest which could only be increased by any raised by sales during the coming summer.
Champions League and that for matter Premiership prize money along with the substantial sums from broadcast rights and other receipts would not be available.
Not long after Rafa became aware Xabi Alonso was likely to leave. Real Madrid were in essence the only bidder and a fee of €30 million (somewhere between £25 and £26 million depending on the exchange rate) was agreed as acceptable compensation by the owners and manager.
Every single penny based on the promise made back in the spring going into the kitty.
Finding a suitable replacement for Alonso as a metronomic influence in midfield would of course take a chunk of that sum but there would be a surplus along with additional funds.
Adding the other receipts in should see the fund standing at:
Xabi Alonso £25,500,000
Alvaro Arbeloa £ 3,500,000
Sebastian Leto £ 3,000.000
Jack Hobbs £ 800,000
Adam Hammill £ 500,000
Paul Anderson £ 250,000
Astrit Ajdarević free
Sami Hyypia free
Jermain Pennant free
Total £33,550,000
Added to the funds promised the total plus a surplus £10 million from Robbie Keane’s transfer back to Spurs the amount to hand should tip just over £63 million.
Notionally there is more as the balance of Peter Crouch's transfer to Portsmouth - somewhere in the region of £7 million - was written off meaning Johnson actualy cost £10 million in real terms.
Though three players have brought no funds in their salaries are savings but along with loan fees due for Ryan Flynn and Nikolay Mihaylov have been excluded. These sums are far from nominal and likely to show a surplus if the figures were to hand additions to the squad plus a number of players from across the ranks receiving increments to their pay will account for some of this resource.
However, contrasted to the £36 million so far spent - Johnson £17 million plus Alberto Aquiline £19 million - leads to a simple equation. After taking a few million out for the signings of Aaron King and Chris Mavinga it seems £25 million or thereabouts should be left.
A £6 million bid for Michael Turner suggests the reserves may well be lower and that a marquee signing to add weight to the front line is unlikely.
Hull could well be offered a little more but with Sylvain Distin remaining an alternative and Stoke’s Ryan Shawcross now touted as an option chances are Turner will no longer be an option.
Speaking after the weekend’s game with Athletico Madrid Benitez was coy when asked about his transfer plans and just how much he had to hand saying:
"We have to work with the players we have at this moment and keep working with the scouting department. We had some money but I will not talk about figures. When you talk about the figures I think it is clear. I will not say anything. I don't have the answer.”
Adding: “We are working hard with the players we have and the money we have. Always it is difficult to compete in the Premier League with clubs who have more money."
Matters could well have changed since the debt which allowed Tom Hicks and George Gillett to buy the club was refinanced roughly a fortnight ago.
An essential clause of the new agreement is that the loan must be serviced by the payment of £40 million within 12 months and though some funds came from personal guarantees of £60 million the owners provide by previous restructuring a fair sum falls squarely on the club’s shoulders.
Whatever the rights and wrongs of the set up other sources were earmarked for that purpose. Not the transfer balance sheet.
Asked directly about any new constraints from Hicks and Gillett there was a diplomatic answer from the Liverpool boss but possibly one which suggested new targets: "We are talking about these things. We are working always. We try to be ready just in case [a new player can be brought in], but you never know. It depends on the prices. It is something I have to talk with the club about. We have some ideas and we have to discuss these ideas."
Discretion continued to be shown as did the prospect of no one else arriving before the end of August: "To sign better players than we have now is not easy. If you analyse it you have to spend big, big money to sign these players. We have to manage with the players we have and I am pleased with them and hopefully with the experience of last season they will be better” Benitez said.
"I think we have some young players who need to improve San Jose, Ayala, but also Ngog, Nabil, Babel and Lucas; young players with quality. The priority was to extend the contract of the senior players to make sure we kept the spine of the team. Alonso decided he wanted to go. He told me in May he wanted to leave. We had to keep working and I think the price at the end was good. With this money we have brought in Aquilani.
“We knew he had an operation, but we wanted to change a little bit the games at home when the opposition is deep and it is not easy to give the final pass. Aquilani will be good there. The other players we have to wait and see how they progress in the season."
Liverpool are the jewel in the crown of Hicks and Gillett's sporting portfolios. So much so that stakes in other "franchises" have been put up for sale.
The club, the current ground and that long promised new stadium are all able to generate huge amounts of money but in the current climate the preferred leverage deals come with multiple strings attached. They also attract great expense which it seems has to be met from coffers which were supposed to be sacrosanct.
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