Carragher Slams Owners

In light of Dev-Ad’s comments (and recent information), we’ve decided to extend coverage on this blog to Gillett as well as Hicks.

They or their PR companies are welcome to comment if they like. Any constructive criticism is taken on board and our posts etc altered accordingly.

Meanwhile, Liverpool vice-captain Jamie Carragher has expressed his antipathy toward the current ownership at Anfield. In his recently released autobiography, he gives his own withering view on why Gillett & Hicks bought Liverpool:

“For richer or poorer, we’d sold Liverpool to two ruthless businessmen who saw us as a moneymaking opportunity.”

Not that that’s a surprise, but the fact that their own players are now publicly criticising them says a lot about how they’re running the club.

He also admits his “disgust” at the thought of them profiting from the damage they’ve caused.

Carragher slams Liverpool’s ‘ruthless’ owners – CNN

Update

Sorry about the lack of activity recently but other matters have taken priority.

The Texas Rangers article was posted in the States and generated a huge amount of interest, not least from a couple of US banks!  This is something we might try to pursue further in future – creating awareness amongst financial institutions & investors, especially those across the water.

Everything written here is based on quotes, newspaper articles and logical reasoning.  We try to be as factual and impartial as possible, given the information available.

There won’t be an article appearing every day.  The emphasis is on quality over quantity and there’s plenty of reading in the stuff we’ve already done.  Hence why you might see some of the existing articles reappearing elsewhere (the principal objective now being to increase awareness).

If anyone has any info, ideas or (especially) quotes, please let us know.  We don’t have time to scour the Internet properly so any help would be greatly appreciated.

Finally, a message to Tom Hicks.  You and your family are not welcome here.  As a man who relies on reputation to generate SPAC capital etc, you should be aware of the potential damage this is causing and may cause in future.

It would be better for all concerned if you took your profit.

EDIT: In the interests of fairness and freedom of speech, I’d suggest people read Dev-Ad’s comments (with an open mind).

Killing the Texas Rangers (Part 1)

When Tom Hicks took control of the Texas Rangers midway through the 1998 season (making George W Bush rich in the process), the Rangers had a pretty good team.  They had won the AL West division (which comprises 4 teams) in 1996 and went on to repeat this under Hicks in 1998 & 1999.

The results since then have been unbelievably poor, with the Rangers’ finishes in the division as follows:

2000 4th
2001 4th
2002 4th
2003 4th
2004 3rd
2005 3rd
2006 3rd
2007 4th

It’s a situation very similar to that at Corinthians – initial success followed by a dramatic decline as mismanagement, poor decision-making and the quest for profits took a toll on the team’s performances on the field.

There’s already a post on this blog quoting Tom Hicks’ attitude toward his sports businesses: “It’s not about winning”.  That’s not to say that he’s averse to winning – especially if it brings in more money and profit – but that winning only matters to Hicks in that it means more bums on seats and more consumers using their hard-earned wage to line his pockets.

Some may point to the infamous (even in the UK) $252m A-Rod contract as evidence that Hicks is a ‘big spender’.  This act of gross mismanagement took place back in 2001, when poor performance led Hicks to attempt to jump start the money wagon with what was, essentially, a massive PR stunt.

But that’s not what Rangers fans wanted.  They didn’t want a marquee player being brought in at the expense of the rest of the team.  They wanted a (hopefully winning) team with players who understood what it meant to play for the uniform.  Thus, A-Rod’s arrival generated only 30k in extra ticket sales in 2001 (certainly not what Hicks had expected), with a drop in total sales of 480k the following year and a further drop in 2003 of 260k.

Since that incident, Hicks appears to have reverted to his original philosophy – the “really trying” philosophy.  Why spend so much on players when just giving the appearance of doing so might be sufficient? Consider the statment he made on taking control of the Rangers:

“This is one of the best franchises in the country. It’s in a world class facility. You don’t even have to win a championship every year to draw the fans. You just have to show you’re really trying.”

Now consider the following passage from the official MLB site in June last year:

“Daisuke Matsuzaka was in the visiting clubhouse on Friday. The Rangers really expected him to be in their clubhouse when they submitted a $27 million bid when he was posted this winter. The Rangers were shocked when they heard the Boston Red Sox bid $51.1 million.

“Absolutely,” Rangers owner Tom Hicks said. “I couldn’t believe it. We thought we were going to win at $27 million.”

Signing Matsuzaka would have made a significant difference in the Rangers payroll. So would have signing Barry Zito, who turned down an offer that was potentially worth $99 million. Instead the Rangers open the season with a payroll of approximately $68 million that could rise to $75 million if Sammy Sosa and Eric Gagne reach all their incentives.

Only three teams in the American League have a payroll lower than the Ranges but Hicks said, “There wasn’t a player out there who we didn’t go after because of money. We went after the players we wanted. We just didn’t get a couple of the players we wanted.”

You just have to show you’re really trying!

And to emphasise this new miserly attitude – which has led to the Dallas Observer recently referring to him as a “billionaire buying knock-offs” – consider the following FACT: the Rangers are now ranked 21st in basic payroll out of the 30 MLB teams.  When Tom Hicks took over they had the 5th highest payroll – more in line with their current standing as the nation’s 5th largest media market.

It’s this new-found frugality, along with problems caused by the global credit crunch, that point to a pretty bleak future ahead for the Rangers.  Especially given that Hicks now appears to be more interested in the Glorypark development around the stadium – in which he is the primary investor – despite recently being forced to postpone some of the development.

The apparent indifference of Rangers fans toward what Hicks has done to their team (with very little in the way of public protest, etc) suggests that a lot have given up hope.  Others – primarily his defenders – appear to be suffering from a form of ‘Stockholm Syndrome’.

Now that his position is weak, perhaps it’s a good time for Rangers fans to wake from their slumber, join up with Liverpool fans and fight back?

Government shuns Hicks

Even the government is now becoming involved in the ownership mess at Liverpool Football Club.  An all-party committee has been set up to examine the ownership of football clubs in general, with the focus being on the situation at Liverpool.

People totally unconnected with the club are now questioning how a man like Tom Hicks – with his history – could come to partly own the most decorated club in British football history.

The review will address the ‘fit and proper person’ test used by the Premier League.  Amongst those invited to attend are co-owner George Gillett and chief executive Rick Parry.

Tom Hicks has apparently received no invitation.

Liverpool to be scrutinised by the government

Stadium

This is one of the murkier issues surrounding Liverpool Football Club at the moment.  Everyone knows about the embarrassing U-turn on the stadium plans announced to such fanfare last July – a move that was publicly attributed to “spiralling costs”.

The idea that costs could “spiral” so unforeseeably in the space of 4 or 5 months is questionable in itself (assuming that a proper project appraisal had been undertaken by architects HKS).  The global credit crisis began to hit around that time and banks were beginning to become more onerous in their lending requirements.  This would have placed higher demands on Gillett & Hicks in terms of the equity and guarantees needed to back their loans; the alternative (and the path they chose) being to revise the cost downwards and reduce the burden on themselves in that way.

It’s certainly better from a public image perspective for Gillett & Hicks to attribute the “downgraging” (to use CEO Rick Parry’s ‘original’ words) to “spiralling costs”, rather than putting it down, for instance, as their not being as rich as we were led to believe, or as their being unwilling to commit sufficient of their own finance to get the proposed stadium built under the new financial conditions.

Even if the reason for the re-design genuinely was “spiralling costs”, it should have raised serious questions as to the competence and cost-appraising abilities of Dallas-based architects HKS.

And this should have been taken into account when they submitted their revised design in January, where they were up against original ‘Parrybowl’ designers AFL.  The much-improved AFL design came in about £60m cheaper.  Yet, despite the blunder in assessing the original cost of the project (if you believe the “spiralling costs” explanation) and a much more expensive design, HKS once again got the contract.

The wisdom of this decision wasn’t borne out by the partial collapse of one of their stadia in Texas a month later.  In addition, a quick read of the description of the project on their site doesn’t inspire confidence as to their professionalism: “The 2005 Champions’ League winners, The Liverpool Football Club, will move into a new 60,000-seat stadium for the LFC at Anfield Stadium in Stanley Park in 2011.”

So why did they get the contract?

This is where it gets murky.  The bit highlighted in bold above, together with the investment practices adopted by Hicks when he was chairman of UTIMCO, have led to a degree of concern amongst some Liverpool supporters.

Alleged links between Hicks and HKS, along with the fact that the club has already (reportedly) spent between £15m-£20m on stadium designs alone (staggering if true), have done little to assuage these concerns.

Whether Hicks intends to actually build the stadium has also been recently called into question, with claims that the recent planning application was little more than an attempt to increase the value of his stake.

Amidst all this uncertainty, only one thing is certain: Liverpool fans know that Tom Hicks will do what’s best for Tom Hicks.  He now has zero credibility amongst Liverpool supporters and that trust will never be restored.

Debt & Lies

The word ‘liar’ is often used to describe Liverpool co-owner Tom Hicks.  Yet it’s a potent word to use and needs to be justified.

For instance, the statement made at the time of takeover – “We have purchased the club with no debt on the club” – did not preclude the loading of purchase debt onto the club in future.  However, given that the loan taken out was a bridging loan (short-term loans which charge penal rates of interest), the owners would have known that they would be refinancing in future, and that the acquisition debt could be transferred onto the club at that point.

So they chose their words carefully – it’s spin;  it’s deceit;  but it’s not an outright lie.

Now to the potential lies.

Hicks & Gillett stated around the time of the takeover that they wouldn’t ‘do a Glazer’.  This implied:

• that he wouldn’t transfer the purchase debt onto the club
• that the club’s profits wouldn’t be used to service this debt.

It’s been widely reported that the only thing that prevented the full £350m refinancing debt being loaded onto the club’s balance sheet was the opposition from Messrs Moores & Parry.  The takeover agreement reportedly stipulated that the consent of all board members was required in order for such a course of action to be ratified.  Tom Hicks, a leveraged buyout expert, didn’t expect such resistance and was apparently enraged by Moores’ and Parry’s stance.

Hicks, still upset that he hadn’t got his way, stated shortly after the deal had been completed that he “ought to line up all the lawyers and shoot them” , likely referring to this contract clause which resulted in only a portion of the total debt being secured against the club.

This invalidates the first bullet point and is potential lie number one.

Amongst the various promises made at the time of takeover was the following in the official offer document to shareholders:

“The payment of interest on, repayment of or security for any liability (contingent or otherwise) due under the facilities [loans] will not depend to any significant extent on the business of Liverpool.”

A few months later, Hicks revealed his true intentions in an interview with Lawrence Donegan in the Guardian:

“Hopefully the club will have extra cash flow so they can pay us a dividend to do that,” Hicks said. “If they don’t, then it will come from our pockets. But the club will have to have profits sufficient to pay those dividends.”

This appears to contravene what was stated in the official offer document and invalidates the second bullet point – giving us potential lie number two.

It’s the second of these which is the principal source of anger and concern amongst Liverpool FC supporters.  The club’s operating profit just about covers the annual interest payment – meaning that failure to qualify for the Champions League in any one season could lead to serious financial difficulty.  It also means that, rather than putting the club’s profits toward transfer funds, these profits are instead diverted to service the ridiculously high (EDIT: in relation to the club’s operating profit) interest payments on the owners’ acquisition debt.

In short, it’s a recipe for disaster.

Yet, the above also creates an opportunity; Hicks may actually have broken the law.  His statement to Donegan appears to contradict what was written in the official offer document, the sort of thing that could warrant investigation by the Takeover Panel (since shareholders may effectively have been provided with false information by Hicks).

So, to summarise, we have now established that Tom Hicks may have lied about the debt being put on the club.

The bad (or good!) news is that this is only the tip of the Hicks iceberg.  There are many more examples of possible spin and lies which we will hopefully be able to cover in future, though none as serious as this.

Media turn on Hicks

Even the British Media now appear to be tiring of Tom Hicks and his big mouth.  His ‘big interview’ on Thursday appears to have gone down like the proverbial lead balloon, with various journalists in reputable newspapers now openly displaying their disdain for the man.

Hicks tries to put it down as “British tabloid spin” but the Telegraph is certainly not a ‘tabloid’.  The following humourous article, by Jim White, shows what a laughing-stock the man has now become:

Tom Hicks Fails To Convince At Liverpool

Another indicator of the esteem in which Hicks is held by the Telegraph is given by the following article, written by Henry Winter a week prior to the above:

Anfield fiasco: Tom Hicks could sink Liverpool

And then there’s this article by Alan Fraser in the Daily Mail:

Mugged by Texas’s answer to JR as Hicks spins out his TV spot

The ‘tabloids’ have actually been pretty kind to him by comparison.  Apart, that is, from ex-Liverpool Echo writer Chris Bascombe, who wrote the following in the NOTW:

Hicks Is Killing Kop

All in all, the whole affair is turning into an enormous PR disaster for Tom Hicks.  Liverpool fans will be hoping that he soon finds first gear and manoeuvres his “gargantuan sub-prime” (to use Jim White’s words) quickly out of Anfield.

Destroying the ‘Liverpool Way’

“Liverpool is a fantastic club with a remarkable history and a passionate fanbase,” Gillett and Hicks said in a statement. “We fully acknowledge and appreciate the unique heritage and rich history of Liverpool and intend to respect this heritage in the future.”

Respect our heritage?  Liverpool supporters have spent the past few weeks looking on in anger and disbelief as their club was being publicly dragged through the gutter.  Barely a day went by without the destabilising figure of Tom Hicks attempting to stir up trouble of one sort or another.  Things have even gotten to the stage where there are Manchested United fans saying that they’re “glad they have the Glazers”.

This particular week of the year was always going to be a very important and emotional one for Liverpool supporters around the world.  It’s the 19th anniversary of the Hillsborough Disaster; the day in which 96 people lost their lives in the Leppings Lane end of the old ground.  It’s a time for reflection and respect; a time for compassion and remembrance.

Yet the whole week has been overshadowed by the loose cannon form of Tom Hicks, who has spent the time lobbing grenades at his chief executive Rick Parry, his co-owner George Gillett and, potential purchasers of the club, Dubai International Capital.  On the Thursday prior to the anniversary, Hicks decided to go public via Sky Sports News and demand Rick Parry’s resignation.  No board meeting was called to discuss the matter with his co-owner and the other members of the board.  No proper legal procedure was followed.

He cited his reasons for wanting Parry out (all valid) but failed to disclose his true reason: an extra vote on the Board and the means to prevent himself being outmuscled by the (possibly) incoming Dubai group.

Having decided his initial effort hadn’t had the desired impact, he began slinging more mud two days after the ceremonies.  He gave a quite bizarre interview to Sky Sports News (again) in which he labelled Parry a “disaster” and DIC “masters of British tabloid spin”.  He also attempted to drag Benitez further into the conflict by claiming that Parry had been in discussions with Jurgen Klinsmann prior to his arriving at that now infamous meeting in New York.

It was a continuation of his transparent efforts to create a ‘Benitez or Parry’ situation; the hope being that a Benitez ultimatum and fan-power would ultimately force Parry to resign.

And all of this on the week of the Hillsborough anniversary!  How is that “respecting the heritage” of the club?  How are Hicks’ public skirmishes and one-upmanship battles part of the ‘Liverpool Way’ (the decades-old doctrine through which these kind of issues are addressed behind closed doors)?

A few months ago he said: “The Liverpool Way is to win championships and to not create controversy … we need to win championships”

One can only assume that he didn’t understand what he was saying.

Corinthians

It seems Tom Hicks leaves a trail of devastation wherever he goes.  His disastrous foray into the Brazilian football market as chairman of Hicks, Muse, Tate & Furst left Corinthians, second most popular club in Brazil, in a state of turmoil.

The parallels between what happened to Corinthians and what is currently happening at Liverpool are unsettling to say the least:

• There was the initial blaze of publicity and fanfare when the company bought the club in 1999, with promises of big spending on the best players and the construction of a brand new 45,000 seater stadium in the suburbs of Sao Paulo.

• There was an initial capital investment to tie down existing players and to finance the purchase one or two other additional players.

• The economics behind the Corinthians deal appeared to be based on ridiculously rudimentary logic: “If you add up all the fans of professional baseball, basketball, football and hockey in the United States, that number is lower than the number of Brazilians who are soccer fans.” Clearly, no proper risk analysis had been undertaken – a situation which resonates with the due diligence period of 3 days prior to the purchase of Liverpool.

• This flimsy approach was reinforced by the apparently rash and impulsive purchase of Cruzeiro six months later – traits which Liverpool fans are rapidly coming to associate with Hicks.

• There was also the emphasis on the cheaper “young players”, with the following quote from Richard Law, president of Hicks’ subsidiary group: “Our job is not to turn back the inevitable, but to build Corinthians and Cruzeiro up from the junior ranks.” Hicks followed a similar tack following the takeover of Liverpool: “You need to keep your star players but also develop your young players. Young players are the lifeblood of your team, so we talked about how we can improve that side of the team.”

Corinthians had already won the Brazilian championship in 1998 so Hicks inherited a winning team.  The initial expenditure assisted in retaining the league title in Dec 1999 and the club also won the inaugural FIFA Club World Championship the following month.

This is where things started to go wrong.

Unable to resist the temptation to make a quick buck, HICKS BEGAN SELLING TRANSFER RIGHTS TO THE CLUB’S STAR PLAYERS.  On top of that, he decided on the bizarre idea of changing the traditional colour of the club’s shirt.  He also introduced sponsorship (something which Corinthians fans felt defiled their heritage).

All of these things led to a furious reaction from supporters and widespread protest against Hicks and his partners.  The company bailed out three years later, ironically having accused its local partner in Brazil of “misappropriating funds” (read the UTIMCO post and you’ll understand).

Corinthians began to spiral downwards.  MSI took over the club’s management but, despite a league title in 2005, the financial problems initiated by Hicks proved too much of a burden.  The club was relegated to the second tier of Brazilian football for the first time in its history in December 2007.

THERE WAS NO NEW STADIUM.  Hicks invested about five hundred million dollars and within two years filed for bankruptcy.

In a recent prospectus issued to financial companies in London, Hicks claims in to be “a master of purchasing and growing professional sports teams”.

Liverpool fans, Texas Rangers fans and Corinthians fans might disagree.

Brazilian Fans Hit Out At Liverpool Owner

Peasants?

“There’s a difference between American fans and not just European but UK,” he tells MLB. “Liverpool football fans are on a different planet but God bless ‘em they’re proud of it.”

This quote appeared in the article in the previous post.  It’s a condescending and patronising remark; he appears to think that he’s better than us (“God bless ‘em”) because of the pride we show in supporting our team.

At the very least, he sees our “pride” as something he can exploit and make money out of (“this business has to do with fan affinity and brand devotion”).

Yet the “peasant” idea was dismissed at the time.  That is, until the following post appeared on RAWK:

“Mods – not sure which Thread to put this in, so feel free to move it to somewhere more suitable but I heard some gossip out in Milan from 2 very highly placed figures at Liverpool which is worth passing on (and I sense why I was told it ).

Apparently at the Newcastle match on Saturday one of Tom Hicks sons was present with 10 to 15 mates, most of whom had never been to a football match before. After the match they “enjoyed” the hospitality on offer rather liberally with the result that:

1. At least one of his friends was sick on the boardroom floor.

2. Another one passed out totally and medical attention had to be called to revive him and ascertain that he was ok.

3. Most of the group were very rude and insulting to the waitresses, laughing at their accents, mimicing them to their faces, making a series of lewd and personal remarks, and calling them “peasants”. (Although to be fair a couple of the group were very embarrassed by the majority and apologised for their behaviour saying they were overaged college boys who had never grown up).

When Moores found out about this he was absolutely livid (not surprising when you think his family had run the boardroom for over 30 years). He tried to contact Hicks Senior to complain but was unable to get through and his calls were not returned. Moores was still livid on Tuesday and was going on about the incident constantly.

Meanwhile, Ian Ayres, officially our “Marketing Director” but effectivley Hick’s day to day representative at Anfield (and an utter cunt according to pretty much everyone who knows him) was also out in Milan, and enjoying a few drinks on Monday night. Possibly under the influence he was heard by many people loudly bad-mouthing Hicks (Rash: I think he meant to say Moores) AND Parry, calling them all sorts of names and declaring that they are nobodies who will soon be out of the door.

Sad times indeed.

We are owned and run by scum of the very highest order.

Shocking, if true.”

RAWK link

It can’t be guaranteed that this is true but there’s too much in it, in my opinion, for it not to be.  The account clearly conveys the total lack of respect being shown by Hicks’ son’s entourage towards the staff of Liverpool Football Club.

Not to mention the foray by Tom Hicks Jnr into The Sandon a few weeks earlier: an honest mistake or a man looking for a bit of drama?

One would assume that he’d have noticed the bodyguards surrounding him before he made the decision to enter the pub.

Tom Hicks Jnr – How Visit To The Sandon Turned Nasty