The Dallas-Fort Worth Metropolitan area is, according to market estimates, the fifth largest television market in the United States of America. 2.2% of all households in the entire United States of America live in the metro Dallas-Fort Worth area. Dallas is the third largest city in Texas, ninth largest in the United States, and Fort Worth is the 17th largest city in the United States independently of Dallas. Only nine states in the United States have a city as large as Fort Worth, Texas. Texas is the second largest state in the United States, has 6 of the 25 most populous cities in the United States, and has only two major league baseball teams, one in Dallas-Ft. Worth and the other in Houston… 240 miles away to the Southeast. Regionally, Texas is bordered by four states, of which 0 have a major league baseball franchise. If one went east, one would not find a franchise until they reached Atlanta. If one went Northeast, one would not reach a franchise until Saint Louis. If one went north, one would not find one until Minneapolis, and only then by stretching how “North” one was going. Northwest, until Denver, and west until Phoenix.
It is in this context that the ownership of Liverpool needs to be fully understood. For their owner, Tom Hicks, finds his Texas Rangers baseball franchise presently being auctioned off in bankruptcy court. With satellite television, the internet broadcast of games on mlb.com, wall-to-wall sports news coverage, and the numbers of residents of the United States for whom the Rangers would be the most local team, it is nothing short of incredible that this franchise could be insolvent. Not even President George W. Bush, who (politics aside) was not the world’s greatest business mind in his days as a corporate officer, managed to be able to bankrupt the Rangers.
Reports have come in that there is a takeover bid in the air from a Far East sovereign wealth fund (I hope everyone has enjoyed the lazy journalism of having this term used repeatedly with no one explaining what it is. If you are curious, here is a link to the definition on investopedia). The fund, according to sources has offered to purchase the club through paying of its debt, but not its shareholders, because, “In layman’s terms the shares are worthless, and therefore there is no offer to the current shareholders.”
This group seems convinced that Liverpool Football Club is now worth no more than its debt, which is a nice way of saying that the club’s debt is so unmanageable under current ownership that those to whom they owe could force them to sell the club in order to cover the debt.
To think that a club of Liverpool’s stature and worldwide popularity could be in this position is simply astounding. When I get up early on a Premiership morning and go downtown to Brit’s Pub or The Local to catch the matches, there is always a clique of Liverpool supporters sitting together, loudly talking about how great there club is even when they are not on. Nothing is so interminable than to have to listen to amateur Liverpool talk radio while watching Bolton-Spurs at 10 in the morning.
“Terrible ball by Bentley.”
“He’s no Xabi Alonso.”
“I can’t wait ’till Liverpool play tomorrow.”
and so on… They have a complete disregard for the neutral’s code. They make it unendurable to sit through any match whether Liverpool are playing or not, but they are there, always, treating their club like it’s the center of the universe…
… from Minneapolis, Minnesota.
Yup, that’s the club that Tom Hicks has potentially made worth only its debt (granted, it’s a titanic debt).
One might be inclined to find it impossible to believe that Liverpool’s financial house could be in such a bad order. Until you remember that Nolan Ryan and Mark Cuban are currently wrestling over who gets to pick up what should be a massive American sports asset like they are both going for a discount wedding dress at Filene’s Basement. Until you remember that Liverpool had to make a last second deal with The Royal Bank of Scotland in 2009.
Recent reports have the Sovereign Wealth Fund backing off and a new Syrian-Canadian investment consortium stepping into the fray. Maybe they will be willing to pay out the owners more than Far East group led by Kenny Huang. But the inside reports indicated quite strongly that the group thought the club worth only its debt, and if anyone else was foolish enough to overpay for the team, they were welcome to it.
All items have worth in an economic sense only insofar as someone else is willing to pay to acquire them. If Liverpool can sell their shares to someone, then it turns out that they were “worth something.” But the reluctance of serious bidders to want to pay anything for shares of Liverpool Football Club is indicative of how bad things are at Anfield. Even if shareholders find someone willing to swoop in with the big money offer they are hoping for, this might not be good news for Liverpool fans. For it may only indicate that the old ownership has found a new ownership who are as fiscally naive as they were.
Written By Steven
Maloney
(80 Posts) |
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