By Nick Harris
2 February 2010
Liverpool’s Spirit of Shankly supporters’ union, which has been campaigning to oust the club’s American owners, Tom Hicks and George Gillett, has today released minutes of a meeting with the club’s managing director, Christian Purslow, that are likely to have an incendiary effect at Anfield, that expose the club’s desperate search for new investment, that suggest Hicks and Gillett want out, and that may even raise questions about Purslow’s future. A source close to Hicks has confirmed this evening that if Liverpool don’t find £100m of new investment by this summer, the Americans will have to sell up.
The meeting was between 12 SoS members and Purslow, in the Cross Keys pub in Liverpool on 21 January. SoS are understood to have taped the meeting, as well as taking minutes. There was an agreement that SoS would share the minutes with Purslow, who then returned them, amending some sections but not actually questioning the original version, at least when he returned them. He is now understood to contest some, but by no means all of the minutes.
“If his opinions were confidential, why sit in a room with 12 people he knows are anti-Hicks and Gillett, people he can see are recording what’s happening?” somebody who was present told sportingintelligence today.
The detail and Purslow’s candour is extraordinary, even in areas that where both sets of minutes tally exactly. He confirmed the club’s total debt at £237m. He said the club want to reduce this by £100m with cash being sought from a new investor, and adds “this a requirement from our bankers”. He says: “The £100m investment [being sought] will be made by the issuance of new shares, and will not go towards anything else other than paying down the debt, reducing it to £137m. This new investment will also mean a dilution of the current ownership.”
In SoS’s minutes, Purslow is quoted as saying that Liverpool’s poor on-field performance has hampered the search for new money. They quote him as saying: “The team’s performance has an affect on commercial interest, it is talked about by potential investors as while we might make up the lost Champions League revenue through a good run in the Europa Cup, the loss of Champions League football next season would impact upon income and this has a relevance to investors. We reassure investors, of course and we already make excellent profits.”
The most contentious passage in the minutes deals with the search for new money, with SoS’s version reflecting negativity about the owners’ image, as this extract illustrates:
CP: I am concentrating on getting the investment needed. Some investors may have issues with working with the present owners, but some don’t just want a percentage, some want 100 per cent. No investor is going to want to invest £100m and have a smaller stake than the present owners.
SoS: Do Hicks and Gillett value the club too high?
CP: No one would invest at the level they want.
SoS: If the bank want £100m paying down on the debt as part of the last re-financing, what will they ask for in the summer? Will it just be for 12 months again?
CP: I have got a conditional agreement for a 3- to 4-year loan deal. At the last re-financing agreement, Hicks and Gillett paid down the debt with their own money. A new investor will pay down the £100m needed now. The banks want us reducing debt and being cautious. RBS are annoyed and unhappy with Hicks and Gillett and they want a change of ownership. The £100m pay down is compulsory, it has to be done. I will not agree to a deal that is unworkable for us, but we need to have the owners own and the managers manage.
SoS: Are there discussions with other banks, to try and get a better deal for any re-financing?
CP: There have been around 30 meetings with different banks, we want the best deal for the club. If other banks will give us a better deal, we will work with them. No other bank will take us on with £237 million debt, they want less debt. RBS are unhappy with the present ownership, so an improved situation at the cub will improve our relationship with them. They want to continue working with us.
Later on in the meeting, Purslow says: “We are a very profitable club and so long as we reach our goals on the pitch we are able to provide the manager with a healthy share of profits to invest in the transfer market as well as of course every penny we generate from player sales. This January the manager has had plenty of funding available but has not chosen to bring anyone in other than Maxi Rodriguez.”
That last claim will surprise many fans.
Purslow also says that it was not true that he had ever claimed work would begin on the club’s proposed stadium in April. He says: “If we get investment we can look at further investment to start the stadium work. How the City Council interpreted this as starting work in April I don’t know, you will have to ask them . . . And we should all have no doubts that this is a long term project. Even if we bring in new investment and then sort out stadium funding quickly thereafter it takes nearly three years to build a stadium. So we are looking at 2013-2014 time period if all goes well.”
SoS quote him as saying: “If investment comes in April, we are working upon an opening date for the new stadium in Summer 2014. I doubt work will start this year but I would expect it to started next year.”
The most astonishing quote in the SoS minutes has Purslow saying: “LFC is for sale. It will be sold. The owners have to sell, they are out of money. The bank want it sold, the fans want it sold and people want to buy it. The problems on the pitch at the minute aren’t the fault of the owners. It is not simple enough to say that new owners will guarantee results on the pitch.”
Purslow’s amended version of the notes has him saying: “I assure you I will not spin or lie. I am under no obligation to meet with you – the fact I do is because all fans have a legitimate right to express views and I want you to feel that you have a channel of communication into the club you all love. We are working together, management, owners, our banks to bring in new investment which is the key first step.”
Liverpool FC were unavailable for comment.