By Nick Harris
12 May 2010
As the Spirit of Shankly group of Liverpool fans confirmed today that they will meet with Premier League officials on Friday to discuss ownership and governance issues at their club, sportingintelligence can reveal the historic rift between Tom Hicks and George Gillett was fueled by their contrasting views on Rafa Benitez.
Sources with intimate knowledge of the Hicks-Gillett relationship during the Americans’ time at Anfield tell us it was Hicks who “made all the running” in sounding out Jurgen Klinsmann as an “insurance policy” management option at the end of 2007.
After the Klinsmann talks were made public in January 2008 – when it became evident the owners had doubted Benitez – Hicks fell firmly into the pro-Rafa camp. Our sources add it was also Hicks who was the driving force in giving Benitez a five-year deal last year.
Gillett, on the other hand, although supportive of the Spaniard, felt Benitez worked best under the supervision of a “moderating” executive, specifically the former chief executive, Rick Parry.
Parry left in the summer of last year, after it became clear that, according to one source, “it was obviously going to be a dysfunctional situation going forward.” Hicks was aligned to Benitez, who had been given more powers in his new deal, while Gillett was aligned to Parry, who Gillett believed “kept Rafa in control”. Except Benitez didn’t want to be kept in control, and would not be.
Fast-forward one extremely disappointing season, and Hicks and Gillett are much closer now in mindset. The club is up for sale and Barclays Capital are actively talking to potential bidders, one of whom we reported on earlier this week.
The Americans still privately insist the club is in great financial shape, despite losses for the parent company of £55m last year, mainly due to interest payments of £40m on debt. They are also prepared to inject more money for transfers this summer “for one last time”, a source says.
The rationale is that they need an asset in good shape to make it attractive for a decent bid, but the Americans harbour “grave doubts” that Benitez should be the man to spend the money to keep the asset in good shape.
Figures acquired from inside the club by sportingintelligence show Benitez has spent more than £244m on transfers in the past four years. Hicks and Gillett do not trust Benitez to spend any more of their money. [NB late addition to piece: that £244m is a gross figure, not net, as the debate in the comments below elaborates on].
They will not sack him because his £16m pay-off is too expensive, and thus hope he leaves of his own volition. If he doesn’t leave – for Juventus or elsewhere – then they will only spend in the summer if the club’s chairman, Martin Broughton, oversees any deals.
Benitez wants cash and the freedom to spend it. All this is understood to have been part of a series of recent discussions (to be continued) between Benitez and Broughton.
The SoS group, meanwhile, will meet the Premier League, including chief executive Richard Scudamore, on Friday, to discuss issues they raised last month about Hicks and Gillett’s ownership.
SoS will ask a series of questions and will tell the League: “We do not want another Tom and George, we want ‘fit and proper’ owners. After all, it’s our football club, it’s our game, and on behalf of our members we are going to have our say.”
James McKenna, spokesperson for SoS, said “The Premier League have a duty to run the game properly, to regulate it and make sure it is protected. However, they don’t seem to take this duty seriously, allowing the debts at Liverpool to pile up, with owners who are far from fit and proper. Sadly, we aren’t the only club this is happening to, it is happening to many others, and the fans are the ones left to fight for their clubs.
“We would like to the Premier League to better protect clubs and put in place regulation that stops what has happened with Hicks and Gillett from happening all over again. It isn’t right or proper that a club should pay for its owners to actually own them, and it isn’t proper for the future and the finances of a club to be put in jeopardy for the sake of business and making a profit. Those in charge need to act, and they need to act now, before it’s all too late.”
Scudamore has been a sympathetic listener as Portsmouth fans have kept him updated on the dreadful declining state of their financially decrepit club this season. Lessons learned at Portsmouth have partly led to new rules that will be adopted this summer to lower the chances of new anonymous owners will no proof of funds and no business plans.
(The mysterious Ali Al Faraj – a former owner of Pompey who has never been seen in Britain and who never had an active role – falls into this category.)
SoS are sure to get tea and sympathy. But it will probably also be pointed out that both Gillett and Hicks had respectable references from major sports bodies in the USA, arguably the most highly-screened environment in the world in terms of sports ownership.
They passed the ‘Fit and Proper Persons’ test, which effectively amounts to having no convictions that bar them being directors in British companies. They would have shown proof of funds, albeit borrowed, but leveraging is not disallowed in English football.
They would also have shown a business plan, including the building of a new stadium. It’s just they didn’t manage to execute it.