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Liverpool latest: full Purslow transcript, and why administration makes no sense


By Nick Harris

10 October 2010

Liverpool’s managing director Christian Purslow said today he is “not even contemplating administration and nobody should be”, speaking in response to reports that New England Sports Ventures would pull out of buying the club if the club were hit with a nine-point penalty.

He says he hasn’t even discussed the possibility of administration with NESV, and sportingintelligence has been told that Liverpool’s chairman Martin Broughton is also confident the club won’t enter administration.

A High Court ruling in the next few days will decide whether Broughton was within his legal rights to agree a £300m sale last week of Liverpool to NESV beneath Tom Hicks and George Gillett’s feet. If the High Court says that was legal, then it’s end of chapter, barring a swift and probably failed appeal.

If the High Court ruling goes against Broughton, he is privately confident there are other legal avenues to explore to force the sale through, before administration.

And beyond that, administration further remains unlikely if only because it is not in the interests of RBS.

Administration would take one of two forms: One is a “pre-packaged” deal whereby the club would enter administration for a few days before being sold to NESV anyway. If a nine-point deduction had been put on the club and NESV were genuinely scared by that, then no pre-packaged deal could be agreed, so that route would not be followed.

The other form is an uncertain “open” administration where RBS is not in control, Liverpool are hit with a points penalty, RBS have no idea of what the ultimate sale price might be, and therefore risk getting only a fraction of their cash back (20p in the £ or whatever).

Hence administration makes no sense for RBS if NESV are really going to pull out with a points penalty, and that’s one reason it’s unlikely to happen. RBS would be the ones to trigger administration; and they won’t act against their own self-interest.

RBS are therefore much more likely to work with Broughton to explore other ways of forcing a sale, even if minor deadline extensions are needed beyond 15 October.

A full, verbatim transcript of Purslow’s interview today with Garry Richardson is below, in which Purslow suggests some kind of a supporter involvement in a future NESV regime, without giving specifics. He also keeps open the possibility that NESV, if successful in buying Liverpool, will give serious consideration to a new stadium.

“[NESV] know how strongly we as a management team believe this is the way forward. They’ve been very impressed by that. I think it’s been a key ingredient in attracting them to Liverpool,” he told R5.

The Radio 5 Live interview can be found in audio at the link here, (relevant part starts at 17 min 40 sec into the show), while a full verbatim transcript is as follows:


GARRY RICHARDSON and CHRISTIAN PURSLOW interview, Sunday 10 October 2010

Garry Richardson: “Christian, good morning to you.”

Christian Purslow: “Morning Garry.”


GR: “Take us through how you set up this deal with NESV. Did they approach you? How did it happen?”

CP: “Yes, they approached us, there’s nothing particularly unusual about that. As is widely known, the company has been for sale since Easter and NESV, with their advisors, approached us, as many have done. But unlike many others, their approach was serious from the first minute and they have done their work and ended up making a binding offer for the club.”


GR: “You say serious from the first minute. So when you’re starting negotiations, you get that feeling straight away that the deal has potential?”

CP: “Yes, I think you do. They met our chairman [Martin Broughton]. He was immediately struck with the seriousness. I’m a great believer that actions speak louder than words and the entire senior management team of NESV came to Liverpool, spent a large amount of time in the club doing their work, and those are important signs of people’s seriousness in the transaction business.”


GR: “You said to me before on this programme that the buyer had to be right for Liverpool. You were adamant that you wouldn’t sell to someone who might be offering lots of money if you didn’t feel they were the right person to run the club. Why do you think [NESV’s] John Henry and Tom Werner are the right men to deal with?”

CP: “Well, it’s not for me to do a commercial for them. They will speak for themselves if and when this transaction completes. But yes, there are important ingredients. I think I’ve also said to you in the past, speaking personally, my total priority in the last year or so has been to try and find a way to reduce or remove the debt which has been put on this club, and which has been a cloud since February 07.

“I think it’s wrong that a football club, it’s not like another business, I think it’s wrong that we should have so much of the money that comes through the turnstile or through our commercial activity go to pay interest on loans, particularly loans that were used to buy a business.

“So for me, a bidder who has been willing to, with cash, rid us of all this long-term debt is by far the largest and most important priority in evaluating bids. And I know our fans have been very concerned in the past that perhaps that was not known when the last sale was done.

“I can assure you: we’ve done our homework and NESV are buying this business with cash and clearing us of this debt, which transforms our financial position overnight.”


GR: “It’s good to hear that and I’m sure the Liverpool fans listening will be encouraged by that line you’ve given us. John Henry and Tom Werner, though – why do they want to buy Liverpool?”

CP: “Well I think it’s a combination of business and maybe emotion. They are a very successful company and they have a number of sporting interests but it’s been well documented that they purchased the Boston Red Sox nearly 10 years ago, and I think they see a number of parallels with the Red Sox when they purchased them, and Liverpool today.

“The word that jumps off the page every time we sit with them is ‘winning’. And I think they see, obviously, that winning on the field is very linked to how you perform commercially off the field. They go hand in hand. It’s extremely enjoyable to make sports clubs more successful. Whether you are poor or a rich sports fan, winning is great fun and I sense both of those things when we meet with these people.”


GR: “There is a suggestion this morning, as I’m sure you know, that if Liverpool were to go into administration and have nine points deducted, then NESV would pull out of the deal. A source close to the American investment group says the club going into administration would be a ‘deal breaker’. What’s your reaction to that line this morning?”

CP: “I’m not even contemplating administration and nobody should be. Last Monday, we had two very good offers to buy our business that would clear all our debts and I’m completely focused on  making sure that the sale completes.”


GR: “So come what may, NESV will carry on with their purchase even if Liverpool were deducted [nine points]? You don’t think that will happen, but NESV, from your understanding, will carry on, Christian?”

CP: “I have not discussed that possibility with them. I am completely focused on the sale.”


GR: “And tell us why you think administration won’t happen. Just spell out that for the Liverpool fans listening.”

CP: “As I say, we are focused this week on making sure the sale of the club, for a very attractive price, completes, and that is our complete focus.”


GR: “Are NESV a company who will provide large amounts of money for signing new players? Give us what background you can on that, please.”

CP: “Well I think it’s simple. They want to win. They are not going to be making hostages to fortune, certainly not going to be giving numbers into the public domain, but a couple of things have come out in our discussions.

“Obviously the first and most important is, again, they see a parallel to their experience in baseball and whilst I think many of those comparisons might not work, I think it’s difficult to argue that investment in players is a key component of success in most professional sport. That was the approach they took with Boston and that is the approach I’m sure they will take with Liverpool. And you don’t spend £300m pounds on buying a sports team for it to be a mediocre team.”


GR: “No, and having spent that much money, will they be owners that will want to attend quite a lot of matches, so you think?”

CP: “Well I think so. Again, for the same reason, I think if you have made such a serious investment and taken so much time, if they buy Liverpool I would expect them to be very visible around the business. They’re serious people, they’re deadly serious about wanting to succeed. I can’t imagine they’ll be hands off for one minute.”


GR: “How do you go about repairing the damage that’s been done by Mr Gillett and Mr Hicks, Christian?”

CP: “Well I think one area is that our fans have felt totally disenfranchised by the experience of the last three years. One thing I really liked about NESV the minute we met them is they’re really serious about the importance of engaging with their fans and I think when you look at their approach to their business in America that’s something that they take seriously.

“So I’ve asked them to consider a scheme at our club that will give our fans a real sense of ownership, a real sense of inclusion, the kind of voice, if you like, that frankly they deserve. And NESV have told us they’ll look at this very seriously if they complete.

“It’s not been easy with the current owners. Tensions have been high and so that side of things has been difficult. But now that we have potential new ownership, I don’t want to miss the opportunity to make sure our fans never again feel so disenfranchised. It’s the way forward for professional football in England.”


GR: “That’s a very interesting line. You say you want to give the fans a voice and a sense of ownership. Can you elaborate a bit more. What do you mean?”

CP: “Well, no more than that. There are various ways to do this, and I’m sure they’ll all be considered seriously after a transaction. But one or two clubs have gone down that line already. I was very impressed with what Arsenal recently announced. [More here on that story]

“As I say, the most important principle is that fans need to feel that they have a means to express their views and to be listened to. And the sense of ownership obviously is the most extreme example of that, but there are many forms and many shapes to these ideas. The important point is one of principle, engaging with our fans, particularly Liverpool fans, and, remember, that’s all I am. That’s a very important ingredient I think.”


GR: “How do you feel about what Mr Hicks and Mr Gillett have done to Liverpool?”

CP: “Well I’m sorry, I don’t personalise it at all. But I do feel right now that they do have an opportunity. One simple, short correspondence today can allow a sale to complete and that would clear the club of all the acquisition debt and would give us a massive lift before the Everton game [next weekend].

“[That would give] a really fresh start, frankly, and real hope for our fans and our players that we can get back to the top. That’s in their gift and that might enable them to leave with some dignity and some peace rather than precipitating a messy dispute. So I hope they’ll think about that.”


GR: “Unlikely, though.”

CP: “I don’t know.”


GR: “Really?”

CP: “I don’t know.”


GR: “How do you reflect on recent results for Liverpool, Christian?”

CP: “Well, it’s been a disappointing start to the season, there’s no doubt about that. We just haven’t been able to get any rhythm yet. But I must say there has been some important mitigating factors. It’s been a very unusual start to the season.

“We had a large number of our players back very late. We’ve had three international breaks already and it’s barely October. And of course we changed our manager and have some new players.

“So those three together mean that Roy just really hasn’t had much time with the players to do the week-in, week-out stuff that is his trademark. And so he’ll start to have that now.

“I think we also need to keep some perspective. We are five points behind Arsenal, who are in the Champions League spots. I would ask people to be patient and supportive. These are trademark qualities of Liverpool, both our fans and our management, and I urge people to provide those.”


GR: “No doubt that Roy Hodgson is an outstanding manager and you make a sensible point about being five points behind Arsenal. Also in many of the papers this morning there is a suggestion that Roy Hodgson has a clause in his contract that would release him if the new owners want to employ their own manager. Your comment on that, please?”

CP: “Well the first thing I would say is it’s absolutely wrong to discuss anybody’s contract in public on radio on a Sunday morning. But in case you think I’m trying to avoid the question, I must say there’s nothing in Roy’s contract that is not totally standard under the LMA guidelines.”


GR: “And you believe Hodgson will be part of the new set-up when NESV take over?”

CP: “Absolutely.”


GR: “Just a couple of final points. The situation with the new ground when the new people come in? What would happen there? Can you tell us that?”

CP: “Well a key part of their interest in Liverpool has been to try and improve the experience of our fans on match day. We all know that for far, far too long, too many of our fans have been unable to get in to watch the team on match day.

“Now we’ve shown NESV all the plans around the stadium that we have full planning permission for in Stanley Park. They know how strongly we as a management team believe this is the way forward. They’ve been very impressed by that. I think it’s been a key ingredient in attracting them to Liverpool.

“I think a bit too much has been made this week into the fact that when they bought the Red Sox in Boston they refurbished the existing stadium. In fact the very same ownership group in two previous teams built new stadia, in Baltimore and San Diego.

“So I think it’s simple. Given that a new owner will be paying for a new stadium, it’s entirely reasonable and their prerogative that when they get here, they want to pull up the carpets, look in fine-tune detail at what we’re proposing, and make their final decision. But one thing is crystal clear: they want to increase the capacity of Liverpool football club.”


Henry Winter [interjecting]: “Christian, it’s Henry, Good morning. I’m just interested to know your view on the current owners. In your long history in working in business, have you met such an unappealing character as Tom Hicks before?”

CP: “Henry, it’s nice to talk to you, and I fully understand the question but I’m not going to discuss or entertain personal questions.”


Henry Winter: “But you love Liverpool football club, and he clearly doesn’t.”

CP: “I do love Liverpool football club and I think there’s probably been times when our current owners loved the football club. But I’d rather speak for myself.

“I do and I have a wonderful set of colleagues at Liverpool who do as well, all of whom would like the cloud to be lifted over our club. And that cloud is one of uncertainty, our business being more talked about than our football and the biggest cloud of all which is debt, which is draining our club of resources that should be on the pitch.

“So yes, I came here to try and help lift that cloud. My colleagues – both my executive colleague and my chairman Martin [Broughton] – have really stepped up to try and lift that cloud this week and I really hope we’re successful in doing so.”


GR: “So to sum up, Christian, in a crucial week to sum up, you definitely believe that the club will not go into administration?

CP: “I’m not in the prediction business but what I’ve told you is my focus this week  is making sure a tremendous sale completes, as we sought to do last Monday.”


GR: “And you’re pretty confident that the deal with NESV, that will go through?”

CP: “Yes, I am.”


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