by Reg » Sat Aug 16, 2008 12:40 am
Why Liverpool appear perilously close to breaking point
Martin Samuel, Chief Football Correspondent
There are a lot of potless billionaires out there. Men who did not do their homework and thought, because they had a lot of money, that running a Premier League club in England was going to provide even more. Wrong. Liverpool, Manchester City, Newcastle United, West Ham United, here were clubs that were meant to be embarking on bold new adventures, encroaching on the top four or on the title itself, funded by owners who had the resources to match their ambitions. What happened? Reality happened. The new money missed the boat.
The time to invest in English football was half a century ago, when there was a maximum wage and a 60,000 walk-up every week. No television deal or megastore, maybe, but Sepp Blatter's slave analogy would not have sounded so foolish given the employment conditions, and no player turned up his nose at £120,000 a week. In his peak earning years, and this included playing for AC Milan, Jimmy Greaves never earned more than £5,200 - per year. That was the time to turn a profit owning a football club, and nobody even knew who the chairman was. These days, we know not only the owner, but the name of the bank that is about to pull the plug on him, because it is only too obvious where the money goes.
Sorry about this. Today's column was intended to be a little more uplifting, more on the theme of a season of surprises. Liverpool for the title was the tag and it went west the moment the owners, Tom Hicks and George Gillett Jr, decided that they knew more about a footballer's worth to his club than their manager, Rafael Benítez. It is hard to fancy Liverpool to overturn Manchester United and Chelsea now, yet when the summer began, Gareth Barry was set to be Benítez's missing link and, had the club bought him, this could have been their season to evolve from a team capable of impressing in set-piece matches in Europe to one capable of emerging triumphant from the slog of the domestic season.
Instead, the way the move failed reveals much about the parlous state of the clubs under new ownership. At the weekend, Rick Parry, the Liverpool chief executive, said that Aston Villa's asking price of £18 million for Barry was too high. It is not. It is the going rate for an England central midfield player, as indicated by the fees paid by Manchester United for Michael Carrick (between £14 million and £18.6 million depending on success) and Owen Hargreaves (£17 million). Indeed, Barry is an England regular at present; Hargreaves and Carrick are not. Nor is age an issue, because Carrick, Barry and Hargreaves were all born in 1981. Barry is 34 days younger than Hargreaves and 155 days older than Carrick and Villa's valuation, for a player under contract, the captain and an important member of their team, is entirely reasonable.
Yet, privately, what is said to concern Liverpool's owners is Barry's resale value if he signs a four or five-year contract. And there is the key; if a player could be the difference between winning the championship and falling short, why should the eventual return matter? His cost would be reimbursed instantly if the trophy was installed at Anfield, and while that is a big if, so is every transfer of substance.
The resale issue with Barry confirms that there are serious financial concerns at Liverpool, despite the costly purchase of Robbie Keane from Tottenham Hotspur this summer. It has been well documented that Gillett would sell his half of the club at the right price, while Hicks wants to stay in the game. In the City, the word is that an American bank is ready to offer Hicks the funds to buy out Gillett, but not at the figure his partner wants because Gillett is insisting on a 30 per cent profit on the purchase price. Whether a Hicks buyout could resurrect the Barry deal, however, is questionable. If he plays for Villa against FH Hafnarfjördur, of Iceland, in the Uefa Cup tomorrow, and is cup-tied in Europe, Benítez may well give up hope.
Despite Parry's protestations to the contrary, the attitude of Liverpool's owners must greatly frustrate Benítez and threaten his commitment to the club. Funnily enough, in the paddock at Epsom, one rarely sees John Magnier, the head of the Coolmore Stud, overruling his trainer, Aidan O'Brien, so that he can pass instructions to Johnny Murtagh, the jockey; and Magnier knows a hell of a lot more about horses than Hicks and Gillett know of football. It seems bizarre to have an authority, a manager of experience and consistent success, and then ignore his expertise. Benítez must surely have impressed upon his employers the difference Barry would make to Liverpool: he would complete the starting XI.
Benítez is strong in most areas but requires a left-footed partner for Javier Mascherano in front of the back four. Barry is a perfect fit. With him, Liverpool could play the 4-2-3-1 formation that is all the rage right now, with Mascherano and Barry holding, Ryan Babel starting on one flank, Robbie Keane playing the Dirk Kuyt role on the other and Steven Gerrard behind Fernando Torres, with free range. Even the reserve options, Kuyt, Martin Skrtel, Sami Hyypia, perhaps Xabi Alonso, are good. The last piece of the jigsaw is an overused phrase, because even the best teams are in a permanent state of evolution, but Barry, potentially, was the most significant signing of the summer.
To be so close, and then to be distracted by talk of resale values, can only suggest a club perilously close to financial breaking point. Last season, it was believed that Liverpool's owners would struggle to service loan repayments if Champions League football was not secured and with Michel Platini, the Uefa president, intent on reducing the number of fourth-placed qualifiers from the leading countries, this precarious existence will not go away.
The team who finish fourth in the Barclays Premier League will have to play another non-champion from a leading European nation next season. Instead of FC Twente and Standard Liège, this season's opponents for Arsenal and Liverpool, the fourth-placed English team could be up against the likes of Fiorentina or Atlético Madrid, a far greater test.
General concern over the financial future of the club is likely to trouble Liverpool's owners more than the specific long-term worth of one player. At the weekend it was suggested that Benítez would now bid £18 million for David Silva, of Valencia, who plays on the left or as a playmaker behind the front two, the inference being that he has Barry's transfer fee available, but not for Barry. That would be madness. One of the positions Silva plays is already occupied by Gerrard, in the other Benítez has tactical options.
Why would any clear-thinking football business make a sum of money available, have the manager identify a target within that range and then tell him he cannot have the player, but can buy another instead? A year from now, Silva could be an excellent signing, as Liverpool move on, but right now, give Benítez what he wants.
Meanwhile, at Manchester City, Thaksin Shinawatra appears to be using his membership of the Potless Billionaires Club to avoid returning to Thailand, where he faces corruption charges. With many of his assets frozen, he is struggling to meet the costs of Premier League competition and short-term loans were recently required to pay the staff's wages. Kia Joorabchian, the agent, has become increasingly influential, which could also explain the involvement of Paul Aldridge, the chief operating officer, who did such a bang-up job helping to secure Carlos Tévez for West Ham two years ago.
Thaksin was another owner who arrived promising a great leap forward, like Liverpool's Americans and Mike Ashley at Newcastle, whose eagerness to wade into this Premier League jamboree was so great that he failed to complete the due diligence procedure when making his investment and is, as a result, surprised by even the most mundane aspects of football business. Ashley thought that the club owned the players on its their books and was subsequently confused to be told of substantial instalments due on individuals he had already seen in the black-and-white shirt. Latching on to that old phrase about looking after the pennies, he now wants the players to pay for such trivialities as club suits, a saving that might cover the postage the next time Newcastle have to send several million to Real Madrid for Michael Owen.
What these owners have in common is that they did not know football. This is why the business of it is now getting away from them. Pay attention and one will know the going rate for an established international footballer, or appreciate that transfers are paid in instalments and City are unlikely to attract sell-out crowds while mid-table. Roman Abramovich made a success of Chelsea not only because he is insanely wealthy, but because he understood from the start that running and maintaining a very successful football club required such lavish investment that, short term, it was a black hole.
Few can operate at Abramovich's level but, like Randy Lerner at Villa, at least they can be realistic. Those who arrived promising the earth to the fans, and a fast buck to their financiers, have been found out. There are not merely potless billionaires in the Premier League, but some pretty dumb ones, too.
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