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Last Updated: Monday, 21 January 2008, 17:04 GMT
Q&A - Liverpool refinance plans
A computer projection of the new Stanley Park stadium
The new Stanley Park stadium is central to Hicks's and Gillett's loan plans

Five Live sports news correspondent Gordon Farquhar
By Gordon Farquhar
BBC Radio 5 Live sports news correspondent

Fresh doubts have been cast over Liverpool regarding the uncertainty of George Gillett's and Tom Hicks's futures as co-owners of the famous club.

The American duo are hoping to conclude a refinancing deal this week in a bid to secure a 350m loan to repay previous loans and begin work on a new stadium at Stanley Park.

Meanwhile, Dubai International Capital - the investment arm of the Dubai government - are also ready to make another offer to buy the Reds outright.

So what exactly is going on off-the-pitch at Anfield?

WHAT DOES REFINANCING MEAN?

Refinancing is a bit like remortgaging, or consolidating loans.

It is a chance to get rid of some more punitive debts with high interest rates in the short term and replace them with lower repayments over a longer period.

It is designed to help viable businesses facing cashflow problems, such as a successful football club that needs funds for a new stadium!

WHY IS THE CLUB BEING REFINANCED?

Hicks and Gillett need to spread the risk.

They have got a stadium to build and need money at a time when the global "credit crunch" is making borrowing expensive and in some cases impossible.

It's quite normal for businesses to do this. The Glazers did it with Manchester United. It is down to the judgment of the directors as to how they want to run their finances.

DO HICKS AND GILLETT WANT TO SELL LIVERPOOL FC? IF SO, AT WHAT PRICE?

It is very difficult to give a straightforward answer to that. The Americans are businessmen, who are ultimately looking for a return on their investment.

George Gillett and Tom Hicks pose with the "This is Anfield" sign
Gillett (left) and Hicks took full control in March 2007

When they take that return might be influenced by any number of things.

Hicks is adamant that talk of selling is out of order; that he has not been negotiating on a deal; and that he is committed to the club.

But we know there have been talks at some level.

Some might argue that Hicks and Gillett are just playing "hard to get".

After all, some offers cannot be refused. But at the moment Hicks and Gillett are giving the impression they are not desperate to sell.

At the same time, DIC do not want to overpay for a stake in Liverpool.

If the position of either party shifts, then a buy-out could probably happen quite quickly.

WHO CONTROLS THE CLUB? HICKS AND GILLETT OR THE BANKS WHO LENT THE MONEY?

Again, it is a bit like the mortgage on your house.

You own a bit and the banks own a bit. If you cannot make the repayments, then the banks hold the security of your property up their collective sleeves.

Normally, a bank would not get involved in the day-to-day running of a business, unless they stop getting the monthly payments.

As long as Hicks and Gillett keep making them, they will keep calling the shots.

WHAT FINANCIAL STATE ARE LIVERPOOL IN?

They are a successful club, benefiting from unprecedented payments from the Premier League's TV deal and strong match-day revenue streams.

A computer image of the Stanley Park stadium
The new 60,000 stadium is central to the Americans' future aspirations

However, Liverpool are not as strong as Manchester United and Arsenal, who both have bigger stadiums, while Chelsea are bankrolled by billionaire owner Roman Abramovich.

And now the Reds are loaded with debt associated with the purchase by Hicks and Gillett.

Moving to the new home in Stanley Park is a crucial part of the club's future business growth plans. But it is all about risk.

The club could stay put at Anfield, take the TV money and try and make the most of 40,000 bums on seats each week.

Moving is a longer-term investment, much as Wembley is for the Football Association. It involves lots of cash upfront, but, in the end, it gives you a better return.

But how long are Hicks and Gillett prepared to wait for payday?

IS THIS USUAL BUSINESS PRACTICE FOR HICKS AND GILLETT?

They have made their money through a number of different business models.

Some involve getting into business with debts, then embarking on a period of restructuring and reorganising, making them profitable and then selling them on.

606: DEBATE

The sports franchises they have invested in have been longer-term interests. Hicks bought the Dallas Stars ice hockey team in 1995 and the Texas Rangers baseball team in 1998.

Gillett bought the NHL side the Montreal Canadiens in 2000 and there are no signs of them being offloaded. But both men are risk takers and risk calculators.

WHAT IS THE TEAM'S OUTLOOK WITH THIS UNCERTAINTY?

It's a bit of a cliche to suggest the players and manager get distracted by this sort of thing.

Aston Villa owner Randy Lerner
Randy Lerner has had a stable influence at Aston Villa

It is not a given. Some, like Jamie Carragher, are clearly upset at what has been going on, but that doesn't mean he is playing worse or better as a result.

A lot of players probably do not give two hoots.

Fans are upset because their feelings for the club and its history transcend the short-term issues of profit, loss and ownership.

That said, Manchester United had a dip in form during the wrangling that accompanied the Glazer takeover. Perhaps that was a co-incidence, but maybe not.

On balance, you would say that stable ownership with a hands-off approach to team affairs from the owners - take Randy Learner at Aston Villa, for example - probably makes for the best climate.

WHAT ARE THE IMPLICATIONS FOR MANAGER RAFAEL BENITEZ?

If Gillett and Hicks stay, their differences of opinion over transfers and the Jurgen Klinsmann gaffe would make you question Benitez's long-term position.

If Dubai International Capital take over, then it would not be unusual for the new owners to change the management around.

If they come in promising a transfer war chest for the summer, they might want someone different to spend it for them.

But Liverpool might have won the Champions League by then!



SEE ALSO
Hicks denies Liverpool sale plans
21 Jan 08 |  Liverpool
Alan Hansen's view
21 Jan 08 |  Football
Liverpool braced for takeover bid
20 Jan 08 |  Liverpool
Liverpool owners deny sale claims
17 Jan 08 |  Liverpool
Liverpool admit Klinsmann talks
15 Jan 08 |  Liverpool
Benitez wants to call Reds truce
26 Nov 07 |  Liverpool
Liverpool deny transfer ban claim
18 Dec 07 |  Liverpool
Gillett gives backing to Benitez
17 Dec 07 |  Football
Duo complete Liverpool takeover
27 Mar 07 |  Liverpool
Anfield of dreams
06 Feb 07 |  Liverpool


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