Dubai International to make bid for Liverpool FC

[MattB]

I hesitate to admit this, but I've worked in PR for years and know Financial Dynamics pretty well.

The fact that they have hired an agency to manage their recent announcements speaks volumes for me. It's all about perception management and they have used the classic **** sandwich technique.

In essence this is -
Tell them some good news (stadium plans)
Put the **** in the middle - the big lie re debt on the club but keep it light on details and focus on telling a positive story (see Hicks quotes in the official press release)
Top it off with some more good news - Mascherano

Drip drip the details later - interest repayments, preferably through a third party

Then it is a case of keeping your head down and seeing how it pans out. Heard much from them recently?

[CAD]

Or, are they going to use the next 18 months to oust Moores and Parry in time to secure the total debt against the club when are they next due to refinance?

Like I said Alpha. Everything is possible.

Right now I think Hicks/Gillett sees a good business opportunity and that they want to invest and make and exit looking for a 200 mill profit.

That might not work out. What will happen then? Who knows?

Let's us write an email to Moores. maybe he has some answers.

I have stated my position clearly enough. I understand the concern but I don't believe that it's as bad as some will have you believe. It could turn nasty. There is always a risk. Right now I see more upside that downside. That's all I'm saying

[MattB]

Like I said Alpha. Everything is possible.

Right now I think Hicks/Gillett sees a good business opportunity and that they want to invest and make and exit looking for a 200 mill profit.

That might not work out. What will happen then? Who knows?

Let's us write an email to Moores. maybe he has some answers.

I have stated my position clearly enough. I understand the concern but I don't believe that it's as bad as some will have you believe. It could turn nasty. There is always a risk. Right now I see more upside that downside. That's all I'm saying

See? PR does work

[CAD]

See? PR does work

Did you think that we would build a stadium without getting debt in LFC? Is that really what you thought would happen?

[akjs123]

I hesitate to admit this, but I've worked in PR for years and know Financial Dynamics pretty well.

The fact that they have hired an agency to manage their recent announcements speaks volumes for me. It's all about perception management and they have used the classic **** sandwich technique.

In essence this is -
Tell them some good news (stadium plans)
Put the **** in the middle - the big lie re debt on the club but keep it light on details and focus on telling a positive story (see Hicks quotes in the official press release)
Top it off with some more good news - Mascherano

Drip drip the details later - interest repayments, preferably through a third party

Then it is a case of keeping your head down and seeing how it pans out. Heard much from them recently?

I dont buy the Mascher signing as a positive from them anyway. They have made public that Rafa has 45m to spend for the next 2 summers. I short they have told Rafa that you can spend it on David Villa or 10 Yossi's, but dont ask for anything more.

[MattB]

Did you think that we would build a stadium without getting debt in LFC? Is that really what you thought would happen?

Don't think I said that. In fact manageable debt is the only sensible way to finance the stadium. However, the recent refinancing announcement had little to do with building a stadium, if you disregard the £60m or so start-up funds.

It was all about restructuring the purchase debt, which is a different animal all together

[SRR]

Did you think that we would build a stadium without getting debt in LFC? Is that really what you thought would happen?

It would be naive to think that there would be no debt to build the stadium, but what has pissed most people off is that their debt to purchase the club is now secured against the club, with the club expected to support the interest payments each year.

At the minute I do not see any silver lining with those tossers owning the club.

[akjs123]

Like I said Alpha. Everything is possible.

Right now I think Hicks/Gillett sees a good business opportunity and that they want to invest and make and exit looking for a 200 mill profit.

That might not work out. What will happen then? Who knows?

Let's us write an email to Moores. maybe he has some answers.

I have stated my position clearly enough. I understand the concern but I don't believe that it's as bad as some will have you believe. It could turn nasty. There is always a risk. Right now I see more upside that downside. That's all I'm saying

That is what you fail to see. You are fine with uncertainty of the club's future which is in the hands of someone with a track record of ruining sporting teams.

[CAD]

Don't think I said that. In fact manageable debt is the only sensible way to finance the stadium. However, the recent refinancing announcement had little to do with building a stadium, if you disregard the £60m or so start-up funds.

It was all about restructuring the purchase debt, which is a different animal all together

Agree entirely. So what will happen when they refinance in 18 month. The reason it's only 18 months is that they obviously wants to refinance with a much bigger loan next time. They will probably try to secure around 500/600 mill£ all in all to get the stadium in place. That is the loan that will tell us exactly what to expect from G&H. They will be forced to put up assets on a bigger scale than they have now.

The short 18 month loan also opens a window for a G&H exit in summer 2009. I think that is a very realistic option as well. If Gillett is short then they could still exit albeit with a smaller upside.

[blacky]

I think it's a bit of a generalisation about the OOT'ers and TBH this type of talk would paint a poor picture of LFC fans. I live in the west of ireland and can only manage to get over for 2 games a year but does that make me any less a liverpool supporter than a local? I'm supporting the club for 27 years. If we want to get rid of the yanks we need to be united and not divided by where in the world we might be supporting the club from.

[MattB]

Agree entirely. So what will happen when they refinance in 18 month. The reason it's only 18 months is that they obviously wants to refinance with a much bigger loan next time. They will probably try to secure around 500/600 mill£ all in all to get the stadium in place. That is the loan that will tell us exactly what to expect from G&H. They will be forced to put up assets on a bigger scale than they have now.

The short 18 month loan also opens a window for a G&H exit in summer 2009. I think that is a very realistic option as well. If Gillett is short then they could still exit albeit with a smaller upside.

I don't think anyone really knows what will happen in 18 months. Putting that aside though, borrowing £600m to build a £300m stadium is not great however you look at it.

Whether you want them to go or not, giving them an easy ride now sets a dangerous precident

[CAD]

I don't think anyone really knows what will happen in 18 months. Putting that aside though, borrowing £600m to build a £300m stadium is not great however you look at it.

Whether you want them to go or not, giving them an easy ride now sets a dangerous precident

I don't think anyone really knows whats happening now...

This scenario was created by the previous owner. Nothing we can do but wait.

[SRR]

I don't think anyone really knows whats happening now...

This scenario was created by the previous owner. Nothing we can do but wait.

What's happening now is:

Refinancing package of £350m
£105M secured against LFC
£245M secured against KOP Football (and it's assets i.e. LFC) with some limited guarentees from G&H, a figure of £30m each has been mentioned a number of times.

Part of this was to repay the original loan that G&H used to purchase the club which was secured against their assets and not the clubs.

The two biggest issues with this are:

1. They have gone back on their word and secured their funding to purchase the club against the clubs assets.
2. The club are expected to find the reported £30m each year for these loans, profit wise LFC doesn't make that much and is not expected to until the new stadium is built (if it ever is) any clue as to what will be sacrificed to pay for this?

Which ever way you look at the club has nearly £300m secured against it with no means to service it. To be able to service it we need a bigger income which won't come until we have the new stadium of which another £300m is needed to build it. Say we managed to secure £100m naming rights that would still leave about £500m secured against the club.

There is nothing good about this scenario.

[dww]

I dont buy the Mascher signing as a positive from them anyway. They have made public that Rafa has 45m to spend for the next 2 summers. I short they have told Rafa that you can spend it on David Villa or 10 Yossi's, but dont ask for anything more.

To be honest they should have done something similar to that rather than the bull**** they pulled with the player specific budgets initially. Giving a manager free reign within a constrained budget is sensible and under almost any owners would be what you would expect while paying for a new stadium surely?

The only case where it may be worth loking to change the budget would be if a highly marketable player became available at a reasonable price. That might change the economics of the deal and make it worth the owners altering their financial arrangements.

[dww]

What's happening now is:

Refinancing package of £350m
£105M secured against LFC
£245M secured against KOP Football (and it's assets i.e. LFC) with some limited guarentees from G&H, a figure of £30m each has been mentioned a number of times.

Part of this was to repay the original loan that G&H used to purchase the club which was secured against their assets and not the clubs.

The two biggest issues with this are:

1. They have gone back on their word and secured their funding to purchase the club against the clubs assets.
2. The club are expected to find the reported £30m each year for these loans, profit wise LFC doesn't make that much and is not expected to until the new stadium is built (if it ever is) any clue as to what will be sacrificed to pay for this?

Which ever way you look at the club has nearly £300m secured against it with no means to service it. To be able to service it we need a bigger income which won't come until we have the new stadium of which another £300m is needed to build it. Say we managed to secure £100m naming rights that would still leave about £500m secured against the club.

There is nothing good about this scenario.

The thing is though that this is a short term loan sorted out during a credit crunch. There is an argument that we may have much more favourable terms by the time we are looking to complete the more ambitious refinancing for the stadium.

To me it seems a high risk business strategy rather than necessarily a completely doomed one. Obviously I would be happier with someone with deeper pockets but I really suspect that waht we have will ahve to be the norm for clubs of our size when bought by non-sugar daddy types. I don't see DIC as a radically different proposition - although they might well have more money to invest upfront and their greater resources might result in better loan terms.