What might have been: No 2 - How Liverpool FC was sold out by the board for £8m

It's an understatement to say that Tom Hicks and George Gillett have not endeared themselves to Liverpool fans over the last two and a half years. Since the undynamic duo took over, a catalogue of public embarrassments have made Liverpool into a laughing stock at times, all of which could have been avoided had the board simply chosen Dubai International Capital (DIC) as the club's new owners. Instead, greed, incompetence and a breathtaking lack of judgement prevailed.

In an April 2008 interview, former Chairman David Moores spoke of his ‘heartbreak’ at how his beloved Liverpool was becoming a ‘laughing stock’:

"It's heartbreaking. I'm almost lost for words about the damage that's being done to the club at the present time. As a fan, and as someone who loves the club, it is totally unacceptable to see this being played out in the public arena. When things are played out like they are at present it virtually makes the club a laughing stock".

No wonder Moores felt/feels so bad – Liverpool’s Honorary Life President was/is partly to blame for the turmoil the club has endured since Hicks and Gillett took over, and was/is probably feeling immense guilt over selling out to the mighty dollar.

As part of the same interview, Moores also stated:

"All I can say is I feel very sorry that it has come to this. I do feel let down. With everything that's going on, I have to feel let down. This is not how I foresaw it and I'm sure it's not how the fans foresaw it".

Given the seemingly rudimentary due diligence carried out on Tom Hicks and George Gillett, I fail to see how Moores could have expected to foresee *anything*, but I'll come back to that later.

Moores said that he felt ‘let down’ - I submit it it is he who let everyone down. If he and his boardroom cronies had just gone with the DIC deal, then the Gillett/Hicks debacle that has shamed the club would have been avoided.

Why did Moores pull out of the deal with DIC?

There was nothing ostensibly wrong with the DIC proposal; and - as DIC chief executive Sameer Al Ansari, explained at the time - it would have offered the same benefits as the Hicks/Gillett deal:

“We have worked very hard over a long period with Liverpool to come up with the best possible offer for shareholders and for the long term of the club. Our deal is not just about buying some shares; it is about financing the stadium, getting the stadium built and making money available for players."

On December 4th, 2006, the now (thankfully) departed Rick Parry gave DIC a glowing review:

"DIC is a potential investor with the resources and philosophy that we believe could make them an ideal partner. Already they have demonstrated a full understanding of, and respect for, the club's heritage and values.

"We also believe they share our passion for success. In particular, DIC believes in investing in the businesses it acquires. This is very important in terms of the proposed new stadium, which is key to plans for the regeneration of the local community."

Bullying?

A few months later, Parry had changed his tune:

"DIC gave the club 12 hours to make a decision but the chairman was not prepared to have Liverpool Football Club bullied like that".

DIC refuted the accusation that an ultimatum had been issued:

“There was no ultimatum given, but we did make it clear we needed to know quickly if the press conference was going ahead on Monday because DIC officials needed to know if they should book their flights".

The ‘bullying’ excuse was and is an insult to the intelligence of all Liverpool fans. It is clear that by the time Parry made that statement, Liverpool were in bed with George Gillett, and were looking for any excuse to get out of the deal.

And even if an ultimatum *was* issued, who could blame DIC after Liverpool stabbed them in the back and started negotiating a secret new deal with Gillett?

Muddying the waters?

DIC were understandably irritated by Liverpool’s unprofessional conduct, and they had every right to be, especially since the club did not even bother to keep the group informed about what was happening. At the time, Sameer Al Ansari confirmed this:

“Liverpool Football Club has been looking for years and years for an investor, going through numerous suitors. They came to the conclusion DIC were the best people. We’ve been working closely with advisors for the last six to eight weeks, and spent a lot of time preparing a deal.

“We heard from the press that George Gillett had made another bid. No-one from Liverpool told us this, and when we asked what was happening they said they didn’t know why a bid was made other than to muddy the waters.

“Then we read a formal statement from Liverpool announcing Gillett’s bid. Again, DIC were informed by a journalist. We expected the board meeting to accept our proposals. Instead, we found out the board was discussing George Gillett’s offer, once again through the press.

“We could get no answers from Mr Moores and Mr Parry. The people back in Dubai thought they weren’t being told what’s going on. Once word got back to Dubai that there were no answers from Liverpool, the word from on high was this is bad for our reputation and it all stops right now".

Due diligence?

So again, I pose the question: Why did Moores back out of the DIC deal? Rick Parry offered another lame excuse:

"Clearly things with DIC took longer than we expected and we thought we would have things wrapped up before Christmas, but it was taking significantly longer than that”.

So – the due diligence process took a few weeks to complete. Big deal! Due diligence is an important aspect of any big business deal and *should* take a long time to complete, especially when hundreds of millions of pounds are at stake. In any event, why was it so important for things to be 'wrapped up' by Christmas anyway?

There were no such time delays with George Gillett, who breezed in and completed his due diligence in three days. Three days?! And what about Moores' due diligence and responsibility to ensure the club was getting the best deal possible? Rick Parry assured everyone that Moores was on the ball:

“You can be certain that he [Moores] has done his homework carefully and will make a decision in the best interests of the club."

Homework? Well, according to Moores, everything was in 'good faith':

"It was in total good faith. I believed these fellas, I believed everything they said to me. They talked about putting the money in and the new stadium and having no debt on the club”.

It sounds like Moores was just took everything the 'fellas' said at face value! Why bother checking them out properly when everything is in 'total good faith'?

It's hard to believe that Moores could've proceed with such astonishing naivité, but if he did, then he deserves the harshest criticism possible. Indeed, a simple google search of Tom Hicks reveals some concerning things about his past business dealings that should have set the alarm bells ringing, (erm, Corinthians anyone?).

The club's best interests...or greed?

So what caused Moores to take his eye off the ball? After DIC withdrew their bid, Rick Parry stated:

"We have a duty as directors to consider a very interesting bid from George Gillett”.

Translation: The DIC bid was done and dusted but then Gillett came back with a deal that made us all more money, so we decided to go with that instead.

There can be no other conclusion than this: David Moores and the Liverpool Directors had dollar signs in their eyes, and instead of sticking to their deal with DIC, they saw an opportunity to milk more money and took it.

DIC were offering £4,500 a share and the deal was all but done. Gillett comes in at the eleventh hour with an offer of £5,000 a share, and suddenly it’s all change.

Quite simply, with Gillett’s offer, Moores stood to make £88million compared to £80million from DIC’s offer.

So, for the sake of £8million, David Moores sold Liverpool out to a couple of cowboys who have proceeded to make a mockery of everthing Liverpool FC stands for.

Rick Parry can go on and on about needing to make the best deal for the club and satisfying the shareholders, but the question is, has all hassle and debt associated with Hicks and Gillett been worth the extra £8million that Moores pocketed?

Of course not, and I am sure Moores would agree with that.

If Liverpool had continued with the DIC deal, there would, in all probability, have been no hint of public or private unrest over the last couple of years.

Ultimately, there was no concrete, believable reason for Liverpool to pull out of the DIC deal, and the excuses the club have come up with have been tenuous at best.

Reaping what you sow

Moores was clearly sincere when he spoke of being ‘shell-shocked’ over what has happened since he sold the club, but he should acknowledge the mistakes he made instead of just blaming everything on Hicks and Gillett.

The fact is, if it wasn't for Moores, there would be no Hicks and Gillett!

You reap what you sow, and right now, Liverpool are paying the consequences for the board’s shameless greed.

And that is something Moores (and everyone else who lined their pockets at the expense of making the right decision) will have to live with.