Thursday, January 31, 2008

Point: Accept your new American overlords

These two aren't the problem at Anfield
(photo credit: The Sun)

Discontent with the ownership of Tom Hicks and George Gillett has reached a new high, with word that a group called Share Liverpool FC plans to raise 500 million pounds to buy the club. The scheme, in which 100,000 fans would plonk down 5,000 pounds each, is modeled after the ownership structures of Real Madrid and Barcelona, the supporter-owned Spanish giants. If the supporters' takeover went through, it would be a bad thing for Liverpool FC.

A bit of digging, though, reveals the comparison to be facile. Both Real Madrid and Barcelona enjoy certain structural advantages, notably their duopoly at the top of La Liga and the ability to negotiate separate TV deals. The clubs are also figureheads for the big rift in Spanish politics, which means they enjoy heavy political support and have at various times received subsidized loans from friendly banks.

Liverpool, on the other hand, play in the most unabashedly competitive and capitalist league in Europe, and must compete with the financial resources of Chelsea, Arsenal, and Manchester United. What happens to the supporter owned team if they miss the Champions League and the fans are forced to make a further capital contribution to pay wages and buy players absent the extra TV and gate revenue? Would a fan owned team be able to make unpopular business decisions, like raise ticket prices, so that Liverpool could keep up with the Big Three?

The real issue here is not foreign ownership, and it’s not the fact that Hicks and Gillett have used debt to finance their takeover. You don’t see many Chelsea fans complain that their club is owned by a shady Russian billionaire. Up north, the Glazers are far more guilty on both counts, especially since the original 374 million pound loan to fund the takeover of Man U in 2005 was refinanced the following year into a 575 million pound loan. Where the newly borrowed 200 million pounds went is anyone’s guess, although I would bet a fair bit found its way into Malcolm’s trousers.

Plus, the debt is manageable, given that they don’t cancel the Premiership due to a recession, which means revenue is pretty stable. With the new TV deals and increased worldwide exposure, now is a critical moment for a big club to make savvy business decisions and build its global fanbase. Whether it’s good for the long term health of the EPL or not, the actions taken this decade by the big clubs have served to cement their places at the top, and put a widening gulf to the rest of the league. If you are a fan of a big club, now is not the time for provincial thinking.

Chelsea and Man U fans don’t complain because their teams have won the league the last three years. The real issue with Liverpool is not foreign ownership, no matter how tone-deaf and bumbling Hicks and Gillett have been. The problem is that the club isn’t winning. And the blame for that rests on the shoulders of Mr. Benitez, not the Yanks. Chelsea fans also backed Jose over their foreign owner, but once the switch was made and winning resumed at Stamford Bridge, they forgot all about their tiff with Roman.

Hicks and Gillett have been generous with the transfer funds; Torres and Babel did not come cheap. It’s not their fault that Rafa either a) can’t buy the right players or b) won’t put his best players on the pitch every time out. A managerial change and a few wins would do wonders to soothe the vitriol directed at the Americans.

A counterpoint from Lingering Bursitis to follow in the morning. He's lazy and unreliable, much like Harry Kewell.

1 comment:

The Fan's Attic said...

Don't the British know by now that they cannot own their own football clubs. Nine are already in foreign hands. Its business to everybody else, but its like blood to the Brits. All rational thought is out the door, which isn't good in business.