It is perhaps symptomatic of the importance of finance in modern football that the Royal Bank of Scotland (RBS) has taken the unprecedented step of writing to Liverpool supporters to justify its continuing financial support of the club’s American co-owners. The bank has been flooded with emails from Liverpool fans calling for the plug to be pulled on Tom Hicks and George Gillet’s £350m debt. Discussions on refinancing the loan have been proceeding well and the sending of the e-mail is virtual confirmation the loan will be refinanced.
It is perhaps symptomatic of the importance of finance in modern football that the Royal Bank of Scotland (RBS) has taken the unprecedented step of writing to Liverpool supporters to justify its continuing financial support of the club’s American co-owners. The bank has been flooded with emails from Liverpool fans calling for the plug to be pulled on Tom Hicks and George Gillet’s £350m debt. Discussions on refinancing the loan have been proceeding well and the sending of the e-mail is virtual confirmation the loan will be refinanced. The message from RBS says the bank has ‘a long-term relationship with the club, and we look forward to this continuing for many years to come. In our view and that of the executive management of the club, it is financially healthy and able to service comfortably its debt obligations from cash flow generated by its playing and commercial activities. It is in our commercial interest to support the club so that it can continue to perform successfully on and off the pitch.’
George Gillet Jr. has moved to ease the club’s financial troubles by agreeing to sell his majority stake in the Montreal Candiens ice hockey franchise. It is expected that the refinancing of the £350m credit deals with RBS and Wachovia will require more than £185m in personal guarantees from the American co-owners. Molson has agreed to buy Gillet’s 80.1 per cent stake in the Canadiens for about £330m. The brewing company, which owns the remaining 19.9 per cent share, sold Gillet the controlling stake in the franchise eight years ago for about £165m, but was prepared to buy it back for double that amount. As part of the deal the Molson family will acquire the Bell Centre where the Canadiens play. Liverpool could receive another boost if the other co-owner, Tom Hicks, manages to offload about half of his 95 per cent stake in the Texas Rangers baseball team. The Rangers are valued at about £245m.
Carlsberg is running out of time to negotiate a new shirt sponsorship deal with Liverpool as the club hold out for a bumper contract amid interest from a host of leading international companies. Liverpool are looking to strike a deal similar to the £80m, four-year arrangement that Manchester United secured this month with American insurance giant Aon, but Carlsberg is offering only about half that sum. The Danish brewer has been Liverpool’s main sponsor since 1992. The club’s American co-owners believe that the club has been undersold commercially for too long and want a deal that reflects their position as one of the most recognisable brands in world fooball. The present deal with Carlsberg is worth £7.2m a year and expires next summer. Carlsberg has until the end of July to negoriate a new contract. Liverpool believe that United’s agreement with Aon has set the benchmark they should aspire to.