by Brian Reade
Hicks had spun the same fiction to all of his sports fan-bases in that his days of making fortunes through leverage buyouts were behind him. Now he was in semi-retirement mode, and his sports clubs were his reward for a lifetime’s graft, his chance to smell the roses and put something back, but most of all they were for his family. Here, he told every fan of every club, was the proof he was in it for the long-haul. These were multi-generational, family investments.
But in an interview with American magazine Sports Business Journal in early 2010, Hicks admitted his sporting purchases were never going to be ‘dynastic’ assets. In other words, Liverpool, the Texas Rangers and the Dallas Stars had nothing to do with love, care and long-term growth. They were Weetabix, pure and simple.
Reading the comments from American sports fans underneath that article (and cutting out the odd douchebag) you could almost have been on the Liverpool forums.
‘Tom Hicks most certainly doesn’t give two shits about what any one of us thinks. But I think the outrage stems from the fact that, as sports fans, we desire, whether it’s a realistic desire or not, for the owners of the teams we support to actually care about the success of the teams, not just their own bottom line. It just sucks to see that Hicks’ involvement with the Rangers and Stars is such a passionless investment.’ – zobzerto
‘What Hicks, that big douchebag, fails to understand is that sports teams aren’t just some investment vehicle for letting fat white guys turn a profit. They are public trusts – the public puts its trust in you to do the right thing! That means having the means to field a competitive team without borrowing out your ass, then defaulting.’ – G. David
‘All this time he sold his team ownership to us as a family deal that he wanted to pass on for generations. He tried to make us believe he cared about winning but as we all suspected he was a money hungry ass-hat. I can’t wait for the day he is out of our lives.’ – Scotts Merkin
Asses of the world unite. You have nothing to lose but your hats.
The more Liverpool’s phantom buyers came and went – like nosy pensioners sneaking around Barratt showhouses checking out the colour schemes – and the longer the silence about the club’s future dragged on, fears grew that, come the October refinancing deadline, Martin Broughton and Christian Purslow would be powerless to evict Hicks and Gillett.
Broughton had said, on the day he became chairman, that the fans would only hear from him when there were serious offers to consider, but this was drifting so close to the deadline the common perception was he had nothing to say. Hatred towards the Americans was becoming so intense, most fans were now letting it be known they would prefer to be taken over by RBS, risking administration and a nine-point deduction, rather than suffer their ownership any longer.
That awful choice looked like proving unnecessary less than a fortnight from deadline, as Sir Humphrey Bufton-Tufton appeared to pull a pair of credible rabbits out of his top hat. His overriding fear, though, was whether he had the power to sell Liverpool FC against the owners’ wishes. Which was why he spent the summer taking advice from top London solicitors Slaughter and May and working hand-in-glove with the Royal Bank of Scotland, so he was ready to do battle with Hicks and Gillett if, as expected, they tried to block any sale which left them without a profit.
On Sunday 3 October Broughton emailed both Hicks and Gillett to tell them he had two buyers lined up: Singapore businessman Peter Lim, and the Boston Red Sox owners NESV. As the NESV offer would expire on 5 October he convened a board meeting for 3.30 p.m. Tuesday, in London, to consider the offers.
On the same day in Liverpool, Hollywood producer Mike Jefferies directed a viral video called ‘Dear Mr Hicks,’ starring John Aldridge, actors Ricky Tomlinson and Sue Johnston, playwright Jimmy McGovern, comedians John Bishop and Neil Fitz-maurice and other fans and celebrities, appealing to the Texan to sell up and go. Jefferies posted it on YouTube, and as well as provoking much bile from rival fans and reassuring old Brookside viewers that half of its cast were still alive, it attracted three-quarters of a million worldwide hits. But the men it was aimed at weren’t heeding its message. Far from it.
On the Monday, unbeknown to Broughton, Hicks and Gillett, realising they were powerless to outvote the three British directors, agreed by phone to reconstitute the board, replacing Ian Ayre and Christian Purslow with Hicks’s youngest son Mack and Lori Kay McCutcheon, the financial controller of Hicks Holdings. As Broughton, Purslow and Ayre, plus bankers and legal teams from all sides, gathered in the first-floor board-room of Slaughter and May, mid-afternoon on Tuesday, 5 October, awaiting the transatlantic conference call board meeting, nerves were strained.
A senior Liverpool source described the tension thus: ‘We’d taken a lot of legal advice and the view was we had the right to sell the club. The Americans also had the right to stop the sale, but if they did, it would probably turn out to be a hollow victory as it could be eventually overturned in court.’
The problem for Broughton, Purslow and Ayre was they knew Hicks and Gillett would try to frustrate the sale, but didn’t know how. Thirty minutes before the meeting was scheduled to start, Broughton received a message which told him. The board had been changed, a listing of the new members filed with Companies House, and therefore any meeting held this afternoon would be invalid.
The first anybody outside the room heard of the drama came in an email sent from one of the Liverpool board members to the press team, who were waiting in nearby offices to announce news of the sale. The email read: ‘Everything is on hold. World War Three is starting. Await instructions.’ This was the final, dusty Main Street, High Noon, shoot-out scene in the Anfield Civil War.
After the British board members digested Hicks and Gillett’s tactic, there followed intense discussions with the legal teams, with RBS advisers assuring Broughton the Americans were in clear breach of their agreement. So the Liverpool chairman decided to ignore what he believed to be an illegal stalling action, told the room he was about to start the meeting, and made the calls to Hicks and Gillett.
‘I’d like to officially declare this board meeting open,’ said Broughton before being brusquely interrupted by a deep Texan voice which reminded the assembly that Purslow and Ayre were no longer on the board, so he was proposing they postpone the meeting for another month. When he asked, ‘All those in favour,’ a small Wisconsin voice was heard to squeak: ‘Aye.’
Broughton went on the attack, reminding the pair he was chairman of the company and they had no legal grounds to change its constitution without his consent. He informed them he was refusing to go along with the removal of Ayre and Purslow, but was calling an adjournment for further legal advice, after which the meeting to sell the club would go ahead regardless of whether they chose to attend or not. The American lines had gone dead before he finished.
After another hour of legal advice Broughton decided to go ahead with the sale.
The Americans were phoned to take part, but neither answered. So a sub-committee was formed, consisting of Broughton, Purslow and Ayre, which unanimously voted to sell the club to one of the two credible bids.
By mid-evening the most amazing press statement ever to appear on a British football club’s website was posted, effectively announcing that a coup had been staged by a British group of directors, declaring independence from the American owners:
The board of directors has received two excellent financial offers to buy the club that would repay all its long-term debt. A board meeting was called today to review these bids and approve a sale. Prior to the meeting, the owners, Tom Hicks and George Gillett, sought to remove managing director Christian Purslow and commercial director Ian Ayre from the board, seeking to replace them with Mack Hicks and Lori Kay McCutcheon.
This matter is now subject to legal review and a further announcement will be made in due course. Meanwhile Martin Broughton, Christian Purslow and Ian Ayre continue to explore every possible route to achieving a sale of the club at the earliest opportunity.
The owners were thus being told back home in America, via their own television channel, that their club was about to be sold, and there was nothing they could do about it. The workers (albeit the very well-paid ones) had literally taken control of the club. Viva la Revolution, gringos.
The three-man board then went back to the Slaughter and May boardroom and began to assess the two offers. By two a.m. they decided to go with a £300 million bid from New England Sports Ventures (NESV), a seventeen-member consortium which is the parent company of the Boston Red Sox, rejecting the higher offer of £320 million from Peter Lim on the grounds that NESV appeared to have a superior track record in club development. Insiders claim another factor in their favour was that NESV were offering to pay off more of the Hicks and Gillett financial ‘PIK’ penalties imposed throughout the summer by RBS than Lim was.
Shortly after seven a.m. on Wednesday, a new statement was put up on the LFC website announcing the sale to NESV. Broughton had also pre-empted Hicks and Gillett’s next tactic by saying he intended to go to the High Court to confirm the legitimacy of the board which had just sold the club.
A Liverpool employee who was close to the action throughout the day said: ‘It was probably the most dramatic twenty-four hours in the club’s history. You had a transatlantic boardroom war going on over the phone, with Martin Broughton magnificently standing up to Hicks’s bullying 3,000 miles away, and four different legal teams [LFC’s, RBS’s, Hicks’s and Gillett’s] listening in. There was no confidentiality because Hicks’s and Gilletts’ legal teams were in the same room, so small knots of people had to huddle outside the boardroom passing on information and making decisions.
‘Then you had the club’s own communications structure ignoring the owners’ wishes and communicating against them. It meant the Americans were reduced to briefing external media to get out a message which contradicted their own publicity machine.
‘It was like something you’d see happening in a Third World Country when there’s a military coup. They had had their own power taken away from them after being boxed into a corner by a very clever guy who had the balls to stand up to them, because he’d made sure when he took the job he had the power to do this, and he knew what he was doing was right.’
That was in effect what Liverpool’s sale came down to. Broughton’s decision to be no one’s patsy. A decision he ensured he had in writing, and one he was determined to see through the longer he worked with the Americans and saw the horrendous damage they were inflicting on a great British sporting institution.
Broughton then seized the initiative by going public about Hicks and Gillett. In a series of interviews he said he pitied them for choosing to walk away from Liverpool ‘humiliated’ and claimed the pair had ‘flagrantly abused’ undertakings they had given him and the RBS not to oppose a reasonable sale.
Furthermore, they had abused the club’s constitution and its articles of association, by seeking to sack the managing director, Christian Purslow, and commercial director, Ian Ayre, and replace them with Hicks’s son and his assistant, to give Hicks a majority on the board.
Liverpool’s articles of association stated that only Broughton, as the chairman, had the right to appoint or remove directors. The key clause was paragraph 81a of the thirty-page document, which stated: ‘Each director appointed to the office of chairman of the board of directors of the company may appoint any person as a director of the company and may remove any director (other than George N Gillett Jnr and/or Thomas O Hicks). Any appointment or removal shall be made in writing and signed by the then current chairman.’
Crucially for Broughton, the RBS backed him all the way. Indeed it was the bank’s decision to take the Americans to court and bring an end to this damaging, drawn-out mess. Broughton said he was ‘confident’ a High Court judge would rule in the board’s favour the following week, before adding worryingly for Liverpudlians, ‘You can never be 100 per cent confident when you go to court.’
Hicks’s spokesman in New York nonchalantly claimed that his client had given no such undertakings to Broughton, stating that, as owner, he had the right to sack and appoint directors: ‘The board has been legally reconstituted and the new board does not approve of this proposed transaction,’ he said.
With the club five working days away from possible administration, and the Americans’ almost superhuman ability to defy death, no Liverpudlian was feeling the least bit confident. In fact everyone was waiting for the next awful twist, the next blow to the teeth from those Liver Bird-encrusted cowboy boots.
Mick Carroll awoke at 5.30 a.m. on Wednesday, 13 October, in a north London B&B on a flea-bitten bed that rocked through the sound of his mate Ben Crone’s snores, and the early morning trains pulling into nearby Euston station. He flicked on the dingy TV to see the first of the trapped Chilean miners being released from his dark, hellish existence and took that as a good omen for his day ahead in the High Court.
At six a.m. the pair set off in (roughly) the direction of the Royal Courts of Justice, using the London Underground map as a satnav. An hour and a quarter later, after non-helpful directions from a Cockney (‘You’re fackin’ miles away, fellas’) and helpful ones from an exiled Scouser (‘Here ya go, lads, I’ll walk ya there’) which they took as another omen, they were standing in The Strand, outside the imposing grey stone archway and black railings of the High Court. They were the first people there, so started their own queue, convinced they’d just bagged rights to the view of a Liverpool victory that would rank up with any of the five European Cup wins.
Over the next two hours more Liverpool fans turned up, mainly London-based ones who had been there the day before to hear the legal battle commence, along with the media and the occasional well-wisher. A woman in her early twenties, on her way to work, stopped to offer support: ‘It’s not right what’s been going on, they need to go. Good luck, lads’. A City gent, in his seventies, dressed in a suit and long overcoat, made his way across the pavement to them: ‘Bloody bastards they are, the pair of them. Hope it all works out OK for you chaps. Bloody good luck.’
At this point Mick and Ben were stunned and humbled. If London workers old and young, rich and not rich, male and female, sense the burning injustice inside their souls, surely Mr Justice Floyd would reflect that, and deliver them victory this morning.
The previous day had seen QCs do legal battle over Liverpool’s future in the same wood-panelled courtroom Mick and Ben were hoping to gain a seat in for that day’s verdict. Hicks’s and Gillett’s barrister, Paul Girolami, QC, insisted his clients were not ‘trying to throw a spanner in the works’ of Liverpool’s sale to New England Sports Ventures. Rather they were trying to save the club for better owners who valued it higher.
They believed the ‘English directors’ had blatantly ganged up on them, calling themselves the ‘home team’, and excluding the Americans from the decision-making.
‘The English directors have gone forward with the NESV bid without properly considering alternatives when those alternatives at least appear to give better prospects,’ said Girolami.
Thus their complaint, m’lud, was not that they would lose out personally from the sale, you understand, but with this rush to do business at such a low price, the club would. It was the fans they were thinking about all along, you see. Honest.
Liverpool’s QC, Lord Grabiner, won the argument about the Americans being in breach of their contract with RBS, through reconstituting the board without Broughton’s approval. He also demolished their claim that the club had not been properly marketed. He said the board had spoken to 130 parties by the previous Tuesday, a necessary deadline set because it was ten days before the club could be forced into administration. Lim’s and NESV’s were the only two offers on the table and although Lim was ‘credible’, the board decided NESV’s bid was marginally better.
‘It was a thorough and well-thought-through process,’ Grabiner said, rejecting the accusation from Hicks and Gillett (still unexpl
ained) that the ‘English directors’ did not want the best bid for Liverpool.
Lord Grabiner derided their decision to snub the crucial board meeting by reconstituting the board: ‘Someone who is invited to a meeting and says, “I don’t want to come to your meeting because I’ve done something else which makes that meeting irrelevant,” said Grabiner ‘is ridiculous and unarguable.’
RBS’s barrister, Richard Snowden, accused the Americans of ‘breathtaking arrogance’, as they sought to derail a potential sale of the club: ‘It is quite astonishing for two businessmen who are owners of their company to say, “We don’t care that we owe the bank £200 million by Friday. They can wait.”’
As the High Court drama unfolded Steven Gerrard was a stones-throw away, following it through his mobile phone. He was on England duty in London during an international break and was holding a business meeting in the Savoy Hotel. A meeting he kept being distracted from as texts from friends kept him up to date on how events were unfolding in court. When progress was frustrated he sent a couple of texts back saying he was only a quarter of a mile away and was tempted to head down to court to give the legal team a hand.
Jamie Carragher was also being blitzed with texts asking him what was going on, to which he replied, ‘I’m back at home watching it on the telly, same as you.’ Like every Liverpool fan, the frustration was killing him.
‘I’d be thinking “We’re nearly there”, and then Hicks would come out with something and you’d think, “No, we’re not are we?” I was chuffed that it was all coming to an end but kept thinking, “Why is Liverpool in this situation?” Seeing LFC in court was just another stain on our history.’
At nine a.m. on the Wednesday, Mick and Ben could see a security guard making his way towards the big wooden doors of the court, just inside the stone archway, and primed themselves for a New Year’s Sale dash. After a visit to the X-ray machine and body scanner they rushed along a corridor, up stairs and down a smaller corridor until they found Court 18.
