On January 7, 2007 two American business men armed with brash promises and impressive soundbites arrived at Anfield boasting they would make Liverpool a superpower in the game once more; but as things turned out it became one of the more regrettable chapters in the club’s glorious history.
The reign of Tom Hicks and George Gillett will always be remembered by Liverpool fans as one of the more shameful periods in the club’s long and illustrious past as the duo almost dragged one of English football’s biggest names to the brink of oblivion.
“It is not about money,” said Gillett as the two men addressed the media for the first time. “It’s about our passion and our understanding of the fans of this club.”
12 months later and their words seemed as laughable as they were hollow as this marriage of convenience all but broken down, with the duo eventually pursuing individual agendas which almost took the club into administration.
A combination of failed gambles and questionable decisions left Reds fearing for their club’s very existence and by the end of it all football had become something of a sideshow compared to the drama which was unfolding off the field.
The pair used borrowed money in the form of huge loans rather than their own personal fortunes to purchase Liverpool paying £5,000 a share which amounted to £174.1million in total, not to mention a further £11 million to pay banks and advisers as well as £44.8 million to absorb the club’s debts.
Even so the two claimed to be working to a very different business model from the Glazers, who had purchased Manchester United in a similar fashion just three years previously, though as it turned out the procedure was almost exactly the same.
Alarm bells began to ring, however, when after just 12 months the club’s new owners took out a loan for £350 million with the Royal Bank of Scotland and Wachovia; £105 million of which was loaded onto the club.
The remaining £245 million of the loan was taken on by the holding company set up by Hicks and Gillett when they bought the club, Kop Holdings; meaning that despite their promises the club was now saddled with millions of pounds worth of debt.
The move was initially seen by some inside Anfield as something of a short term move while Hicks and Gillett reorganised the club’s finances but it wasn’t long before supporters began to become worried at the precarious position the club had been placed in.
And these fears were soon realised when Hicks’ personal spokesperson publicly admitted that the club would be expected to make interest payments of around £30 million a year on their vast borrowings, though the actual figure turned out to be more like £100,000 a day in interest.
One of the biggest factors in the takeover was the pair’s commitment to building Liverpool a new stadium rather than upgrading their existing Anfield home, but it was to be these brash promises which would become the rather embarrassing legacy of the whole miserable episode.
Hicks and Gillett showed off ambitious plans for a new 60,000-seater stadium – which included a vast 18,500-seater Kop – to be built in nearby Stanley Park and claimed planning permission had already been granted.
“The shovel needs to be in the ground in the next 60 days,” claimed Gillett confidently during his first British media appearance, referring to the proposed new stadium in Stanley Park but as we now know the shovel didn’t even make it out of the shed, let alone break the soil; probably due to the fact that there was no money to spend.
Some five years later it was revealed that design fees and legal costs alone for the failed project had cost the club £35 million.
If the duo were already unpopular with Liverpool fans this would only get worse when it became apparent that the club’s new owners intended to replace manager Rafa Benitez with former Inter Milan, Spurs and Germany star Jurgen Klinsmann.
Benitez was probably at the height of his popularity among Reds at the time, having guided the club to two Champions League finals in three years, one of which they won, as well as victories in the FA Cup and European Super Cup. So to replace him with a relatively unproven and out of work manager appeared to be the last straw for many.
Hicks would later claim the issue was a “misunderstanding” and offered Benitez his full backing but by 2010 the Spaniard had left Liverpool with Hicks claiming that Rafa had, “lost the club.”
Amidst growing anger among supporters and increasing protests against the pair’s ownership, not to mention much discontent among board members, the writing appeared to be on the wall for Hicks and Gillett.
And it was no surprise when their association with the club eventually ended ignominiously after a bitter court battle and a number of failed legal challenges resulting in them being labelled “untrustworthy” by a High Court judge.
An attempted 11th hour agreement with Mill Financial Ltd, which would have seen the US hedge fund repay the £237m loan and enabled Hicks to sell his shares and leave Liverpool with a profit fell through with the High Court instead approving the £300 million sale of the club to the John W Henry-led New England Sports Ventures – now known as Fenway Sports Group – on October 15, 2010.
So after their three-year tenure as owners of Liverpool, a period fraught with supporter unrest, failed promises and courtroom battles, Hicks and Gillett would walk away with nothing from their ill-fated venture with George Gillett even believed to be paying £125,000 a month to service the debt he acquired some five years after his departure.
As for Liverpool they had learned a harsh lesson about who and who not to do business with while that dark period between February 7, 2007 and October 15, 2010 continues to provide a pretty painful example for fans and owners everywhere of how not to run a football club.
