Monday, November 17, 2008

Recession Is The Referee In This Game

Relocating Liverpool & Everton to new stadia isn't just a purely footballing question, it's a civic & economic one for Merseyside. Liverpool's proposed move to Stanley Park has been shelved for at least the duration of this recession. Even when the economy starts to improve (2010, 2011?) there is no guarantee that work will resume in the park. Everton's move to Kirkby has been referred to the Whitehall mandarins after objections to it were lodged by Liverpool City Council & Sefton Metropolitan Borough Council. The city council holds that two feasible sites within the city have not been fully considered by Everton & their proposed business partner in the scheme, Tesco. Sefton council fears the economic impact of a major retail development in neighbouring Knowsley, claiming it will adversely affect shops & businesses in its borough. As with Liverpool, Everton, too, face uncertainty over their ownership. Bill Kenwright, Everton's chairman, realises that his wealth alone is not sufficient if success is to be achieved.
It's against such an uncertain backdrop that a cold blast of icy economic reality was blown in last week. Keith Harris, who has helped arrange the takeover of five Premier League clubs, admits he's made "no progress at all" in his search for a new owner at Goodison Park (http://www.guardian.co.uk/football/2008/nov/12/everton-premierleague ).
David Conn, whose previous articles on club ownership have shed much-needed light on the topic, quotes Harris:
"The demographics of Liverpool as a city are not hugely compelling [ ]. It is not a very wealthy city. Everton share the city with another club which arguably has been in the vanguard for the last decade, and they both have a stadium to build. So the economics need a lot of looking at."
The question of a shared stadium is not directly addressed by Harris. However, the implications are glaringly obvious.
The situation across Stanley Park has now been well-documented. The £350m loans which Hicks & Gillette took out with RBS & Wachovia (both effectively crippled by the banking meltdown) are due for repayment in January. Conn observes:
"Harris questioned whether the two banks...would want to keep lending Liverpool the money rather than call the loan in. He argued that it was likely to be difficult for the club to raise cash or new investment for equity in the club if they could not borrow the money elsewhere.
" 'The one that worries me is Liverpool,' Harris concluded. 'The banks are two of those that have suffered, so whether they want to lend again or not, they may not be able to. What normally happens in business, if the banks won't finance, you have to raise equity.'
"However, he suggested that even if Liverpool cannot raise significant cash to repay or reduce their borrowings, and the banks are not happy about remaining exposed to the tune of £350m, they would probably find a solution because of the prestige and high public profile of the Anfield club. 'If they cannot find equity,' Harris mused, 'well, it's a brave banker that would repossess Liverpool Football Club.' "
That's the only saving grace for Liverpool FC...for the time being at least. If the recession's severity intensifies beyond most forecasts, however, reaction to such a possibility, even among local supporters, may not be so adverse.
Harris also pops up in the Independent where he does confront the shared stadium issue (http://www.independent.co.uk/sport/football/premier-league/the-share-option-merseyside-clubs-urged-to-consider-mutual-benefits-1017677.html ).
His message is clear: the only way forward for both clubs is to share a new stadium. The economic reality that is kicking in with the current climate doesn't, however, seem to be registering with those who should be attuned to the changed times. Liverpool FC Chief Executive Rick Parry "reiterated recently he does not see it as the way ahead. 'Groundshare is not back on the agenda. It's a case of delay while things settle down,' he said. How long that remains the case seems dependent on whether Hicks and Gillette manage to sell, before or after the January date on which their loan arrangements expire."
Notwithstanding Harris' rose-tinted view of the rivalry between Liverpool & Everton fans ("My impression from going to Liverpool -- and I've been to both grounds many times -- is that the fans there may have a bit of banter, but there isn't that in-built hatred."), the shared stadium option is now gaining legs simply because the economics of it are unanswerable. Parry's pathetic holding statement attempts to depict the present situation as no more than a temporary blip rather than the most severe economic slump since the 30s.

1 comment:

Wall Street Survivor said...

Great Blog Title!

I think that "Recession" is the reference for all games at the moment.

Alicia
Wall Street Survivor Fantasy Stock Game
http://www.wallstreetsurvivor.com