Dear Reader,
To have a bit of a variety, this week I decided to report on a story from the sports world. To be more specific – Football.
As I was following the FC Liverpool sale on TV and we mentioned this story a week ago in class, I thought everyone would be interested about the result of the negotiations.
Last Friday the US company New England Sports Ventures, owner of the Boston Red Sox, has completed its takeover of FC Liverpool.
After some complications with the former owners George Gillet and Tom Hicks, who had placed a temporary restraining order blocking the sale, finally gave in.
The lucky buyer of the £300m sale, NESV head John W Henry said: “I ma proud and humbled, I cant tell you how happy I am”
(Source: Metro)
Although the sale is over the table; Gillet and Hicks may now take legal action in England to secure damages after dropping a claim lodged in Texas. The American pair was claiming £1bn in Dallas, saying that the deal was “illegal and an “extraordinary swindle” as the club did not take the highest bid on the club. There are rumours that higher bids were rejected as the Club had previously promised an agreement with Henry.
(Source: SportsNews)
However, there was an air of relief as the news of NEVS completed the purchase emerged in the press. This move will now allow major creditors like the Royal Bank of Scotland to be paid the £237m it is owed.
A club statement revealed that this transaction will value the club at £300m and eliminates all of the acquisition debt placed on FCL by the former owners. Consequently the clubs debt servicing obligations will be reduced from £25m-£30m a year to £2m-£3m.
(Source: Dallas-Observer)
As a result Liverpool’s holding company is unlikely new to be put into administration, which would mean a nine point penalty for the football club in the Premier League, placing them in a relegation battle.
Henry, who was spotted inside the law offices of Slaughter and May in central London added: “We are going to do a lot of listening, we have a lot to learn, and we will walk this path together. “
In my opinion, the fuss about the change of the owner influenced the team tremendously. Now that this issue is finally sealed, the club can concentrate on football again. Having the worst start in the history of, it is placed 19th after 8 matches. Looking from an economic perspective, should this sportive dilemma continue the club will forfeit a huge financial loss, by not participating in any international tournament like the Champions League or European Cup. Worst case scenario would be, if the previous american double manage to put the club into administration, meaning a nine point penalty, creating the possibility of being relegated to the second league. Let's hope that this will not happen.
In my opinion, the fuss about the change of the owner influenced the team tremendously. Now that this issue is finally sealed, the club can concentrate on football again. Having the worst start in the history of, it is placed 19th after 8 matches. Looking from an economic perspective, should this sportive dilemma continue the club will forfeit a huge financial loss, by not participating in any international tournament like the Champions League or European Cup. Worst case scenario would be, if the previous american double manage to put the club into administration, meaning a nine point penalty, creating the possibility of being relegated to the second league. Let's hope that this will not happen.
E.V.
Sources:
1. BBC News
2. The Guardian
3. Boston.com
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