The £124m question that Liverpool fans eagerly await an answer to

George-Gillett-and-Tom-HicksLiverpool owners George Gillett and Tom Hicks appear to be closing in on a £124m deal which would see them both sell part of their shares to a new investor in the Merseyside club. The Americans have been struggling to find new investment in the club but in recent weeks many parties have come forward to show their interest in cutting a deal with the owners. It is believed that both Gillett and Hicks want to sell the same amount of shares so they have the same weight on the board, and Gillett made a trip to London last week to announce his attentions of striking a deal in the near future. He obviously believes that the next few weeks will be a crucial negotiating period and has implored other interested parties to come forward as quickly as possible before they miss out on a deal.

The size of the share that both Hicks and Gillett sell will be the crucial issue in negotiations with any new investor. The club is currently worth between 500 and £600 million but with the potential of a new stadium on the horizon, and the fact the club’s revenues have tripled in recent years, the Americans believe they can get more for their share issue than the average market price. Even though it is still a big ‘if’ whether a new stadium will be built, Hicks and Gillett are adamant that any new partner in the club would reap the benefits if construction on Stanley Park commences, and that this should be taken into consideration when valuing the shares to be sold.

If they do find an investor willing to match the owners valuation, questions will no doubt remain about what the new situation on the board will mean. A third pillar of power will be established on the Liverpool board and he will no doubt have to mediate between both Hicks and Gillett, whose fractious relationship has caused so much turmoil at Anfield in recent years. The question will also be asked whether the new investor will want Rafa Benitez to stay as manager; another big concern for the future stability of the club.

The biggest issue at hand though, is whether the £124m that is said to be the asking price for shares will be invested in the Merseyside club. It will most likely be invested in paying down the club’s debts and getting building work started on the new stadium, rather than any money for new transfers. The American owners believe that the best way to increase the value of the club is to reduce debt burdens and increase its assets by constructing the stadium at Stanley Park. There is also a possibility however that the money will not be used at all, Hicks and Gillett have always been adamant that the £300m debt is manageable compared to the Glazers at Manchester United, and they believe they could start work on a new stadium by using the share deal to encourage lenders to loan money to start building work.

It would not be surprising if the £124m vanished into Hicks and Gillett’s financial empires. Gillett has sold his Canadian hockey team, the Montreal Canadiens, for £333m recently while Tom Hicks is on the verge of selling his Texas Rangers baseball team, but none of this money is likely to be invested in Liverpool. It will need to be invested in other parts of Hicks and Gillett’s businesses where their debt burden is higher than those at Liverpool. I would not hold your breath then on a swathe of new transfer dealings in either January or the summer.

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Article title: The £124m question that Liverpool fans eagerly await an answer to

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