Could Roy be hitting Liverpool owners for six?

It was reported in the Times today that Liverpool are in negotiations with Indian businessman Subrata Roy. Discussions are at an early stage but reports suggest that Roy is demanding more than Tom Hicks and George Gillett are willing to sell. So is another potentially interested party really what Liverpool need or is this just another distraction for the Anfield club.

In the financing deal that Hicks and Gillett negotiated when they purchased the club they borrowed vast sums from the Royal Bank of Scotland. RBS are now demanding that they repay £100 million by July as they are frustrated at the lack of financial progress the Americans are making. Hicks and Gillett have therefore been casting a net far and wide to find an investor willing to invest the £100 million required for a 33% share in the club. This task has fallen to Christian Purslow, the clubs Managing Director, but as yet no firm interest has been found.

Subrata Roy is an Indian business tycoon, and the owner of Sahara. Many keen sports fans will know the name, as they are the sponsor of both the Indian cricket and hockey teams. Roy started the business from scratch and has grown it to a net worth of approximately £5 billion. Roy has a keen interest in sport and he was rumoured to be considering replacing AIG as Manchester United’s main sponsor.

In the aftermath of the problems faced by Portsmouth, money is no longer enough for some fans. There needs to be a level of decency and a strong character to be a popular investor. Despite his success there are some critics of Roy, who claim that his 700,000 employees are like a cult, with their own special greetings and phrases, with Roy at the head of the ‘family’. Such an odd criticism may put off some fans but unfortunately Liverpool are not in a position to be excessively selective of their new investors.

Liverpool struggles off the pitch have arguably affected the team’s performances this season. There needs to be stability at the top which can then filter down through the rest of the club. As Hicks and Gillett are unable to fund the club on their own then new investment is inevitable. Potential investors such as Roy are unwilling to cover the debts without the return of a majority shareholding. Hicks and Gillett are asking a lot to only offer a third of the club in return. It is believed therefore that Roy would want a 51% shareholding for a £237 million investment, removing all the clubs debts in the process.

With Liverpool so overtly searching for investment since the summer it seems as though they may have to accept a higher bid, despite their misgivings. Hicks and Gillett will ultimately have to accept losing their individual majorities in exchange for the prosperity of the club. In any other business scenario of course the Americans are fully entitled to hold out for the best possible offer. When business merges with sport however, the negotiation becomes blurred as other moral and fan issues become involved. Continued stalling has limited Rafa Benitez’s ability to improve his squad and the on pitch performances have suffered.

Subrata Roy may well be another name that is incorrectly linked with a Premier League football club. Many other wealthy men have lost considerable amounts of money as well as damaging their reputation by owning an English football club. The appeal of the Premier League is however universal and the wealthiest businessmen will continually look to own a club of their own. So long as the investor Liverpool eventually find is appropriate and passes stringent checks, of both finances and of their intentions then, for the sake of the club, I hope that Hicks and Gillett can swallow their pride and act in the best interest of Liverpool FC.

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