Ridiculous Speculation? Liverpool fans need some EXECUTIVE action!

As a Liverpool fan with an extremely rudimentary understanding of how finance works within football, I have found myself irked by the outrageous behaviour of the club’s American owners without fully appreciating the gravity of the situation. For all intents and purposes I have been under the basic assumption that the club have several debts to pay, and as such, cannot afford to buy the Agüeros and Villas of this world. I mean, I’m a football fan, not an economist, what matters to me is which players we can buy in order to guarantee trophies at Anfield, not such things as whether the owners have indulged in a “leveraged deal”.

Despite my ignorance, it is generally deemed to be exciting news when a foreign multi-millionaire or billionaire is linked with buying the club. In my eyes, this means someone rich is going to roll into Merseyside, wipe our debts, build us a grand new stadium and buy some of the best talent in the world. Take today for instance. Stories circulating around some of the broadsheets have stated that a Chinese multi-millionaire has discussed a potential takeover of Liverpool Football Club. Zhu Jun, a 44-year-old gaming entrepreneur from Shanghai, has been described by local sources as “sincerely interested” in the club, with another “informed source” implying that Zhu has already had two exploratory meetings about buying Liverpool.

Unfortunately, this is another piece of media speculation that will probably act to fuel another false dawn of hope amongst Liverpool’s suffering fans. Zhu Jun, is not the first, and certainly won’t be the last, affluent tycoon to be linked with our club. Indeed, newly-appointed Liverpool chairman Martin Broughton recently acknowledged the nature of such conjecture, urging fans to “ignore all ridiculous speculation”. Broughton added that, “Any serious owner would surely want to do it privately, which is how we want to do it. We anticipated a lot of interest, it’s a great club. Expect to see all sorts of names in there – ignore the whole lot.”

Perturbed by the black financial clouds surrounding my beloved club, I bit the bullet and decided to do some research on exactly what economic mess Liverpool find themselves in. Deliberately avoiding the mystifying jargon of balance sheets and Financial Times-esque reporting, I managed to saliently discover the essence of the club’s problems and why the club’s fans need to start seeing action being taken.

In short, the arrival of parasitic cowboys Tom Hicks and George Gillett Jr was SUPPOSED to herald the start of a glorious new era, with the imminent promises of a new 60,000 seater stadium and an influx of the world’s top talent. A prudent family-run club under David Moores was set to give way to a bright new corporate future under wealthy American benefactors, in a manner ever so slightly akin to the way that a dormant Chelsea were awoken by a prosperous Russian man (but with more class and grace, obviously).

To say that this hasn’t occurred would be an understatement of the highest order. Upon their takeover three and a half years ago, the club were around £78million in debt. Despite promising not to load any debt upon to the club, Hicks and Gillett have managed to increase this debt to a level of around £240m. Accordingly, the club have been required to pay interest on the debts acquired by the Americans, with recent reports indicating that £78 million in interest was repaid between 2007 and 2009. Imagine if that £78 million had been used to buy players within the last 2 years?

As a result, the club’s management have had to implement a “sell-to-buy” policy with additions to the squad, a policy that just isn’t good enough when challenging for top honours. Last summer’s transfer dealings were indicative of this mess. Depending on which sources you believe, Alberto Aquilani and Glen Johnson were brought in last summer for a combined fee of around £38 million. At the same time, the sales of Xabi Alonso, Álvaro Arbeloa and Sebastián Leto brought in the same figure. At any other club, following a season where a club had finished within four points of landing the title, funds would have been guaranteed to ensure that the right players were bought in order to bridge that gap between first and second place the following season. Whilst I do not seek to assess the merits of the Alonso sale and his replacement Aquilani, what is clear is that last summer Rafael Benitez was not able to improve his squad, he was only permitted to replace personnel. Although no one could’ve predicted the dismal Liverpool season endured last year, the turmoil behind the scenes ensures that the blame cannot be laid squarely at the feet of Benitez.

Notwithstanding the increased revenue accumulated through the new Standard Chartered shirt sponsorship arrangement, the prospects for the long-term health and success of the club do not appear rosy. With Hicks and Gillett unable to put any money in to the club, it means that this debt figure (currently around £240m) will increase until new owners are found, with touted figures of a £700m debt if Hicks and Gillett remain at Anfield in five years time. This rising debt means an inability to buy new players, an inability to build Liverpool’s much needed new stadium and a consequential loss of the club’s top players. The consequences of these scenarios occurring at our great club do not bear thinking about. For the sake of the club’s future at the top level, it is imperative that action is taken soon to stop the rot started by the two American parasites.

Follow me on twitter at www.twitter.com/zarifrasul