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Unread 17-12-2009, 01:20 AM
fred tissue
Default Liverpool's 62m stake looks underdone

Uncertainty over debt repayments could deter investors
Co-owners want 62m for minority stake in loss-making club

What a remarkable conjuring act that would be if George Gillett and Tom Hicks do somehow manage to secure 124m in return for a stake in Liverpool. The Daily Telegraph yesterday indicated that there are two or three parties interested in picking up one of two unspecified stakes in the club, each available for a mere 62m.

Apparently, despite all evidence to the contrary, the co-owners believe Liverpool to be worth of 500m to 600m. So for that 62m you can buy yourself a little over 10% of a club that still has to spend more than 300m on building a new stadium.

Now 62m, neatly, bought Randy Lerner 100% of Aston Villa and, unlike Liverpool, it was not making a cash loss of 11m a year. Nor, unlike Liverpool, had Villa's auditors said there was a "material uncertainty" casting "significant doubt on [the club's] ability to continue as a going concern". That material uncertainty, deferred when Liverpool refinanced a 290m loan in July, could return when its repayment is required. A spokesman for the co-owners did not come back with answers yesterday about when that will be. Previously, the club's lenders have not extended their loans for more than a year. The current loan's maturity could well be only seven months away.

Nor did the spokesman say whether the 60m that is supposed to be repaid since that July refinancing has been handed over on schedule. Nor was there any response to a question about whether interest payments will rise next year. But with so much clarity about what 62m will buy, who could resist?

Russo's dilemma

Jimmy Russo has a bit of a tricky decision ahead of him. The millionaire Watford shareholder could, until he quit at the club's AGM on Tuesday night, bask in his reputation as the Hornets' chairman and saviour, having pumped millions of pounds of loans into the club to cover its cashflow problems. But after Russo and his brother's split with the rest of the board this week they have called in their 4.88m in loans on 48 hours' notice. Unless Watford's largest single shareholder, Lord Ashcroft, puts his considerable money where his stake is, the club will be in no position to pay up. And the Russos must then weigh up whether to enforce a winding-up order that would mean a 10-point penalty for a club that is even now closer to the Championship play-offs than relegation. Even if Ashcroft helps Watford come through this crunch, 5.5m of additional funding will still be needed before the end of June. Suppose they can always start praying at Vicarage Road.

Unaccountable resistance

As we all now know, there was nothing actually wrong with Sport England's inability to account for 20m of missing money. Tim Dutton's inquiry that ended last week could find no fraud, just an astonishing lack of governance among the sports bodies. But still Sport England inexplicably resists demanding that all its sports produce full accounts on their websites for public scrutiny. Its chief executive, Jennie Price, defends the lack of transparency by saying: "We do not own the sports, they are self-governing." But if Price's organisation provides more than 90% of a sport's funding from the public purse, at what point does it feel in a position to act?

Woods undone by words

Live by the media, die by the media, and with Tiger Woods's reputation mauled by revelations about his "transgressions", CNN has taken the opportunity to draw attention to some of the less fitting comments he has made. In February 2006, while he was allegedly seeing Jamie Jungers although possibly before he was allegedly stepping out with Cori Rist but certainly while he was married to Elin Nordegren, Woods spoke to CNN's Don Riddell. "Ever since [Nordegren]'s moved in, in 2002, we've been a great team, inseparable team and I think a lot of the success that I've had is certainly due to her," said Woods, before adding: "I don't ever want to be defined as a golfer. I want to be defined by my character as a person." You said it, Tiger.
Matt Scott

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