Premier League chief: Liverpool were not at risk

(GSM) – Premier League chief executive Richard Scudamore has stated that Liverpool were never at risk of going out of business despite the financial uncertainty which surrounded the Merseyside club until the recent takeover.

However, Scudamore also pointed out there is nothing in place to stop another debt-funded buyout, which Tom Hicks and George Gillett’s did when they assumed control at Anfield in 2007, taking place in England.

Liverpool, who would have likely faced administration and incurred a nine-point penalty for a failed takeover, were eventually taken over earlier this month by New England Sports Ventures.

The new owners had guaranteed to pay off the club’s £237 million acquisition loan from the Royal Bank of Scotland, which had been taken out by Hicks and Gillett.

Scudamore explained: “The club was never at risk. There were bidders for it and the outcome was always what was likely to happen. There is nothing in place per se to stop another Hicks and Gillett happening. When they came along they passed all our tests and they would pass our current tests in terms of them as individuals.”

Scudamore, however, believes the sort of buy-out put together by Hicks and Gillett could not take place in the current financial circumstances. And he insists there are stricter controls in place at the Premier League.

Scudamore said: “What is different now is the extensive meetings we have with any prospective new owners and the future financial information which is required.

“The world has moved on. That sort of borrowing against that sort of asset is just not available in the market place anymore. Those were different times. There is no way that sort of borrowing could be obtained now to put that sort of deal together.”

There are no moves, however, to ban debt-funded takeovers. “They are allowed,” added Scudamore, who was speaking on BBC Radio 5 Live’s Sportsweek programme.

“But if we deem the level of leverage to be too high and the business to be unsustainable then we have much more power as a board to either prevent that from happening or to apply some pretty stringent controls on the club. I am not sure that (the level of debt) was going to threaten the existence of Liverpool Football Club.

“I would prefer everything to be done in cash. I would prefer everybody to pay their bills on time, but we have to live in the real world and football has always attracted investment. Leveraged debt per se is not bad. It is the level of it, the terms of it, the short term nature of it. Anybody who borrows that amount of money (£237 million) and has to repay or refinance in 12 months is certainly at the risky end of the business.”