Premier League President Richard Scudamore has declared that Liverpool were never at risk of exiting of business in spite of the financial uncertainty which surrounded the Merseyside club till the late takeover.
Yet, Scudamore also pointed out there is nothing in place to stop another debt-funded buyout, which Tom Hicks and George Gillett’s did as they assumed control at Anfield in 2007, happing in England.
Liverpool, who would have probably confronted 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 drawn by Hicks and Gillett.
Scudamore explained: “The club was ne'er at risk. There were bidders for it and the outcome was always what was expected 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'd pass our current tests in terms of them as individuals.”
Scudamore, yet, believes the sort of buy-out put together by Hicks and Gillett could not take place in the actual fiscal conditions. And he asserts there are stricter controls in place at the Premier League.
Scudamore said: “What is different now is the extensive meetings we have with any potential new owners and the future financial information which is necessary.
“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 got 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 hold the level of leverage to be too high and the business to be unsustainable then we have a lot more power as a board to either prevent that from happening or to apply some pretty tight controls on the club. I'm not certain that (the degree of debt) was going to endanger the existence of Liverpool Football Club.
“I'd prefer everything to be done in cash. I'd 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. Anyone who takes up that sum of money (£237 million) and has to repay or refinance in 12 months is surely at the unsafe end of the business.”
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