Red Sox to be on negative points?

[Yorkshire Blue]

The Liverpool Red Sox franchise are facing a points deduction that could take them into negative points, if Kop Holdings go into administration next week.

EPL rules state that

67. Upon a Club or its Parent Undertaking suffering an Event of Insolvency the Board shall have
the power to impose upon the Club a deduction of 9 points scored or to be scored in the
League competition. If the Board exercises this power it shall forthwith give written notice to
the Club to that effect.

Fortunately for Liverplol, they aren't subject to the rules that everyone else is subject to (cf DJs unwilling to play the right music; Champions (sic) League qualifying rules etc), so I doubt that this rule will be invoked, even though it would for any other club. If it is, Liverplol will be bottom of the EPL on negative points.

 

[EastStandBlue]

Sadly, the EPL have already confirmed Lolerpool's exemption from standard rules and have insisted that they won't fall victim to a point penalty should Hicks/Gillet default, as is widely expected, on the RBS loan next week.

Although, in their defence, they're probably doing everybody a huge favour sparing us from the incessant, sanctimonious scouse sympathy hunt and blame mongering that would certainly occur. Not to worry... If today's figures are anything to go by, coupled with the shambolic financial results of the Glazer's "money making" companies in the US, then it won't be long before Man United suffer the same consequence.

And it's not like them to get preferrential treatment at all, is it.

 

[Yorkshire Blue]

Sadly, the EPL have already confirmed Lolerpool's exemption from standard rules and have insisted that they won't fall victim to a point penalty should Hicks/Gillet default, as is widely expected, on the RBS loan next week.

Although, in their defence, they're probably doing everybody a huge favour sparing us from the incessant, sanctimonious scouse sympathy hunt and blame mongering that would certainly occur.

Hmm, I'm not convinced it will save us from that.

Have you a link to the EPL confirming that rules don't apply to Liverplol?

 

[EastStandBlue]

Hmm, I'm not convinced it will save us from that.

Have you a link to the EPL confirming that rules don't apply to Liverplol?

It was a point in one of the Grauniad's Fiver emails earlier on in the week, I'll see if I can dig it out.

EDIT: It's here, http://www.clickliverpool.com/sport...l-fc-points-deduction-if-sale-is-blocked.html, including these quotes supposedly direct from the EPL:

"However the Premier League, who will ratify NESV's proposed bid, insist that the club will not be docked points provided that it is solvent, which remains the case.

"The aim of the regulations is primarily to capture clubs who have gone into insolvency," said a League source.

"This is manifestly not the case with Liverpool Football Club."

Although I notice this was two days ago and there's a few stories now suggesting otherwise. I dare say the EPL will manufacture some **** and bull story about the club itself doing all within its power to avoid administration, it's just they're being held up by Duke & Duke from Trading Places.

 

[Bluesmanager]

http://news.bbc.co.uk/sport1/hi/football/teams/l/liverpool/9074311.stm

You were saying?

 

[Yorkshire Blue]

http://news.bbc.co.uk/sport1/hi/football/teams/l/liverpool/9074311.stm

You were saying?

I think that's the story I linked to in my opening post. However it doesn't contain any new information from the Premier$hite to contradict the stance they were taking to earlier this week in the story ESB linked to.

Alas, it seems that the Red Sox will escape the points deduction. Still, I think we'd all rather they were relegated on their own merits (or lack thereof) rather than because of a points deduction.

 

[EastStandBlue]

http://news.bbc.co.uk/sport1/hi/football/teams/l/liverpool/9074311.stm

You were saying?

Like I said above, I hadn't seen the bout of recent news stories, but none of them contain quotes from the EPL confirming their stance. I'd imagine Lolerpool will argue that the West Ham case set a precedent in the fact that it wasn't the club that was insolvent, nor had the club contributed to the debt, but it was the fault of the holding company. In West Ham's case the Icelandic bank collapsed, and in Lolerpool's case it's on the debt of Hicks/Gillett.

There's no doubt that, strictly speaking, they should be docked points, but a deduction would cast severe doubts on Lolerpool's ability to beat the drop and an EPL without Lolerpool isn't half as endearing to Asian markets...

 

[haveaguiness]

I'm sure I've seen somewhere about the West Ham case that, because it was the owner of the Parent company that had gone bust it therefore did not effect West Ham's ability to deal as a Solvent Business as there was no money tied to the Parent company, it was all tied to the Club itself. This is in contrast to Southampton whereby they tried to write all the debts to the Parent company, then put the parent company into Admin to wipe out these debts, but the football League saw straight through it, hence the points deduction.

As for Liverpool, because the Parent company effectively has the debt against it's name for the Loan which they bought the club with, all of Liverpool's debts are tied to the club through the Parent company. This therefore suggests that Liverpool are not a Solvent Company as they are unable to pay their debts. Whether the club wanted those debts in the first place or not all leads down to Hick's and Gillett.

This is how I heard things anyway. If it comes to a point where Liverpool has to go into Admin then the Premier League (whether they like it or not) have to set a marker down that this will not be tolerated.

 

[EastStandBlue]

I'm sure I've seen somewhere about the West Ham case that, because it was the owner of the Parent company that had gone bust it therefore did not effect West Ham's ability to deal as a Solvent Business as there was no money tied to the Parent company, it was all tied to the Club itself. This is in contrast to Southampton whereby they tried to write all the debts to the Parent company, then put the parent company into Admin to wipe out these debts, but the football League saw straight through it, hence the points deduction.

As for Liverpool, because the Parent company effectively has the debt against it's name for the Loan which they bought the club with, all of Liverpool's debts are tied to the club through the Parent company. This therefore suggests that Liverpool are not a Solvent Company as they are unable to pay their debts. Whether the club wanted those debts in the first place or not all leads down to Hick's and Gillett.

This is how I heard things anyway. If it comes to a point where Liverpool has to go into Admin then the Premier League (whether they like it or not) have to set a marker down that this will not be tolerated.

I don't think that's quite the case, as I'm not sure to what extent RBS could demonstrate Liverpool's insolvency. Certainly, they could demonstrate Hicks' if/when he fails to make the payment, but I'm not sure to what extent his debt is linked to Liverpool (Different to our circumstances, say, as RM's, RHL/SEL/Mezcal et al, and SUFC's finances are so intertwined they're one and the same).

I've read it's because Liverpool are the sole asset of the parent company rather than in West Ham's case, when the club was one of a number of assets.

Apparently Broughton has a Plan B should Hicks/Gillet triumph in court, which should be interesting.

 

[haveaguiness]

I think all this shows is just how confusing the business market is!!!

I have also just read however that Hicks is trying to negotiate a Hedge Fund to pay the debt to RBS, therefore waiving the Admin threat, but aren't Hedge funds ridiculously expensive to service also?

It is certainly going to be very interesting watching over the week.

 

[EastStandBlue]

I think all this shows is just how confusing the business market is!!!

I have also just read however that Hicks is trying to negotiate a Hedge Fund to pay the debt to RBS, therefore waiving the Admin threat, but aren't Hedge funds ridiculously expensive to service also?

It is certainly going to be very interesting watching over the week.

Not more expensive than PIK Loans I'd imagine, which the Glazers were quick enough to attach to United when they needed some quick cash.

(Also interesting in reference to the PIK Loans that it was alleged that, as part of the agreement, the Glazers could take £70m out of United at short notice should the need arise, the same United that announced a record loss despite improved turnover last week.)

 

[haveaguiness]

Not more expensive than PIK Loans I'd imagine, which the Glazers were quick enough to attach to United when they needed some quick cash.

(Also interesting in reference to the PIK Loans that it was alleged that, as part of the agreement, the Glazers could take £70m out of United at short notice should the need arise, the same United that announced a record loss despite improved turnover last week.)

It does make for horrible reading in the press at the moment that the America's are ruining two of the oldest and most successful football club's in this country. Even if you don't like or support them you have to admire their history.

Did you watch the Panorama program that was on a while back about the Glazers? It was quite an interesting and eye opening insight into their wealth (or lack of). They are pretty much living a millionaires lifestyle thanks to Mortages to finance their Mall's out in America, which was working fine for them whilst the Mall's were making money and they were able to pay back to Mortages. Now, it seems that something like 95% of the Mall's they own are in Negitive Equity and a vast number of them are in the process of being repossessed. Basically they no longer have a leg to stand on, so no wonder that have put the 70 Mil clause into the PIK loans deal.

In some aspects, the Premier League has to take some responsibility in allowing such risky takeovers to happen to two clubs, that were, year on year making a healthy profit. Weren't Man United a few years ago said to be the richest sport's club in the World and the first to be recognised as being worth $1 billion; now they are 750 million in debt and making losses of 80 million a year!

 

[EastStandBlue]

Well, I was speaking to a United fan who's very much "in the know" and a member of MUST, and he claimed that the Glazers had siphoned off approximately £450m since their arrival for various loan repayments. His biggest point was that this amount was pure profit made by the club, not investment from an oil tycoon or sugar daddy, but money the club had made from their various activities, minus their expenditure... Can you imagine what kind of team £450m could have assembled? It's an obscene amount of money.

That said, he told me that most United fans are equally as frustrated with Gill and Ferguson and their recurrent support for the Glazers. Gill is alledging that there's £165m in a bank account somewhere for Ferguson to spend on transfers should he see fit, which wouldn't be unbelievable if Ferguson's lies about not seeing value in the market bore fruit. Khedira and Oezil went to Madrid for little more than £25m combined, Sneijder was available for £20m when he went to Inter, Van Der Vaart was available for £8m, yet United went and spent £7m on Bebe.

He also made an interesting point about changes to United's transfer policy all of a sudden, they went from buying young and exciting talent who would obviously go on to play for the first team, to signing young talent for resale profit (Manucho and the like). I think Liverpool will escape from this, but United's situation is twice as precarious.

 

[Yorkshire Blue]

It does make for horrible reading in the press at the moment that the America's are ruining two of the oldest and most successful football club's in this country. Even if you don't like or support them you have to admire their history.

On the contrary, I'm enjoying watching them reap what they sowed.

They are the ones who broke away from the Football League because they wanted a larger slice of the pie. This is the logical conclusion of that move.

I think a spell in the lower leagues would do the club a world of good.

Did you watch the Panorama program that was on a while back about the Glazers? It was quite an interesting and eye opening insight into their wealth (or lack of). They are pretty much living a millionaires lifestyle thanks to Mortages to finance their Mall's out in America, which was working fine for them whilst the Mall's were making money and they were able to pay back to Mortages. Now, it seems that something like 95% of the Mall's they own are in Negitive Equity and a vast number of them are in the process of being repossessed. Basically they no longer have a leg to stand on, so no wonder that have put the 70 Mil clause into the PIK loans deal.

In some aspects, the Premier League has to take some responsibility in allowing such risky takeovers to happen to two clubs, that were, year on year making a healthy profit. Weren't Man United a few years ago said to be the richest sport's club in the World and the first to be recognised as being worth $1 billion; now they are 750 million in debt and making losses of 80 million a year!

Didn't see that, but I think a similar thing probably applies to many "British" tycoons, who are lauded as business gurus - I'm thinking of people like Branson and Al-Fayed. Not sure how successful Sugar is either (outside of his TV interests and his Amstrad fortune)

 

[Yorkshire Blue]

Well, I was speaking to a United fan who's very much "in the know" and a member of MUST, and he claimed that the Glazers had siphoned off approximately £450m since their arrival for various loan repayments. His biggest point was that this amount was pure profit made by the club, not investment from an oil tycoon or sugar daddy, but money the club had made from their various activities, minus their expenditure... Can you imagine what kind of team £450m could have assembled? It's an obscene amount of money.

That said, he told me that most United fans are equally as frustrated with Gill and Ferguson and their recurrent support for the Glazers. Gill is alledging that there's £165m in a bank account somewhere for Ferguson to spend on transfers should he see fit, which wouldn't be unbelievable if Ferguson's lies about not seeing value in the market bore fruit. Khedira and Oezil went to Madrid for little more than £25m combined, Sneijder was available for £20m when he went to Inter, Van Der Vaart was available for £8m, yet United went and spent £7m on Bebe.

He also made an interesting point about changes to United's transfer policy all of a sudden, they went from buying young and exciting talent who would obviously go on to play for the first team, to signing young talent for resale profit (Manucho and the like). I think Liverpool will escape from this, but United's situation is twice as precarious.

I don't think the transfer fees are the issue, so much as the wages. £70k a week over a 3 or 4 year contract starts to really add up. The 50% tax rate as well means that EPL clubs have to pay that much more to match the take home pay of La Liga players.

Young players tend to cost more in transfer fees, but less in wages (at first). It's a model seen very much in US sports, where star players salaries' are so extortionate, it's more valuable to have the up and coming stars than the established stars (although this is also to do with the control over a player in that he can't be a free agent until a certain time). Whether this is the Glazer influence, or the Fergie influence - much of Fergie's success has been focused around young players he's been able to mould (Giggs, Scholes, Beckham, Ronaldo, Rooney etc) I'm not sure. It may well be Fergie's decision to try and find the next Ronaldo rather than Berbatov.

 

[EastStandBlue]

I don't think the transfer fees are the issue, so much as the wages. £70k a week over a 3 or 4 year contract starts to really add up. The 50% tax rate as well means that EPL clubs have to pay that much more to match the take home pay of La Liga players.

Young players tend to cost more in transfer fees, but less in wages (at first). It's a model seen very much in US sports, where star players salaries' are so extortionate, it's more valuable to have the up and coming stars than the established stars (although this is also to do with the control over a player in that he can't be a free agent until a certain time). Whether this is the Glazer influence, or the Fergie influence - much of Fergie's success has been focused around young players he's been able to mould (Giggs, Scholes, Beckham, Ronaldo, Rooney etc) I'm not sure. It may well be Fergie's decision to try and find the next Ronaldo rather than Berbatov.

Tax on foreign imports to Spain isn't that much different to England since the "Beckham Law" was repealled last year, although admittedly Spanish players are still subject to circa 27% IIRC. I think the point most Manchester United fans are making is that they're more than happy to trust Ferguson's judgement on talent as long as some movement is actually made... Lord Ferg says there's no value in the transfer market, then Khedira and Oezil, two of the breakout players at this years World Cup in positions United desperately need, go for a combined value of £25m. It's a fair point that they've joined one of the World's elite at Real, but it doesn't look as if there was even a fight to sign them. The comments would suggest that any approaches for players aren't even getting to contractual negotiations...

Either that, or deep down Ferguson knows he's not got long left, so he's encouraging United to hoard some cash for when Mourinho turns up...