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Strafford warned to be wary of USA takeover
MONEY talks in football so it was no suprise that the cash-strapped Owls were yesterday delighted to announce that a leading US sports investment bank had agreed to try to close a deal that would deliver £20m to Hillsborough.
For a club around 25m in debt, that kind of money talks very loudly indeed and would transform Wednesday's outlook on the future overnight.
But the Owls still have some significant hurdles to overcome, not least converting strong interest from potential backers into hard cash.
Even if backers linked to major US sport franchises can be persuaded on board, Hillsborough's wide and disparate band of shareholders still have to agree to revolutionise the club's structure to transfer ownership to America – a country which has a chequered ownership history at English clubs.
And lurking beneath the surface ready to hole any potential deal is the stubborn iceberg otherwise known as former chairman Dave Allen, a man who previously helped fund the club and is insistent he deserves full repayment of what he is owed.
Assuming the first – and probably most difficult – hurdle is overcome, shareholders will be asked to agree to the issue of a huge new block of shares reserved solely for the new investors.
Increasing the club's entire shareholding will require more than 75 per cent of those voting at an extraordinary general meeting to agree. If that goes through, it should be a formality to obtain the simple majority vote needed to allow the new owners not to have to make an offer for the entire shareholding which they would normally be required to do once their holding passed 30 per cent.
Dave Allen could use his 9.9 per cent shareholding to vote against the proposal unless he accepts the repayment deal on offer but the club is confident it would still control enough shares to secure the votes it needs.
But aside from the mechanics of bringing in new owners, there are voices of caution and not just from Allen who last night recalled a previous deadline for investment, set for March 31, had long since slipped by.
Liverpool used the same bank Wednesday have appointed, Inner Circle Sports, to introduce new owners George Gillett and Tom Hicks to Anfield two years ago.
Although the pair promised to invest 200m in the Premier League club and build a new stadium, they have failed to deliver so far and increased debts by a staggering 300m.
The club is now up for sale with a reported 500m price tag but the owners are under pressure to renegotiate debts with the Royal Bank of Scotland and the US bank Wachovia.
According to James McKenna, a leading member of the Spirit of Shankly supporters group, the duo are reviled by the majority of Liverpool fans.
"The big problem with American owners is that they don't fully understand how football is viewed in this country," said McKenna, whose group has staged protests against the American ownership at Anfield for the last 17 months.
"When they arrived, they said all the right things but, within a couple of months, they were showing a complete disregard for the supporters and the promises they had made."
Hicks owned both an ice hockey club and a baseball team in Texas while Gillett owned, but has since sold, his stake in a Montreal hockey club.
"They treat our fans as consumers of a brand and don't grasp what the club actually means to us. In America, the chairmen think they should do the interviews and lift all the trophies. They have not been responsible for any improvements on the field but they have publically questioned the manager (Rafael Benitez).
"Rather than the papers talking about Liverpool wins on a Saturday, they have just turned us into a circus.
"They promised to put nothing on the debt (originally 44m) – which was re-assuring because we did not want to go down the same route as Manchester United and the Glazers – but they have re-mortgaged the club and now, if we cannot keep up the repayments, Liverpool Football Club could go into administration which is a frightening thought.
"Basically, they are hated by our fans," he added. "We would gladly turn the clock back to February 2007 and be without
their involvement altogether.
"I would urge Sheffield Wednesday not to welcome American investment with open arms but adopt a more cautious approach," he stressed.
But the understated and well-received involvement of American Randy Lerner at Aston Villa shows how US investment can work well and Wednesday would also have a degree of comfort in knowing current chairman – and avid fan – Lee Strafford would be staying at the helm if new ownership is eventually secured.
KEY FACTS OF TAKEOVER
Deal brokers Inner Circle Sports previously tied-up major US investment at Liverpool and Sunderland.
Owls deal would bring in 20m in cash through a new share issue with only 2m set aside to pay towards 25m debts.
Investors would own the club by taking up over four fifths of the total shareholding.
Co-Op Bank – who are owed 22m by Wednesday – happy with the proposed deal which provides extra security.
New investment hoped to be in place by December to buy new players in January transfer window.
Wage budget to be capped at around 10m in the Championship.
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Saturday 26 May 2012
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