Irrespective of your personal football leanings, this is an interesting turnaround story…
One of UEFA’s most senior officials has warned MPs that Liverpool Football Club came within hours of going into administration. William Gaillard, an adviser at UEFA, the governing body of football for Europe, told a parliamentary inquiry into the governance of English football that Liverpool was an example of why financial fair play rules have to be brought into the game.
Gaillard, one of UEFA president Michel Platini’s closest advisers, warned a committee of MPs that Liverpool had come perilously close to going under after Tom Hicks and George Gillett loaded it with debt, before the club was taken over by American firm New England Sports Ventures (NESV) company.
Gaillard said: “We’ve seen more than 80 clubs in Europe in 10 years going into administration.
“Leveraged buy-outs for many clubs end in disaster. Just take Liverpool where you have owners who came, contracted debt, bought out the previous owners and saddled the club with the debt.”
Gaillard told the inquiry that what brought Liverpool down was “two failed banks, one British, one American,” which had been nationalised. He added: “They suddenly found themselves being owned by two failed banks that had been taken over by governments – Royal Bank of Scotland by the British government and Wachovia by the US government.
"The club has now been rescued and thank God because it has tremendous heritage - but it was a close call."
UEFA's new rules are designed to force clubs to break even after an initial period of flexibility. They tighten up the access to the Champions League for clubs burdened with huge debts.
Gaillard cautioned against sudden massive investment by unpredictable and untrustworthy parties.
"We at UEFA feel if a person brings equity, that is much better sit than if he brings debt," he said.
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