Dear Tom & George,
I’m sure you have been watching the events of the last few days with interest with regard to the events at Manchester City and assessing how this will impact one of your own business interests – i.e. Liverpool Football Club.
This takeover by Abu Dhabi will clearly have a major impact in English and World Football but it has come at exactly the right time for both of you. Had this takeover happened 2 weeks earlier when the transfer window had more than a few hours remaining, Manchester City could have bought 5 or 6 major world stars and become a very realistic prospect for at least a Champions League place.
As it is, they were able to demonstrate their intent with several bids but only one acquisition. Good as Robinho is, he is unlikely to transform the team alone in surpassing Liverpool in their league standing. Imagine the situation though 12 months from now when they have spent £200 Million plus. With that level of investment the absolute minimum they would expect is to be challenging for the title next season.
Liverpool are still clearly some way off making a similar challenge and though the team may have improved slightly from last season, so have Man Utd and Chelsea and there is no real confidence that we will catch them this year. The stadium, with no signs of a start to construction is potentially years away and the revenue this would bring at the moment is little more than a pipe dream.
We are in real and immediate danger now of losing ground in our league and financial position and for yourselves this obviously means a fall in the value of the club and your ability to realise a healthy profit. In the short-term, this takeover of Manchester City may (due to the laws of supply and demand) increase the value of other clubs ripe for a similar takeover from wealthy billionaires.
The valuation of course is based on the potential earnings of a club as well as the assets it holds. You could find yourselves in a situation where the star players begin to leave due to frustration at the lack of progress by the club. Without Gerrard, Torres, Carragher and Reina and a 5th place finish in the league, how much would Liverpool be worth then?
I understand that DIC have tabled another offer (or are considering) for the club that would give each of you a profit of around £75 Million. In 18 months this represents a huge percentage return on your initial investment and I would urge you both to take it as soon as possible. Come January when the next transfer window opens, it might be too late and you will live to regret it as you see your profits gradually eaten away by those clubs who took the opportunity at the right time.