Minutes from Christian Purslow and SOS MeetingTuesday 2nd February 2010
The Spirit of Shankly Management Committee are disappointed that Christian Purslow has been unable to agree the minutes of the meeting that took place with him on the 21st January 2010. We have decided that to be fair to both the Club and the Union that we should put out the version we sought agreement upon and what has been returned by Mr Purslow as his recollection of what he said - these are below.
There were twelve members of the Union present at the meeting and the version we produced for agreement was previously agreed as a fair representation of what had been said. We will leave it to members to decide which version they consider more reliable.
We recognise that this step may put our relationship with the senior management of the Club at risk, but the risk is worth it when balanced with putting out a version of a meeting that in good conscience we could not accept as a fair representation of what was said.
Spirit of Shankly Minutes
Attended - Christian Purslow, James McKenna, Graham Smith, Jon Paul Hill, Nicky Allt, Fran Stanton, Stephen Monaghan, Kieth Culvin, Daniel Nicolson, Tommy Keiner, Andy Williams, Paul Gardner, Peter Hooton.
Apologies - Paul Rice, Sam Armstrong
GS gave introductions to the meeting and how it would run. Due to a shortage of available time, it was agreed that we would go through what questions we could now, and any not covered would be answered by CP later via email. CP said he had imagined we would want to talk about DSG (Debt, Stadium and Governance - which covers investment and ownership).
Club Finances
1. You confirmed to us at the last meeting
……..that currently the TOTAL debt owed by the Club and its associated companies was approximately £245m. GS asked him specifically to confirm that that figure represented the total debt (rather than just that owed by LFC) and he confirmed the £245m figure again.
Can you confirm if this figure has changed at all and as a result what is the TOTAL current debt for the Club and its associated companies?
CP - The debt is currently £237 million. This is the total debt for the holding companies and the club itself.
2. It would not be unreasonable for RBS to be asking for the debt to be reduced, and presumably the Club has this as a priority too. Is it fair to say that, if only in the short term, the Club’s strategy to reduce the debt is focussed on an increase in income plus the liquidation of some of the playing assets?
CP - My project and task is to reduce the debt by £100 million. This is a requirement from our bankers and will allow us to look at a more flexible and longer term refinancing with our bankers when this investment is brought in. Ideally we would like a three or four year refinancing deal rather than the shorter ones we have had recently. The reduction in borrowings was agreed by the bank, CP and the owners when I was appointed.
The £100 million investment will be for new shares, and will not go towards anything else other than paying down the debt, reducing it to £137 million. This new investment will also mean a dilution of the current ownership, fans should be delighted I have come in to reduce the debt.
3. What is your current view of the UEFA proposals about Club’s finances and debt playing a part in their ability to take part in UEFA sanctioned events?
CP - I am highly supportive of the plans, and want to make us self sufficient. Not worried by the plans or how it could affect us, as we will be living within our means.
Investment
4. On the 25th October 2009 you said that you expected there to be new investment in the Club between three to six months from that date. As we are now in the period you indicated can you confirm that you still expect this time frame to be achieved?
CP - There are no promises, just an expectation and hope that it can be done in that time. I cannot guarantee it. As of now, I had expected it to be completed by February, but now I expect it to be around Easter.
The team’s performance has an affect on commercial interest, it is talked about by potential investors as while we might make up the lost Champions’ League revenue through a good run in the Europa Cup, the loss of Champions’ League football next season would impact upon income and this has a relevance to investors. We reassure investors, of course and we already make excellent profits.
There had been around 25-30 investors interested, although some were clearly not seriously interested once we had spoken with them. There are now around five or six potential investors with whom we are talking.
5. Can you also confirm that the intention (as reported) would be to secure investment from a third party for a 25% share of the Club – is this still the intention? If not, what is the current intention?
CP - It is not a given that £100 million will buy 25%. I need to find £100 million, and if this is for 1% or 100% I don't care. I am concentrating on getting the investment needed. Some investors may have issues with working with the present owners, but some don't just want a percentage, some want 100%. No investor is going to want to invest £100 million and have a smaller stake than the present owners.
KC - Do Hicks and Gillett value the club too high?
CP - No one would invest at the level they want.
JM - If the bank want £100 million paying down on the debt as part of the last re-financing, what will they ask for in the summer? Will it just be for 12 months again?
CP - I have got a conditional agreement for a 3/4 year loan deal. At the last re-financing agreement, Hicks and Gillett paid down the debt with their own money. A new investor will pay down the £100 million needed now. The banks want us reducing debt and being cautious. RBS are annoyed and unhappy with Hicks and Gillett and they want a change of ownership. The £100 million pay down is compulsory, it has to be done. I will not agree to a deal that is unworkable for us, but we need to have the owners own and the managers manage.
AW - Are there discussions with other banks, to try and get a better deal for any re-financing?
CP - There have been around 30 meetings with different banks, we want the best deal for the club. If other banks will give us a better deal, we will work with them. No other bank will take us on with £237 million debt, they want less debt. RBS are unhappy with the present ownership, so an improved situation at the cub will improve our relationship with them. They want to continue working with us.
6. Share Liverpool have regularly asked to be considered part of any new investment but despite requests for what figure they would need to raise to be considered they have been told they would not be considered in any “first wave” of investment – why is this? And what figure is being looked for from any investor in what you have described as this “first wave”?
PLEASE LET US HAVE A RESPONSE TO THIS QUESTION
7. You said recently-"If the right investor made the right approach at the right time, as a custodian of the club I’d be the first to endorse that - and I’m sure the owners would be." How do you / the owners define "The right investor"? - Someone who is primarily a suitable custodian of LFC and what it stands for (not like Hicks and Gillett), or someone who will simply give Hicks and Gillett a significant return on their "investment"?
PLEASE LET US HAVE A RESPONSE TO THIS QUESTION
8. What was your involvement with the club and Steve Morgan prior to the purchase of the Club by Hicks and Gillett - did you have any role in the shareholders agreeing to the takeover deal?
PLEASE LET US HAVE A RESPONSE TO THIS QUESTION
Transfer Window Funding
9. The fans remain unconvinced about the new method of valuing our transfer budget by including wages and new contract deals within it – reports suggest that despite the two current sales that have gone through the Manager will not receive even the sale proceeds to reinvest in this transfer window – is it fair for us to assume that sale proceeds from the Summer transfer window, this and the future window will to some significant extent be used to reduce the Club’s borrowings? If not can we expect sale proceeds plus what you described as “the usual £20m” to be spent in the Summer?
CP - The reduction of debt does not affect player sales as there is a separate player account and money does not come from this for anything else.
KC - Is the “Player Account” visible in the accounts?
CP - No, it will show total amounts, we have around 50-60 bank accounts so we list the total. The nature of funding the player account is it must balance, no more can go out than has come in. If we have £30 million in the account, then we can only spend £30 million. The player account is funded by player sales and any profit. Presently profit goes primarily towards paying the debt, so reducing debt means we have more money to spend.
The present owners have made it clear that they will not invest more money of their own; they have already invested around £130 million. We will not be like Manchester City or Chelsea as we are living within our means.
In the summer we had seven new contracts signed on new deals for existing players; this had to be funded from player sales, losing other wage costs and the profit available. Agents’ costs for new signings or contract renewals, around 1.5 %, come out of the player account as well.
Most deals are paid over three years. If we purchase for say £10 million, we pay just over £3million each year.
JM - Gillett has told fans including myself in the past that they have used their own money for player purchases, how does this fit with the player account about being self sufficient?
CP - I am not the owners, I am the management. They did invest their own money, £15-£20 million each season for the first few years. This wasn't good for us and it needs to be managed. They have no money now to invest; they have spent £130 million, and cannot borrow further.
PG - Will the transfer net spend always be zero as, what goes in is all that can go out?
CP – The Player Account is made up of player sales and any profit put into it. Profit will not be as much this season due to disappointing season so far.
10. It was a coincidence no doubt but on the day his son resigned, Tom Hicks Senior emailed a fan saying that the Summer transfer window for Liverpool FC would be “big”. While appreciating that you can’t give specifics can we assume that “big” can be defined as significantly more than using the sale proceeds from the previous two transfer windows plus our “usual” £20m expenditure?
CP - I can't speak for Tom Hicks, but he has no involvement in transfers, I do. We will only have what we make and generate. The budget will only change if we get a sugar daddy.
Stadium
11. Liverpool City Council recently announced that the Club had said that building work on the stadium would start in April. Was it true you said this to LCC? What form will such “building work” take? Is it just enabling works and then a halt or would a start date mean an uninterrupted development – if so what would be the proposed opening date for the new stadium?
CP - It is not true that we said work would start in April. LFC and EFC supported the city in World Cup bid. When asked by Lord Mawhinney about the stadium being built, I said there was investment interest and talks with banks on financing a stadium. Investment has to happen for the stadium to start, and we expect that around Easter time.
If we get investment we can look at further investment to start the stadium work. How the City Council interpreted this as starting work in April I don’t know, you will have to ask them.
KC - How will the stadium be financed?
CP - A combination of a long term mortgage, equity, and using the reduction in interest repayments will be available for a stadium as the debt will be reduced.
Any investment of £100 million will have to then be followed by support in financing the stadium. There is a six to nine month process before stadium work can start, tendering and legal processes. If investment comes in April, we are working upon an opening date for the new stadium in Summer 2014. I doubt work will start this year but I would expect it to started next year.
Our approach is to cost and time a stadium build by balancing the extra costs on a quick build to Rolls Royce standards, which is the expensive option as opposed to a longer build to VW standards where the costs can be less. We will have to balance these up.
12. If the new stadium is not being started in April has the current owner and senior management regime ever considered a redevelopment of Anfield, something which the previous regime would not consider despite there being compelling arguments that it could supply the size of stadium needed, without the disruption that has been suggested as a major reason why a redevelopment cannot work?
CP - Refurbishment will not happen. We would be playing in front of two or two and a half stands for a few seasons, and fans would not want that. There would also be the loss of revenue.
KC - Have fans been asked? Would you canvass fans?
CP – Our view is that to punch our weight we need the finance coming in. If we look at Manchester United and Arsenal, they are making say £100 million whilst we make £50 million. It will give us £50 million extra.
13. Would you be prepared to meet with those who have done some serious work on a proposal and if not why not?
CP – On the basis that we have dismissed the concept we see no reason to.
14. What has been the total spent to date on the new stadium in terms of planning, architects etc?
PLEASE LET US HAVE A RESPONSE TO THIS QUESTION
Community
15. What is the position relating to SOS meeting with various departments within the club to learn more about the club's Community and operations? Meetings were arranged with the Community Department which were then cancelled. We were told all requests for meetings had to go through CP.
CP - I didn't know that. Will get Andrea to contact PG, haven't seen Andrea much or spoken to her in past few months.
There then followed a short any other business type of discussion. NA gave CP insight into why the Union came about and that fans were unhappy with the lies.
CP - I will not spin or lie. I am only here because I am a fan. I don't have to do this, but I hated what I saw from the outside looking in. I share the same concerns as you.
DN - All through the meeting it is all about IF, what if? What do we do if what if doesn't happen?
CP - There is no answer to “what if?” I am optimistic, but there is no Plan B. There may be one in the future, but not yet, I have confidence in this plan working.
DN - If investors don't come into the club, do we become a mid-table team?
CP - LFC is for sale. It will be sold. The owners have to sell, they are out of money. The bank want it sold, the fans want it sold and people want to buy it. The problems on the pitch at the minute aren't the fault of the owners. It is not simple enough to say that new owners will guarantee results on the pitch.
FS - At the moment we are only buying to replace players, not to improve.
CP – That isn’t true. We have signed England’s best right back and Alberto Aquilani.
FS - But we have bought them in replacement of players sold, like Arbeloa and Alonso.
CP - They are improvements, but we can't foresee player’s form or injuries.
GS - Can we meet any new investors before they come in, to explain our view of the Club’s philosophy and introduce ourselves and the fans’ expectations?
CP - Ok. I wanted investment just like you do; I stood up at AGMs and said that. Those who sold the club are responsible too. The promises of Hicks and Gillett are unforgivable. Hicks and Gillett cannot hang onto the club.
KC - New investors will be watched carefully and not trusted easily.
CP - New investors will be scrutinised and they know this.
NA - Do you have a vote on the board?
CP - Yes, a controlling vote. Hicks and Gillett have let me in. I will do the right thing.
NA - Will you stay on if we get new owners?
CP - I will be there if needed or asked. If not I will go. My interest is Debt, Stadium and Governance/Ownership. I will have failed if I do not secure investment.
KC - Will you come to an AGM? Fans would appreciate it and be able to form their own opinions of you.
CP - I will think about it. I don't want the profile, was happy enough with being unknown seven months ago. I am happy to speak with you and you distribute what I say.
Christian Purslow Minutes
Attended - Christian Purslow, James McKenna, Graham Smith, Jon Paul Hill, Nicky Allt, Fran Stanton, Stephen Monaghan, Kieth Culvin, Daniel Nicolson, Tommy Keiner, Andy Williams, Paul Gardner, Peter Hooton.
Apologies - Paul Rice, Sam Armstrong
GS gave introductions to the meeting and how it would run. Due to a shortage of available time, it was agreed that we would go through what questions we could now, and any not covered would be answered by CP later via email where possible.
Club Finances
1. You confirmed to us at the last meeting
……..that currently the TOTAL debt owed by the Club and its associated companies was approximately £245m. GS asked him specifically to confirm that that figure represented the total debt (rather than just that owed by LFC) and he confirmed the £245m figure again.
Can you confirm if this figure has changed at all and as a result what is the TOTAL current debt for the Club and its associated companies?
CP - The debt is currently £237 million. This is the total debt for the holding companies and the club itself.
2. It would not be unreasonable for RBS to be asking for the debt to be reduced, and presumably the Club has this as a priority too. Is it fair to say that, if only in the short term, the Club’s strategy to reduce the debt is focussed on an increase in income plus the liquidation of some of the playing assets?
CP - One of our key priorities is to reduce the debt by £100 million. This is a requirement from our bankers and will allow us to look at a more flexible and longer term refinancing with our bankers when this investment is brought in. Ideally we would like a three or four year refinancing deal rather than the shorter ones we have had recently. The targeted reduction in borrowings was agreed by the bank, CP and the owners when I was appointed.
The £100 million investment will be made by the issuance of new shares, and will not go towards anything else other than paying down the debt, reducing it to £137 million. This new investment will also mean a dilution of the current ownership.
3. What is your current view of the UEFA proposals about Club’s finances and debt playing a part in their ability to take part in UEFA sanctioned events?
CP - I am highly supportive of the plans, and want to make us self sufficient. Not worried by the plans or how it could affect us, as we will be living within our means.
Investment
4. On the 25th October 2009 you said that you expected there to be new investment in the Club between three to six months from that date. As we are now in the period you indicated can you confirm that you still expect this time frame to be achieved?
CP - There are no promises, just an expectation and hope that it can be done in that time. I cannot guarantee it.
There had been around 25-30 investors interested, although some were clearly not seriously interested once we had spoken with them. There are now around five or six potential investors with whom we are talking.
5. Can you also confirm that the intention (as reported) would be to secure investment from a third party for a 25% share of the Club – is this still the intention? If not, what is the current intention?
CP - I have seen this reported and I think it comes from the sales document prepared by the owners bankers last year. The reality is much less proscriptive. The owners and the board are considering different sorts of proposals which could involve new investors taking a stake or a full takeover. The market will determine valuation and we have enough interest to suggest that the owners valuation is realistic.
The current lead bank RBS is highly supportive of the club and this is a vitally important and positive thing. With new investment they have already agreed that they would provide new long term facilities and would also like to participate in financing the stadium and they are not the only bank who has met with the club and expressed interest in the stadium project, many have.
But the common denominator of all these financing providers is that we need new investment first and so this is the key first step.
6. Share Liverpool have regularly asked to be considered part of any new investment but despite requests for what figure they would need to raise to be considered they have been told they would not be considered in any “first wave” of investment – why is this? And what figure is being looked for from any investor in what you have described as this “first wave”?
CP - We have met with Share Liverpool and welcome their interest in the club. They have not been turned away or told they won't be considered. It is a practical reality that their funding would be difficult to bring about in the time horizons which the club needs to work within.
7. You said recently-"If the right investor made the right approach at the right time, as a custodian of the club I’d be the first to endorse that - and I’m sure the owners would be." How do you / the owners define "The right investor"? - Someone who is primarily a suitable custodian of LFC and what it stands for (not like Hicks and Gillett), or someone who will simply give Hicks and Gillett a significant return on their "investment"?
CP - I prefer to say that it is not about the personalities-but that it is about new investment being made with a clear appreciation of all aspects of Liverpool FC - its needs, its plans, its unique character. This comes from spending lots of time with the club beforehand or in business speak-doing detailed due diligence. You should rest assured any investor in this economic environment will spend plenty of time understanding LFC before committing and this is a good thing if however sometimes painfully slow. I would rather get it right than rush and our banks and owners agree.
8. What was your involvement with the club and Steve Morgan prior to the purchase of the Club by Hicks and Gillett - did you have any role in the shareholders agreeing to the takeover deal?
CP - I had a small shareholding in the Club for a number of years like many fans. I gave Steve Morgan some informal advice for a short time in 2004 when he was looking at a possible investment. Like all small shareholders I obviously had no involvement in the sale process in 2007. This was a matter for the controlling shareholder and his board of directors and their advisers.
Transfer Window Funding
9. The fans remain unconvinced about the new method of valuing our transfer budget by including wages and new contract deals within it – reports suggest that despite the two current sales that have gone through the Manager will not receive even the sale proceeds to reinvest in this transfer window – is it fair for us to assume that sale proceeds from the Summer transfer window, this and the future window will to some significant extent be used to reduce the Club’s borrowings? If not can we expect sale proceeds plus what you described as “the usual £20m” to be spent in the Summer?
CP - No proceeds from player sales are used to pay down bank debt. The proceeds go into our player account and are available for buying players. Full stop.
The player account has to balance, this is normal. In the past the owners have topped this account up with significant sums but we are now seeking to be self funding which is, in my view, much more sustainable and, in fact, more in keeping with where football regulation may be heading.
The key point is that the idea that somehow we have sold a player to pay off bank debt is just wrong. It isn't possible. Last summer a large amount of debt was paid off by the owners personally. And at the same time, they having by then invested some 130m pounds, it was agreed we would fund our transfer spending for the time being out of our own resources, simple as that. We are a very profitable club and so long as we reach our goals on the pitch we are able to provide the manager with a healthy share of profits to invest in the transfer market as well as of course every penny we generate from player sales.
This January the manager has had plenty of funding available but has not chosen to bring anyone in other than Maxi Rodriguez, a full Argentinian international. And we will not sell players simply to leave money in the account-we need our assets on the pitch not in the bank so we are strong for the second half of the season. Rafa and I have spent more time in January talking about our summer transfer plans than the January window-which tells you all about what a thin market January actually is.
The value of our squad today is substantially greater than it was five years ago-unrecognisably so. This reflects well on both the owners for funding that period of investment. But this has been enormously expensive and now they have accepted we need new investment to pay down debt and get the stadium project back on track. These are now our key goals.
10. It was a coincidence no doubt but on the day his son resigned, Tom Hicks Senior emailed a fan saying that the Summer transfer window for Liverpool FC would be “big”. While appreciating that you can’t give specifics can we assume that “big” can be defined as significantly more than using the sale proceeds from the previous two transfer windows plus our “usual” £20m expenditure?
CP - I suspect he meant big meaning "active" as opposed to small, meaning relatively inactive in January. But I can't and won't speak for owners comments. You understand the reality of our transfer policy.
Stadium
11. Liverpool City Council recently announced that the Club had said that building work on the stadium would start in April. Was it true you said this to LCC? What form will such “building work” take? Is it just enabling works and then a halt or would a start date mean an uninterrupted development – if so what would be the proposed opening date for the new stadium?
CP - It is not true that we said work would start in April. LFC and EFC supported the city in World Cup bid. When asked by Lord Mawhinney about the stadium being built, I said there was investment interest and talks with banks on financing a stadium. But that Investment has to happen for the stadium to start, and we hope that will be done by Easter time.
If we get investment we can look at further investment to start the stadium work. How the City Council interpreted this as starting work in April I don’t know, you will have to ask them.
KC - How will the stadium be financed?
CP - We will explore all options. Clearly a large construction project of this kind would normally involve long term project finance, both debt and equity. The fact that we will have substantially reduced our debt at LFC before any stadium project means we will have much more of our profit available for servicing a stadium financing. But it is too early to even guess what this will look like. We have to focus on step one.
And we should all have no doubts that this is a long term project. Even if we bring in new investment and then sort out stadium funding quickly thereafter it takes nearly three years to build a stadium. So we are looking at 2013-2014 time period if all goes well.
12. If the new stadium is not being started in April has the current owner and senior management regime ever considered a redevelopment of Anfield, something which the previous regime would not consider despite there being compelling arguments that it could supply the size of stadium needed, without the disruption that has been suggested as a major reason why a redevelopment cannot work?
CP - We are considering all options but I must say I have not seen a compelling case for redeveloping Anfield. The serious long term disruption for the fans and the team of playing with one or two stands out of action isn't very attractive. The revenue shortfalls are an obvious issue. More importantly the current management team, owners and all potential new investors strongly believe that a new stadium is in fact a transformational opportunity for the club to actually compete financially with our main rivals. Simple financial projections show LFC in a new stadium as the largest and most cash generative club in England. This is a prize worth chasing and that's why it’s our priority. Only with a new stadium will we have the financial capacity to have a similar wage bill as our top rivals and still be self sufficient, profitable and properly managed.
13. Would you be prepared to meet with those who have done some serious work on a proposal and if not why not?
CP – We have a lot on our plate. And an excellent team looking at all the options.
14. What has been the total spent to date on the new stadium in terms of planning, architects etc?
CP - Substantial sums were spent in the period up to the new stadium getting full planning permission and this is an asset which will be valuable when we get the project restarted.
Community
15. What is the position relating to SOS meeting with various departments within the club to learn more about the club's Community and operations? Meetings were arranged with the Community Department which were then cancelled. We were told all requests for meetings had to go through CP.
CP - Ian Cotton oversees our community activities and I will make sure he schedules a meeting with your community representative. I was not aware of any such request.
There then followed a short any other business type of discussion. NA gave CP insight into why the Union came about and that fans were unhappy with the lies.
CP - I assure you I will not spin or lie. I am under no obligation to meet with you-the fact I do is because all fans have a legitimate right to express views and I want you to feel that you have a channel of communication into the club you all love.
We are working together, management, owners, our banks to bring in new investment which is the key first step.
In the meantime my first priority is supporting the manager and players in trying to give them the best background and circumstances to do their work. We all need to be behind them all the time even when we have a bad result.
And as I said to a small group of you when I arrived. The most difficult part of bringing in investment is the coverage of disturbances or protests at games. Much is overplayed but it gets read. The fact is that the owners are working hard to bring in investment. They are not an obstacle to this process-indeed they started it and bringing me in confirmed it. But it is tough to persuade new investors of the attraction of the club if they think they will get hassled every time they visit. So I again urge you all to think about this aspect and try and do the right thing. We are making slow but sure progress. Please help us get the job done and we will happily continue to keep you and your members informed via this channel of communication. |
發表於 2010-2-3 07:06 PM
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