A Decade of Liverpool Football Club: Fenway Sports Group’s Epic Swindle

A little more than a year before Fenway Sports Group and John Henry arrived in England to swindle it away from a pair of reviled owners and save a club staring down the threat of administration and perhaps even relegation, things seemed to be rather looking up for Liverpool Football Club. At least if you didn’t look too closely.

After nearly two decades without a Premier League title, two decades fighting on the fringes of relevance, there seemed reason for hope out on the pitch. There had been the surprise Champions League triumph in 2005, of course, but in that case surprise was very much the operative term. Even having made it to Istanbul had been something of a miracle—never mind overturning a 3-0 deficit to one of the best sides in world football.

Two years after that triumph, it was a stronger group Rafa Benitez took to Athens, even if in the end they lost their rematch with AC Milan. And to the outside world at least it appeared as though he had continued to build on that side until, in 2008-09, it all clicked.

With a spine the fans could sing about as being world class, a core to compete with the best in the league and Europe, Liverpool embarked on a proper title challenge that was to be their most convincing, at least to that point, in the Premier League era.

In the end they finished second in rather cruel fashion, falling just four points short of Manchester United, but they deserved to be there at the end of the season, sitting on 86 points and dreaming of next season.

It felt like they were a side that deserved to be challenging for titles. They had that world class spine and a world class manager and new owners who had made big promises about player purchases and shovels in the ground. After two long, hard decades, Liverpool were well and truly back. Or seemed to be. If you didn’t look too close.

Then everything went very, very wrong, though of course it didn’t happen overnight.

The problems began almost as soon as those new owners, Tom Hicks and George Gillett, bought the club in 2007 as the Reds worked towards that second Champions League final appearance under Benitez. The problems began when their lofty promises of funding for signings failed to materialize and their ambitious plans for a new stadium didn’t actually lead to shovels in the ground. Those problems began with two years of slow rot.

Hicks and Gillett seemed necessary at the time. The were global owners for a global football era that David Moores, who had taken over the club back in 1991, simply lacked the financial wherewithal to compete in. It didn’t take long, though, for concerns to arise, and for those who paid attention to more than just the results on the pitch concerns came early—along with protests by the fans in the stands and public grumblings from manager Benitez.

Out on the pitch, Liverpool looked ready to challenge for titles for the foreseeable future; looked poised to reclaim their place at the pinnacle of English football. Right up until the moment that it all fell apart rather inevitably.

That lack of funds meant players were sold and not properly replaced. That in turn led to a thin squad becoming undone by injuries and a lack of depth. The bounces seemed to all go against them. Distractions off the pitch as fans and the manager focused on problems with the owners sapped everyone’s energy. And they lost.

A year after finishing second, Liverpool finished seventh. It was the first time under Benitez that they hadn’t qualified for the Champions League. It was their worst finish in more than a decade. It saw Benitez, his relationship with the club hierarchy having become untenable, rather controversially sacked by Christian Purslow, the club’s self-proclaimed Fernando Torres of finance having arrived the summer before with the remit of cleaning up the financial mess the new owners had piled on the club.

Off the pitch, the loans Hicks and Gillett had placed against the club in purchasing it were going unpaid and the search for new investment had turned into an unsuccessful year-long slog. On the footballing side, Purslow, increasingly seen as an agent for the reviled owners, followed up the sacking of Benitez by bringing in Roy Hodgson as the new manager and overseeing a series of unpopular signings.

More poor results followed, with Liverpool winning just one game of eight to start the new season and ending up in 19th place two months into the season before eventually creaking their way back towards mid-table. The results, though, seemed almost an afterthought for many as fan protests intensified and local MPs took to calling the owners “asset strippers” in the house of commons.

In the stands, in the fanbase, it was open revolt. Against the owners. Against Purslow. Against a new manager who seemed indifferent to the larger plight of the club. And as a backdrop to it all, there was the October deadline on Hicks and Gillett’s personal loans, taken out to fund their purchase of the club. It loomed. It threatened. It felt inescapable.

The owners had owed upwards of £380M to creditors since the summer of 2009, with nearly £240M owed to the Royal Bank of Scotland. It was a situation that first led to the installation of Purslow and then, under increasing pressure from the bank, the formation of a new five-man governing board of the club that included the Liverpool owners, Purslow, commercial director Ian Ayre, and chairman Martin Broughton—newly appointed in 2010 at the behest of RBS with the goal of finding a buyer for the club.

By the autumn of 2010, Hicks and Gillett had been resisting an ever-increasing pressure—pressure to sell or to agree to significant new investment and repay their outstanding loans—for more than a year, conceding ground in the fight slowly, grudgingly, inch by inch. On the pitch, in the autumn of 2010, Liverpool were in a relegation fight. Off it, things had become even uglier.

Because that October deadline, October 6th, was when the Royal Bank of Scotland could call in its outstanding loans, putting the club into administration and seeing Liverpool hit with a nine-point deduction—something that, given their league position, could well have seen them relegated.

It all came to a head on October 5th, when Broughton and Ayre and Purslow out-voted Hicks and Gillett’s stand-ins on the board, accepting a bid of around £300M from New England Sports Ventures—soon to be renamed Fenway Sports Group—to pay off their outstanding debt and take control of the club.

Broughton, having been appointed by the Royal Bank of Scotland directly, was secure in his position on the five-man board but the Liverpool owners responded by firing Purslow and Ayre in an attempt to take back control of the board.

Multiple lawsuits, one in England and one in Texas, saw them fail first in those efforts and then in their attempts to block the sale. As for that sale, they labeled it an epic swindle as it would repay the club’s creditors first and see them lose control of the their investment with nothing to show for their four disastrous years in charge, four years that had seen them run Liverpool to the very edge of administration and relegation.

Finally, seven days after the deadline had passed, following a High Court challenge and with RBS having declined to call in their outstanding debts believing that in FSG a suitable buyer had been secured, the sale officially went through.

On October 13th, 2010, ten months into the new decade, Tom Hicks and George Gillett lost their grasp on Liverpool Football Club and a new ownership group arrived—though Hicks in particular would continue to fight aspects of the sale all the way until 2013.

Broughton and Purslow soon departed along with them, their jobs done, though Ayre found a role within the new club hierarchy. Meanwhile, even as the excitement of finally being free of the two men who had taken the club to the edge of administration remained high, there were reasons to be worried.

Mostly, though, those worries came from what was taking place on the pitch, where even with the threat of a points deduction off the table Liverpool were in a bad place, struggling along with an unpopular manager at the head of a deficient squad. But at least they were concerns about football now. Again. Finally. Those hopes of 2008-09 may have felt an awfully long way in the past, but there was still a Liverpool Football Club.