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23 July 2024

Dubai set to walk on alone?

By Gary Meenaghan



The protracted sale of Liverpool Football Club is set to go into extra time as Dubai International Capital continues its chase for ownership, according to a leading football finance expert.

Current co-owner Tom Hicks vetoed a deal last week between DIC and investment partner George Gillett Jr insisting he had no intention of running the club “by committee”.

But Professor Chris Brady believes Hicks’ actions are simply “negotiation tactics” and believes the investment arm of Dubai’s government will complete its takeover before the season’s end.

Brady is Dean of the Business School at Bournemouth University and told Emirates Business that DIC have endeared themselves to Liverpool supporters by its “dogged pursuit” of England’s most successful club.

“I think a deal will go through eventually,” he said.

“I suspect a complete takeover once Hicks gets his wheelings and dealings done. DIC are like the mounted police – they get what they are after eventually. After the deal fell through last year, they could have thrown their hands up and said: ‘It’s too much trouble.’ But they didn’t. They were persistent and I think that steely resolve is impressive – they really want this club. Hicks is using negotiation tactics. If I had to play a scenario, I’d imagine Hicks will get Gillett to sell to him, then he will sell the entire club to DIC for $450 million (Dh1.6 billion). And from a DIC point of view, they will want it all sorted before the end of the season.”

Much has been written about Sameer Al Ansari, the CEO of the Dubai investment fund.

The 44-year-old has come under scrutiny since it emerged he is a long-time Liverpool supporter, but critics claim the Kuwaiti’s interest is driven more by playful passion than potential profit.

Brady, however, doesn’t agree. He says English football is “undervalued” when compared to the fact that American NFL teams generate hundreds of millions of dollars despite being popular only in the United States.

When you consider that each week, the English Premier League is shown in 200 countries with more than 1,670 hours of coverage, it is little wonder international investors are keen to get involved. The league’s global reach is unparalleled.

Seven of the top 10 clubs in the English top flight have foreign investors, while league leaders Arsenal are fighting a possible takeover from Alisher Uzmanov, the Russian oligarch. A report published last year by Deloitte confirmed that the English league is the most profitable in the world, generating revenues of more than £1.4bn during the 2006-2007 season. Add to that the financial injection new broadcasting contracts will provide next year and the annual revenue is likely to rise to £1.8bn.

And while Brady refuses to rule out the possibility of Al Ansari’s judgement being clouded by enthusiasm, he remains philosophical.
“I think he’s feeling with his heart, but what you have got to remember is that, even if it all goes to rats, there is always somebody willing to buy a football club. There is always somebody who wants to buy and who is thinking 51 per cent with his heart and 49 per cent with his head,” said Brady.

Sources close to the situation say a consortium of Liverpool supporters known as the Share Liverpool FC Group and led by Rogan Taylor have approached DIC with a business plan.

Hicks was forced this week to deny he rejected a proposal from DIC to place a fan on the club’s board. However, Taylor, a lecturer at the University of Liverpool and long-time supporter of the Anfield club, insists that while he is keen to speak to Liverpool’s owners he has yet to discuss anything with Hicks, Gillett or DIC.

“We haven’t spoken to them, but we would be happy to speak, in the future, to whoever owns the club, including DIC,” he said. “Our long-term objective is to own the club completely. Putting a fan on the board is not enough for us, we want something more substantial.”

Taylor added that much of the interest in the Dubai investment group stems from the way Hicks and Gillett have treated the club.

“The current ownership is extremely unorganised and has a radical split down the middle,” he said. “DIC is seen as a sovereign investment fund. They have a number of significant projects, but they also reflect excellence as they have a connection with the Al Maktoum family.

“Perhaps it’s like what a father feels when his daughter marries. You don’t care where the guy is from, it’s how he treats her that counts.”

Bob Kabli, Chairman of Dubai Reds, the official supporters’ club, agrees, saying: “The impression of DIC is slightly distorted due to the way the owners have dealt with things. Hicks and Gillett have made a shambles of it, they haven’t endeared themselves to the fans. Dubai are being treated like saviours.

“Personally though, having lived and worked in the UAE for three or four years now, I think there is a shrewd side to businessmen here.

“DIC will take into account the opinion of the fans and I think Sameer Al Ansari would show just the right mix of business and passion for the club.”

Both Al Ansari and Liverpool FC refused to comment.

Timeline of the merseyside saga

March 29, 2006 Liverpool confirm they have held discussions with potential suitors, which “may include an offer for the entire share capital of the club”.

December 4, 2006 Liverpool enter a “period of exclusive negotiations” with DIC about a possible investment.

January 26, 2007 Reds Chairman David Moores announces George Gillett has approached the club about a possible takeover.

January 30, 2007 Liverpool board, including Moores and Chief

Executive Rick Parry, convene to discuss Gillett’s offer after

stalling over the bid made by DIC.

January 31, 2007 DIC pull out of deal.

March 27, 2007 Gillett, with financial help from Tom Hicks, buys 98.6 per cent of the club’s shares, meaning a compulsory purchase of the remaining 1.4 per cent completes takeover.

January 9, 2008 After months of rumours surrounding the relationship between Hicks and Gillett as well as ongoing financial problems, DIC are said to be ready to step in.

January 27, 2008 Hicks reveals he has held talks with DIC – but only about the company becoming a “minor investor” in the club.

March 5, 2008 Gillett is believed to be considering an offer from DIC to buy his stake in the club.

March 10, 2008 Reports claim talks between DIC and the Americans are at “an advanced stage”. Hicks later says in a statement he has “decided to terminate” discussions over the purchase of a minority stake by DIC.

March 11, 2008 Rabih Khoury, head of emerging markets at DIC, leaves the company with “mutual consent”. Khoury had been photographed attending Anfield with Al Ansari.

March 13, 2008 Gillett hints relationship with Hicks is strained by announcing they hold “different perspectives”, while advising future investors to “choose your partner wisely”.
In Depth