madcomments

Football or franchise?

Posted in General, Marketing February 9th, 2007 by Stuart Aitken

The takeover by American sporting tycoons has serious implications for brand Liverpool.

No one could have guessed that something called Project Oslo would decide the fate of Liverpool FC. Until recently the only tangible link between the club and Norway was the presence of John Arne Riise, the club’s energetic ginger haired left-back. This however was the name of the 7-page document produced by Dubai International Capital (DIC) which put the final nail in the coffin of Sheikh Mohammed’s bid for Liverpool FC and led to the successful bid by US sporting tycoons George Gillett and Tom Hicks.

Project Oslo was leaked to the press just before the New Year. It outlined DIC’s plans to make massive short term profits, sell up and move on within eight years – not the ideal plan for a football club known for its fiercely loyal fanbase. Instead, long-serving club chairman David Moores switched his allegiance at the eleventh hour and decided to sell the club to Gillett - a man who runs the Montreal Canadiens ice hockey team – and Tom Hicks, owner of baseball team The Texas Rangers (bought from George W Bush), ice hockey team The Dallas Stars and The Mesquite Championship Rodeo.

And so it is Gillett and Hicks who stand prepared to propel Liverpool further into the footballing elite. Moores believes that the new owners will bring a more long-term plan to the table. It is also thought that the pair will respect the club’s proud history. A joint statement after the deal was confirmed read: “We fully acknowledge and appreciate the unique heritage and rich history of Liverpool and intend to respect this heritage in the future.” All to the good. However, much of this good work was undone when Gillett referred to the club as a “franchise” and “Liverpool Reds”.

Liverpool is of course not the first club to fall under American control. Manchester United has been the property of Malcolm Glazer for some time. Aston Villa too was bought over this year by American billionaire Randy Lerner. The situation can lead to interesting culture clashes, as can be seen by some curious goings on at Villa Park.

A certain General Charles C. Krulak is Randy Lerner’s right-hand man. A former military adviser to the White House, he has spent a large amount of time since the takeover talking directly to fans on various Aston Villa internet message boards. The results are often fairly eccentric. In one famous example he signed off one of his messages with the words: “Thank you! In the immortal words of that famous centre-half, Clint Eastwood, ‘You made my day!’”

We shall have to wait and see if Gillett and Hicks adopt similar strategies. What is for sure is that interesting times lie ahead at Liverpool. First off, there is a new stadium in Stanley Park to be built. The new owners are already proclaiming that this will be the best facility in the world. But at what cost? Earlier this week Gillett explained: “If the naming rights are worth one great player a year in transfer spending, we will certainly look at that as a serious option.” This latest development in the world of football sponsorship has been grudgingly accepted at a number of clubs including Arsenal, Bolton and Leicester but just how will the regulars of the Kop respond?

Arsenal’s tie-up with Emirates which saw historic Highbury give way to the Emirates Stadium was initially met with dismay by long-term fans. The deal however has helped Arsenal develop its brand and reap the accompanying financial rewards. Such a deal may well be crucial to the long-term prosperity of brand Liverpool.  

In the meantime, the new set up at Liverpool also calls into question the club’s 15-year association with Carlsberg. The sponsorship is up for renewal at the end of this season and speculation is already mounting that the new owners will be looking for a higher profile brand association to leverage as much income as possible inside and outside Europe. It should be noted of course that this was one of the first things Malcolm Glazer did when he took charged at Old Trafford.

As is the way with the modern game, Liverpool’s financial success is crucial to survival on the pitch. Worryingly for the new owners, figures this week from Deloitte’s Football Money League, which measures the wealth of international football clubs, shows that Liverpool is falling behind. Last year the Merseysiders were in eighth place. This year they have dropped to tenth, losing ground to Premiership rivals Arsenal who moved up from tenth to ninth. Both clubs are still some way behind Manchester United (fourth) and Chelsea (sixth). It may be some time before this gap is bridged.