So the news this week was that Tom Hicks, half of Liverpool’s current ownership, wants to buy out George Gillett’s share of the club.
If Hicks gets his way and buys the club outright, it might get even worse before it gets better.
Take a look at the history of the two owners and their past business ventures.
Take Gillett first. Apart from having a controlling interest in several meat and poultry companies, Gillett has bought two sports franchises. He bought the NHL’s Montreal Canadiens (as well as the Bell Centre-then the Molson Centre) for US$185 million. He owned the team from 2001 to December of 2009, when he sold the Canadiens, the Bell Centre and his Gillett Entertainment Group for US$550 million. Gillett also bought a stake in a NASCAR team in 2007, which he merged with another team to form Richard Petty Motorsports, a mildly successful team.
Did he make money? Sure. That’s why he’s in business. But the most important thing to pay attention to is that he didn’t let either of his teams fall into total disrepair. When he sold the Canadiens in 2009, the team was still profitable-in the NHL, the seventh-most profitable team in 2009 according to Forbes-and they were still competitive to some degree. The team was in the playoffs most years and would often make a run. In the NHL, that’s acceptable for most fans.
In the case of his racing team, Gillett at least knew well enough that he needed help. So, who did he turn to? Richard Petty, a former seven-time NASCAR champion. At least the man knows when he’s in over his head and knows that he might need some help sometimes.
However, Tom Hicks is another case. He’s the anti-Midas of franchise owners; every team he touches turns to rubbish.
Hicks bought his first team, the Dallas Stars, in 1995 for $82 million. It’s still a very valuable franchise because of the lease deal it has on the American Airlines Center, the television contract and its history of consistently producing revenue. They even managed a Stanley Cup in 1999. But the team has gone to garbage. The team’s payroll is in the bottom five amongst NHL team and team’s record shows it. Attendance is slumping and the team, like many others belonging to Hicks, is up for sale. Hicks also partnered with Corinthians of Brazil. He promised them a new stadium. The fans are still waiting.
But the most telling of Hicks’ franchises is the Texas Rangers. First off, he’s completely bungled the team’s ownership and sale. He’s facing several lawsuits right now and he’s generally hated in Texas as well. But a closer look at his ownership of the Rangers provides insight into what Hicks wanted to do with the Rangers. He wanted to sabotage the team in order to get rich.
Major League Baseball is somewhat like European soccer because the success of the club is usually directly related to how much the team’s ownership is willing to spend. The trade deadline is late in the year and since very few teams make the playoffs, lower teams will unload talented players with big contracts for next to nothing. It’s all to improve the team’s bottom line at the end of the year. Why pay an expensive player when you know you’re not making the playoffs. Also, since there is no salary cap, teams can offer huge contracts to free agents. That’s how Alex Rodriguez of the New York Yankees managed to land a 10-year, US$252 million contract. At one point, Alex Rodriguez used to play for the Rangers. At that time, he was one of the most dominant players in baseball, however polarizing, and he continues to be.
So why would Hicks let Rodriguez walk? It comes back to a policy that MLB has called ‘revenue sharing.’ It can get kind of complicated-if you want to read more about it, read this article-but the long and short of it is that teams can often make more money by keeping their payroll low and taking the money from the revenue sharing within MLB. This means letting good players-like Rodriguez-go can often make more financial sense.
It’s the ultimate move in fan betrayal. You let the fans suffer for financial gain by keeping your payroll low and your team low on talent. Last year, the Texas Rangers had the fourth-lowest payroll at around US$55 million. In contrast, the Yankees, last year’s World Champions, spent $206 million.
You can bet that Hicks saw plenty of money from revenue sharing during his time as an owner of the Rangers. He purposefully undercut his team’s ability to win in order to make money.
This is not the man that should have sole ownership of Liverpool FC. He has failed in every single venture he’s made into sports and, with the Rangers and Stars up for sale, he’s making a last-ditch push with Liverpool. He’s going to try to drain every last dollar out of it that he can. That will likely include funds from the sales of Fernando Torres, Pepe Reina and whatever other valuable asset the team has.
We can only hope that Martin Broughton and the Liverpool board block the sale of Gillett’s shares to Hicks. If not, we’ll long for the days when Gillett and Hicks ran the club together.