These are some pretty incredible quotes from Ed Weiss, FSG’s one-time general counsel.
They’re born from the fact FSG have been forced to give evidence in the court case between Mill Financial, Royal Bank of Scotland and our heinous former owner George Gillett, and the Echo’s tracked them down.
Gillett believes he didn’t get a tidy enough profit after being forced to sell the club in 2010 after failing to payback a £280m debt secured against the club.
Mill wanted John W. Henry to answer questions under oath, but he refused, so Weiss took the stand instead.
He intimates that FSG, then called New England Sports Ventures, were not equipped to make a proper judgement about the playing staff at the time and made the grave mistake of using tactics that worked in baseball in the Premier League.
For us, it’s clear he’s referring to the moneyball investment strategy.
When FSG took over, Steven Gerrard, Pepe Reina, Daniel Agger, Jamie Carragher, Dirk Kuyt and Fernando Torres were all at the club, but Weiss thinks the inherited squad was actually very poor.
Here’s some extracts from his interview:
Q. Okay. You also testified earlier that the club would require “a significant amount of investment” to enhance the value of the club. How did you take that into account or how did NESV take that into account in is valuing LEC in October 2010?
A. I think we underestimated that. We ended up losing quite a bit of money in our first couple of years and we had to make even more considerable investment in the playing squad than we had estimated as we went through the bidding process. So, you know, like trying to catch a knife falling off the table, you’re not sure where before it’s hit the ground you’ve caught it. You know, I think we underestimated how poor the playing quality of the squad was, and frankly, we underestimated how difficult it was going to be to stabilise the asset. We were overconfident in assuming that many of the things that we had done in Boston at Fenway would translate naturally to the Premier League and they just didn’t all translate.
Q. Did NESV come to know that the team had a playing squad with top internationals before it made a bid to purchase the club?
A. I mean, we obviously did some due diligence on the playing squad during this process before we closed on the transaction in the middle of October of 2010. What we came to know was that the playing squad was poor. We were sitting at the time we closed on the transaction for the club in 17th place is my recollection which is one spot above the relegation line. And while we had a few top players like Steven Gerrard, other players like Fernando Torres and Pepe Reina were probably beyond their primes, and Javier Mascherano was not even on the team.
Q. Okay. And did you or any other representatives of NESV attend a Liverpool Football Club game?
A. We did.
Q. One or more than one?
A. In due diligence we attended one match.
Q. You believe that is an important part of conducting due diligence when you’re purchasing a sports team?
A. It was an important — it was important for us to see a Liverpool match, yes.
A. You know, most of us had never been to a Premier League match, so it was going to be hard to recommend to our investor group that we buy a football club without ever having been to one, so…
A. The one we saw was less than thrilling. It was a near no match.