Debt, Lies, and Cowboys
England's greatest soccer teams and American owners, a match made in hell.
For the past two years, the home crowd at Anfield, the larger and more reliably histrionic of Liverpool's two major soccer stadiums, has increasingly come to resemble a Tea Party rally from another dimension. Populist chants echo from the stands; angry signs bristle like javelins. But where the American resentment machine is fueled by anger at what's seen as European-style socialism, the Merseyside protesters are incensed by what's seen as American-style capitalism. "Yankee Liar$ Out," the placards blare. "Thanks But No Yanks." Liverpool Football Club, one of the most successful teams in English soccer history, is owned by a pair of American billionaires, and the fans absolutely hate their guts.
It's the same at Manchester United, Liverpool's fierce rival, who beat the Reds 3-2 in a chaotic game on Sunday. By a weird quirk of destiny, England's two greatest soccer clubs have both fallen under the control of American tycoons of a peculiar carpetbagging sort. These minor billionaires have gone to England like backward colonists, looking to reap the bounty of the Premier League's soaring global popularity by taking advantage of its lax financial regulations. The standoff between the clubs' owners and supporters hasn't merely led to innovations in signcraft. It has also thrown an unwitting light on some big differences in the way English fans and American fans view sports.
To line up the protagonists: On the Liverpool side, we have Tom Hicks, the anvil-headed Texas billionaire previously best known for signing Alex Rodriguez to his $252 million contract, and George Gillett, the pinch-mouthed Colorado billionaire who formerly owned the Montreal Canadiens. Hicks and Gillett joined portfolios to buy Liverpool in February of 2007, bringing along the delightful Tom Hicks Jr., who served under his father as a director of the club until a minor lapse of protocol—he responded to a critical e-mail from a fan by writing "blow me fuck face"—precipitated his tragic resignation earlier this year. On the Manchester United side, we have the Glazer family of Tampa, Fla. (and, by way of an afterthought, of the Tampa Bay Buccaneers), who snapped the world's most valuable club off the vine in 2005. United has won three Premier League titles and one European Cup since the Glazers arrived. A lot of fans hate them anyway.
The problem, in a word, is debt. The sales of both Manchester United and Liverpool were structured as leveraged buyouts—the owners borrowed money to finance their purchases, then transferred the debt back onto the clubs. This means, first, that the fans, those obliging trickles of revenue, are effectively being made to buy soccer clubs for owners they despise. It also means the clubs are gushing out millions of dollars each month in interest payments, money that might otherwise be used to help them compete in the cash-maddened upper echelons of the Premier League.
If numbers in sports can still stagger, there are staggering numbers on these clubs' balance sheets. Hicks and Gillett borrowed about $550 million to purchase Liverpool FC. At Manchester United, the Glazers borrowed more than $800 million, much of it from high-interest hedge funds. Liverpool has struggled to make its payments—the economic crisis hit both the club's and the owners' finances—and the Royal Bank of Scotland moved its share of the loans to the bad debts divisionearlier this year. After being rebuked by everyone from bank executives to the former owner of the club to Parliament, Hicks and Gillett have moved to find a new buyer, but so far no one's biting. Hicks is now pursuing a deal that would give him at least two more years at the club, and see the triumphant return of Tom Hicks Jr. The Glazers have held on more doggedly in Manchester, but United has seen its interest burden swell to $500 million—and the club's total debt has geysered into 10 figures. The angry fans' view of this American financial sorcery is neatly expressed by the billboards that a Liverpool supporters' group hung around the city: "Debt, Lies, Cowboys: Not Welcome Here."
It's hard to imagine that kind of thing happening here: American fans protest losers, not financial mismanagement. In the United States, we've accepted that teams are businesses, even if we don't always like it. We see owners as profiteers whose interests we hope will align with ours. When the Pittsburgh Pirates had their books forcibly opened last month, fans weren't upset to learn that the team turned a profit. Rather, they were outraged that Pirates ownership pocketed money while fielding a losing ballclub. The prevailing philosophy: Line your pockets all you want, just score some damn runs.