An Epic Swindle details the takeover of Liverpool Football Club by Americans Tom Hicks and George Gillett and the fall out from their reign as things turn sour.
Hicks and Gillett took over the club with grand designs to propel Liverpool back to the top and build a brand new stadium. Three years after taking over, they were forced out via a high court injunction after their creditors, RBS, demanded their money back.
The two had bought Liverpool, one of the most successful clubs in England, via a leveraged buyout, which meant they took out a giant loan instead of investing much of their own money into the club. Malcolm Glazer had negotiated a similar deal a few years earlier in his takeover of Manchester United.
However, the financial crash in 2008, meant the capital dried up and the club was left with a large bill to pay back. The relationship between the owners becomes strained, as they decline to speak to each other.
The fans begin to become uneasy about the ownership of Hicks and Gillett, as several promises, including building a stadium are broken, and players are sold to help repay the club’s debts.
The title of the book is a reference to the claim by Hicks and Gillett that they were being swindled out of millions of dollars when the club was sold in October 2010. Despite the furore and mess that surrounded their reign, they were still adamant they were in the right and were being maltreated.
An Epic Swindle is a fascinating look at what happens to a football club when it is sold to unscrupulous individuals whose backgrounds have not been well vetted. As always, it is the ordinary fans who suffer the most, as they watch the club they love being run through the ground.
An Epic Swindle summary
Takeaway 1 – Liverpool F.C. was very close to collapsing
Liverpool is one of the most successful clubs in England and Europe. They are the third most successful team in terms of European Cups won with six, yet they were perilously close to seizing to exist as a club towards the end of 2010.
The debt loaded onto the club by Hicks and Gillett’s takeover was strangling the club. When their creditors, which included the Royal Bank of Scotland, the writing was on the wall.
This situation was exacerbated by the fact that neither were overly keen to sell unless their valuation of the club was matched. Interest on their debt was totalling £35 million and without the commercial of rivals of Manchester United to dig them out of a hole, things were looking dire.
British Airways chairman, Martin Broughton was brought in to oversee the sale of the club in April 2010, in a move which seemed to indicate the club was going to be sold after all.
Liverpool received a bid from a company in America, New England Sports Ventures, which valued the club at $300m. This would pay off the club’s debts and put them on a firm financial footing once again.
However, Hicks and Gillett conspired to stop the takeover as much as they could, jeopardising the future of Liverpool. They tried to remove two members from the five-person board but failed. When the takeover had been agreed, Hicks and Gillett had a restraining order against the sale placed by a Texas court.
This was after it emerged Hicks had defaulted on his loan with RBS and breached its terms following the attempt to sack the two board members.
The club was close to going into administration, which would have resulted in a nine-point deduction and a step closer to the collapse of the club.
Had the sale not been agreed there was a high likelihood, the club would have struggled to stay afloat. It’s a story so crazy, a fiction writer would struggle to dream it up.
Sometimes reality is stranger than fiction.
Takeaway 2 – Hicks had previous for mismanaging sports teams
Before Tom Hicks co-owned Liverpool, he had had dealings with several other sports teams. None of which went particularly well.
The first team he purchased was the Dallas Stars of the NHL. Although they were successful in winning the Stanley Cup in 1999, it wasn’t a successful reign.
Once which came to an end in November 2011, when the club was sold. This was after Hicks’ company had defaulted on $525 million in bank loans.
In June 1998, Hicks bought the Texas Rangers from future President George W. Bush. Like his reign at the Dallas Stars, success was in short supply, but financial problems were not.
He signed star player Alex Rodriquez to a huge $252 million deal over ten years, but this left the team with little space to sign over players.
By 2010, it emerged that Hick’s holding company owed $500 million to several lenders. Like with Liverpool, the sale of the Rangers went to court and the Rangers were eventually sold in August 2010.
The other teams that Hicks was involved with were Brazilian clubs Cruzeiro and Corinthians. Hicks entered into a partnership with the clubs in 1999, and in an eerie echo of what was to happen at Liverpool, promised fans a new stadium was in development.
The stadium never materialised. Following infighting and financial troubles, Hicks left the partnership in 2003.
Just from these few sentences, it’s evident that Hicks was not fit to own a sports team. All of the ones he had dealings with suffered in the long-term. Anyone doing their due diligence would have come across these concerns.
The questions have to be asked about how the American pair were able to gain control of the club and who was vetting them at the time.
It represents a huge failure from the people running Liverpool at the time and those in the Premier League, who should have done their own independent vetting.
This episode highlights the need for tighter controls on those who plan to buy a sports team and how they plan to finance their takeovers.
Takeaway 3 – It’s always the fans who suffer the most
The sad thing about these episodes is that it’s always the fans that suffer the most. They are the lifeblood of teams. This is especially the case in England and Europe.
Without these fans going to the matches every week, spending their hard-earned money, there would not be much of a spectacle. It would quickly collapse.
Liverpool is a huge team. They have fans from all over the world, but to the local community, the club means a lot. It’s hard to describe if you’re not from the area. It’s more than a football club.
Many of these fans will have been going to matches for over 30 years. They have supported their team through thick and thin.
To see it dragged through the mud and almost put out of existence is not something they will have ever thought they would see.
Football has become to big to be financed by the local businessman. It’s a global game with mass appeal and millions flowing in every other day.
To compete, the clubs needed to be heavily bankrolled and commercial machines. This necessitates the need for rich owners. Unfortunately, sometimes these owners turn out to be crooks and not the caring owners they have otherwise thought they were.
The fans live and breath the club. They are passionate and follow their team no matter what, but it’s heart-wrenching when that team is pushed to the brink.
The vitriol directed to Hicks and Gillett is entirely justified, considering the haphazard way they were running the club.
It’s an example of what goes wrong when people take on more they can manage. If you step into an unfamiliar domain full of hubris, you’re bound to fail.
That’s exactly what the Americans did.
An Epic Swindle review
This An Epic Swindle summary has looked at one of the most unfortunate episodes in the history of my football team, Liverpool.
I remember the fanfare when Hicks and Gillett. There was genuine hope that their cash could see us finally win the Premier League after seeing the likes of Arsenal, Chelsea and Manchester United dominate in recent years.
Unfortunately, things went wrong fairly quickly and the promises that were made early on were broken. Most notably the pledge for there to be a ‘spade in the ground‘ within 60 days to build a new stadium.
Ironically, that failure turned out for the best, as Anfield was redeveloped instead. However, that was about as good as it got in regards to the owners.
As a fan, this was haorrible to live through. Liverpool had just started to trun the corner and after winning the Champions League in 2005, it was felt we could push on.
The takeover by Hicks and Gillett pushed the club back several years and it’s only recently that we’ve well and truly left behind the damage that they created.
This book is a fantastic account of their short but troublesome spell in charge. It’s a remnder that no matter how big you are, how competent your club is run, if you let the wrong people in, it can quickly fall apart.
This is similar to what Michael Lewis explains in his fantastic book, The Fifth Risk, regarding Trump’s transition after his election win. Operations that are run faultlessly can quickly become a shambles if the custodians are not fit for purpose.
Who should read An Epic Swindle?
Any Liverpool fan will want to read this book. You may not enjoy but it’s essential reading to get a better understanding of what happened during this period.
Complement the book with Inverting The Pyramid, to get a deeper understanding of football and its other elements that lie away from the playing field.