Thoughts on Christian Purslow’s Interview

Posted: January 13, 2010 by mcdonaldtaf in Business, Finance
Tags: , , , , , ,

Those who have been regularly reading my blogs will know that I have a good level of respect for Christian Purslow. I also have confidence, based on progress to date, in the senior management team at Anfield he heads up. It is no coincidence (in my opinion) that since Rick Parry’s replacement arrived, the club has taken significant steps forward commercially.

If I have had one ‘bone to pick’ with Mr. Purslow though it is that the shutters too often come down at Anfield. Everything the club does is masked in secrecy, at a time when fans are genuinely worried about the clubs future prosperity (or for those pessimists its survival). This lack of communication I know frustrates other reds as well.

I have written to Christian Purslow, Tom Hicks Jr. (before his departure) and Tom Hicks Sr. as well as mentioning the lack of communication on pretty much every blog I visit. Ironically I have had no response from the club, not even a mail to say ‘sorry we can’t comment’. How many organisations could treat their customers that way and retain their loyalty? If I write to Tesco, Asda, Ford or even my local shop I’m 99% certain that, when I post the letter, I’ll get some sort of response. Yet from our club… nothing! It just adds to the frustration of being a Liverpool fan.

However, I digress.

So it was refreshing to see an interview with Christian Purslow not only in a paper, but also reproduced on the club’s website. Finally. An interview that appears relatively open and frank about the club and its current issues.

In my opinion there is no reason to distrust Christian Purslow or to think of him as anyone’s patsy. You don’t reach that level of management by simply following orders and not exercising your own mind. Any executive that can walk into another job tomorrow, as I suspect he could, does not have to worry too much about treading on anyone’s toes (including our owners). So it is on that basis that I’m going to review what he said in the interview. (Therefore, if you plan on commenting about him being the owners’ puppet I’ll need to see the strings or the hand up his backside before I publish it.)

On the Sale of Star Players

Tom Hicks said that we would not be selling any of our star players a few months back and it was good to see Christian confirm this. Not least because to sell our top players would be like giving up on the champions league for the next 5 years. Even if we do fail to qualify this season, which I doubt we will, we’ll still need top players to qualify for the following season. To sell in the summer would need a wholesale change of strategy, when the existing one is only now starting to unfold.

There is one slight problem with the terminology used by both though. They both stopped short of confirming that no players will be sold to make up any shortfall in revenues. I can see a few ‘middle of the range’ players being moved on to cut down the squad size, raise some money and cut the wage bill. Should we not qualify and end up selling some good (and not star) players the facts and figures would suggest (à la Tomkins) that we should give up any hope on becoming Premiership champions for a few years. While we no doubt scrap our way to a fourth place finish.

On the search for investment

Christian, as ever, seems very upbeat about securing investment. What he says about the club being an opportunity for investors, even in these trying times, appears to stack up. Especially as there is so much untapped potential within the club, starting with a new stadium. I believe there is a significant return on investment available for the right buyer, with the right deal.

It was good to see him open up about the current levels of debt (£237m) and give the broad strokes of how any investment would be the catalyst for growth. From my experience with bank funding for businesses he is absolutely right that the bank will be looking for more shareholder investment before they relax their lending policies. They’re looking for more financial commitment from the club before they ease the restrictions, which is a fair and prudent approach. Shame they didn’t apply a prudent approach pre credit crunch eh!

Debts will remain a feature of the business model though. Just as they feature in most premiership clubs. Those debts I would expect to end up higher, albeit with a new larger stadium, as the club invests on and off the field concurrently.

It was very interesting to see him mention a full takeover of the club. This possibility has been categorically refuted in the past by the owners. Maybe it’s a political strategy to draw out other investors, or, maybe the inhospitable ground is starting to wear away the owners’ resilience. Maybe it’s both but I suspect it is more likely the former of the two. A bit of research into fan power in the US showing that the anti-owner sentiment shown outside Anfield, while rare in the UK, is par for the course in America.

On the stadium

“The stadium is absolutely central to the club’s strategic development because with a new stadium comes a transformation in the financial resources of Liverpool that can be ploughed back into the core of our activity – which is our playing squad.” The stadium should now be heading towards completion. The additional revenues should be starting to flow in next year so investment back into the squad is made. This was all before the credit crunch crunched. Now with delays we’re in the position of having to fund stadium and playing squad development without the extra revenues.

It was good to see Christian suggesting that the drama of ‘Anfield II’ is reaching its conclusion and that we should hear more in the next 2 months. No longer are we looking at months and months of silence!

On the season so far

He is obviously as disappointed as the rest of us fans, and as optimistic about the second half of the season as some of us. I don’t think the ‘Rafa Out’ brigade are feeling very sunny at the moment.

He very quickly gets the subject back on to the business side of things and tells us that off the pitch day-to-day matters could not have gone better. There is a reiterated confidence that matters which have milled around and are causing discontent are coming to a close. Starting with the investment.

Player sales will go into a ‘players account’ and not be touched for other reasons. This is good news and should bolster Rafa’s kitty in the summer. The main interesting thing here being the intimation that more money may yet be paid into that account before the transfer window closes. Is it Babel on his way out or someone else?

On the future

The man says it so well himself .

“The overall message right now as we head into 2010 is that, slowly but surely on the strategic side, we are making progress towards finding new investment which is the key to unlocking a new stadium. And that stadium is the single event that will transform the financial prospects of Liverpool.

“Meantime I hope and believe we are running our club sensibly, with a total focus on the business of Liverpool supporting our manager and the football operations.”

I have no reason to not believe what Christian is saying. I’m sure there is some PR spin in the terminology being used for strategic gain or fan appeasement but that is all it will be. Hopefully we are reaching conclusions with investors and this investment together with sponsorship deals, naming rights and other commercial gains will see progression being made.

I’ve always been of the opinion that we are at the dawn of a long-term plan, hindered by the credit crunch. It is good to see that we seem to finally be making the first significant steps forward.

The interview, probably by design, wasn’t very in-depth and I would have liked to seen a more challenging examination of the business. Is the club sustainable with life outside the champions league, which may not always be guaranteed with 7 clubs vying for 4 spaces? What is plan B if investors aren’t secured, are we considering a bonds issue like MUFC? That said it was a good start with the broad strokes of the business strategy in there.

I hope this is the start of a more open Anfield! He could also do me the courtesy of at least responding to one of my letters or emails!

  1. Chris Lawley says:

    Top post. Glad to see that I’m not the only one with the view that the people running the club, while not perfect, are not going to bring forth the end of the world.

    • mcdonaldtaf says:

      Purslow’s comments about a full takeover were interesting and given the unrest would resolve some additional issues. As a neutral at least there would be one less thing to argue about!

  2. RobboHuyton says:

    “Any proceeds we generate from the sale of players can only go into our player account for the recruitment of new players.”

    So where did the Robbie Keane and Xabi Alonso money go and why did we sign a cut-price Greek defender?

    Like you, I’m glad there is some form of communication to the fans. But I’d like to see a decent journo go head to head with him and ask some more pressing questions rather than blindly accept the PR to stay on side – ala the Echo.

    • mcdonaldtaf says:

      Hey mate, I did ask the question of you before but don’t think you answered. Do they players at contract renewal get a signing fee? If so would that fee for Torres and Gerrard be significant?

      Yes I agree a more in depth and grilling interview would have been better. But it’s a start.

  3. RobboHuyton says:

    Oh, and I can’t get too excited about debt reduction either as it was Hicks and Gillett who put it there in the first place…

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