Who’s Got the Power?

Posted: July 6, 2010 by mcdonaldtaf in Business
Tags: , , , , , ,

It doesn’t sit comfortably with many supporters that a fan of Chelsea plays any role at Liverpool Football Club. When he arrived many believed, or were led to believe, that he was simply at Anfield to oversee the sale of the club. When the truth is that the extent of his power runs much deeper. As we’ve already seen he was a significant component in the removal of Benitez and was even the board’s representative at the unveiling of the incoming manager.

Mr. Broughton may have a heavyweight reputation in the business world, but it was tarnished very quickly amongst the fan-base after ‘that party’. It seemed wholly inappropriate for the chairman of Liverpool Football Club to be present at a function of celebration for the premiership champions. I’m pretty sure that Manchester United’s or Arsenal’s chairmen weren’t there, so why was ours? Then there are the comments he is reported to have made about our talisman striker during the shindig. Now to be fair the reporter involved, Charlotte Jackson, denied the comments were made. However as Oliver Kay pointed out to me on one of his webchats, why haven’t there been any letters from the club’s legal team for a retraction? We all know how quickly they reacted when someone dared publish Christian Purslow’s address (which as a side note has now been changed at Companies House and his service address is now that of the club).

So the man who is quickly becoming as unpopular as Christian Purslow, who’s in his own race to become as unpopular as Hicks and Gillett; just how much power does he have? Well the club have recently, after approval from the FA, submitted amended articles of association to Companies House. The articles can be thought of as the rule-book of the club from a company perspective. A fuller definition is available here. The amendments have been made, it would appear, to facilitate the transition from the joint chairmanship of Hicks and Gillett to Martin Broughton.

I have seen quite a few comments recently from people suggesting that Hicks and Gillett have nothing to do with the club anymore, their power is gone and RBS have taken over. This is after all why Broughton has been put in place. Now I am not qualified (or in the know enough) to comment on who is actually in charge at the club – but only five weeks ago (and after Broughton’s appointment) the articles were provided to Companies House which state “the number of directors (other than alternate directors) shall be not less than six, and shall consisit of at least George N Gillett, Thomas O Hicks, the Managing Director (or equivalant) of The Liverpool Football Club and Athletic Grounds Limited, the Commercial Director (or equivalant) of The Liverpool Football Club and Athletic Grounds Limited, the Finance Director (or equivalant) of The Liverpool Football Club and Athletic Grounds Limited and the chairman duly appointed.” Interesting that only two people are mentioned by name, isn’t it?

Despite the way he was ‘just brought in to sell the club’, Broughton’s power (as with any chairman) is significant. If any board vote is undecided he is the one who gets the casting vote, in addition to his already cast vote. When it comes to who is actually on the board, well he gets to determine that as well (well sort of). Clause 81 (a) states “Each director appointed to the office of chairman of the board of directors of the company may appoint any person as a director of the Company and may remove any director (other than George N Gillett and/or Thomas O Hicks).” So he can sack the whole board if he wishes, well except the two who should have been sacked years ago.

Now I think it’s fair to point out two things here. The first is that Broughton has no more or no less power than the chairmen of most companies. This is common practice but I understand why fans thought he was merely with us for a while as a salesman; although this is clearly not the case. The second is that the changes made appear to be aimed at allowing the business to be run more effectively by the board, without waiting for Hicks and or Gillett to clear their diaries.

However the fact remains that one of the most powerful men in Anfield at this present time, openly supports a competing club. Not too many eyebrows were raised when Benayoun headed down south, this would not be the case if Torres or Gerrard were to leave for the same club.

As for the puzzle of what power Hicks and Gillett can exert over the club. Well it just seems to get more complex. I understand the logic of those who say that RBS are effectively in charge and we may be in de-facto administration, but if this is true it was surely the case when Broughton arrived. So why Hicks and Gillett are personally mentioned in several places throughout the articles, which only adds more confusion, is anyone’s guess.

Martin Broughton arrived with immense business experience and a business heavyweight profile. He is quite clearly a very experienced man in his chosen field and knows how to run a business, or the board of a business, which is far larger than that of our club. However his experience of football is limited, questionable even. Which is worrying in itself. But even more worrying is that a Chelsea fan holds so much power over our club, maybe even more power than the owners.

  1. Adam says:

    A lot of the confusion over Broughton surprises me – I have read plenty of blogs, tweets and comments questioning the role of the Chairman – but for me it has always been very clear. Maybe because in my day job I am frequently involved with other companies’ MDs, Financial Directors, Commerical Directors and Chairman…?

    I seen him as a ‘merged’ face of Hicks and Gillett, based in the UK as well, to conduct a unified persona to potential buyers. H&G invested in him the negotiation powers (and perhaps decisive powers if Broughton’s quote of “the owners cannot block a sale” is to be believed).

    I seen his PRIMARY ‘project’ being the sale of the club, but it is natural that he would oversee other issues – he is above the MD, FD, CD etc so needs to be aware of their activities – and just like the Queen and the PM’s relationship – he can still block things if he wants. So it was natural to me that he would rubberstamp the exit of Benitez and arrival of Hodgson (even if he didn’t sit back for 3 weeks looking at the pros and cons and actually MAKING the decision). I really wasn’t surprised by that at all (only the absence of the MD at the unveiling though hopefully he is sorting the sale out…?)

    However I do agree that Broughton made some huge errors with his Chelsea connections. OK, I can accept that he can’t attend the league game given 40 years of supporting a club (hell, I wouldn’t), but he should NOT have attended the end of season do. HUGE error in my opinion – if he can abstain from the one, he should abstain from the other.

    I’ll take a look at the Companies House info tomorrow as well.

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