Liverpool Debt Leaves Montreal Canadiens In The Cold
Total Pro Sports – How about this for some pan-continental sporting interaction; George Gillett could be on the verge of selling the Montreal Canadiens to fund the construction of Stanley Park stadium on the outskirts of Liverpool, England, the expected home of Liverpool Football Club come 2011.
North American sporting entrepreneurs’ dalliance in European sports, soccer specifically, has been on the increase in recent years: George Gillett owns the Canadiens, NASCAR’s Richard Petty team and 50% of Liverpool F.C., Cleveland Browns owner Randy Lerner has dominant stakes in Aston Villa, after guiding the Tampa Bay Buccaneers to a Super Bowl in 2002 Malcolm Glazer decided to expand his portfolio to include one of the richest sports franchise in the world Manchester United. These moves have always been vehemently opposed by European soccer fans, who just see brash American owners saddling their club with debt and distorting the path of their clubs. On the field Glazer has kept Manchester United on the same track as previous, Lerner has taken Aston Villa from mid-table mediocrity to a top 4 contender whilst Gillett, along with business partner Tom Hicks who owns the Texan Rangers MLB franchise, Dallas Stars of the NHL and the other 50% of Liverpool, tried his best to elbow head coach Rafa Benitez out of Liverpool a move met with stadium demonstrations by the fans – a mixed bag of results for North American sport pioneers in European soccer.
The Hicks and Gillett double act was heavily criticized on three fronts; a conservative transfer policy, a nasty public dispute with head coach and fan favorite Rafa Benitez and persistent opposition to Liverpool GM Rick Parry. Basically the pair of them has taken the club in questionable directions and the reaction from the Liverpool fans has been aggressively anti-Hicks/Gillett; if you thought Eagles fans were spiteful for snowballing Santa, try sparking a pro-Hicks/Gillett conversation in Anfield’s Kop stand. Gillett buckled under this pressure and has been wanting out for the last 6 months, but who wants to buy out a 50% share of a club in the middle of a monumental $520million construction project of a new stadium in an economic crisis that is going to wipe out all the value of that stadium once production is completed. Construction of Stanley Park, the proposed new stadium, was meant to start last year but the economic times have meant funding has dried up. Last year the two owners, whose relationship has been strained to say the least, agreed on a $700million refinancing package which would be used to fund the stadium and transfer activity.
Here’s where it gets tricky for Gillett and the Montreal Canadiens. Hicks and Gillett couldn’t find the cash to repay the loan for the 25th of January deadline, so were granted a 6 month extension giving them until the 24th of July. Gillett appears to be struggling for the money again so has asked four financial firms to look into the possibility of selling his sports franchises, and since he can’t ship Liverpool this could mean the end of his ownership of the Montreal Canadiens. Forbes value the Canadiens at $334million which would cover his part of the debt should he find the buyer, and it’s also worth considering that Gillett owns their stadium – the Montreal Bell Centre – so could sell that to.
Gillett needs money, and providing he finds a buyer the Montreal Canadiens would be the best way for him to service his Liverpool debt. Without any obvious prospective new owners the effect on the Canadiens is unknown at this point, but if that new owner doesn’t like what he inherits job cuts, stadium relocation, franchise relocation or cutbacks in team investment could all be on the table. Any large business owner is feeling the economic downturn, so being a North American franchise owner caught double dipping both sides of the pond can’t be much fun right now and as the economy tightens it looks like the Montreal Canadiens may about to be squeezed out.