Use your head like Sadio and subscribe to the Liverpool FC newsletter Sign me up Thank you for subscribing We have more newsletters Show me See our privacy notice Invalid Email

Former Liverpool FC chief executive Rick Parry has revealed in detail how wavering in Dubai allowed George Gillett and Tom Hicks to begin their disastrous stewardship at Anfield.

This week marks the fifth anniversary of a High Court judge ending the Hicks and Gillett era at Liverpool Football Club and the stewardship of Fenway Sports Group beginning.

But how did they get there in the first place?

Parry, who was Reds’ CEO from 1998 to 2009, has spoken of how then-principal LFC shareholder David Moores shook hands on a deal with Dubai International Capital (DIC) but was eventually forced to walk away from it.

It was the arrival of Roman Abramovich at Chelsea and the need for a new stadium generating significantly improved levels of revenue that had convinced David Moores that outside investment was needed into Liverpool.

And Parry himself was always keen that Dubai was the place to look for it.

Parry said: “I was always keen on the idea of investment from Dubai, on the basis I’d been there a lot, I knew quite a few people there, quite a lot of the high ranking people there, within the Jumeirah Hotels group for instance, were big Liverpool fans.

“Every time you’d visit Dubai it had changed, they’d built half a city, so you think these are the kind of people that get things done.

“And we had quite a few false starts with people claiming they could introduce us to senior Sheikhs and it turned out they couldn’t and mythical interest.

“It wasn’t that uncommon to go for two days and come back not having met anyone at all. We spent so much time kissing frogs and wasting time.”

We first met DIC in Istanbul

It was Liverpool’s famous Champions League triumph in 2005 which allowed the club to solidify interest from the Middle East, says the former Anfield supremo.

“One of my very good friends was going to come to the Champions League final in 2005, but couldn’t get his son out of school and asked ‘would it be OK to give my ticket to the guy who runs DIC’?

“I said absolutely, he sounds like just the fella we ought to be meeting. I made contact with him in Istanbul. The thing that was always a concern with DIC – and this isn’t just with hindsight, it was a concern at the time – was that the amazing thing about Dubai is the speed with which everything happens and the breath-taking pace with which the city is transformed.

“Bearing in mind the first conversation was in Istanbul, we were still negotiating with DIC in February 2007. And if there’s real commitment from the top in Dubai things don’t take that long. They’d come, then they’d go, then they’d come back again with a slightly different deal and then they’d go again.

“By December 2006 when they finally come back and say ‘here’s a deal’ and David said it’s acceptable, they’d been working with us for 18 months.”

The need to work in the January transfer window of 2007 as well as progress the stadium meant Liverpool were keen for DIC to increase the speed at which they were moving.

We needed steel for the stadium and to act in the transfer window - but DIC still wavered

Parry said: “We accepted their bid early December (2006) and we said there’s a transfer window coming up, there is steel to be ordered for the stadium, this all has to be signed, sealed and delivered by the 31st of December.

“You can’t possibly need much time for due diligence because what else is there to do, you’ve been pouring all over the club for 18 months, you've got all the financial models.

“They said that would be fine. As we now know, we then got into February, we’d missed the transfer window, and we’d got really exposed over a steel order.”

The Liverpool board was frustrated and becoming increasingly anxious about whether DIC would move forward at the necessary pace.

Parry recalled: “We had a board meeting in late January 2007 and – it sounds crazy now – but we were racing to get the stadium built, delivered and in place by 2009 and of course, there’s a real critical (time) path to do that.

“And if we were to have any chance of hitting the close season, we were told we had to order the steel, about £10m worth, in the January. And still DIC hadn’t completed.

“And we spoke to their number two guy to try to push things along. We said ‘we’ve got a board meeting, we need to discuss the steel order, what’s the board to do about the steel’?

“And he said ‘we’ll underwrite it, don’t worry, go ahead, order it and tell the board that DIC is underwriting the steel’.

This wasn't feeling like Dubai and David Moores had to lend us the money to buy Dirk Kuyt

“Then literally the next day the boss of DIC says he had no right to say that. And you think, ‘hang on there’s got to be a degree of good faith in this, what is going on’?

“We’ve placed the order, we’re exposed and you’re saying we had no right to do it and the deal still isn’t finalised.

“Bearing in mind the pace of Dubai, the growth, the amount they invest when they want something to happen, this wasn’t feeling like Dubai and also you’re starting to think if it’s like this before the deal’s done what will it be like afterwards.”

The questions were mounting up about the DIC bid and Moores was forced to dip into his own pocket for players.

“We were missing the transfer window, we’ve got David (Moores) literally lending the club the money to buy Dirk Kuyt to keep us going and there was just something about it where everyone was thinking this is not feeling right.

“We had a board meeting at West Ham away. The very strong feeling of the board was ‘enough’s enough’. We’d said the 31st of December was the deadline, we missed that, we missed 31st of January.”

The Liverpool board had originally rejected George Gillett in favour of the sovereign wealth of Dubai but he returned with what appeared an improved offer.

The board felt DIC had been given long enough

It was considered by a board that included Moores as its chair, Rick Parry and Les Wheatley as the working directors, Terry Smith, a representative of shareholders Granada and director Keith Clayton, as well as lawyers and financial advisors from within the club’s professional team.

Parry said: “George Gillett, who’d we’d rejected in December, hadn’t gone away. He’d taken on board some of our concerns – sadly – about him alone up against the riches of Dubai.

“So he’d come back in with a stronger and wealthier partner – we all know who that was – and ostensibly more money, more money available for players, an absolute commitment to developing the stadium.

“And the very strong view of the board was we’ve got to go with this one, DIC have had long enough.”

Yet even then David Moores did not want to walk away from Dubai, insists Parry.

“The dissenting voice was actually David’s, because his view is once he’s shaken hands on something he’s committed to it and he wasn’t going to let that go lightly and obviously he was the majority shareholder.

“The strong view of the non-execs, the professionals, we were pretty much united in the common sense view that the DIC deal doesn’t seem right. But David’s view was that ‘I’m shaken hands, I’m not going to be rushed, I want 48 hours to sleep on it’.

You're not going to blackmail Liverpool Football Club

“I went to David’s house the following morning with Keith Clayton and he said ‘we’ve got to let DIC know what’s happening’. And he phoned Sameer al-Ansari (chair of DIC) and David said ‘look Samir we’re in a bit of a mess, everything’s gone pear-shaped, you’ve missed deadlines, there’s a strong view on the board that we need to go in an alternative direction’.

“Had I been Sameer I’d have said ‘David I’ll be on the next plane we can sort this out’. Sameer’s response was ‘if you don’t commit to DIC by 5pm today, we’re walking away’. David then says ‘you’re not going to blackmail Liverpool Football Club. No-one’s going to treat us like that, we’ll call your bluff.

“It was that that pushed David in the other direction.

“The other problem we’d had with DIC was this article that had appeared in the Telegraph a few months before that they’d been touting the deal around the City Of London as a leveraged buy-out which frightened the life out of David, understandably, because it was completely at odds with what we’d been expecting.”

The problems with the Dubai deal now sent Liverpool towards George Gillett and his new partner, Tom Hicks.

Parry said: “Gillett we’d known for many months, we’d been over to Montreal and spent three or four days with him.

“And the interesting thing about George when we went there was he said literally ‘here are the keys, wonder round, go and talk to whoever you want’. We talked to the sponsors of the Montreal Canadiens who were a major Canadian brewery, he brought the commissioner of ice hockey to one of the games and left us with him half an hour to talk through whether this guy was a decent owner.

The idea we didn't Google Tom Hicks is ridiculous

“There were literally no constraints, that was fairly convincing. The idea (from some fans) that we didn’t Google Tom Hicks is faintly ridiculous. Of course we did, we were aware of a lot of the history of his involvement with Corinthians in Brazil where if he made a mistake it was in investing too much money which wasn’t the worst sign.

“And bear in mind we had our financial advisors and lawyers who were doing due diligence, we had their financial advisors and lawyers, we had the statements they made in the offer documents which went to (Liverpool FC) shareholders, the guarantees that they weren’t going to base the deal on debt, it was all going to be family money.

“At the end of the day if people don’t tell you the truth there’s a limit to what you can actually do and it’s all easy to look back with hindsight and say ‘he didn’t tell us the truth’ but you tend to take things at face value particularly when they are underpinned by your whole professional team who are talking to their professional team, financial advisors who are giving all the assurances and we’ve got the certificates of all their assets.”

Parry rejects any suggestion that Liverpool were suffering negotiation fatigue after various possible deals had possibly arisen and then fallen through, including the likes of Thai prime minister Thaksin Shinawatra and Redrow founder and Liverpool shareholder Steve Morgan.

“It took us just two meetings to realise Thaksin Shinawatra wasn’t real. In 2004, David with great sadness and reluctance had actually agreed the deal with Steve Morgan, then it went into due diligence. David had shaken hands and resigned himself to it, but on the back of the due diligence, Steve tried to reduce the offer and David said ‘no, I’m shaken hands on a deal, I’m not accepting a lower offer’ and that was the end of that one.

“We spent six months getting to know George Gillett, our professional team had vetted him. Clearly there was a need for a degree of speed, the desire to get the stadium funded and given the commitments they gave to funding and building the current design, it all sounded good.

“And it was a fairly careful analysis, he wasn’t rejected out of hand at the beginning, he was a credible individual but it was felt a Sovereign Fund with deeper pockets was a better deal than one individual.

“There were highly respected business people who we worked with saying you can’t deal with faceless organisations, it’s better dealing with entrepreneurs, this (Hicks and Gillett) will be better for the club.”

The deal with Hicks and Gillett was finally agreed but Parry said his alarm bells were ringing even before they were unveiled at Anfield on February 6, 2007.

“It rapidly became clear (the problems). It was actually day minus one, even as we were planning the press conference. We were looking at the running order of announcing the deal.

“We thought we’ll have George going first. But Tom just said ‘I’m going first or I’ll never get a word in edgeways’ and you think ‘mmm, interesting.’ And then in pretty short order after that we have Tom Hicks saying ‘we’re not building that stadium, we’re starting all over again’ despite the assurances about spades in the ground.

“So it wasn’t long before it was clear the two owners were not at one. And if you’ve got two 50/50 owners who are not at one, that’s not a recipe for harmony or success.

“We could have decided we’re not doing a deal with anyone but then we’re right back to square one.”

The pair had also used borrowed money to finance the deal – effectively leveraging the cost against future profits the club would make to pay it off.

And Parry believes the ready availability from the banks of such finance was at least in part to blame for the terrible mess Liverpool Football Club later found itself in.

“Without question, banks lent money too easily. I remember Stephen Hester, chief executive of RBS, coming up to Liverpool. This was several years later and he came out with the brilliant phrase, ‘with hindsight some of our borrowers borrowed too much’ and you think ‘hang on isn’t the right phrase we lent them too much’. Why wouldn’t they borrow too much if you’re irresponsible enough to give it to them.

I wish we hadn't done it but you can only go on the information at the time

“For me Hicks and Gillett has to be the classic example of that. At the end of the day, football doesn’t really lend itself to highly leveraged buy-outs. Anyone could see that. It’s not like buying Weetabix, whatever Tom Hicks might say.

“It’s the easiest thing in the world to say we shouldn’t have done it – and I wish we hadn’t – but you can only evaluate by looking at the information you had at the time, not on what has happened since.”

While Parry deeply regrets the decision to sell to Hicks and Gillett, he believes DIC would have been just as disastrous.

“I dearly wish that the rulers of Dubai had been committed to the project. We flew out to Dubai around October (2006), ostensibly to meet the Maktoum family, and low and behold we didn’t meet any Maktoums. And David got really cold feet about DIC.

“To say we should have gone with DIC is complete and utter nonsense, that would have been a disaster too.

“DIC as a vehicle has imploded since.”

This interview is edited highlights reproduced with the kind permission of The Anfield Wrap. Rick Parry was speaking in summer 2015 to Gareth Roberts, Tony Barrett and Kevin Sampson. You can subscribe to The Anfield Wrap Player viawww.theanfieldwrap.com

How might the Reds have looked now with Dubai owners? Let us know below