Kevin Howson, from independent Liverpool website redandwhitekop.com, reveals how a chance email led to an exclusive interview with one of the new owners of Liverpool Football Club.
It all started with a surprise late night email.
It was 11.30pm on Friday October 15. Earlier that afternoon it had been announced that, after a week of high tension and high court appearances, Liverpool FC had finally been wrestled from the clutches of Tom Ollis Hicks Jr and sold to John W Henry and his company NESV. We'd celebrated with a bottle of bubbly and a few more drinks and I'd decided to have one last read of the messages of joy that were flooding both phone and PC.
That's when I saw the message from Andy, one of the lads who worked tirelessly behind SaveLFC and a man with an uncanny knack for flushing out email addresses. We knew that he had managed to contact John W Henry and pass on all our best wishes earlier in the week but none of us were prepared for what came next. "Are any of you free tomorrow morning, he's got back to me and he'd like to meet us for breakfast?" It's not the kind of bombshell that aids a good night's sleep.
So a few hours later, three of us; myself, Andy and another of the SaveLFC lads Ray were sat rather sheepishly in the coffee bar under the Kop waiting to meet the man who had just bought our club. In many ways the man who had answered our prayers of the last three years. When he arrived he was affable and charming and we chatted for over an hour, well I say chatted, in the main he listened and we rambled on about what Liverpool FC means to us fans, about Shankly, about the Liverpool Way, about what we wanted from him. As we were leaving I decided that with nothing to lose it was worth a cheeky punt and asked him if he would consider doing an email interview for redandwhitekop.com, the independent Liverpool supporters website that I help out on. To my amazement he said yes.
A few days later we had put together a selection of 23 questions submitted from Liverpool fans all over the globe and we sent them off to John W Henry, not really knowing if we dare expect a reply, and if we did then whether we'd just get a lot of non-committal stock answers. I'll let you be the judge of that.
I have tried to group the questions into themed areas to make things easier. I guess the first theme is: Why Liverpool?
1. Given that financially there are far more reliable investments, what motivates you to invest in and buy sports clubs?
We are an organisation filled with people who are driven to compete at the highest level. There certainly are better investments than sports clubs, but we know that everything we do has meaning to large numbers of people. And what we do has meaning for us. We wake up every day thinking about what we can do improve our chances of winning a championship. It's incredibly interesting and we really enjoy working together toward a common goal.
2. What was your motivation, individually and as a company, for buying Liverpool FC? Was there one thing that sold the club to you?
We kept seeing the similarities to purchasing the Red Sox in 2002. They've been recounted in the media. But the most important issue for us was the ability to compete at the highest level in the world's biggest sport. Liverpool FC provides that opportunity. I believe almost any sports fan would purchase a club, if they had the means. We had the means - both financially and with regard to organizational strength - to run one of the most coveted sports clubs in the world. It's a privilege.
3. It's naive to think you made the decision to buy Liverpool FC without the input of any "football people". Care to name-drop those who advised you during your due dilligence?
We did our own due diligence. We don't know English football, but we do know the sports business. It's been a very steep learning curve - but one that has been rewarding and interesting. The structure of football in Europe is totally different from what we are used to. It's fascinating and challenging. Now we are lucky enough to be meeting football people who can give us input. Our biggest responsibility is to bring in the right people to the club on and off the field.
The next group of questions are unfortunately your inheritance from the previous owners.
4. How have NESV funded the £300m acquisition?
This simple answer is that we paid cash for LFC and left £37 million of stadium debt in place - even though there is no stadium in place - just a lot of expensive plans etc. We view stadiums as separate from clubs. They are separate entities.
We have some very successful partners - some of whom are big EPL fans - and we are well-financed internally. But NESV has always had debt from the first day we purchased the Red Sox. We have some partners who look at Internal Rate of Return and almost demand that we have debt as a consequence. Debt increases IRR.
I recently read the New York Yankees have $3.5 billion of debt, but I've never heard a Yankee fan complain about it. I've never heard a Red Sox fan complain about the usage of credit. Credit is probably more acceptable in American culture than elsewhere. But you have some people that are good at borrowing money and poor at investing beyond that. There are others - and we feel we are in this camp - have lines of credit etc., that are good at running businesses prudently and invest in those businesses.
In nine years of operation our partnership has yet to make a profit distribution. We've only made tax distributions. We've invested a quarter of a billion dollars into Fenway Park. We've invested in players - second among thirty MLB clubs - over the last nine years. We're invested now in LFC and there is work to be done on the stadium front there as well. Other than the stadium debt mentioned above, there is no debt on LFC. This has greatly reduced interest payments which I believe were running close to £40 million per annum.
5. Is there a contractual commitment that none of the acquisition debt will be placed on the club?
No, none was needed.
6. How does NESV intend to extract money to make a profit on this transaction?
That's a good question. With the club struggling, money I can't foresee any profits being "extracted". Hopefully some day LFC will be worth more than it is today.
7. What is the capital structure and cash flow of NESV, and how does it service its debt?
It's a private company and we do not release financial information. LFC, however, does release financial information annually.
The next batch are all about your plans for the club now that you have your feet under the desk...
8. All of the questions I would want answered are to do with things he really needs to reflect on awhile. I'd be interested at this stage however, to know what his five key milestones for the next three years would be.
We are focused on getting the club positioned to win trophies within the Financial Fair Play rules that are being imposed next year. That means off the field we are intent on increasing LFC revenues worldwide. On the field we have to be smarter. Arsenal and Man U have depth that is young and capable. We do not. We have a lot of work to do there. A lot of work. And we will, but we have to be smart about it.
9. Liverpool FC needs a sustained period of stability. Liverpool supporters will be patient as long as we can sense that we are moving in the right direction. How long are you planning on staying? Are we a long-term (10 years+) or a shorter term project?
Long-term. Everything we do is for the long-term.
10. Mr. Henry & co. - Liverpool Football Club has one of the largest fanbases in the world with passionate Reds in every corner of the globe. With the greatest of respect, the sport of baseball in which your team has achieved great success is a major sport in Northern America but is not comparable to Liverpool Football Club or the Premier League in terms of fanbase /viewing figures etc etc. How do you plan to market the club globally and expand and enhance the club's profile worldwide in the future?
I think you might be surprised at the actual number of Red Sox fans around the world. Essentially we aren't allowed to market outside of New England and that has always been disappointing to us. It was one of the reasons we were attracted to the Premier League. The best way to market Liverpool FC globally is to win because, as you point out, the fanbase is already so large globally. If we build the right team on the field, everything off the field will take care of itself. We also have a very strong commercial team that arrived over the past couple of years lead by Ian Ayre. Ian and his team have already made great strides. We will be working to give him the resources to expand the LFC presence globally. 11. For the last 18 months there has been an absence of football expertise and experience at senior management / board level and this has resulted in some poor footballing decisions. This is something that needs addressing before any big changes are made and a future footballing strategy is decided on. What do you intend to do to rectify this situation?
Our first appointment was Damien Comolli. Damien has a philosophy that is similar to ours and what has made us successful in Boston. But he is just our first appointment. We don't know English football, but we do know the sports business and what it takes to be successful. You must first of all have the right people in place and you must be able to give them the resources they need to be successful. With the new Financial Fair Play Rules coming into effect next year, we know that we need to emphasize revenue growth. That is an area we feel we are very strong. And LFC already has a strong commercial team.
12. What level of involvement will you have in the day-to-day activities? Will we be seeing you and Tom in Liverpool regularly? Will anyone in the organisation be based in Liverpool permanently?
We will be in London and Liverpool with regularity. There is a lot to be done. We speak about the Sox and LFC daily - seven days a week. We are working on teleconferencing as well as spending time in Liverpool. In the digital world of today one can say almost nothing is local. It has never been easier to work from a distance. But like Fenway, Anfield will be hard to stay away from. We've really enjoyed our time in Liverpool thus far.
13. Having completed the takeover, you mentioned that "we have terrific strategic thinkers". Could you expand on that, please?
The most strategic thing I can do is to not comment on that. What I can say is that our partnership and our staff are very strong overall. We are changing the name of our partnership from New England Sports Ventures to Fenway Sports Group. This group has strategic relationships as well as strong, bright "strategic thinkers." We are always discussing what we can do to improve in various areas - from venues to player performance. Always. 14. What are the qualities and values that you personally believe you and your consortium can bring to Liverpool FC to enhance it and complement its traditional values? We know what Liverpool can give to you. Beyond the numbers and investment, what can you give to Liverpool, in terms of a personal vision, quality, philosophy, and personality?
It is up to us to solve the problems that have plagued the club for some time now. The club has terrific revenues, but they need to be allocated properly. Where revenues, in fact, suffer are in relation to match day. That is a problem we have to solve. It will be difficult to solve. If the match day issue had been easy it would have been solved a long time ago. Many EPL clubs have this problem. We will have to be bold, thoughtful and aggressive in order to do the right thing for the community, for the supporters and for the club long-term.
Liverpool values are well known. What makes Anfield so special beyond the history of the ground are the people who populate Anfield each match. They value the club first and foremost. That is what we have to ensure every person who wears a kit or works for the club at any level has in the their minds first and foremost - the club comes first.
In Boston every player who puts on a Boston Red Sox uniform knows what it means to wear that uniform. It's something very special. Wearing that uniform has a great deal of meaning. We have a Red Sox way that is discussed in spring training each year. It is a privilege to work for the Boston Red Sox at any level. We have Red Sox Ambassadors who spend their days ensuring that people outside of the organization know how much all of us inside the organization appreciate our fans and visitors to Fenway Park.
The values that we have to strive for within the club at Liverpool emanate from the supporters. We cannot have anyone at the club who when they walk into the Academy, Melwood or Anfield, aren't aware of club values and that the club comes first and foremost. We have to have everyone from top to bottom on the same page - exactly the same page. And we will. We will make mistakes and it will be up to us to correct them. With the level of support this club has, if we are all on the same page, we will be incredibly successful.
I think we were all delighted to see in Mr Henry's meetings with fans immediately after the sale that he recognised our feeling of disenfranchisement. This is a major concern at the moment and the next question reflects that.
15. Are you considering engaging fans with the club, either by letting the fans take a stake in the club, having an elected fans representative in a non-executive position on the board or by instituting regular fan forums or other channels of communication between yourselves and the fans?
These are issues we are just now beginning to tackle. It's up to us to discuss these issues, communicate about these issues and implement something that serves Liverpool FC for the long-term. Consider this email exchange a part of that effort. But it really has just begun.
And finally, sign of the times, we got round to asking a few questions about what was happening on the pitch. Can anyone remember the halcyon days when that was all that really mattered?
16. We see that in Boston you have given a lot of priority to producing your own young players. Under the previous manager the club began to set up a good youth system based on the Barcelona model. Two promising players from that system were sold in the summer and as a result fans are concerned that this is not the priority it once was. Can you confirm that you will be looking to invest in a best-in-class youth system to produce talented youngsters for the team?
I've been to the academy three times and I've met with Jose Segura and Rodolfo Borrell. They are key people for the future of Liverpool. They know their work is now a major priority for us. I've made a personal commitment to them. We intend to give them the resources to build LFC for the future.
We need "top four" young players. They will not produce a quick fix, but our philosophy in football will be based on the long-term. That is what has made Arsenal and Manchester United so strong. They understand something we understand in Boston - to be consistently strong on the field, you must have a consistent flow of young talent that has be nurtured and developed the right way. We will focus on that. That is also the philosophy of Damien Comolli.
17. Over recent years we have started to see some of our best players leave the club. Are you planning to work to keep Fernando Torres at the club?
The club has gone through a very difficult period and the period has not ended. We've dealt with baseball players and race car drivers at the highest level. LFC also have players at the highest level. These players all want the same things. They want to win. It's up to us to build a winner going forward. It's up to them to determine to win now. We saw a certain team on the field against Chelsea last week that showed what they can do. We also know how competitive the EPL is this year. There are no guaranteed matches any longer for any club. This club can be better. Blaming the manager or any one particular player is simply wrong. This club needs to play up to their potential every match. If they don't, they won't win.
That being said, we have work to do and must invest in this club to improve it on the field. Can that be successfully done in January? A number of people I've talked with doubt it. Most people seem to think it will be the summer before we can really begin to improve. So the players - all eleven each week - have to be on the same page every match and have to live up to the history and respect this club has engendered - no matter what.
I've met with a number of our players and had private discussions with some of them. I've been greatly impressed by them personally. They are all exceptionally bright and they all want to be here. The question they have had, rightfully so, is whether or not the club is going to go in the right direction. They all want to see that. I have been very forthright about our philosophy and about what we are going to try to achieve. Some would prefer a quick fix. Others prefer to focus on the long-term and that is very difficult for most players. But, as I wrote previously, this club needs everyone on the same page every day. Every day. We need everyone focused on what needs to be done in the next match facing us and during that match. The club should not have to settle for less. As one insightful player told me, "The spirit of the side needs to be there like a family - as one."
The response to the interview has been phenomenal both on RAWK and in the media in general. On RAWK I think what has impressed fans most of all has been Mr Henry's willingness to enter into such an open and honest dialogue with the fans. It's a far cry from the stage-managed fireside chats, LFC mug in hand, that we were fed by the previous owners and I think that alone gives people a huge amount of confidence and reassurance.
It's also interesting to see how willing fans are, when presented with the information directly, to be patient and look at the bigger picture. The main feedback on the site was delight at the reassertion of the club's core values and the reassurance that the good work of Rodolfo Borrell would be built on with local kids becoming the core asset of the club.
Elsewhere, Mr Henry's answers have gone on to be used as the backbone for most of the media's Liverpool FC articles this week. As someone who normally just reads the reports it was interesting to see which journalists asked about using the interview and credited the site and which just took the quotes. It was also interesting to see that the answers which proved of most interest to fans contrasted wildly with those which most interested the journalists with the vast majority of articles preferring to focus on the short term and lack of a quick fix in January rather than the long term planning and the focus on youth development that had so pleased the fans.
So there you have it. The improbable tale of how a no-mark Kop season ticket holder got to meet and then interview the man who bought Liverpool FC. In many ways in writing this it feels like I have perpetrated my own epic swindle in that so much of the work that has made this possible has been done by others. I truly am standing on the shoulders of giants. Thanks to Ray, Andy and the other lads in SaveLFC for helping make this possible.
I think a lot of credit must also go to the posters on RAWK who came up with some excellent and challenging questions. Most of all, though, a huge vote of thanks to John W. Henry for engaging with the fans from the off and for sticking to his promise and then over-delivering.
The more numerate amongst you will notice that there are still seven questions unanswered, John W Henry has clearly taken some time considering the questions and has been returning the answers in batches. So watch this space.
The views expressed in this article are those of the author and may not represent those of Liverpool Football Club.