Why it's Morgan v Moores and not Scouse v Thai

Posted by Rushian on May 13, 2004, 06:08:44 PM

From the discussions flying around the pubs, phone-ins, letters pages and internet forums, the debate over future investment in the club has become a battle of Scouse v Thai. I instead believe it's a battle of Steve Morgan v David Moores.

To explain why I'll quickly cover the bare bones of Steve Morgan's proposal again:

i) It will raise 73 million pounds

ii) David Moores would have to pay £31m to see his share % drop from 51% to 46.4%; the smaller the amount he invests, the lower his share of the club becomes, dropping to 23.2% if he invests nothing.

iii) Steve Morgan gains a large increase in his shareholding, and could become the major shareholder.

iv) The fans have a chance to buy shares, which are now more accessible in terms of availability and price.

v) Existing shareholders will see their shareholding diluted unless they invest in the club.

Morgan has played his proposal like a seasoned politician. His press conference was a blinder PR wise with the fans; he talked of hitching to games, bunking in, going home and away and being a Red all his life. Saying he wanted to see the club back as the best in England and Europe was bound to play well with Reds. The fans also like the sound of being able to invest in the club via cheaper shares, though existing small shareholders I've spoken to aren't happy at all with his current proposals. He also comes across as a Scouser who's worked his socks off and built up a fortune which he's prepared to use to benefit the club.

In contrast there's been a big upswell of opinion against the Thai deal in Liverpool. There's concerns over the ethical and moral issues raised by the likes of Amnesty International. Questions on the length and nature of the Thai's interest in the club. Confusion over the source of the funds - is it the Thai PM's private money? Lottery funded? Government money?, and if so what happens if the Government of Thailand changes? Also a genuine wariness of the unknown coupled with the preference to accept, if available, a local bid from a fan of similar value.

The issue is thus being played in the press, and in the minds of many fans, as Steve Morgan v The Thai PM when in reality it has now become a question of  Steve Morgan v David Moores and Rick Parry.

The way you can look at the Morgan deal is this:

The fans can see a route has been offered to get a £73m cash injection for players and the new stadium at a time when funding appears to be needed by the club. It's been decribed as an investment by Morgan when it is in fact both an investment and a takeover which could see David Moores usurped.

Moores has 4 options in my opinion:

1) Accept the Thai deal (for however much it turns out to be) and ride the rough waters of the protests.

2) Alternatively he can agree with the Morgan proposal and cough up between £20m and £31m of his own money, which will be needed to maintain his largest shareholding (money it's rumoured he does not have), though still dropping lower than the crucial 50% controlling stake in the club. Morgan would still increase his shareholding and now have a major presence on the board. Does Moores have the stomach for the inevitable boardroom battles?

3) Or he can agree with Morgan's proposal but decide not to invest himself. This would see his shareholding reduced to 23.2% and David Moores hand over control and the chairmanship of the club to Morgan, with Moores reverting to being a "minor" player on the board.

4) Finally if Moores turns down the Morgan proposal down, and the Thai deal is considered too unpalatable, then he now finds himself in the position where he has got to come up with a third proposal as financially attarctive or lay himself open to the accusation that he's putting self interest ahead of the long term interest of LFC. This would cast him as the villain of the piece thanks to Morgan's cleverly put together deal and manouvering. And Moores isn't the type of person who'd be comfortable with that stereotype thrown at him.

So it's time for Moores to make a decision. Morgan has dragged him into a high stakes game of blackjack and our David can double by paying 30m, twist with the Thais or stick and see Morgan take over.

Or does he instead have a five card trick up his sleeve? All will be revealed ...

© Rushian 2004

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