By Gregory Hunt, Director of CEDR Solve & Client Relations
40 years ago I was fortunate to be born with two great privileges. The first was to be born in the great city of Liverpool. The second, and the most profound, was to be born in a family exclusively raised in the pursuit of happiness through dedication to Liverpool Football Club under the guidance of the great late Bill Shankly. Mr. Shankly had taken the club from the second division and promised to build it in to a ‘bastion of invincibility’. He did just that.
I am a pure bred red. Not a bit of blue in sight. We are not sure where the link started, but I do know it was a matter of choice for my granddad. He told tales of how, when football was a working man’s game, he would get the tram to watch Everton one week, Liverpool the next. In those days, the greatest goalscorer of his time, Dixie Dean, would, so the story goes, join other supporters on the tram with his boots in his hands after a swift half in his local and then go off and score three or four goals for Everton for fun (something nobody else has done since!).
40 years later the world has changed and with it has come corporate ownership of our great clubs (and Manchester United as well), often financed with debt. Today, as it has been for a couple of years now, the club is in dispute, guilty of bringing the memories of my granddad and Bill Shankly and the loyal followers before and since in to disrepute.
But this is not an isolated dispute which has blown up from nowhere, it has been brewing since 2007, when joint ownership off the pitch was greeted by supporters with scepticism following an earlier failed attempt at joint management on it. In the three years since, Liverpool FC have slid from the Champions League Final to the Europa League to the bottom 3 of the Premier League. During this period, supporters have felt alienated by a combination of poor brand management and poor customer engagement. Yet despite this, brand loyalty is as strong as ever.
This is because the Liverpool FC brand is built on emotion. Despite the fact that supporters (customers) have felt alienated and excluded by the owners of the club, the emotional pull of the brand is so strong that customers are more loyal to it now than ever before. Records over the past two years indicate more merchandise has been sold than before, the brand is stronger than ever, and problems off the pitch have galvanised supporters from across the world to work together to apply pressure to those in charge of the daily running of the club to sort the problems out. More than ever before, fans feel that it is “our club”.
Back to the commercial dispute. Earlier this week the board accepted a bid from New England Sports Ventures (owners of the Boston Red Sox – at least we won’t have to change the colour of our socks if the sale goes through!). The deal was announced on the club’s website by the board, despite the fact it is not accepted by the owners. This is one of many examples of the assets of the club, and its channels of communication with the world, are being used by one side, the board and the commercial operators of the club, to further their cause against the owners. Indeed, it has been strange to watch the club sit silently whilst supporters bring anti-owner flags and banners to the game, sing anti-owner songs and stage demonstrations against the owners, all seemingly with the blessing of the club. Even the current manager, Roy Hodgson, has commented on his delight on the sale before the sale has been confirmed. Would this happen in any other walk of life?
In reality though, whatever the main protagonists say, the dispute is between the supporters and the owners. The supporters feel let down, cheated, and lied to. Groups like Spirit of Shankly have started to gather together supporters with the aim of a supporter buyout, a la Barcelona and Real Madrid.
Others have planned and executed fan power against the owners and their business partners across the world. There have been demonstrations (inside and outside of the ground), there have been mass emailings to potential investors planning to keep the owners afloat, bringing servers down by their sheer volume. There are Twitter pages, Facebook pages, viral videos on YouTube, with peaceful threats to close bank accounts and boycott goods of those willing to keep the owners financed and in place. This is fan power at its most devastating. One group contains thousands of RBS customers who have undertaken to close their account with the bank if they do not call in the debt next week. Power to the people as never seen before. Much more effective than buying green and gold scarves.
However, back in corporate land, the dispute is being played out between the board and the owners, with the likelihood of High Court hearings within the next week. The latest line of dispute is the attempt by the owners to argue that the board could not accept the bid from NESV because it was not constituted properly. This follows the owners attempt to remove two members of the board and replace them with two new directors, one of which was one of their offspring. The board say they were constituted properly – that only the non-executive Chairman, Martin Broughton, had the power to change the board – and quick as you like we have a formal dispute.
The courts will now need to issue a declaratory judgement for or against the owners. If it is in favour of the owners, then the sale cannot proceed, but then it is possible that RBS will take action and maybe then they will force through the sale. Mr. Broughton says on the LFC website that it “… is for the court to declare that we did act validly in completing the sale agreement, and then the buyers can complete the sale. We have to get Premier League approval and I’m certain that’s not going to be an issue. There are one or two minor things like that but the key issue is the court, which should meet I would think next week sometime. That is the most likely time, in short order.”
But going to court can be dangerous, which is acknowledged by Mr. Broughton. In today’s Guardian newspaper, Mr. Broughton says of the upcoming hearings “You can never be 100 per cent confident when you go to court. There is always the risk the judge will come to the opposite conclusion”.
How right Mr. Broughton is. And he should know. As the figurehead of the world’s global airline, BA, and the world’s global football club, LFC, he has had a challenging year. But his sentiments are so right. You cannot be sure of the outcome in court. You cannot be sure of the cost. You cannot be sure of the damage to your own and your company’s reputation. All you can be sure of is that the history of a great sporting institution, respected all over the world, is being tarnished by such a public war between entrenched parties. This is tarnishing the club. Tarnishing its standards and traditions, and tarnishing other third parties like Standard Chartered, the new LFC sponsor, who find that many supporters are buying alternative shirts bearing the mock brand “Standards Corrupted” – with the intertwined ropes being replaced by intertwining snakes. There is no inference of disquiet with Standard Chartered, but they are suffering by association.
So what is the solution? Who knows? Mediation could be the answer. Just five minutes walk from the Court of Appeal is CEDR’s office, packed to the brim with mediators. I wonder if Mr. Broughton, Mr. Hicks, Mr. Gillet and others would be prepared to take that short walk and resolve this dispute in private?
During the 80′s when LFC’s success was at its height, Liverpool was gripped with unemployment and the iconic television show, Boys from the Blackstuff, issued us with a quote from the character Yosser Hughes. I’ll repeat that, to Mr. Broughton, Mr. Hicks, Mr. Gillet. Stop washing dirty linen in public. Instead, give it one last go, try to talk. You don’t even have to be in the same room. There don’t have to be any pleasantries. Show us what great businessmen you are – negotiate don’t litigate. Try using an independent mediator.
In other words, as Yosser would say, “Giz a job”.