Wednesday 2 December 2009

The 'Dubai Effect' Still to be Felt by LFC?

I recently wrote on the potential side step we took in relation to DIC's proposed takeover which fell through. Given the recent goings on in Dubai it is possible that fate dealt us a kind blow during the ownership wrangle. It is unfortunate then that Liverpool FC may still find itself within the turbulence of what is happening in Dubai.

When reading the articles about Dubai last night two notable names kept coming up. Reports suggest that the bank most likely to be affected by the Dubai fall out is our shiny new sponsor Standard Chartered. It is unknown at this juncture as to how indebted the Dubai companies in mention are to Standard Chartered. Worryingly though there is now talk of a second wave to the credit crunch - with our new sponsor at the fore front of it. Standard Chartered fared quite well during the credit crunch, hence their ability to enter into a record breaking (at the time) shirt deal with Liverpool. It is early days with the Dubai 'situation' but Standard Chartered will certainly be a name to keep an eye on.

The other name which has been thrown into the mix of the potentialy affected is RBS. RBS is a different 'kettle of fish' altogether, having been battered by the first wave of the credit crunch. In the blame game part one I put together the timing of their demise and it's impact on Liverpool Football Club. Following the first wave of the credit crunch Liverpool's owners had to pay off £60m of the debt capital. This was despite the club being in a relatively stronger position financially than its competitors (in relation to debt). Is it conceivable that a second wave of bad debts (not from Anfield) to hit the bank could mean they have to impact on their good customers again? It is certainly possible that they will once again have to shore up their own finances. Any more demands for capital repayment will no doubt have an impact on any transfer budget and future growth plans for the club.

On the plus side this may yet all blow over and in a year's time some will be back wishing that DIC had bought us. Many are suggesting that Abu Dhabi will still ride to Dubai's rescue, see it's not what you know...