We know that investors are not always rational beings. But to invest in a football club in the English Premier League - as Kenny Huang, boss of Hong Kong company QSL Sports is proposing to do - you really have to be stone crazy. Huang is looking to buy Liverpool FC from its American owners George Gillett and Tom Hicks. Liverpool, just in case you've been living under a rock for the past few decades, is one of the most famous football clubs in the world. Founded in 1892, Liverpool rose to an unprecedented dominance of the English game during the late 1970s and 1980s, winning the league championship 10 times in 15 years and establishing a record that has never been surpassed. Today, the reds are considered one of the 'big four' of English football, with a level of recognition in Asia's fast growing markets second only to Manchester United. So high is the team's profile around the region that Standard Chartered is prepared to pay up to GBP20 million (HK$247.57 million) a year just to get its name on the players' shirts. With the prospect of pay-per-view over the internet surely just a matter of time, analysts are salivating over the potential revenues to be generated from the club's Asian fan base. But alas, that doesn't mean Liverpool - or any other big Premiership club come to that - is an attractive investment proposition. To see why, just take a look at the club's finances. Back in 2007 Gillett and Hicks borrowed close to GBP300 million to fund their acquisition and to provide working capital. That debt was then effectively loaded on to the club via Gillett and Hicks' vehicle, Kop Football (Holdings). That's standard procedure in a leveraged buyout. But what might work in other businesses runs into problems when tried in football. Despite handsome television revenues of GBP75 million in the 2008-09 season, thanks largely to Liverpool's participation in the European Champions League, turnstile fees of GBP43 million and commercial revenues up 25 per cent to GBP68 million, the club has struggled to service its debts. The reason is simple enough: to compete at the top level, a club has to attract top-flight players, and that is getting astronomically expensive. Over the five years to 2009, former Liverpool manager Rafa Benitez spent a net GBP113 million on buying new players in the transfer market. And that was just the start. Those players then had to be paid. Last season Liverpool's wage bill hit a monstrous GBP103 million. The combination of interest expenses now running at more than GBP40 million a year and sky-high player costs simply proved too much, and Liverpool recorded a net loss of GBP43 million for the 2007-08 season followed by another of GBP53 million in 2008-09. And the situation is only getting worse. Not only are the club's debts mounting - total debt is now reckoned to be around GBP350 million - but all that lavish spending by Benitez failed to translate into performance on the pitch. Liverpool finished the 2009-2010 season only seventh in the Premier League. That's not good enough to qualify for next season's Champion's League, which means Liverpool will miss out on more than GBP20 million in European television and gate revenues, exacerbating the club's losses. New manager Roy Hodgson could attempt to plug the gap by selling star player Fernando Torres, which could bring in GBP40 million or more. But without Torres, Liverpool's chances of making it back into lucrative European competition, as well as the club's commercial revenues, would fall alarmingly. With the outlook so bleak, Liverpool's creditor banks are getting impatient. In May they installed a new chairman with orders to find a buyer for the club as soon as possible. It's at this point that Huang stepped forward, with the backing, according to British media, of an unnamed East Asian sovereign wealth fund. Unfortunately for Liverpool, it's hard to believe any sovereign fund would be so reckless with public money. Not only would the buyer have to take on Liverpool's debts and stump up an additional GBP100 million or so to fund the purchase of new players, he would also have to find enough money to finance the construction of a new stadium. With a capacity of just 45,000, Liverpool's Anfield ground is small compared to the stadiums of competing clubs like Manchester United and Arsenal, each of which makes more than twice Liverpool's turnstile revenues. But the cost would be huge. Arsenal, for example, paid a massive GBP390 million for its new stadium which opened in 2006. As a result, to stand any chance of making a success of his purchase, a buyer would have to have very deep pockets indeed. Realistically, he could not expect to see much change from an upfront investment of GBP1 billion. And even then a decent financial return would depend on success on the field - always a deeply uncertain prospect. You'd not only have to be rich to try it, you'd have to be crazy, too.