Jurgen Klopp's signing of an extension of his Liverpool contract through to 2026 is bigger than any piece of business owners Fenway Sports Group could have possibly done.
The German boss had long intimated it was his intention to call time on his tenure as Reds boss when his contract expired in 2024, with that date on the horizon one that was viewed with increasing concern by Reds fans with every day closer it became. But after a difficult campaign played behind closed doors last season, where the Reds failed to rekindle the kind of form that saw them dominate domestically and in Europe through 2019 and 2020, Klopp feels he has been suitably re-energised to stay at the helm for a further two years.
The signing of Klopp to a longer contract will be met with delight by all those associated with Liverpool, from fans to players, from owners to sponsors. The successes of his squad individually and collectively have been something at which to marvel, but it has been Klopp who has been at the core of it, a man who was identified early on by FSG as the man they wanted to succeed Brendan Rodgers, a man who they felt had the managerial acumen and charisma to turn the club from dreamers into achievers. A Champions League and Premier League title later, and with the club chasing an unprecedented quadruple, it has been a major success.
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But while Klopp's extension undoubtedly increases the chances of continued success on the field, and therefore the hundreds of millions in prize money that comes with it, it also increases the chances of the club being able to leverage their position when it comes to commercial revenues and engaging with new partners.
Liverpool have some key sponsorship renewals on the horizon, most notably the front of shirt partnership that they currently have with Standard Chartered for around £40m per season that ends in 2023. Liverpool are in the process of sounding out other partners, with Standard Chartered also part of the conversation and engaged in 'live and ongoing' talks, and having the kind of security that comes with retaining your most iconic member of staff at the club means that sponsors will be happier in the knowledge that they will be investing in a partnership with a club fronted by the man who has delivered so much. Had a change of manager in 2024 been enforced then it would come just one year into any new front of shirt partnership and would be something that would-be sponsors could point to as being uncertainty on the horizon, therefore emboldening them to look at paying less than they may have.
The more security in the partnership, the more valuable it becomes. Potential sponsors will look at how much visibility their brand would likely have, and at present that is something maximised through Liverpool's deep run in the Champions League and their position as being one of the most broadcast clubs in the Premier League when it comes to live games domestically and internationally.
As well as the myriad other commercial deals that the club has engaged with, and will engage with, Liverpool also have the Nike kit deal in the background. With that deal at a flat £30m per season, the 20 per cent that the Reds receive from the global sales of Nike/Liverpool merchandise is key to raising the value of the deal closer to the £60m-£70m mark. A successful team on the pitch aids the sale of merchandise globally, and having Klopp at the helm gives the best possible chance of that continuing to be the case.
Then there is the boost that his long-term commitment gives to the future of Liverpool's stars whose future remains less clear, most notably Mohamed Salah. Having Klopp at the helm, with his charisma, energy and success means that Liverpool are a hugely appealing proposition to commercial partners, and that is worth a lot of money.
