Fenway Sports Group aren’t selling Liverpool, that much has been made crystal clear.
The Reds owners flirted with the idea briefly as they sought to test market conditions in the wake of the sale of Chelsea for what was seen by many as an inflated figure given the commitment to infrastructure investment that was also made.
Instead FSG pivoted quickly to an investment search, prepared to give up some equity in the club that they have owned since 2010 to a third party, one that would be aligned with FSG’s own way of working but could deliver scalable capital and additional expertise to achieve business growth.
The potential investment rumbles on in the background, but is understood that nothing is imminent on that front, nor are there any names that are in advanced talks and moving towards the finish line. It remains something that the owners are looking at, having conversations over, but something that has no pressing time constraints. Business will continue to be done in the manner that boss Jurgen Klopp and FSG leadership had agreed, regardless of the outcome of the investment search, transfer business was not predicated upon completion.
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FSG will exit Liverpool at some stage, John W Henry has said as much already this year. But that almost certainly won’t be anytime soon, and Henry himself told the ECHO back in March that the commitment of the ownership group remains ‘stronger than ever’.
How well the summer’s transfer business goes will go a long way to determining the kind of feeling towards the owners heading into next season. With Alexis Mac Allister confirmed, adding four or five new names of either proven quality or significant potential would give rise to optimism following a bruising campaign where the ageing Reds, in need of a rebuild of sorts, missed out on the lucrative Champions League for next season.
FSG, then called New England Sports Ventures, acquired the Reds for a little over £300m in October 2010. By the end of May 2022 the valuation placed upon the club by renowned US finance magazine Forbes stood at $4.49bn (£3.57bn), an increase of around 1,090 per cent. That is a phenomenal rate of return.
In November of last year it emerged that FSG were considering their options and the valuation of the club stood around £4bn, something that some baulked at. But the reality is that the Reds have true scarcity value in a sport that is still continuing to see valuations boom as new media rights deal come in, new investment arrives and new markets and territories that previously had shown little appetite for the beautiful game, such as the USA, become more engaged and ever more important to the financial future of the biggest clubs.
FSG know that with Liverpool they have a remarkable asset. It is a club that has, according to insights provided by international firm Brand Finance this week, the second strongest brand in world football, behind only Real Madrid. It has been a successful team on the pitch, last season aside, and as a business it has outperformed most of its rivals in a more sustainable way, driving revenues higher through leveraging both the success and the brand’s voice globally.
Manchester United are on the block in terms of a sale. Sheikh Jassim bin Hamad al-Thani’s Nine Two Foundation submitted its final ‘take it or leave it’ offer on Wednesday, one that is reportedly to be the very last time they move the needle to try and reach a deal with the owners of the Red Devils, the Glazer family. British billionaire Sir Jim Ratcliffe is the other contender who has been in the driving seat in recent weeks, according to reports. The Glazers are understood to want as much as £6bn for the club.
FSG have made moves to address some of the issues that impacted Liverpool last season. President Mike Gordon, Klopp’s closest ally in the FSG leadership team and key part of the success of the Reds behind the scenes in recent years, has returned to the fold in a significant way having spent time away over the winter months to spearhead the investment search. The club have also landed on a new sporting director, albeit on an initial short-term deal, with German Jorg Schmadtke coming into the club during a key recruitment period for the Reds.
The value of Liverpool for FSG isn’t entirely tied up in the success of the club on the field, but it certainly makes and impact and it is very much in the owners’ interests to make sure that the club is competitive at the very top level consistently.
“Liverpool are in a unique position where that kind of global fan base was always there and never eroded during some difficult years and has definitely seen a new boost,” explained Daniel Haddad, head of commercial strategy at global sports agency Octagon.
“Football in some markets is still growing in popularity, such as China, India and the US, so it is probably a good time to be successful.
“People talk about Manchester United in the 90s having success then and capitalising on it. That is probably true, but the Premier League’s growth trajectory now means that it is also a great time to have success as there are a lot of new fans still out there to capture.
“Liverpool’s success since Jurgen Klopp has definitely had an impact to keep that growth in line with Real Madrid, Barcelona and United, but also keep it proportionately growing faster than those other clubs within that same period.”
There is further growth to be seen in football and plenty of road left to travel down. To look at the Forbes list from 2022 to 2023, with the new ranking published last week, Liverpool have seen a rise of 19 per cent year on year with regards to valuation, now sitting at $5.29bn (£4.23bn). The Reds are the fourth most valuable club in the world behind Real Madrid, Manchester United and Barcelona and have higher revenues and operating income than the latter two of that trio. Liverpool saw the third biggest percentage increase of the top 10, behind only Manchester United (30 per cent) and Paris Saint-Germain (32 per cent).
The performance of FSG's Liverpool investment, for comparison, wildly exceeds the S&P500, the index that tracks historical stock market performance of the 500 biggest companies. That 10-year average stands just over 10 per cent, for the last year it has been at around 3.9 per cent.
There is little impetus for FSG to sell now given the rise of valuations, which will be aided further by the clubs that make regular appearances in the reworked and expanded FIFA Club World Cup in the future, not to mention the bigger slice of revenues to be obtained from next year’s introduction of the larger ‘Swiss model’ of the Champions League. Factor in greater value from international media rights likely to be arriving through the next cycle and there is plenty of upside left for investors.
Key to it all remains success, and how much FSG will be willing to make available this summer, or more importantly how well and thoroughly they recruit, will give some clues as to the longevity of their tenure at Anfield. It is set to continue for a long time yet, but if they can get back to finding a winning formula then there will be fewer headaches they will have to contend with on Merseyside.
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