Off the field at Liverpool, the search for investment into the football club has been a dominant topic.
In November last year owners Fenway Sports Group kicked open the door on cashing in when it emerged that a sales deck had been produced and that expressions of interest in both a full sale and partial equity stake were on the table.
For FSG, attention quickly turned to the latter, with the ownership group ruling out letting the club go, despite erroneous reports that serious talks with sovereign wealth funds were had, with the sale stance something that principal owner John Henry confirmed when he spoke to the Boston Sports Journal back in February.
“"I know there has been a lot of conversation and quotes about Liverpool, but I keep to the facts: We merely formalised an ongoing process,” said Henry.
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"Will we be in England forever? No. Are we selling Liverpool? No. Are talking with investors about Liverpool? Yes. Will something happen there? I believe so, but it won't be a sale. Have we sold anything in the past 20-plus years?"
Henry spoke to the ECHO in March and reaffirmed the commitment of FSG to Liverpool for the longer term.
“While we formalised a process that has identified potential investors for the club, we remain fully committed to the long-term success of the club,” he said.
“That has been the case since day one in 2010. Our efforts every day have been and continue to be focused on the long-term health and competitiveness of the club. Investment in the club is never for the short-term. This approach has been successful over the long haul with patience necessary from time to time.
“In regard to Liverpool Football Club our commitment remains stronger than ever.”
The timeframe of this summer for a deal to be done is something that has been mooted, and while there remains the possibility of that being the case given how quickly these deals can materialise when there are two sides on the same page, it was never a marker that was set in stone, nor was its arrival, as the ECHO have previously reported, being what Liverpool’s transfer spend this summer would be predicated upon. Liverpool have the resources to conduct the business that they want now, but an injection of capital to aid cash flow or for further infrastructure plans or team reinvestment can still arrive after the rather arbitrary deadline of this summer.
There is understandable scepticism from fans. After the pursuit of Jude Bellingham was ended and his path to Real Madrid cleared, the notion of ‘next summer’ started to wear very thin on Liverpool supporters. Given the struggles that existed on the pitch last season and the very impactful missing of key targets, notably the money-spinning nature of a top four finish and Champions League football, there has to be investment into the team this summer to address those issues and ensure that a longer term problem doesn’t arise. While it is the quality of the recruitment that is the most important factor, not how much is spent, the fact remains that it will have to be an expensive window for the club, and one where FSG will be judged by the time that the season starts, and again when it finishes.
Investment into football has been heavy across Europe over the past couple of years. Leeds United have changed hands this summer, while Bournemouth and Chelsea both came under new owners during the course of the last 12 months. There has also been a spate of minority investment deals that have been struck across the continent.
Everton are close to announcing their own investment deal, with New York-based fund MSP Sports Capital set to acquire as much as a 25 per cent stake in the club via a preferential share structure, with United States Securities and Exchange Commission filings revealing that £130.2m had been raised from a pool of 13 investors for the deal, which should see at least two new board members arrive from MSP, or requested by MSP.
The news of Everton’s developing situation this week caused some ripples among Reds fans on social media, understandably frustrated by an investment deal being struck across Stanley Park at the same time there was still radio silence on what was happening with Liverpool’s own investment search. The two situations, however, are wholly different.
Everton, with five loss-making seasons, allegations over breaches of Premier League profit and sustainability rules and a new stadium needing a considerable tranche of funding to reach its completion, are a distressed asset. There positioning and need to find investment has meant that there is considerable leverage for interested parties, with the MSP deal essentially loans with warrants that can be called in for equity at a later date, with the loans giving MSP an annual return. But with the deal also including a likely couple of seats on the board and some operational control, it is one that is appealing to investors, especially those in the US, who seen the continued trajectory of the valuations of Premier League football clubs and the value in the asset of a new 52,888 seater stadium. There is major upside, but upside that they will know they have a better chance of realising if they are able to at least have a hand on the wheel.
The investment search for Liverpool is different. As a business, there are few more successful football clubs in European football. Major investment projects are almost concluded and the club is in rude health financially and, until last season at least, competitively. FSG’s search wasn’t so much about finding a solution to an existing problem but finding capital for further growth.
FSG president and the company’s most hands-on man at Anfield, Mike Gordon, was seconded to spearhead the investment search last year. There was interest and those who FSG felt might be a good fit, with whom they were simpatico, remain in dialogue over something manifesting. But whereas Everton owner Farhad Moshiri didn’t have the leverage, FSG have plenty. They are able to be choosy, to reject expressions of interest from those that either don’t value the business as they do or who they feel don’t give them the expertise along with the capital.
When the FSG/RedBird Capital Partners deal concluded in March 2021 for 11 per cent of the business in a $750m deal, that was negotiated swiftly. Talks had initially centred around a potential stock market play for FSG with the RedBird/Billy Beane special purpose acquisition company RedBall having been talking over a 25 per cent stake. That was moved away from in December 2020 and talks continued privately until the March 2021 deal was signed. It was a quick pivot because the two parties were aligned and RedBird’s track record of delivering scalable capital could address a need that FSG had, which was to grow the business and push ahead with team investment and acquisitions during the financial uncertainty of the pandemic.
Hopes remain that investment could be forthcoming by the end of this summer, although there are no certainties on this. But the position of Liverpool is unique to a very small number of clubs in European football in that they can be picky because they have leverage and little need to cede more control than they need to. A need has to be satisfied that is linked to future growth when investment is taken on board, that is the nature of the beast and the business, although it sits uncomfortably in football at times.
Little has materially changed since Henry’s comments in both February and March. It remains a part of the FSG agenda, but they are unlikely to follow anyone else’s timescales but their own.
