While potentially having one eye on an exit strategy at Liverpool, Fenway Sports Group remain focused on the Reds' growth both on and off the field.
Liverpool's revenues have risen significantly since FSG acquired the club, when turnover stood at £184m at the end of the 2010/11 accounting period. Through a combination of greater commercial deals and hugely increased media rights, revenues have risen to what is expected to be around £600m for the 2021/22 financial year, something that would represent a 226 per cent increase over the past 12 years.
Liverpool have been able to leverage their success on the pitch and their huge global fanbase and turned it into major revenue streams that have been able to support the vastly increasing wage bill over that time, as well as investment into the first team and the club's infrastructure.
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Liverpool are valued by Forbes magazine to be around the £3.7bn mark, a figure only slightly higher that the $4bn (£3.4bn) figure that the ECHO had learned from US sources that the club had been looking at to begin any kind of talk with interested parties. Even selling at the lower end of those two estimates, a return on investment of more than 1,000 per cent would represent a remarkable piece of business for FSG, whose principal John Henry made his fortune as a commodities trader, where the idea is to buy cheap and sell high.
Major sponsorship deals have been struck in recent times, with the renewed front of shirt deal with Standard Chartered understood to be worth a little over £50m per year, while through the structure of the Nike kit deal, where a guaranteed £30m per year is aided by a 20 per cent slice of the sale of Liverpool/Nike branded merchandise globally, could net the Reds as much as £70m per year on some projections for the coming seasons.
Even the sleeve sponsorship deals have grown, with the current deal with Expedia, which runs until the end of this season, pegged at around £10m per year for the Reds, an increase on the £8m per year deal that had been in place with Western Union prior to the 2020 Expedia deal being struck.
But the landscape is changing. Manchester City's commercial revenues outstrip all of their Premier League rivals despite a far smaller slice of the global football fanbase, commercial revenues that have been helped along the way in no small part to the simpatico nature of some of the business relationships that exist in the MENA region, where the owners, City Football Group, have considerable reach and ties.
Newcastle United are also now ready to make their mark. The Magpies were taken over in a somewhat controversial move by the Saudi Arabian Public Investment Fund (PIF), with PIF serving as the sovereign wealth fund of Saudi with assets of around £300bn.
Their pockets are deep and their ambitions large for the Magpies, and while they have been somewhat reserved since their acquisition of the club in terms of their approach to recruitment they have shown a commitment to structure and strategy and their appointment of Eddie Howe has worked wonders thus far, the club sitting third with just one defeat in their opening 15 games heading into the winter break for the World Cup.
For a club that were viewed as having to be mindful of Financial Fair Play rules, something that was thought would mean a slow rise to success, they have taken on the challenge of being disruptors of the rather cosy 'big six' with relish. And their efforts to grow and be able to spend at key times, most notably next summer, are likely to be aided considerably by the deals that they are starting to strike, where their strong links with the MENA region are starting to tell.
The club brought in Noon.com as a sleeve sponsor during the summer, having placed a £7.5m figure on their inventory, something that was agreed as fair market value by the Premier League. The value of the deal with Noon, a MENA-based ecommerce platform, outstrips that of the club's main shirt partner at present, Chinese betting firm FUN88, which has a reported value of £6.5m per year, according to the Chronicle.
One of the first acts of the new Newcastle owners what they arrived was to review commercial deals. As a result of that review they decided to end their agreement with FUN88 early, the firm to end their relationship with the Magpies at the end of this season.
What comes next will undoubtedly be a club record for Newcastle, and one that provides some clues as to the level they will be able to leverage their relationships with major Middle East business in the coming seasons, albeit having to be mindful around the regulations related to 'fair market value' for a team outside of the 'big six' by the Premier League.
SAUDIA, the national airline of Saudi Arabia, have already linked up with Newcastle over the club's winter trip to Riyadh, with Magpies CEO Darren Eales and SAUDIA Group's CMO Khaled Tash holding up sponsorless Newcastle shirts. It remains to be seen whether the airline are the next sponsors of Newcastle, but it is likely that the value placed upon the deal will be significantly more than what the club could previously command, and likely over a longer term.
There are also potential moves that could be made with kit manufacturers, currently Castore, as well as stadium naming rights, while the other sponsorship opportunities could arrive through naming rights for the training ground and advertising space throughout St James Park.
PIF see Newcastle as being full of opportunity to scale, particularly given the low £305m that it took to get the deal done. When viewed against a backdrop of club valuations of £2.5bn for Chelsea, £3.4bn for Liverpool and the Glazer family reportedly wanting £6bn plus for Manchester United it offers the chance for value for money.
Newcastle are priming themselves to be challengers consistently in the coming years, and with FSG eyeing the exit, or at least wanting some fresh capital to be brought into the business, the challenge of Liverpool to compete with Manchester City has been hard enough, the prospect of having another major challenger, especially having been unsuccessful with efforts for the European Super League and Project Big Picture, suggests the Liverpool owners feel it is going to become an ever costlier exercise to remain at the summit year in, year out.
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