Fenway Sports Group chief executive Sam Kennedy says that winning is core to the business model that the owners operate at Liverpool and their other sporting teams.
The Reds owners are currently on the lookout for outside investment as they seek to recapitalise the business, engaging US investment banking giants Goldman Sachs and JP Morgan to facilitate the search and moving FSG partner and key Jurgen Klopp ally Mike Gordon over from his involvement with Liverpool to lead on the search.
FSG's initial desire to test the market was born from what was perceived as an overvaluation for Chelsea when they were sold to the Todd Boehly/Clearlake Capital-led consortium midway through last year. That was an auction with a strict timeframe given the sanctions placed upon former Chelsea owner Roman Abramovich, with an expedited sale needed to stop the London side from falling of a financial cliff edge.
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The desire of some minority FSG partners to potentially divest their interest held for a long time also encouraged FSG to test the market.
Many links have been made since it was first reported by the Athletic in November that FSG were open to a partial or full sale, although well-placed sources with knowledge of the situation have continued to maintain to the ECHO that no bid has been received for the club to date, nor has there been serious high-level talks over stake-holding.
While a full sale cannot be ruled out if a bid comes in for the club that meets the lofty valuation held by FSG, one that may be impacted for better or worse by the potential sale of Manchester United in the coming weeks, it has been maintained throughout that the preferred course of action was a minority sale to a partner that could deliver growth capital for a rebuild and also expertise to grow the business. It is also possible that any minority partner takes a smaller stake initially and accretes it into full ownership over time.
It is that continued growth of the business that is key to FSG, with company CEO Sam Kennedy stating that winning is central to the continued financial success of the teams that they own, with Kennedy hinting at the kind of investor that they could partner with.
Speaking on the Capital Allocators Private Equity Deals Podcast with Ted Seides, Kennedy said: "We are a platform company designed to win championships with the teams and clubs it owns and operates. That's first and foremost because the business flows and the value creation flows from winning. That is our north star, winning championships and being involved in markets that have incredibly avid fan bases that care deeply about their teams.
"We have a revenue first mentality here where we are trying to generate as much revenue as possible from every source, and then we have been re-investing it into the product on the field and into the venues in which we occupy.
"Fenway Sports Group as a company has great revenues and growth and profitability, but the individual sports team assets have years that are up and down, that are break-even, that are cash losses, and I think it takes a really special type of investor, someone who really has gone into the space and who understands the space to see where the value creation comes from. It's not a quarterly look at EBITDA or cash flow, it's really building long-term equity value through investing those revenues back into the product.
"We look at what moves the needle. Primarily it is big blue chip assets in major markets that hopefully need to ramp up the revenue engine but also the competitive engine on the field, on the pitch, on the ice or on the track. We are passionate about it."
While Liverpool sailed close to what would have been an unprecedented quadruple last season, ending up with the FA Cup and Carabao Cup after making a Champions League final and having been some 15 minutes away from second Premier League title, this season has been one of immense struggle, one that has seen the focus placed firmly on the ownership and a perceived lack of investment into the on-pitch product.
Liverpool's midfield issues this season have seen questions return around missed opportunities in the transfer market, and their lack of spend compared to rivals has seen the ownership face criticism for their approach, which has long focused on finding undervalued talent and also selling players at an inflated price to enable them to offset some transfer spending costs.
FSG are likely to have to spend heavily this season given the need for a pretty significant overhaul of playing staff in certain areas, as well as maintaining the level of depth needed to fight on all fronts. But there remains uncertainty around hopes of a spot in European football's most lucrative knockout competition next season, a competition they won in 2019 and one where they have reached the final in three of the last five years.
Whatever happens with the remainder of the season, and if FSG decide to remain in situ and press ahead with a preference to sell a smaller stake in the club, then there will need to be a demonstrable commitment to winning again when this summer comes around.
They still have their greatest asset in Klopp, but they will need to re-tool in key areas, and that won't be cheap.
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