For the foreseeable future, Fenway Sports Group will be at the Liverpool helm.
The Reds owners, who acquired the club in 2010, kicked open the door to a possible sale back in November, although that swiftly turned to a search for outside investment into the club in a bid to recapitalise the business ahead of what is anticipated to be an expensive period, not least due to a necessary team rebuild.
When speaking exclusively to the ECHO back in March, FSG chief and Liverpool principal owner John Henry insisted that FSG’s commitment to the Reds remained "as strong as ever" and that potential investors had been identified, with that process set to advance in the coming months.
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When FSG’s intention to sell part of their stake in Liverpool was announced it led to a series of links, from Qatar’s sovereign wealth fund to Indian billionaire Mukesh Ambani.
Another narrative that formed early on was that the motivating factor behind the move was that FSG wanted to buy an NBA team, and in releasing value from their stake in Liverpool they would go someway to meeting the likely $3bn-plus sticker price that will come with an expansion franchise for basketball’s elite competition.
At present there are 30 NBA teams but the league’s commissioner, Adam Silver, has been open about the fact that the NBA would look toward expansion, potentially adding another two teams. Of the markets likely to get a team it is Seattle and Las Vegas that have been the frontrunners for some time.
FSG had looked at the Minnesota Timberwolves a couple of years ago, while the Phoenix Suns being on the sale block in the last 12 months would also have piqued interest. But it is Las Vegas where FSG want to pitch up a team eventually, and with FSG partner LeBron James, 38, wanting to helm that particular project when he eventually retires, it is highly likely that the Liverpool owners will be at the very front of the queue when the NBA seeks expressions of interest from would-be ownership groups.
But expansion is not imminent, nor is FSG’s desire to raise the capital that they would need for such an endeavour.
There was an idea that had been kicked around that James wanted to play his final season at an expansion team he ran, with his son, Bronny, who only last week committed to play college basketball at USC. But given the time frames involved, where the NBA needs to agree a deal for its next TV cycle next year, and the logistics involved in creating an expansion team, that is something that seems far-fetched.
According to people familiar with the matter in the US, who the ECHO has spoken to, it is highly unlikely that any new teams arrive on court and ready to compete in the next four years, although the process behind just who will be behind those teams when the do arrive will happen a lot sooner.
Sources have told the ECHO that the Liverpool investment search has no link to any interest that FSG might have in an NBA expansion franchise. FSG have made no secret of their desire to add an NBA to their portfolio, which as well as the Reds consists of the Boston Red Sox (MLB), Pittsburgh Penguins (NHL) and RFK Racing (NASCAR).
Liverpool chairman Tom Werner last year said: “(Owning an NBA team) is certainly something that we would look at. We don't have a secret piece of paper that says, 'let's go acquire an NBA team'.”
It could well be that FSG gets to NBA ownership by linking up with other partners, with private equity now allowed to be involved in the NBA. One of FSG’s partners, Arctos Sports Partners, has several minority investments with teams in the NBA.
But it isn’t something that is imminent, nor is it something that is impactful on FSG’s decision to sell some of their stake in Liverpool.
The decision to seek investment and sell a piece of the club to another partner was borne from the desire to recapitalise but also to present themselves with an easier exit route in the future. By bringing on board a partner with whom they have a simpatico relationship, who can deliver the growth of the business but also possess the potential to accrete a minority stake into full ownership, allowing FSG to realise the value proposition that they feel is still to come with the Reds, it reduces the burden of risk in the here and now but also presents them with a route to a sale in the coming years.
Speaking to the Boston Sports Journal earlier this year, Henry, who ruled out a full sale of the Reds, stated that owners’ time at Liverpool would end at some point.
Henry said: “Will we be in England forever? No. Are we selling LFC? No. Are we talking with investors about LFC? Yes. Will something happen there? I believe so, but it won't be a sale. Have we sold anything in the past 20+ years?”
FSG’s investment in Liverpool has always been something of an outlier. The Reds' owners have the vast majority of their portfolio based in North America, with the sporting structure around US sport providing far more cost certainty given the absence of the promotion and relegation system, the existence of salary caps or luxury tax thresholds, and the absence of the Wild West that is the European football transfer market.
FSG had looked at growing their portfolio at one stage to include a number of clubs in a multi-club model, although that is something that they are not, at present, pursuing.
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