Fenway Sports Group are set to give the green light for Liverpool to smash the British transfer record
FSG chief John W. Henry.
FSG chief John W. Henry.(Image: Carl Recine/Getty Images)
As Liverpool close in on a deal for German superstar Florian Wirtz there has been a shift in narrative among rival fans, now criticising a summer of heavy spending for the Reds.
For so long under the ownership of Fenway Sports Group, Liverpool were something of the outliers when it came to transfer spending in the market, preferring to focus on the underlying data and sniff out a bargain for players with a low price but high ceiling.
The perceived lack of ambition in the transfer market by FSG, which is always linked to the price paid for players and never seems to take into account the actual impact, has been something that has been a hot topic of discussion every single transfer window.
Indeed, the Reds posted the lowest gross transfer spend of all 20 Premier League clubs for 2024/25 at £36m, with only the arrivals of goalkeeper Giorgi Mamardashvili, who stayed with Valencia for an extra season, and a cut-price deal for Federico Chiesa, who would be a bit-part player.
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But Liverpool won the title. So who really cares about how much was spent to get there, right? The success of the Liverpool strategy was borne out through last season’s triumph and bodes well for what is to come under head coach Arne Slot.
This summer the plan will have to change, with a new right back in £30m Jeremie Frimpong and a new left back, set to be £45m Milos Kerkez from Bournemouth, to arrive. A £75m outlay on two key positions, with Trent Alexander-Arnold’s departure and Andrew Robertson’s advancing years forcing moves into the market.
The move for Florian Wirtz of Bayer Leverkusen isn’t like-for-like, it isn’t plugging a gap, nor is it trying to find a player with a high ceiling that they can improve and find resale value for.
Liverpool, while not best pleased to have only received £10m for a player they produced, knew that the value in Alexander-Arnold staying even though it had become apparent his long-term future lay away from Anfield, was what he could aid in terms of the competitive picture. The team was better with him in it, and that meant the chance to achieve lucrative success was greater.
The stance on Luis Diaz in the face of interest from Barcelona and Saudi Arabia is similar, with the club more willing to lose him on a free and get value from him being part of the team, better aiding the pursuit of success, is another line from the playbook. The same could be said for Wirtz if his potential £126m deal goes through.
That is an investment in the football side of things, which in turn is an investment in the business. The two go hand in hand. It was ever thus.
It’s hard to make a case for leaping to the defence of billionaires, but much of the FSG narrative has been flawed for some time. The idea that Liverpool was just a cash cow to be milked and success on the pitch didn’t matter was erroneous. FSG want and need Liverpool to be successful, it aids every facet of the business in a positive way when they are. To ensure that continues to be the case there are moments when investments have to be made to build from a position of strength, that is the case with any business. It is about growth.
It may be an unpopular statement to make for some fans who require stronger hits of dopamine from transfer activity than others, but the list of those who ‘own well’ in the Premier League and beyond is not extensive. Liverpool sit very near to, if not at the top of that list.
Successful businesses are ones who have their blueprint mimicked by others who want to achieve the same level of success. To talk about Liverpool as a ‘business’ seems rather crass, but to separate the passion and fandom that exists for what goes on on the pitch, in order for good things to happen during a season, great things must happen off it.
Matchday revenue has doubled in the last 10 years as the improvements of Anfield paid dividends, while commercial revenue has not far off tripled.
Football has, for better or worse, evolved. It is part of the entertainment industry now. In order to make a cinematic masterpiece that everyone wants to pay to watch and that stands the test of time you need a visionary director, you need world class actors, you need the best videographer, production designer, camera operator, showrunner, film editor and sound engineer. You also need to finance it.
All major sports teams now look globally. Whether it be to appeal to new fans in new demographics, or to new commercial partners around the world, the game is global, and no domestic league on the planet is more so in tune with that than the Premier League. As champions, Liverpool are at the pinnacle right now.
Back in 2022, FSG were reported to have put Liverpool up for sale. But from very early on, as ECHO sources close to FSG in the US had maintained throughout the process, the idea had shifted to try and find out what the whole price of the asset was so that they would know how much they could sell a slice for, which they did to Dynasty Equity in September of 2023.
The move came two years on from the 2020 Premier League win, out of which FSG were criticised for a lack of action in the transfer market. The argument around that, the ECHO was told at the time, was that spending heavily in the midst of a pandemic when there was so much uncertainty around the sporting ecosystem would have been foolish.
The Reds have now won the competition once again, with no such concerns over the state of the ecosystem. What has happened? Well, signing arguably world football’s most in-demand playmaker for a British transfer record is a statement of intent, and one that reaffirms what has been the case with FSG for some time, that they are in for the long haul with Liverpool.
Even with the hiring of Slot last summer that should have been instructive. He wasn’t a cheap option, he was the right option, and much deliberating went on around who would be the man to succeed Jurgen Klopp. As they have done for much of their time at Anfield, FSG made the right call when it comes to making hires. Good people in the right positions lead to success, you only need to look at the managerial churn at Manchester United, Chelsea and Tottenham Hotspur to see how negative that can be.
FSG is a portfolio company. All of their assets, sporting and otherwise, sit under the umbrella of FSG but have total independence when it comes to operational control.
According to Forbes, Liverpool is now the most valuable asset ($5.4bn) that FSG has, and in a growth market too. It has surpassed the value of the Boston Red Sox ($4.8bn). There is still bullishness over values of the biggest Premier League teams, while in the US there is likely to be some stagnation given the incline it had been on and struggles for the likes of baseball to still remain as relevant as it had been in the face of changing consumer habits.
The football is working at Liverpool, and that is really all fans should have to care about, but the value of having a strong business, where there are still growth opportunities, shouldn’t be overlooked when it comes to predicting how the Reds might be able to sustain success and bring in the money that allows them to do that.
Speaking to the ECHO in April, chief commercial officer Ben Latty spoke on the plans to make the club “the most impactful partnerships platform in sport” when it came to commercial activity, and the success that has been seen with Liverpool off the pitch in recent seasons has also not gone unnoticed by Gerry Cardinale, the founder and managing partner of RedBird Capital Partners, the New York-based investment fund that took an 11% stake in FSG back in 2021.
Speaking to CNBC Sport in the US last month, Cardinale, whose firm has a controlling ownership stake in Italian giants AC Milan, said: “Take Fenway Sports Group.
“That was the one time in my career where I decided to be a junior partner and not the primary partner. It was because I had such a strong conviction around the quality of that ownership and management team.
“They were the first to really diversify and create a sort of holding company platform. You see the results at Liverpool – they speak for themselves.
“If you ask anybody today what investing in sports is and they all say it’s taking minority stakes in teams. Of course, my crowd, [private equity], they jump in because they see a business opportunity. But the problem with my crowd is that KPIs, their metrics for success, is not about building businesses, it’s about raising funds, right?
“So ultimately, at the end of the day, the guys that own the IP [club owners], they’re not as well served by guys who just want to come in and raise funds as their KPI.
“Raising funds is something I need to be able to invest scalable capital. But what really gets me excited is a partnership with a Liverpool or a Fenway and finding ways to build new companies with terminal value appreciation around the IP. So, for the rights holder, they don’t need to sell a stake.”
Cardinale’s view on building business around intellectual property should be instructive as to the wider FSG plan for Liverpool.
FSG have already been clear they wanted to add another football club with the creation of Michael Edwards’ role as CEO of Football for FSG, tasked with finding another club. The plan for another team would be to aid the pursuit of competitive success for the Reds through maximising recruitment opportunities.
But there is much room for growth for Liverpool, and FSG knows this. It is a footballing powerhouse both domestically and internationally, it has a story to tell and that is huge for bringing on board new fans and engaging them in new ways. Look at some of the commercial partnerships in markets like Japan, such as Kodansha, where the focus is storytelling.
Football is the world’s game, and the Premier League is effectively a global league given the interest. That is a hugely valuable piece of IP, and something that is continuing to accrete value. Liverpool has enormous scarcity value, and there hasn’t been an appetite for FSG to part ways with it for some time, as they know the valuation still has plenty of road to travel, irrespective of what happens with traditional broadcast rights in the next few years. The club reduced its reliance on that some time ago, and continues to do so.
The move for Wirtz should speak to the longer-term plan for FSG. It isn’t about making a statement, it’s about signing a player that will enhance their chances of turning a Premier League title into several, and helping the Reds continue to grow a global brand.
The football is all that matters at the end of the day. But for that to be where fans want it to be, everything else has to be the best in class. That requires some heavy investment from time to time.