Fenway Sports Group are already guaranteed a monumental return on their investment at Liverpool, but John Henry and his colleagues in Boston do not rest on their laurels.
FSG have owned Liverpool since paying about £300m for the club in 2010. If they sold tomorrow, the consensus in the football finance industry is that they would be looking at £4bn at the very least.
Regardless of where Liverpool finish in the Premier League this season, that value is baked in.
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The explosion in the club’s value over the last decade and a half is down to several factors.
Tom Werner was clear about FSG’s vision from the start
If and when Fenway leave, who do you want to see take over?
TalkingPoints creative featuring FSG and Liverpool chairman Tom Werner
Tom Werner TalkingPoints creative Credit: Winslow Townson/Getty Images
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At Anfield, FSG have supersized commercial and matchday income by hiring well, implementing a sophisticated strategy, upgrading Anfield and leveraging the club’s brand internationally.
Beyond Merseyside meanwhile, the growth in the value of Premier League and UEFA TV rights means Liverpool will soon be aiming for £300m-plus in broadcast revenue every single season.
In the spring, the club will release the accounts for the title-winning 2024-25 campaign. Expect to see Liverpool become one of only a handful of teams in the history of the game to break the £700m turnover barrier when those figures are made available.
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However, the paradox that some analysts have pointed out when it comes to Liverpool’s multi-billion pound valuation is that, as fast as revenues have risen, costs are rising faster.
Liverpool owner John W. Henry and his wife Linda Puzzuti after the Premier League match between Liverpool FC and Wolverhampton Wanderers at Anfield on May 19, 2024 in Liverpool, England
Photo by James Baylis – AMA/Getty Images
FSG are one of a tiny group of owners who have not had to invest any of their own money in football operations to date, but the club generated a £70m operating loss in their last set of accounts. With the wage bill and transfer amortisation rising perpetually, especially after spending £250m net in the summer, Liverpool are a long way from generating consistent, chunky profits.
On the other side of the pond, where FSG own the Boston Red Sox and until recently the NHL’s Pittsburgh Penguins, the system is set up so that profits are virtually guaranteed.
As quoted by the Financial Times last week, Arctos co-founder Doc O’Connor, whose company owns a five per cent stake in FSG, said: “You have this very predictable, durable, sustainable growth [in the US]. The environment in European football is very, very different from North American leagues.”
Arctos, who also own stakes in Paris Saint-Germain and Atalanta, were recently sold to the US investments firm KKR, who control over £500bn worth of assets worldwide.
Most of the value of the £1bn deal, though, was wrapped up in some 15 investments it has made in the NFL, NBA, MLB and NHL, not Liverpool or its other outposts in European football.
So, can European football ever catch up?
A general view of Anfield
Photo by Andrew Powell/Liverpool FC via Getty Images
“The NBA and NFL were designed as television projects with a sporting angle, whereas football is a sport which has become a televisual event over time,” says University of Liverpool football finance lecturer Kieran Maguire, speaking exclusively to Rousing The Kop.
“Some of the core issues, such as having 45 minutes without advertising breaks, are not going to go down well with investors.
“On the flip side, with the NFL and NBA, it’s America or nowhere else. In any negotiating framework, you have two parties within a balance of power. In the US, the balance is tilted towards the owner because they can treat the staff as commodities, whereas there is a greater degree of player power in football because you can go to Saudi Arabia or another top European league.
“In America’s favour, there is a hive mind of profit maximisation in sport, but that hive mind doesn’t exist in football because you have got people who bought into the industry because they want on-pitch success, either because they are fans of the club or they are looking for some kind of soft power return, as we have seen with Newcastle, Man City and Chelsea. Those two ownership models can’t work together to deliver for everyone, so you end up with an adversarial approach like that we have at present.
Are you comfortable with reducing the size of the Premier League?
Some experts think it's what FSG wants…
FSG principal owner John Henry looks on
Photo by James Baylis – AMA/Getty Images
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“The only way that Liverpool’s value can now go up is if the likes of FSG manage to extract more and more concessions from the governing bodies in football.
“As far as domestic football is concerned, they would ideally reduce the Premier League to 16 teams, though they would be happy with 18 teams and scrapping the League Cup. So you’ve freed up eight slots in which you can go and play a match of greater value, which is either exhibition football or high-brow European football.
“One of the issues FSG have is that the Premier League is too competitive. They can’t put out a bunch of kids and roll over teams in the bottom half. You have to have a big squad, which means you have a bigger wage bill.”
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