British-Indian businessman Amit Bhatia is to become Liverpool’s new vice-chairman and take a place on the board in return for a minority stake in the 20-times English football champions.
He is to be joined on an expanded board by Elaine Saverin, the wife of Facebook co-founder Eduardo Saverin, and Bryan Baum, who is representing Amazon founder Jeff Bezos rather than Bezos becoming a board member himself.
The transaction documents provide options and flexibility for how a relationship may evolve over time, which effectively means that Bhatia would be in the driving seat to purchase a larger shareholding should FSG wish to sell more of the club in the future. For now, FSG will retain majority ownership and there is to be no change in the day-to-day operation of Liverpool. The transaction is not a direct capital raise for the club, or an indication of a change in transfer strategy.
The deal remains subject to approval from the new Independent Football Regulator and those involved must pass the Premier League owners’ and directors’ test. That could take up to 90 days.
Liverpool announced record revenues of £703million in the last accounting period, spending about £550million on new signings for the team over the past 14-months. The club had not been seeking investment out of financial necessity. Rather, FSG believe the opportunity stood out due to the calibre of people involved and the experience, relationships and global links they can bring to help grow the club.
There is an expectation that the consortium will open up networks in India and across Asia and support Liverpool’s long-term growth ambitions by bringing together experts from across global business, technology and investment.
Increasing the club’s turnover would then enable more to be spent on the team given the Premier League’s squad cost ratio regulations. These limit the spending of top-flight clubs to 85 per cent of their football-related revenue and net profit/loss from player sales. In addition, those who play in European competition, as Liverpool invariably do, must fall in line with Uefa’s 70 per cent cap.
Bhatia, the son-in-law of Indian steel magnate Lakshmi Mittal, has been speaking to high-ranking FSG figures for more than a year, with his interest having been facilitated by Corestone Capital Advisors, who introduced the relevant parties. He is viewed by FSG as the primary partner and has subsequently put together the group of high-profile investors.
1982 Holdings comprises the Bhatia and the Mittal Family Trusts, K5 Sports, with Bezos as the lead investor in the K5 Sports fund, and EE Capital, the family office of Elaine and Eduardo Saverin.
FSG president Mike Gordon, who has taken on more of a day-to-day role in Liverpool following the resignation of chief executive of football Michael Edwards, said: “Liverpool has always been built by thinking beyond one season and making decisions with the club’s long-term interests in mind.
_Reaction from supporters’ group_
The Liverpool supporters’ group Spirit of Shankly (SOS) has already contacted the new football regulator and is seeking engagement with 1892 Holdings and Bhatia, who was previously involved with fans’ bodies at QPR.
“As Liverpool supporters, we need zero reminder of the importance of good governance and club ownership,” said SOS, in a reference to the tumultuous regime of Tom Hicks and George Gillett, which preceded FSG’s tenure. “We trust that the current owners FSG realise this, and have carried out their own due diligence because we as supporters will most certainly do our own.
“It’s important we take time to understand fully the long-term implications this deal will have for our club’s ownership and at the same time what it doesn’t mean — wild speculation about transfers and spending helps no one. It is vital for the game in general that football clubs are run sustainably, as LFC has been, and not an arms race funded by mega-rich individuals or state-backed entities.”