FSG are ready for their next big Liverpool move as £388m truth emerges - Now soccer
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FSG are ready for their next big Liverpool move as £388m truth emerges



Liverpool have managed to achieve huge financial growth by being successful and compelling at the right time.

For Liverpool, their success on the pitch during the last decade could not have come at a better time.

The Premier League has for some years been the most dominant, and lucrative, in Europe when it comes to not only success but winning hearts and minds of global fans. Yet it is only in more recent years that it has kicked up a notch.

When the Premier League managed to finalise its 2022 to 2025 broadcast cycle for domestic and international rights they delivered more than £10bn. While domestic rights were rolled over during the pandemic at the same value, seen as a win at the time given the financial uncertainty, the international rights grew in value by more than £1bn, becoming more valuable than domestic rights for the first time.

The arrival of Jurgen Klopp as Liverpool manager in 2015 heralded the beginning of a remarkable new chapter in Reds history as the club won the UEFA Champions League, reached the final on two other occasions, ended a 30-year wait for an English league title by clinching the 2020 Premier League, and picked up additional silverware in the FA Cup, Carabao Cup, UEFA Super Cup and FIFA Club World Cup.

That success, and the manner in which it was achieved with Klopp’s likeable demeanour and largely ‘heavy metal’ playing style enabled Liverpool, a club that already had global appeal, to leverage their position to grow as a business under Fenway Sports Group, the owners since 2010. Greater exposure globally, new audiences becoming interested and engaged in the Premier League and marketable athletes such as Mohamed Salah all made for a lucrative business.

The Premier League, even over the past decade, has changed dramatically in terms of the money that flows into the competition and to its 20 member clubs. Analysis from football finance expert Swiss Ramble has assessed how each club has fared across key financial metrics between 2012/13 and 2021/22, the most recently published and publicly available accounting period.

In 2012/13 Liverpool finished seventh in the Premier League under Brendan Rodgers. The Reds saw exits at the fourth round stage in both the FA Cup and League Cup, while the Europa League would see them reach only the last 32 stage, defeated on away goals over two legs by Russian side Zenit Saint Petersburg.

Financially, the picture was very different than it is now. Revenues for the Reds for 2012/13 stood at £206m, wages at £131m and amortisation (how transfer fees are accounted for with the guaranteed fee divided by the length of the deal remaining) standing at £37m. In terms of revenue against both wages and amortisation for that period, the Reds were net positive to the tune of £38m.

For that period, the Reds had the fifth highest revenues in the Premier League, behind Manchester United (£363m), Manchester City (£271m), Chelsea (£256m) and Arsenal (£243m). The net position for the clubs when taking into account revenue, wages and amortisation saw United at plus £141m, Manchester City at minus £43m, Chelsea at plus £24m and Arsenal at plus £47m.

In the decade that followed these figures, Manchester United (who won the top flight crown in 2012/13) and Arsenal have failed to win a league title or the Champions League, while Manchester City, Chelsea and Liverpool have won both league titles and European football’s most glittering and elite knockout club competition.

Manchester United have remained a commercial juggernaut, although there have been signs in more recent times that the notion they didn’t need success on the pitch to be a booming business may have been flawed. Manchester City, who were recently charged with more than 100 alleged breaches of the Premier League’s profit and sustainability rules during the last 10 years, have been the focus of scrutiny as to how they have managed to grow revenues to such an extent while lacking the kind of global appeal that Liverpool, United and Arsenal possess.

Fast forward to the 2021/22 accounting period, which for Liverpool took them up to the end of their financial year in May 2022, and the level as to which the Reds have been able to leverage their on-pitch success in comparison to their rivals such as United and Arsenal, whose 1990s and 2000s dominance came when the Premier League wasn’t so financially bountiful, is stark.

For 2021/22, on the back of a season when Liverpool reached the Champions League final, finished second in the Premier League and won both the FA Cup and Carabao Cup, the Reds’ revenues stood at a club record £594m, a rise of £388m, while wages had climbed £235m to £366m. Those two rises were the largest increases across those two metrics of any of any Premier League team for the same period.

Liverpool’s net position for the 2021/22 period when taking into account wages and amortisation against revenue was plus £87m. In contrast, Manchester United’s had fallen to minus £91m and Chelsea’s to minus £44m. Manchester City’s net position was £161m, by far the largest in the Premier League, with Tottenham Hotspur second at £129m and Liverpool third.

Liverpool’s player amortisation figures had risen by 178.4 per cent over the decade, with amortisation at £103m for 2021/22. That was the fifth biggest in the Premier League for the most recently published financial year but in terms of growth it came in at £66m, the same figure as Aston Villa over the time period.

Revenues, however, saw Liverpool see the greatest rise, a jump of £388m, although that revenue rise helped to finance the significant rise in wages, up £235m, a figure that was the highest increase in the Premier League for the period, 15 per cent higher than the next largest, Manchester United.

Other notable metrics included the amount of owner funding received by the club between 2012/13 and 2021/22. Owner financing was defined as owner loans plus share capital less dividends. Only the Glazer family, owners of Manchester United, took dividends out of the club, something that has seen £177m head out of the football club during the last 10 years directly into the pockets of the owners.

FSG’s approach of constructing a financially sustainable business model that provides the foundation for on-pitch success has been both lauded and derided in recent years. Last season’s poor performance, where the club finished fifth and missed out on the Champions League for the first time since 2016/17, saw the Reds owners face the ire of sections of the fan base over a perceived lack of investment into the first team.

A look at the amount of owner financing of Premier League teams over the past decade puts Everton, beset by financial trouble in recent years, at the top of the list with owner Farhad Moshiri having poured in £678m, with a significant chunk of that sum having gone towards the new stadium build at Bramley Moore Dock, slated to open during the 2024/25 season.

Next on the list was Chelsea at £577m, followed by Manchester City (£515m), Aston Villa (£492m), Brighton & Hove Albion (£356m), Leicester City (£340m), Arsenal (£211m), West Ham United (£173m), Leeds United (£140m) and Wolves (£131m). Liverpool sat 11th in the Premier League list when it came to the amount of financing that had come directly from ownership, with £118m coming from FSG. Of the so-called ‘big six’, that placed them fourth, with Tottenham Hotspur having received £97m of owner financing in the last decade.

FSG provided funding for infrastructure development of both the Main Stand and Anfield Road End. The club has had less reliance on external financing options over the past decade which has resulted in lower interest payments heading out of the club. Liverpool paid £25m in interest from 2012/13 to 2021/22. In comparison, Manchester United have racked up £278m in interest repayments, with Arsenal next at £130m and Spurs’ new stadium build seeing them third with £120m. Liverpool’s overall interest payments were ninth on the overall list.

One metric that has become a focus for fans in more recent times is that of transfer net spend, where the cost of acquiring players is offset against the sums received through selling players on. It has been something that Liverpool have been successful at under FSG, with notable deals such as the £142m sale of Philippe Coutinho to Barcelona in 2018 seeing the Reds land a £134m profit.

Since 2012/13 up to 2021/22, Liverpool rank fifth on the Premier League list when it comes to net spend, with a figure of £572m. That is some £562m less than Manchester United’s net spend over the same period which was £1.134bn. Manchester City were next on the list at £1.04bn, followed by Arsenal (£748m) and Chelsea (£612m). To put Liverpool’s net spend in some context it comes out at £81.7m per trophy, while Manchester United’s stands at £189m per trophy.

In terms of financial health, Liverpool are one of the best positioned in European football having managed to grow the business through a period of on-pitch success. But the factors around such a rise, with new markets and new generations ready to engage with the Premier League, should act as a prompt for what they will need to do to ensure that they continue to be successful, with one hand washing the other when it comes to how FSG operate the Reds. If the team is successful, so too is the business, and that will be reflective in the valuation rise of the team itself for when the US owners do decide to call it a day.

FSG are in the business of value creation around their teams and franchises, and that is achieved through making sure there is a compelling and successful product, whether that is on the pitch, the field or the ice. Valuations are continuing to rise, and will do so for some time yet. But with new markets now engaged, such as the United States where football is starting, at long last, to make serious strides, then making sure that Liverpool are front and centre of the conversation will be of paramount importance for FSG, and that, as has been demonstrated through the past decade, is best served by being successful on the pitch first and foremost.

To achieve that will require significant investment at a time when disruptive market forces such as Saudi Arabia are starting to emerge to challenge the established elite.

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