“The Abramovich era had arrived and I knew I could never compete”. Those were the words of former Liverpool FC chairman David Moores when he explained why he sold the club to George Gillett and Tom Hicks in 2007.
Change “Abramovich” to “state property” and those could be the words of John Henry today.
The headlines had been made recently then a report showed what the net owner financing of Liverpool is like over the past five years minus £37 million. Hence incendiary reactions to why Liverpool’s owners are taking money out of the club.
Of course, the reality is much simpler, even if it’s still not what fans would like to see. That money is money paid back by the club to the owners for loans they made to expand the stadium. Exactly why those loans are paid back during the day the redevelopment, and not once the Anfield Road Stand is completed and the additional revenue generated from it, is another matter.
The reality is that the debate over financing Liverpool’s owners is actually very, very simple: FSG implemented a self-sustaining model at Liverpool FC.
It’s that simple. Liverpool FC finances all affairs of Liverpool FC. The owners don’t put any money in it and they don’t take any money out of it.
Now that seems very sensible. A sports organization uses the money it generates to fund the sports organization. Isn’t that exactly how it should work?
Well, yes and no. It’s exactly why FSG first bought Liverpool FC, believing that UEFA and Premier League Financial Fair Play rules would mean all clubs should be run in such a way.
FSG significantly increased Liverpool’s commercial revenue, making more money available to players, while overseeing Anfield’s expansion to over 60,000 and the new training ground. Infrastructure projects that had crippled the club decades earlier.
The problem is that if FSG don’t put any money into the club during ownership, what exactly will happen if the club they bought for £300m is now valued (by Forbes) is sold for more than £4.3 billion?
When FSG received an investment of £533 million from RedBird Capital Partners in 2021 – an amount impacted by Liverpool FC being part of FSG’s portfolio – there was no additional investment in Liverpool FC.
So while they don’t take money directly from the club every year, they benefit significantly from the club. And they will win exceptionally if/when they sell.
When Moores reluctantly sold the club in 2007, he did so because he knew the club could not compete with the new wealth that had ushered in Roman Abramovich’s era at Chelsea. Liverpool are now in the same position. FSG, through their self-sustaining model, cannot compete financially with Man City, Newcastle United, Man United and apparently even Arsenal.
“We have searched long and hard for the right person or institution, we have followed every lead,” Moores said of his search for an investor – something FSG was apparently looking for, but also to no avail.
“We WANT that fantasy investor to come forward,” said Moores. “The infinitely wealthy, Liverpool-loving person or family with the resources to make our dreams come true.”
FSG was apparently looking for a similar fantasy investor. One to either offer an outright sale at a valuation of over £4 billion, or one to come on board as a minority investor. However, nothing has been agreed in the seven months since chairman Tom Werner confirmed they were “looking into a sale”.
If FSG has received investment, it should be invested in Liverpool, the club, not FSG’s portfolio.
Adjust or decline
So while FSG’s approach to a self-sufficient model is morally correct – and arguably the way all football clubs should be run – it cannot compete.
This is where supporters at least like to see the owners put money into the club to compete.
Too often there has been a sense of being shortchanged in the transfer market, or that resources are being saved for next summer – every time this has failed to materialise. Tomorrow never comes.
Liverpool as a football club should have built on two successive seasons of winning the Champions League and Premier League, but three years on they are out of Europe’s premier league and are likely to face a greater challenge than when Jurgen Klopp was eight years ago arrived at the club.
When Klopp arrived in 2015, he inherited a weaker side than he has now, but he failed to compete with the mega-wealth that now dominates the Premier League with the emergence of Newcastle.
The actual investment from FSG over the last three years, to enable Klopp to acquire an extra centre-back when needed, a midfielder when needed, a higher caliber player to keep the squad at the very top, would make things look very different.
You can’t argue that FSG have been good owners for Liverpool, they have. They improved the club’s infrastructure, significantly increased revenue streams and oversaw its most successful period, in terms of silverware, since the 1980s.
And as outsiders, they have the right to treat the acquired property as they please. But football clubs are not like traditional companies and are unique in that they represent a culture, a community, a fan base – and they also need to be treated differently.
Liverpool is the fourth most valuable football team in the world, according to Forbes. But they simply cannot compete with their current model.
FSG as owners have been risk averse. Without a change of approach, or significant investment, or change of ownership, Liverpool will face a formidable challenge in remaining competitive with the state-backed clubs that now dominate the top flight of the Premier League.
FSG must adjust its strategy, otherwise a decline will be difficult to avoid.
More Liverpool stories
Liverpool transfer news is accelerating ahead of two major renovations in the summer.
Benjamin Pavard of Bayern Munich has been linkedwhile James Ward-Prowse would be on the shortlist. Celta Vigo’s Gabri Veiga is a target And Khephren Thuram from Nice was about to join – But Manuel Ugarte is a star who is reportedly not moving to Merseyside.
Liverpool too fighting Arsenal for the signature of Romeo Laviafollowing Southampton’s relegation to the Championship.
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