Fenway and Liverpool: Time’s up?

SOME Liverpool fans may be anxious about the prospect of a new owner; if nothing else a change at the top can bring about disruption and, in what is proving to be a difficult season for the club, they could do without a period of uncertainty. But it is no coincidence that Fenway are contemplating a divestment, be it a partial disposal or complete sale. In the current climate, there have to be concerns about the type of investor that might be drawn to Liverpool and if you believe everything you read, the supporters will be demanding a say in who takes over. That won’t happen, of course, FSG are smart business people and professional sports team owners.

Since 2011-12, Fenway’s first full season as owners of Liverpool, the club has spent £1.2 billion in transfers, the fifth highest gross outlay in the Premier League. However, the club’s net spend, a popular topic of discussion at Anfield, was £ 446 million. By comparison, Manchester United and Manchester City run-up a net outlay of over £ 1 billion. Liverpool have been very smart in the market and their success has been a combination of good use of resources and dynamic leadership from Jürgen Klopp. But the Klopp team that won the Champions League in 2019 and the Premier League in 2020 has peaked and a rebuild is needed. The Premier League, especially when you have opponents like Manchester City, doesn’t allow you the time to change the oil. In all probability, Liverpool will have to tolerate a couple of transition years, unless of course, fresh impetus arrives. Furthermore, if Liverpool fail to qualify for the 2023-24 Champions League, the club’s market value will surely drop.

There seems to be a disproportionate amount of angst over Liverpool’s current position. The fans seem obsessed with Manchester City and Klopp appears more irritable by the week. Klopp was appointed in October 2015 and it wasn’t until 2019 that he won his first piece of silverware. Nobody ever felt Klopp wasn’t doing his job properly, the trajectory was positive and there were visible signs that something special was happening. The 2021-22 season could have been the greatest ever campaign, but two trophies, admittedly the two lesser baubles, was the outcome. Klopp’s team went into 2022-23 possibly a little burnt out. The club didn’t strengthen in the right places and the finger was pointed at Fenway rather than Klopp, whose popularity remains strong.

Despite Fenway’s conservative ownership and investment in the club’s infrastructure, the underlying feeling is that Liverpool’s owners cannot or will not attempt to compete with the seemingly endless resources of state-owned or influenced clubs. Why should they? If they are sports team owners, who treat clubs like assets, then why would they run a club in a manner that diminishes the asking price?

There is every possibility Liverpool’s valuation has peaked, although people appear to be sticking a pin on a graph in coming up with the club’s true value. Let’s say £ 4 billion is a likely price – who will be in a position to pay such a figure? With interest in the Premier League from the US still growing, it is possible Liverpool will exchange one American owner for another. On the other hand, if they want to compete with Manchester City, they will have to find a sovereign wealth fund or oil billionaire with money to spare. How will that align itself with the club’s values?

Fenway may have concluded the time is right to exit. John Henry was an advocate of the aborted European Super League and was left red-faced when it collapsed, prompting him to publicly apologise. At the moment, it is all very tentative, but they are not likely to declare they want completely out as it can compromise the price and may deter any auction. The fact they have engaged Wall Street names like Goldman Sachs and Morgan Stanley to sound-out the market means they are very serious. Fenway will have no shortage of takers, the club would be an attractive acquisition, regardless of who manages the team or who sits in the boardroom.

However, with clubs now costing billions, fans cannot hope to exert much influence on how their owners handle their property. Football is no longer the property of butchers, bakers and candlestick makers, it is now part of the asset management industry. While fans may hope for a new owner who indulges the culture of the club, they are at the mercy of the free market. As we have often seen, the popularity of an owner is not necessarily determined by how efficient they are at running a club, it depends on how much they “invest” in a team and how successful that team becomes. Like coaches, owners can go from hero to zero in a short space of time.

So, what type of football club owner do you want?

WHY would anyone want to invest in a football club? It is a no-win situation, largely because football fans are fickle, clubs are not really big, well-run businesses in the scheme of things, and the owners are expected to stump-up cash and not expect any sort of return. In short, football club owners are benefactors, or at least, that’s how many supporters see the owners .

Liverpool, by their own lofty standards, are having a challenging time. This can be translated as the natural cycle of a club, where a successful side needs replenishing but a shabby job of succession planning has been carried out. Liverpool’s recent history has been built on some smart transfer dealings and an outstanding coach in Juergen Klopp. But his team has started to age and his methods are no longer innovative. Most managers go through this cycle as their unique selling point starts to be copied and bettered by others. Klopp is far from finished, but he’s no longer unique and the clubs and coaches that have been observing him have discovered what makes him tick.

Furthermore, the team that he relied upon now needs a rebuild and they need to start replacing some key figures. The likes of Henderson, Milner, Salah, Firmino and Van Dijk all need to be phased-out at some point in the near future.

Klopp is so popular that the easy response is to blame the owners of the club, Fenway Sports Group. They have done their bit and they’ve also given Klopp the resources to build a very good team. But in recent years, their investment has slowed considerably. There’s logic in that strategy, especially as the football industry has gone through the pandemic and seen some revenue streams badly impacted. FSG have adopted a transfer market policy that maintains a modest net spend. In some ways, this is a sensible tactic, but Liverpool are competing in a very uneven playing field. They always have and they’ve been beneficiaries themselves.

It is unreasonable for Liverpool fans to call for FSG to be gone? That the club should be put up for sale. Why? FSG are not reckless, they are not damaging the club or football by the way they operate. Maybe they are refusing to even trying to compete with state-run clubs, but is that so wrong?

For some years, Liverpool have believed their way was more ethical than the model that brought Chelsea success and then elevated Manchester City. They are not the only club to feel aggrieved by “new money” clubs like Chelsea and City – Arsenal and Manchester United also resented the rise of the new order. To Liverpool’s credit, they came through this and because of Klopp, they have battled cheek-to-cheek with City. But fighting on four fronts burned them out in 2021-22.

FSG, as owners of Liverpool FC, can do what they like. They are also in it for the long game, so they will know exactly what they are doing, be it conserving their cash or building a war chest in case there’s another twist in the covid tale, which is a possibility. Because they have decided to be more cautious in the transfer market doesn’t mean they should go. Who has the right to demand an owner departs a club?

And if FSG were to put the club up for sale, what sort of owner do Liverpool fans want? The rising force in club ownership is not hard-line middle eastern regimes, but US business. And this means a very different way to the likes of Roman Abramovich or Qatar Sports Investments. The US team owners run their assets with a view to making a return. Liverpool already have a US owner, so do Arsenal, Chelsea and Manchester United. Arsenal fans have been willing Stan Kroenke to leave for a couple of years, but given they are now currently top of the Premier League, the complaints have stopped. Chelsea are now US-owned and Todd Boehly won the fans over with a record summer spending spree. But if the results started to go bad, Boehly would be under pressure. Manchester United and the Glazers have a rocky relationship and the fans want them to leave, but if United were to be successful, you wouldn’t hear many complaints. Two years ago, everyone was praising Fenway, but now they are supposed to sell to satisfy the fans.

At the end of the day, football is not sustainable without the billionaire owners. They might not be liked, but without their dollars, the big clubs would not be able to compete. If Fenway were to sell Liverpool, it is just as likely that another tycoon with no apparent connection to the game would come along. And once again, it would be a cyclical situation. Good times, bad times… or maybe just less successful times.