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.

Manchester City’s financial power evident on opening weekend

THE LONG-awaited arrival of Norwegian striker Erling Haaland in the Premier League was marked by two goals and a comfortable 2-0 victory for Manchester City at West Ham United. Haaland, who already looking like a bargain at just over £ 50 million, showed what a powerful player he is and might have netted a third with a little more composure. But Haaland is young, has the appearance of a player designed by scientists for a team made by engineers, and he’s nowhere near his peak. It will be a surprise if he doesn’t hit 30 goals in 2022-23.

For the opening weekend, City fielded players that cost them £ 700 million-plus in the market. In this age of five substitutes, the power of Manchester City’s wallet is really going to tell, possibly more than ever. With 50% of the outfield team now replaceable during a game, those teams with bigger or better quality squads are going to have a significant advantage over their poorer stablemates. City are already a step ahead of everyone else, so their strength in depth is going to possibly lengthen the margin of superiority. Certainly, it is not hard to interpret the early season angst of some clubs about their squad.

Compared to their “big six” rivals, City’s first round squad cost substantially more – Manchester United’s team that took the field cost £ 459 million, Chelsea’s £ 422 million and Liverpool’s £ 400 million. Tottenham, who didn’t play their big signing Richarlison, spent £ 204 million on the players who received appearance money in their 4-1 win against Southampton. Arsenal, meanwhile, won 2-0 at Palace with a team that cost £ 370 million. Let’s be clear here – Manchester City’s squad on the first day of the 2022-23 season cost £ 346 million more than the average for the other “big six” members (£ 371 million) – so goodness knows how it measured up against the rest of the Premier.

In days of old, when one, two or three substitutes were permitted, the relative strength of a squad was always determined by the quality of the benched players. That measurement has never been more relevant, but it comes with unprecedented strain for some clubs.

Looking at Manchester City’s replacements at West Ham, which included new signing Kalvin Phillips as well as Riyad Mahrez and Bernardo Silva, the quality was far greater than the men that came on for Liverpool, Chelsea and Manchester United.

Naturally, the cry of “you’re buying it” can be heard in Liverpool and the other side of Manchester, but City have also started to sell talent in the market. Liverpool have spent big on key players, but they cannot afford to bolster their squad in the same way. Manchester United have spent prolifically but their expertise in the transfer arena in recent years has to be questioned. Arsenal have also bought poorly at times, while Chelsea seem to make costly mistakes on a regular basis, such as Romelu Lukaku, Timo Werner and Alvaro Morata.

In the 2022-23 window, Manchester City’s net spend is a positive of £ 46 million (as at August 13 2022), thanks to the sales of Raheem Sterling and Gabriel Jesus. Over the past five seasons (including 2022-23), their net spend has been £ 173 million, which is less than every other member of the “big six”. But extend that over 10 years and you see where City’s arms-race gathered momentum; their net spend from 2013-14 to the current window has been £ 824 million, topped only by Manchester United, who appear to have frittered away £ 900 million-plus. The lowest among the top half dozen include Tottenham Hotspur (-£291 million) and Liverpool (-£300m).

Interestingly, in the period between 2016-17 and 2021-22 – the completed Guardiola v Klopp seasons – City’s net spend of £ 711 million is more than three times Liverpool’s £ 226 million. City have won nine major trophies to Liverpool’s four under their current managers, but the gap between the two clubs is small, which tells you that the differential in market prices is far higher than the relative qualities of players.

And yet there are few failures at both clubs, indicating that the player acquisition model, driven by data as much as gut-feeling, is generally sound. There appears to be fewer “forgotten” individuals at City or Liverpool, which says as much about the administration teams and recruitment strategy. The issue is that man-for-man, their starting elevens have very little between them, but City’s wealth allows them to acquire high quality options. A missing key player or two will have more impact at City’s rivals than it will at the Etihad.

City’s other advantage, like it or not, is the business philosophy of their ownership. Arsenal, Chelsea, Liverpool and Manchester United are all owned by US investors. Their approach is very different to the one adopted by Roman Abramovich when he owned Chelsea, in other words, no desire to pay himself anything in the form of dividends. City are very much on their own in the Premier (although Newcastle may eventually join them) as “Sports team ownership” becomes more common and increasingly attractive to entrepreneurs and business people both sides of the Atlantic.

The increased substitutions will have a profound influence on the outcome of the Premier League because it can provide transformational impetus to struggling teams. Replacing half your outfield team should/will change the shape of a game dramatically. Hence, Manchester City’s rivals may see them accelerate into the distance in 2022-23, a season in which the term “squad game” has never been more relevant.