For Liverpool owners Fenway Sports Group the last 12 months had been something of a rollercoaster.
The start of 2021 saw FSG come under fire from Reds fans for their inaction in the January transfer window, something that so very nearly cost them a lucrative place in this season’s Champions League.
In March came the arrival of $750m worth of investment from US-based RedBird Capital Partners, with FSG giving away 11 per cent of their business empire to RedBird, with the fresh capital earmarked for infrastructure development with both Liverpool and the Boston Red Sox baseball team, as well as acquisitions of other sporting teams further down the line. The Reds got work underway on their redevelopment of the Anfield Road End while, in Boston, FSG poured millions into their regeneration of the real estate surrounding the Red Sox’s Fenway Park Stadium.
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But the events of April 2021 would provide the nadir of FSG’s tenure thus far as they and five other Premier League clubs linked up with a dozen of European football’s biggest hitters to agitate for the formation of a European Super League.
It was presented late on a Sunday evening through an organised social media campaign and shook football to its core. But within 48 hours of them announcing their grand plans the plot had unravelled as supporters, governing bodies and the wider football family unanimously rejected the proposals, leading to an embarrassing climbdown from Liverpool and eight others involved. Real Madrid, Barcelona and Juventus remain committed.
FSG’s stock had already been pretty low at this point with many Reds fans for the perceived lack of investment in the first team, but so unpopular the idea, one that hadn’t had any fan consultation, that it appeared that there may be no way back.
John W Henry, FSG’s supremo and Liverpool’s principal owner, issued an apology via video to Reds fans, and the ownership then opened themselves up to engagement with the Reds’ supporter groups, most notably Spirit of Shankly, which resulted in a historic agreement reached last month that allows for greater fan representation at board level and a need for consent to be given by the newly-elected Supporters Board for any plans for Liverpool to join a breakaway league in the future.
But while the ESL debacle was a low point, FSG kicked their own plans for ‘FSG 3.0’ into gear and took a stake in LeBron James and Maverick Carter’s SpringHill Entertainment company in October, before sealing a deal to acquire the Pittsburgh Penguins NHL ice hockey team in late November, a deal that saw the Penguins valued at around £630m.
It was quite the 12 months for FSG, one of their most active since acquiring the Reds as their business strategy for the future began to play out.
Of course, with the riches that had been promised with the formation of the ESL, that was seen as a part of that future strategy. But with that off the table FSG have focused on growing their business and investing in infrastructure that would allow them to drive revenue streams higher, something that is vital to the success of their sporting teams.
But what might 2022 look like for FSG, and how might it impact Liverpool further down the line?
Last year FSG partner and president of the Red Sox, Sam Kennedy, who played a significant role in the deal to purchase Liverpool back in 2010, spoke about “FSG 3.0” and what the future of the firm looks like heading into its third decade. And while there the rumour mill may have suggested that FSG may look to sell off assets like Liverpool, Kennedy is adamant that the opposite is true and that this year will see them “double down” on their commitment.
“I think this kind of talk pops up frequently in different markets with different sports ownership groups and teams,” explained Kennedy, speaking on MassLive’s ‘The Fenway Rundown’ podcast last year.
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“It is unusual that a partnership has lasted so long, 20 years now, and we’ve had some really exciting things happen and some great success.
“I was surprised when I was asked because we are so into everything that we’re doing and I can tell you that, especially given the (RedBird Capital Partners investment) deal, if anything you will see a renewal and commitment to Fenway Sports Group as a business.
“We’re tripling down, we’re entering our third decade together and we’re calling it FSG 3.0 and are trying to reinvent ourselves, reimagine the business, think about ways we can grow and take on new opportunities.
“I can say with 100 per cent certainty that John Henry and Tom Werner are not selling Fenway Sports Group. We are looking at some strategic partnerships and investment from third parties but not looking at a control sale.”
And at the start of a new year that statement is expected to hold true.
Having brought in outside investment via RedBird and taken a stake in SpringHill, as well as having acquired the Penguins, FSG are understood to have their eye on growth over the next 12 months, will selling parts of the business not on the agenda, particularly when you consider that Liverpool remains their most valuable sporting team with a valuation of over £3bn.
More teams will likely be on the agenda, as will investing in more businesses that will provide a simpatico relationship with the teams that they already own. In the case of SpringHill it is expected that James and Carter’s business will link up with Liverpool and the Red Sox at some stage to try and enhance their global appeal and reach through digital storytelling.
With regards to new teams it has been a pretty open secret that FSG are keen on acquiring an NBA franchise at some stage, and that could manifest into something concrete in 2022.
The NBA has huge global appeal and drives enormous revenues but the valuations of teams isn’t as prohibitive as it is in the global American football spectacle that is the NFL.
James, who owns a one per cent stake in FSG after converting his two per cent holding he had in Liverpool since 2011, has long been interested in NBA team ownership, something that Michael Jordan stepped into when he finished his career on the hardwood. And while the 37-year-old continues to be a stellar performer for the Los Angeles Lakers it seems logical that he would be a major part of the thinking when it came to potentially acquiring an NBA team in the near future.
Then there is the potential to add more football teams to the FSG empire, something that could have benefit for the Reds through various efficiencies, such as getting game time for talent in different environments, being able to keep talent in-house abroad that may have otherwise been prohibited through tougher regulations on the signing of players from Europe after Britain’s exit from the European Union.
Acquiring a Governing Body Endorsement (GBE) is slightly less problematic when it comes to the South American market, and with FSG having been linked to Brazilian sides Cruzeiro and Botafogo in recent weeks, the former having since been acquired by Brazilian legend Ronaldo and the latter set to be acquired by Crystal Palace shareholder John Textor, it is a market that offers potential for FSG and Liverpool. Valuations of teams are comparatively low, the interest in the clubs from fans is enormous and the talent pool that could aid player trading further down the line is vast.
There is also the potential for FSG to explore different markets that could have a knock-on effect for Liverpool.
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With technology and sport continually seeking ways that it can be integrated and then monetised, the possibility of seeking opportunities with firms that develop virtual reality software and artificial intelligence that could be used to provide a virtual Anfield experience for the legions of Reds fans around the globe who may never get the chance to experience it in person is one that is appealing.
Of course the question for Reds fans will, understandably, come back to how much would any of these moves impact a transfer budget and allow them to keep pace with the likes of Manchester City and Chelsea.
FSG have been clear from the start that success would have to be sustainable and pay for itself. The investment that has arrived directly from FSG in the past for the redevelopment of the Main Stand was done so for the longer term benefits of satisfying ticket demand and raising corporate hospitality revenues, two things that both impact the Reds’ ability to spend money on their first team affairs.
It is unlikely that it is a strategy that changes, but finding new ways to bring in income and leverage their global appeal the challenge that they will continue to take on in 2022. Whether it is operating more football clubs to aid their player trading efforts, or finding ways to maximise the revenue potential of a global fan base, 2022 will likely be another busy year of investment and acquisition for the Liverpool owners.
Liverpool’s continued success is increasingly important to maintaining their most valuable asset and maximising the financial benefit. With limited transfer spend over the past two years it will be a key element of their future strategy to find ways to invest into the team without sacrificing cash flow, and that is no easy challenge.