Despite the company’s eye on an exit strategy at Liverpool, Fenway Sports Group remains committed to both the club’s on-field progress and its off-field success.
Liverpool’s revenues have risen significantly since FSG acquired the club when turnover stood at £184m at the end of the 2010/11 accounting period. Through a combination of greater commercial deals and hugely increased media rights, revenues have risen to what is expected to be around £600m for the 2021/22 financial year, something that would represent a 226 percent increase over the past 12 years.
Through their success on the pitch and their huge global fanbase, Liverpool has been able to turn these factors into significant revenue streams that have allowed the club to maintain their vastly increasing wage bills during that time, along with investments in infrastructure and the first team.
Liverpool is valued by Forbes magazine to be around the £3.7bn mark, a figure only slightly higher than the $4bn (£3.4bn) figure that the ECHO had learned from US sources that the club had been looking at to begin any kind of talk with interested parties. If FSG were to sell at the lower end of those two estimates, the return on investment would be more than 1,000 percent, representing a remarkable piece of business for its principal John Henry, who made his fortune as a commodities trader.
Major sponsorship deals have been struck in recent times, with the renewed front-of-shirt deal with Standard Chartered understood to be worth a little over £50m per year, while through the structure of the Nike kit deal, where a guaranteed £30m per year is aided by a 20 percent slice of the sale of Liverpool/Nike branded merchandise globally, could net the Reds as much as £70m per year on some projections for the coming seasons.
With the current Expedia sleeve sponsorship agreement, which runs through the end of this season, the Reds are set to spend around £10 million per season, up from the £8 million per year deal that Western Union had negotiated before the 2020 Expedia deal.
But the landscape is changing. Manchester City’s commercial revenues outstrip all of their Premier League rivals despite a far smaller slice of the global football fanbase, commercial revenues that have been helped along the way in no small part to the simpatico nature of some of the business relationships that exist in the MENA region, where the owners, City Football Group, have considerable reach and ties.
Newcastle United are also now ready to make their mark. The Magpies were taken over in a somewhat controversial move by the Saudi Arabian Public Investment Fund (PIF), with PIF serving as the sovereign wealth fund of Saudi with assets of around £300bn.
While they have been somewhat reserved regarding recruitment since acquiring the club, the Magpies have shown a commitment to structure and strategy. They have deep pockets and large ambitions for the Magpies, and while they have been somewhat reserved about recruiting, they are committed to structure and strategy. As the club heads into the winter break for the World Cup, Eddie Howe’s appointment has worked wonders, with only one defeat in their first 15 games.
For a club that was viewed as having to be mindful of Financial Fair Play rules, something that was thought would mean a slow rise to success, they have taken on the challenge of being disruptors of the rather cozy ‘big six’ with relish. And their efforts to grow and be able to spend at key times, most notably next summer, are likely to be aided considerably by the deals that they are starting to strike, where their strong links with the MENA region are starting to tell.
The club brought in Noon.com as a sleeve sponsor during the summer, having placed a £7.5m figure on their inventory, something that was agreed as fair market value by the Premier League. The deal with Noon, an online retail platform based in the MENA region, was valued at more than twice that of the club’s current shirt partner, Chinese betting firm FUN88, which has a reported value of £6.5 million per year.