Kieran Maguire moots £4bn Liverpool takeover as Billy Hogan reveals one thing FSG have already agreed on
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Having barely put a penny into Liverpool since they bought the club over a decade ago, FSG are in line for a massive pay day when the time comes to sell up.
The Boston-based investment group own stakes in a number sports franchises and their long-term strategy at every one has always been one of capital appreciation, AKA buy low, sell high.
The £300m FSG paid for Liverpool in 2010 now looks like extraordinary value, with the value of Premier League clubs soaring thanks to maturing commercial strategies and a £10bn TV deal.
Granted, FSG have their critics at Anfield.
The owners have never won the trust of some fans back after the European Super League coup, while other fans are suspicious of what they perceive to be an overly strong focus on commercial performance.
But when they do eventually decide to seek a return on their investment in Liverpool, they will leave the club in a better place than they found and with the trophy cabinet
There have been several developments recently that have been emblematic of why FSG are held in such high regard in the world of football finance.
In an exclusive interview with TBR Football, Liverpool University football finance lecturer and author of the Price of Football offered his insight into the latest from L4.
New Adidas deal yet another commercial triumph for FSG
When FSG inherited Liverpool from Tom Hicks and George Gillett in October 2010, their annual matchday income was £43m, media income £80m, and commercial income £62m.
Fast forward to the most recent published financial year, 2022-23, and matchday income has doubled and is expected to exceed £100m once a full season at the redeveloped Anfield has been played.
Media income, the one income source largely outside of Liverpool’s control, has hit a staggering £242m.
But commercial income is perhaps the most impressive metric. It stood at £272m at the last count and will probably have hit £300m when they release their accounts early next year.
From 2025-25 onwards, Liverpool fans can expect those figures to skyrocket thanks to their new kit deal with Adidas.
The deal will be worth a baseline £60m per year to Liverpool over the next decade, but finance expert and Liverpool pundit Mo Chatra forecasts that the total value will likely be close to £100m annually.
“They are future-proofed,” said Maguire.
“It’s broadly identical to the deal that Man United have over the next decade. That has set a benchmark. It would be difficult for Liverpool to negotiate above that price.
“Real Madrid are also with Adidas and on a long-term deal, so we can see that Adidas are trying to get their A-listers tied up for a long time.
“In the short term, you could argued that Adidas are paying over the odds. But you and I could have this conversation in 10 years time and we will think it has been fantastic for both parties.
“No one does their homework more than Liverpool when it comes to the value of their commercial deals.
The value of Anfield as Billy Hogan shares FSG’s stance on further expansion
One of FSG’s legacies at Liverpool will be the redevelopment of Anfield.
After increasing the capacity of the stadium by around 20,000 since 2016 with the redevelopment of the Main Stand and Anfield Road Stand, the ground can now accommodate more than 61,000 fans.
The makeover has also seen Liverpool become more attractive as a venue for non-football events, with Taylor Swift’s three dates at the stadium in the summer worth around £10m to the club before costs.
Next June, Dua Lipa – who, incidentally, has become something of an unlikely icon for the football club after her performance at the 2019 Champions League final – will grace the stadium.
And Liverpool CEO Billy Hogan revealed that the club will also look at the possibility of hosting events in July.
That move, as Maguire points out, would be similar to what Tottenham have done at their stadium, getting dispensation from the local council to almost double the number of non-football events per year.
“The advantage that Spurs have is that the built a stadium that can be scaled up in terms of non football events to the extent that they will now have more non-football events than football events over the course of the year.
“The challenge for Liverpool is the groundsman. It’s a combination of grass and synthetic material that s designed on a match-by-match basis.
“They might have a chat with the groundsman and say that Nunez won’t be fit this weekend and, because he is a certain type of impact player, that will affect how heavily they water the grass. It is a science now.
“Liverpool’s battle will not be with the council. It will be trying to ensure that the pitch is ready for the first match of the season at Anfield. It needs to be absolutely perfect for the elite athletes in whom they have invested.”
Liverpool’s loans from the owners and what they mean for a future takeover
The ownership model that John Henry and his FSG peers run at Liverpool means that they very rarely have to put money into the club.
However, they made an exception for the cash that they pumped into the club via interest-free shareholder loans to fund the redevelopment of Anfield.
In total, Liverpool have £137m in shareholder loans which, as Maguire explains, would need to be either refunded or factored into the price when FSG eventually come to sell FSG.
“I don’t see FSG having any particular skin in the game with regards to repayment,” the finance expert said.
“When you value the club, you value it on an enterprise basis. It’s a bit like buying a house – you don’t do it based on how much is left on the mortgage. We agree a price based on other factors and the payment is split between repaying the loans and the excess going to the equity shareholders.
“In the case of FSG, the first 100 per cent will be repayments of the loans. As shareholders, they will then pick up the residual.
“They are a 100 per cent shareholder, so it makes no difference to them. If they agree a figure of £4bn and let’s say there are £200m of loans, they first get £200m in loan repayments and then £3.8bn of equity. If you repay the loans first, FSG still get £4bn. Either way, they get £4bn.”
