October 2020 will mark 10 years since Fenway Sports Group (FSG), headed by John W Henry, took complete ownership of Liverpool Football Club. At the time of purchase under the guise of New England Sports Ventures, the American conglomerate paid 300 million pounds for the club following a court case. FSG already owned Major League Baseball side Boston Red Sox and had seemingly transformed their fortunes over time. Could they do the same at Liverpool?
It’s difficult to imagine today with the club in such a strong position both on and off the field, but at the time of the takeover, Liverpool were in the doldrums, financially and in terms of performance. Under the stewardship of previous owners, another American group, duo Tom Hicks and George Gillett, Liverpool were close to financial ruin; facing the prospect of administration, a points deduction and a relegation dog fight under manager Roy Hodgson. Fast forward 10 years and the direction of travel has been reversed and life as a red is a whole lot brighter.
Ahead of the 10 year anniversary later this year and with the Reds current Premier League, Champions League and Club World Cup champions, what better time to take a look at FSG’s tenure and how they have transformed the fortunes of Liverpool Football Club over the past decade.
Looking at all aspects of the changes they have implemented. With a mixture of highs, lows and therebetween’s.
On completion of the takeover, the then NESV group of American businessmen lead shareholder John W. Henry said ”I am proud, humbled and I can’t tell you how happy I am, we’re here to win”. Words that were sure to lift the gloom that had descended around Anfield. At this point these were just words, it was going to take a lot more to get a majority of loyal Liverpool fans on board. The new owners had a battle on their hands from the off in certain quarters, the ill-feeling towards an American based consortium was rife. Tensions towards the new owners owing to the fact the previous holders heralded from the states, who had all but ran the club into the ground with eye-watering debts. It was going to take time to build trust.
The men at the helm set about turning Liverpool, still one of world football’s most decorated clubs into a superpower once more; John W. Henry, the principal owner holding an estimated 40% of stock. Mike Gordon who’s 12% saw him appointed Managing Owner and has since been dubbed ‘the man who runs Liverpool FC’. Partner Tom Werner – appointed as Chairman and is another from the FSG consortium.
Within months the boardroom looked very different; previous Managing Director Cristian Purslow left the club at the time of the takeover, FSG appointed Ian Ayre as his replacement. Tom Werner was instated as club chairman and French football mogul Damien Comolli was appointed Director of Football Strategy, a role he held for only 18 months. In his time with the club Comolli is believed to be the man who identified and secured the deal to bring current captain Jordan Henderson to the club from Sunderland; a deal Comolli has since said ”cost him his job”.
With the club languishing in 12th and support for his reign thin on the ground, the new owners dealt their first managerial casualty. Roy Hodgson was relieved of his duties and replaced by club legend Kenny Dalglish, instantly winning fan approval. A smart move.
Dalglish was only ever a short term fix for Liverpool and despite lifting the League Cup under his leadership, he was moved back into the stands in an ambassador role in May 2012. Brendan Rodgers was appointed shortly after, FSG’s first major managerial appointment.
FSG set about transforming Liverpool Football Club on and off the field, writing off stadium debts along the way. Like any good businessmen, they believed the commercial success of the club was integral to the success of the team. A mantra that has since proved correct. Four key promises were made and these would be the benchmark the club was working towards
- Attracting the best players – First getting the club into a strong financial position
- Turn losses into wins
- Competing for trophies
- Create a culture for winning
With recent records broken commercially and set to be broken on the field as well, it would seem FSG have helped deliver on their promises. This was never likely to be an overnight success. A model of growth and sustainability was laid out from day one from the owners and they haven’t veered off course at any juncture.
So how have they done it? A combination of clever appointments, smart investment and sustainable growth. I have taken a look at the key factors and stage-posts that have seen Liverpool rise from 12th place under a loveless Roy Hodgson (no disrespect) to Champions of the World under a charismatic Jürgen Klopp.
Liverpool have seen four managers during FSG’s ownership. Roy Hodgson was in place at the time of the takeover, Kenny Dalglish was appointed as somewhat of a morale boost. The first big appointment of the FSG era was Brendan Rodgers, coming from Swansea where he had done a fantastic job having implemented his style on the Welsh club, a style he brought to Liverpool with some success.
After taking Liverpool to the verge of ending the long wait for a Premier League title in 2013/14, the departure of Luis Suarez to Barcelona seemed to take its toll on Rodgers’ reign. The Northern Irishman was sacked in October 2015 with Liverpool languishing in eighth place. It would be naive to think the hierarchy hadn’t been waiting for their man before pulling the trigger; Klopp, the much coveted manager was in place just four days after Rodgers departure. After a short hiatus following a successful time with Borussia Dortmund, the energetic German was ready to step in at LFC.
So good he needs his own section. The best piece of FSG business to date. During his first interview as reds boss Klopp described himself as the ‘normal one’, a jovial swipe at Jose Mourinho’s self proclaimed ‘special one’ tag. As it transpired Klopp has been anything but normal in the eyes of Liverpool fans. A match made in heaven, the German has immersed himself in the culture of the Liverpool faithful. A passionate man manager for a passionate bunch of supporters. He seemingly gets the club as few have before him, wearing his heart on his sleeve and creating a group of players who will seemingly run through brick walls for their manager. Not to mention his famous embraces. Safe to say this appointment was somewhat of a masterstroke from the men at the top.
Klopp has overseen some rocky periods in his time in charge, non more so perhaps than the sale of Phillippe Coutinho. At this time some fans had become disillusioned with the clubs direction, an apparent reluctance to spend whilst continuing to sell their best talents. Klopp and his positive demeanour were the glue that held things together, appearing to take the stance of ‘nobody is bigger than the team’. When Coutinho left for Barcelona for £142 million Liverpool seemed to improve without him, taking everybody by surprise.
Liverpool under Klopp progressed at a rapid rate. Unlike other top level managers the reds boss did not need a billion pound transfer kitty to make great things happen. Instead, he had been identifying areas in need of improvement and finding the perfect fit. He has a way of extracting the very best a player has to offer and the players trust him. A combination that has taken this current Liverpool squad to the pinnacle of what is possible to achieve in club football.
In the early years, in particular, Klopp took Liverpool to numerous finals with a ‘net spend’ of next to nothing in comparison to their rivals. At this time the finals were a heart wrenching experience, with three successive defeats. It was something that Klopp would in time put right.
The owners realised quickly they were onto a good thing with Klopp, committing his future in July 2016 with a six year contract. A deal which was extended for a further two years recently, all being well the boss will be running onto the pitch after late derby winners until 2024.
Combined with clever spending, hard work on the training pitch, psychological strength and an unrivalled man management style, Klopp and his staff have been integral towards a huge transformation in the fortunes at Liverpool Football Club. Long may it, and he, continue.
In the early days of the FSG reign, the club adopted an American style ‘Moneyball’ transfer policy of signing cut-price, bargain bucket type players who may go on to become a big money asset. At this time LFC were not in a position to dine at the top table in terms of attracting the biggest players, regardless of policy.
The first transfer window under new owners was to be an eventful one and perhaps a sign of things to come. Fernando Torres left the club for Chelsea, a move that lost some of the goodwill amongst the fans earned by Kenny’s appointment. Liverpool received £50 million for the Spanish striker and brought in Andy Carroll from Newcastle and Luis Suarez from Ajax, for around £58 million combined. A sign of dealings to come.
After an incredible spell with Liverpool which saw the Uruguayan left in tears at Selhurst Park in 2014, Luis Suarez got his coveted move to Barcelona for £74 million pounds. Money that would be reinvested in bringing Christian Benteke and Roberto Firmino to the club for a combined £75 million; transfers that had differing levels of success.
One constant throughout the reign of FSG, and with a lot of help from transfer guru Michael Edwards, has been Liverpool picking the cream from the traditional ‘lesser’ clubs crop, most notably raiding Southampton on numerous occasions for the likes of Adam Lallana, Sadio Mane, Dejan Lovren and of course Virgil Van Dijk.
Joe Gomez was bought in 2015 from then League One Charlton for only £2.25 million, he’s worth 20 times that figure today. In that same 2015 window, Liverpool acquired the services of James Milner on a free transfer; he has been an integral part of the squad ever since and is current Liverpool vice-captain.
Transfers from recently relegated sides such as Gini Wijnaldum from Newcastle United and Andy Roberston from Hull have also been some shrewd business. Current left-back Robertson was picked up for just for £8 million. The Scot has gone on to be one of the first names on the Liverpool team sheet, and perhaps the best in is position around. He is just one of a number of bargains currently achieving great things at the club.
Perhaps the epitome of the ‘Moneyball’ philosophy has been Coutinho. Bought for a measly £8 million from Inter Milan in January 2013, the Brazilian spent a scintillating six seasons on Merseyside before appearing to want a move away. He got his wish and was sold to Barcelona for an enormous £142 million in 2018. Mamadou Sakho was sold to Crystal Palace at a similar time topping up the transfer kitty in the shape of £25 million. This money was used to bring in the likes of Mohamed Salah and Alex Oxlade-Chamberlain, with around £100 million left over.
The model of funding transfers via big player sales was by now clear for all to see. In more recent times we have seen the transfer of Xherdan Shaqiri for a mere in football transfer terms £13 million, simply to add to the squad options before seemingly being readied for a sale at a profit.
In lieu of big money transfers, Liverpool more recently have focused on tying down their biggest assets to long term deals. The policy of needing to sell the biggest assets seemingly now a thing of the past now the club is more than self sustainable. With the on field successes, the club can no longer be seen as a stepping stone to foreign stars. Liverpool may now be the big attraction. This shift towards securing the services of the most important players for as long as possible can be a huge outlay in itself.
Very recently, The #FSGOUT brigade has been out in force, after Liverpool seemingly backing out of a deal to bring RB Leipzig striker Timo Werner to the club. Instead, he is headed to Chelsea for £200k a week. Early signs are it seems, despite becoming a formidable force once more, the owners simply refuse to spend what they see as ‘over the odds’. Some may and will call it being ‘tight-fisted’, even accuse the ownership of looking after their own profits, a view which is easy to sympathise with.
The club seems set for a summer of little spend once more, in part down to the current insecurity of the financial market caused by the coronavirus pandemic. The Reds may defer back to their sell to buy policy, raising funds from multiple player sales in order to strengthen where necessary, not that much needs strengthening as it stands.
Although a preferred view may simply be that this is how they operate and it’s taken us to remarkable feats to this point; perhaps it’s time to back them.
No need to mention the players too much, or the man himself Klopp of course. Between Liverpool landing the boss and the player recruitment that followed, the former Borussia Dortmund man has taken this side from 8th place in is first season to Champions of Europe, Premier League champions for the first time in 30 years, World Club Cup Champions and Super Cup holders. All whilst maintaining a profitable organisation and improving the surrounding infrastructure.
A huge part of the Liverpool transfer strategy was the appointment of Michael Edwards. Arriving from Tottenham in 2011, Edwards was originally appointed as head of performance, a role he fulfilled with Brendan Rodgers as manager. Rodgers was seemingly against the idea of having a ‘Director of Football’ alongside him. Edwards’ role has developed under new management and he is now Liverpool’s Sporting Director and is heralded as a transfer mastermind.
Rumoured tensions between Brendan Rodgers and Michael Edwards lead to complications in the working relationship. Klopp, however, has trusted his Sporting Director’s judgement at every turn and most markedly over the transfer of Mohammed Salah. The Egyptian King was an Edwards choice, but Klopp was said to be unsure. He trusted Edward’s judgement, and we all know the rest.
Not only an eye for a low cost talent, but Edwards also has the Midas touch when it comes to departures, with an ability to extract every penny from a player sale. Notably, the fees surrounding the sales of Dominic Solanke and Jordan Ibe, two players with no future at the club both fetching upwards of £15 million each.
As well as those mentioned previously Edwards can boast a hand in the arrivals of Wijnaldum, Firmino and Alex Oxlade-Chamberlain; all of whom may have been overlooked by the so called big clubs. Not by Liverpool’s entitled ‘laptop guru’.
I doubt a Sporting Director has ever had a statue erected outside a ground before. But there’s a first time for everything.
Since their arrival, the members of the FSG have been practically nil by mouth and that’s the way it should be. They have the right people in the right places, ensuring the direction of travel of Liverpool Football Club remains on an upwards trajectory.
After the chaos of Hicks and Gillett, Liverpool FC were in desperate need of some financial stability. Within a few short years FSG had brought that to the club. A combination of shrewd investment, player sales and regular European football helped get the club back on an even keel at least and see sustained growth resulting in profits.
Early on the decision was made to abandon any plans of a new stadium and remain in L4. The Main Stand at Anfield has since seen a huge overhaul, with FSG making the £110 million investment in a step to redevelop the stand in April 2014. This saw an additional 8,500 seats added, as well as a new look concourse and enhanced matchday hospitality. The formidable new stand is a joy to behold and generates an enormous revenue with its multiple hospitality floors and high value seats.
In the decade in charge as well as the aforementioned Main Stand, FSG has also set about building a new state of the art training complex in Kirkby, costing around £70 million (or one Virgil Van Dijk.) The group have also put into action the expansion of the Anfield Road stand, whilst consulting local neighbours at all times regarding plans. This further expansion would take the capacity to over 60,000.
Owing to improved business acumen and an ever growing brand LFC have recently landed their highest ever kit manufacturer deal. The deal with Nike which will start at the beginning of the 2020/21 season could prove to be the most lucrative in history by an English club. Yet another sign of FSG getting the commercial side of the business in order, adding value to the product that is Liverpool Football Club. The humble fan may not know or care about the ins and outs of this side of the business, preferring to focus on an apparent unwillingness to write cheques at every given opportunity, but there’s more to running an organisation of this size and FSG are getting it right.
In February 2020 the club announced pre-tax profits of £42 million, further evidence that squad reinvestment and expanding infrastructure was having a positive influence on the revenues.
In October 2010 FSG bought the club for £300 million. Today the club is worth in excess of £2 billion. That doesn’t happen overnight and it hasn’t; a tough model of spending within the means and slowly growing the brand, whilst still accomplishing unbelievable feats on the field.
One of the promises the owners made was to compete for trophies, they’ve ticked that box. Certainly, since the Klopp reign began, Liverpool’s trophy room has been a hive of activity. Kenny Dalglish brought FSG their first trophy way back in 2011 in the shape of the League Cup. Brendan Rodgers took Liverpool close to the Premier League but his time as manager came to a trophy-less end.
Then Jurgen arrived. The German boss took the reds to three finals before finally tasting glory in Madrid, winning the Champions League. This was the club’s 6th time winning the competition, bettered only by Real Madrid and AC Milan. Following on from the European success Liverpool swept up the trophies thereafter including; UEFA Super Cup, FIFA Club World Cup and most importantly that allusive Premier League title.
On the field, Liverpool have enjoyed their best period for many years, let alone since the new ownership. Silverware is what will define the reign of FSG. Excellent commercial business and profitable balance sheets don’t hold much weight with John Smith on the Kop, he wants to see his beloved team lifting cups and league titles. Fortunately, he’s in luck.
Aside from the perceived reluctance to spend on transfers the negatives have been few and far between.
So far the majority of life under the American stewardship has been positive, with improved on and off field results. A manager the fans adore and a group of players to be admired. But it hasn’t all been sunshine and light over the past decade. There are a proportion of fans who disagree wholly with the FSG transfer policy. Despite loosening the purse strings somewhat in recent years, the general model of not spending big on players unless a big departure doesn’t sit well with some supporters. This model has been brought into question more-so when Liverpool’s balance sheets are so healthy, regularly announcing profits and record figures. In the eyes of some fans, this should then lend itself to free spending. It seems however unless the owners are splashing out on £100 million deals every transfer window like others owners, the loyal #FSGOUT brigade won’t back down.
In 2016 fans protested the forthcoming increase in ticket prices by staging a walkout in a home match v Sunderland. Around 10,000 fans left on the 77th minute to show their displeasure at the proposed hike to £77 for a match ticket. It worked, perhaps helped by a Sunderland comeback following the walkout, levelling the match at 2-2 after being two goals down during the mass exit. FSG promptly announced ticket prices would not increase, including in the newly developed Main Stand. A sign of the owner’s humility in admitting a mistake, also proof that maybe they listened to and most importantly cared about fan opinion; not something associated with all owners.
Perhaps the worst mistake of all came earlier this year. Whilst football was suspended, in April Liverpool’s owners made the announcement they were placing non-playing staff on furlough; the government scheme designed to pay 80% of employees wages. When you consider LFC’s recent successes commercially, to announce record profits and then declare yourselves unable to pay staff wages, it isn’t a good look. It was met with outrage from a majority of football and Liverpool fans alike. Liverpool fans pride themselves on their working class roots and have particular political views that do not lend themselves to this decision. Perhaps the Americans weren’t aware of the ramifications or were simply naive. This decision was quickly reversed amid a swell of backlash. A mistake for sure, but nevertheless but they had listened to fan noise and backed down again.
There can be little doubt what has evolved in the last decade has been extraordinary. A radical improvement off the field with both the Anfield Road expansion and new training ground to follow, as well as record breaking commercial deals. A rebuild has also taken place where it all counts, as out on the pitch things haven’t looked this good for years. After 30 long years, FSG, along with Klopp and an incredible group of assembled staff and players, are bringing the Premier League trophy to Anfield. It’s what happens on the field that supersedes commercials, and in recent months everybody involved at the club have played a part in the trophy collection. Even the most staunch #FSGOUT campaigner could admit to that.
There’s been many a dissenting voice at times throughout the decade, mine included. #FSGOUT still circulates on Twitter to this day, there will always seemingly be a section of fans who don’t agree with certain policies employed by the American owners; but if trophies are to be a barometer of success, then they are doing more than a decent job. Some sections of fans just have short memories.
Owing to steady progression, with improvements year on year it’s not beyond the realms of possibility to imagine things can somehow get even better for Liverpool Football Club under the stewardship of FSG and Klopp.
It would certainly seem to be a bright future, at least four more years of Jurgen Klopp should see to that. Also who knows at some point in the future, FSG may not view it necessary to subsidise purchases with player sales. If we are going to see that Kylian Mbappe deal then they may have to!
What is clear is the finances are markedly improved since the arrival of FSG. The playing squad is full of stars and boasts some of the elite players in world football. The manager is one of, if not the very best around. Trophies which had previously been at a premium, have been like Mersey ferries more recently (one every 20 minutes).
Every promise made by principal owner John W. Henry when he and his consortium took charge of Liverpool Football Club has been achieved.