Liverpool in £8.5bn takeover masterplan after what FSG have agreed with Texas investors

What ingredients go into Fenway Sports Group’s special sauce? After increasing Liverpool’s asset value by 1,400% in the last 15 years, hundreds of investors want the recipe.

The alchemy that FSG have performed is that they have turned a £300m investment into a £4.5bn asset without putting any money into Liverpool.

Well, almost no money. They did put their hand in their pockets to clear the club’s debt when they took over from Tom Hicks and George Gillett, plus providing funding in the form of interest-free loans for the redevelopment of Anfield.

But in terms of cash for football operations – player and staff wages, transfer, agents’ fees and so on – FSG haven’t spent a quid.

A chart showing the key revenue events since FSG's 2010 Liverpool takeover 2010

Liverpool and FSG revenue infographic Credit: Adam Williams / GRV Media

They have managed to balance the self-sufficient approach with glory on the pitch too.

In the modern Premier League era, they are the only team to have been successful without a foundation of massive owner funding.

Yes, Manchester City are profitable these days, but it took them cumulative financial losses of almost £700m over the first 12 years of Abu Dhabi ownership to get here.

We can fall back on some easy platitudes when it comes to the font of FSG’s success: a data-driven approach, a project mentality over a win-now philosophy, and hiring the best operators and letting them get on with it.

Photo by John Powell/Liverpool FC via Getty Images

And yes, they’re platitudes now but arguably only because FSG have executed them so successfully that any serious club has taken note and is now following roughly the same model.

The forensics, dispassionate approach is set to yield only a second Premier League in Liverpool’s history, which will see them draw level with Man United with the most league titles in English football. Thanks to FSG, Liverpool are well and truly back on their perch, while their arch rivals are a fading force.

Major Trophy Season

League Cup 2023-24, 2021-22, 2011-12

FA Cup 2021-22, 2011-12

Champions League 2021-22 (runners-up), 2018-19, 2017-18 (runners-up)

Premier League 2021-22 (runners-up), 2019-20, 2018-19 (runners-up), 2013-14 (runners-up)

Club World Cup 2019-10

Europa League 2015-16 (runners-up)

FSG trophies under FSG

So, where do FSG go from here? Continuing to summit the highest peaks at home and in Europe under Arne Slot is the target, but to what end?

Ultimately, it’s about money. Obviously, it’s about money. It’s always about money.

What do FSG want at Liverpool?

FSG haven’t made any money from Liverpool yet.

In football finance, there are – broadly speaking – two ways you can make a return on your investment.

The first is to treat the club like a traditional company. Pay yourself a meaty salary or a dividend based off profits that the club makes.

Chart showing Liverpool's profit and loss account over the years, with TBR Football logo

Liverpool profit and loss graph Credit: Adam Williams/TBR Football/GRV Media

But while Liverpool are a rarity in the Premier League in having been able to just about break even during the FSG era, they are no way near capable of generating the kind of profit that the owners in Boston want.

Originally, the European Super League and Project Big Picture – to breakaway projects co-authored by John Henry, Tom Werner and Mike Gordon – were meant to rewire the game’s financial structures and create a US franchise sports-like system that would facilitate long-term profits.

Both plots failed, with FSG almost selling the club soon thereafter. Eventually, they decided against a full sale, instead choosing to sell a minority stake to Dynasty Equity.

Even with a new domestic media deal worth £2.2bn annually set to kick in from next season, the Premier League is financially dysfunctional. The numbers don’t add up. It’s a big swinging kick contest.

It’s everyone else, not Liverpool, who are the problem, FSG would argue. But when you have to spend at the same rate to keep up with the competition, it’s your problem too.

Still, club valuations continue to rise. Liverpool are worth £4.5bn now, and investors are betting that the direction of travel is only going one way.

Chart showing the value growth of Liverpool, Arsenal, Chelsea, Tottenham, Manchester United and Manchester City since 2010

Value growth of Liverpool, Arsenal, Chelsea, Tottenham, Manchester United and Manchester City Credit: Adam Williams/TBR Football/GRV Media

For evidence of that, you need only look at FSG’s corporate structure itself.

Fenway continue to receive external investment from groups who are adamant there is a buck to be made.

Liverpool central to £8.5bn investment portfolio

Henry, Werner, Gordon and the private equity firm RedBird Capital are the biggest single shareholders in Fenway Sports Group itself.

Diagram showing the ownership of Liverpool, with FSG and Dynasty Equity included

Liverpool ownership diagram Credit: Adam Williams/TBR Football/GRV Media

But there are dozens of investors in total. Among them is Arctos, another private equity firm focusing specifically on sports acquisitions.

As well as an indirect stake in Liverpool through FSG, Arctos also own a 12.5 per cent stake in Paris Saint-Germain and another significant minority stake in reigning Europa League champions Atalanta.

In a recent insights report, Arctos confirmed that they have £8.5bn worth of sports assets in their portfolio, including NBA franchise Golden State Warriors and the NFL’s Buffalo Bills.

Arctos are said to own five per cent of FSG. Given that FSG they own 97 per cent of Liverpool, that effectively means Arctos own 4.85 per cent of Liverpool.

That makes them the fifth biggest individual indirect shareholder in the club. It also means, if FSG sold at a valuation of £4.5bn, Arctos would be owed almost £220m.

That’s a significant part of the £8.5bn portfolio Arctos have outlined.

Liverpool’s agent spend revealed

One way that money is flowing out of the Premier League is via fees paid to intermediaries.

According to recently released figures from the FA, Premier League clubs have spent over £400m on agents this season alone.

Liverpool have had a quiet season as far as transfers are concerned.

And yet, the Reds have still spent close to £21m on agents.

Club Agent spend

AFC Bournemouth £16,425,116

Arsenal £22,791,917

Aston Villa £25,077,873

Brentford £14,762,657

Brighton & Hove Albion £16,553,102