“The Abramovich era was upon us, and I knew that I could never compete". Those were the words of former Liverpool FC chairman David Moores, when explaining why he sold the club to George Gillett and Tom Hicks in 2007.
Change ‘Abramovich’ for ‘State-owned’ and that could, perhaps should, be John Henry’s words today.
Headlines were made recently when a report showed how Liverpool’s net owner funding in the last five years is minus £37 million. Hence inflammatory reactions of why do Liverpool’s owners take money out of the club.
Of course, the reality is much more simple, even if it's still not what fans would like to see. That money is money being repaid from the club to the owners for loans they made to expand the stadium. Quite why those loans are being repaid during the redevelopment, and not once the Anfield Road Stand is completed and the extra revenue being generated from it, is another matter.
The reality is that Liverpool’s owner funding debate is actually very, very simple: FSG implemented a self-sustaining model at Liverpool FC.
It’s that simple. Liverpool FC funds all Liverpool FC matters. The owners do not put money in, and nor do they take money out.
Now, that of course seems pretty sensible. A sporting organisation uses the money it generates to fund the sporting organisation. Isn’t that exactly how it should work?
Well, yes and no. It is exactly why FSG first purchased Liverpool FC, with the belief that Financial Fair Play rules from UEFA and the Premier League would mean that all clubs would need to be run in such a manner.
FSG increased Liverpool’s commercial revenue substantially, allowing more funds for players, while overseeing the expansion of Anfield to over 60,000 and the new training ground. Infrastructure projects that had hamstrung the club for decades previously.
The problem is, that if FSG don’t put any money into the club during the ownership, what exactly happens when the club they purchased for £300 million, that is now valued (by Forbes) at over £4.3 billion is sold?
When FSG received an investment of £533 million from RedBird Capital Partners in 2021 - an amount influenced by the fact Liverpool FC is part of FSG’s portfolio - there was no additional investment put into Liverpool FC.
So while they don’t take money out of the club directly, year-on-year, they are gaining from the club significantly. And they will gain exceptionally handsomely if/when they do sell.
When Moores begrudgingly sold the club in 2007, he did so because he knew the club couldn’t compete with the new riches that the Roman Abramovich era had ushered in at Chelsea. Liverpool are in the same position now. FSG, via their self-sustaining model, cannot compete financially with Man City, Newcastle United, Man United, and seemingly even Arsenal.
“We looked long and hard for the right person or institution, we followed up every lead,” said Moores of his search for an investor - something FSG have seemingly sought but also to no avail.
“We WANTED that fantasy investor to come forward,” said Moores. "The infinitely wealthy, Liverpool-loving individual or family with the wherewithal to transform our dreams into reality.”
FSG have, seemingly, been seeking a similar fantasy investor. One to either offer an outright sale at a valuation north of £4 billion, or one to come on board as a minority investor. Nothing, though, has been agreed in the seven months since chairman Tom Werner confirmed they were “exploring a sale.”
If FSG did receive investment, that needs to be invested into Liverpool the club, not FSG’s portfolio.
Adapt or decline
So while FSG’s approach of a self-sustaining model is morally correct - and arguably the way in which all football clubs should be run - it cannot compete.
This is where supporters at least would like to see the owners put money into the club in order to compete.
Too often there has been a feeling of being left short in the transfer market, or that resources were being saved for next summer - each time this hasn’t materialised. Tomorrow never comes.
Liverpool as a football club should have built upon the two successive seasons of winning the Champions League and Premier League, but three years on they are out of Europe’s premier competition and arguably facing a bigger challenge than when Jurgen Klopp arrived at the club eight years ago.
When Klopp arrived in 2015 he inherited a weaker squad than he has now but he wasn’t competing against the mega riches that now dominate the Premier League with Newcastle’s emergence.
Actual investment from FSG in these past three years, to allow Klopp to have acquired an extra centre-back when required, a midfielder when it was needed, a higher calibre player to keep the squad at the very top, would have things looking very differently.
You cannot argue that FSG have been good owners for Liverpool, they have. They’ve improved the club’s infrastructure, significantly increased revenue streams, and overseen the most successful period, in terms of silverware, since the 1980s.
And, as outsiders, they are within their rights to treat the asset they acquired however they like. But football clubs aren’t like traditional businesses and are unique in that they represent a culture, a community, a fan base - and they have to be treated differently too.
Liverpool are, according to Forbes, the fourth-most valuable football team on the planet. But they simply cannot compete with their current model.
FSG as owners have been risk averse. Without either a change in approach, or significant investment, or a change of ownership, Liverpool will face a huge challenge to continue to compete with the state-backed clubs that now dominate the top of the Premier League.
FSG need to adapt their strategy, or a decline will become hard to avoid.
More Liverpool stories
Liverpool transfer news is ramping up ahead of two big summer rebuilds.
Benjamin Pavard of Bayern Munich has been linked, while James Ward-Prowse is said to be on the shortlist. Celta Vigo's Gabri Veiga is a target and Khephren Thuram of Nice is said to be close to joining – but Manuel Ugarte is one star who reportedly won't be moving to Merseyside.
Liverpool are also battling Arsenal for the signature of Romeo Lavia, following Southampton's relegation to the Championship.
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