FSG and RedBird have Anfield plan after £534m Liverpool boost

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After a bruising week, Fenway Sports Group are pushing ahead with their planned move into what they themselves are describing as ‘FSG 3.0’, how to find new avenues of revenue generation and growth across Liverpool and the Boston Red Sox is one of their top priorities.

FSG’s part in the failed bid to launch a European Super League has seen their stock at Anfield slump to an all-time low, John W. Henry and Tom Werner et al making a huge miscalculation with their efforts to be part of the breakaway league with 11 other leading clubs in Europe.

While they may have anticipated some push back on the idea, the very nature of the backlash would have left them in no doubt that this was a plan that was never going to get off the ground as it had been presented, with Henry forced into a very public apology.

With that plan kicked into the long grass for the time being there is a need for Liverpool, who released their financial statements yesterday revealing a £120m blow, to think outside the box and add further revenue streams to tackle the losses that have occurred – and continue to occur – due to COVID-19.

The Premier League was suspended from mid-March 2020 and only returned behind closed doors in June.

But in that timescale Liverpool saw media revenue fall by £59million to £202m, matchday revenue drop by £13m to £71m and overall revenue tumble by £43m to £490m.

Liverpool’s loss before tax was £46m.

As sport prepares itself to open up to fans again in the coming months and try and pick up the pieces from the havoc that the pandemic brought across the globe, with finances taking a hammering as stadiums were shuttered to spectators and vital revenue streams diminished.

Last month FSG took a major step forward in their bid to ensure that the profitable empire that they have built up continues to be just that, with the £534m ($750m) investment into FSG from Gerry Cardinale’s RedBird Capital Partners in exchange for 11 per cent of the business being key to that.

While the hope from Liverpool fans would have been that it would provide a cash boost for Jurgen Klopp to work with in the transfer market, the reality is that it will allow for the status quo to remain in that sense, for Liverpool to approach the summer in a way that they would have planned in an non-COVID era.

A more pointed use for the funds will be to try and accelerate plans to add further teams to the portfolio, including in football, with FSG understood to be looking at options across Europe, including in German football.

RedBird and FSG deal

For Cardinale, who already owns French second division side Toulouse through his RedBird FC business, he has built a reputation as a savvy investor who has achieved great success in monetising the space around sporting content and the matchday experience, something that he will be looking to replicate with FSG and, in particular, Liverpool, where the real growth value lies for such an iconic and global brand.

As a key figure in the YES Network in the US, a regional network that broadcasts New York Yankees games as well as other sporting teams from across the Big Apple, Cardinale helped it become the number one regional station in the country.

Partnering with Amazon, YES Network has plans to integrate new ways that fans can consume content, especially in the age where the younger generation aren’t watching full games and are instead taking in sport in soundbites, living it through social media.

Technological advances in things such as AI could well offer a chance in the near future for fans around the world to get a virtual feeling of what it’s like to hear the Anfield roar, but football will be waiting to see how people come back and how they engage with traditions post pandemic, and whether the past year has made people reassess their relationship with the game.

Hospitality is another area where Cardinale is adept, the Legends Hospitality business that he is involved with alongside Dallas Cowboys owner Jerry Jones has been a huge success, taking over the running of corporate hospitality at both the Cowboys and the Yankees.

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But while all these potential new avenues of revenue will help more money flow into the business and, ergo, enable FSG to continue to invest in the team, it cannot, as Cardinale states, come at the expense of the traditions that make sport what it is in the first place.

“We’ve got to be a little careful, here,” explained Cardinale on the Sportico podcast.

“Yes, we’ve got to adapt to the younger demographic and the way that people want to consume content but there has to be a good balance that it doesn’t take away from what is the main product, and the main product is really great sport.

“If everybody has their head down in the stands on their phones, at what point do you reach a tipping point?”