Fenway Sports Group, owner of Liverpool FC, has sold a 10% stake in its business for £533m but while the deal will help the redevelopment of Anfield, it is unlikely to fund a transfer spree. Tony McDonough reports
Liverpool FC owner Fenway Sports Group has sold a 10% stake in its business to a private investment firm part-owned by the former NBA star LeBron James in a £533m deal.
The investment by RedBird Capital Partners values FSG, also the owner of the Boston Red Sox baseball team, at around £5.33bn. The cash injection will allow FSG to press ahead with the £60m redevelopment of Anfield but is unlikely to mean extra transfer funds for Reds manager Jurgen Klopp.
As a result of the COVID-19 pandemic, Liverpool FC is believed to have suffered £120m in lost revenues, a figure which is expected to growth further. The investment will help the club cushion the blow of the losses and press on with the planned expansion of the Anfield Road stand.
FSG, led by US tycoon John W Henry, acquired Liverpool in 2010 for £300m from another pair of US investors, George Gillett and Tom Hicks, following a boardroom tussle. They had saddled the club with huge debts and taken it to the brink of administration.
Livepool’s fortunes have been transformed under the ownership of FSG. Klopp was brought on board and investment in players such as Mohamed Salah, Virgil van Dijk and Allison Becker has netted the Reds the Champions League and, for the first time in 20 years, the Premier League trophy.
And the investment has has also proved lucrative for FSG. The company, whose other interests apart from the Red Sox, include minor league baseball team Salem Red Sox, the NESN cable sports network, and Roush Fenway Racing, has seen Liverpool FC’s value soar to an estimated £2bn.
Last November, the club revived its its plans for the £60m expansion of its Anfield stadium that will take it capacity above 61,000. It is looking to extend the Anfield Road stand, which currently has two tiers. Its plan would add 5,200 general admission and 1,800 hospitality seats to the revamped structure.
Thanks to a £110m loan from FSG, Liverpool began rebuilding its main stand, now known as the Kenny Dalglish Stand, in 2014. It completed the project in September 2016, taking overall capacity to more than 54,000.
However, if fans are expecting Jurgen Klopp to be handed pot of cash for a summer transfer spending splurge as a result of the deal, they are likely to be disappointed. The pandemic means finances remain tighter than normal.
Former Liverpool Echo journalist, now a writer for the Athletic, James Pearce, said the transaction will offer “continuity and stability”. He added: “It will not mean a £200m summer spending spree.”
Redbird was founded by the former Goldman Sachs partner Gerry Cardinale. Like John W Henry, Mr Cardinale is a billionaire who, while a student at Oxford, competed in the world famous Oxford and Cambridge boat race. He is a major stakeholder in the YES Group, America’s biggest regional sports TV network.
A statement from FSG’s leadership, comprising principal owner John W Henry, chairman Tom Werner and president Mike Gordon, said: “Our strategic partnership with Gerry and the entire team at RedBird will enhance our ability to pursue future growth opportunities in a more accelerated way but with the same selectiveness that has served us so well.
“We are also pleased to welcome to our ownership group LeBron, Maverick and Paul, with whom we have enjoyed a successful collaboration for well over a decade. Their addition is an important milestone for FSG and expands and deepens a longtime friendship and relationship that began in 2010.
“To our fans and supporters: winning continues to be the driving force for all of us. The growth of FSG as an organisation allows us to further strengthen our resources and commitment to the communities we serve, and we look forward to having these talented new partners join us in the next chapter of FSG’s evolution.”