Just one of the world’s biggest football clubs being available for sale is pretty uncommon, so two being publicly put on the market at the same time is exceptionally rare.
That is the position arch-rivals Liverpool and Manchester United now find themselves in, though, with the former’s owners, Fenway Sports Group, having admitted they are seeking out potential new owners for the club, while the Glazer family have also revealed that they are open to new investment or a full-blown sale of the latter.
FSG have built a sale prospectus with which to draw in potential buyers, and employed the services of multinational banks Goldman Sachs and Morgan Stanley to help sound investors out, while the Glazers have partnered with Raine Group to do the same.
Why are Liverpool and Man Utd for sale?
FSG’s ownership of the Reds has been enormously successful, seeing them win every major trophy under manager Jurgen Klopp. United, though, have stagnated and seen diminishing success under the Glazers, who have loaded debt onto the club while paying themselves dividends.
Both sets of Americans appear to have had their interest in cashing in piqued by the sale of Chelsea earlier this year, when a consortium led by investor Todd Boehly paid £2.5bn to purchase the Blues from Russian oligarch Roman Abramovich, with a commitment to invest another £1.75bn once the takeover was completed.
That means the value of any top end Premier League club has had a value placed on it, and FSG and the Glazers can use it as a foundation upon which to move forward with a sale – though both will surely seek a higher figure given their respective clubs’ greater international profiles and fanbases. With FSG having paid £300m for Liverpool in 2010 and the Glazers just under £800m for United in increments by 2005, both stand to make an enormous profit on their investments.
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With the NBA and NFL both set to increase the number of franchisees in their division in the near future, and the prospect of financially challenging state-owned clubs like Manchester City, Newcastle United and Paris Saint-Germain in football becoming more difficult, the idea of shifting from owning a European football club to a new American sports team may appeal more.
While both are inherently similar businesses, there are some key differences. FSG’s investments in Liverpool’s training ground and stadium means a new owner would not need to invest in infrastructure, but many United fans feel Old Trafford has been left in a state of disrepair – so significant capital will be resolved for new owners to rectify various issues.
Yet there are a limited number of prospective owners who could buy or purchase a stake in Liverpool or Manchester United. So who are they, and would a deal really work for them?
Nation states
The first option for fans of both clubs to contend with is the idea that a nation state could purchase them.
That would raise questions surrounding sportswashing, just as has been the case at a number of elite European clubs.
The Abu Dhabi United Group owns the City Football Group with Manchester City their prized asset; PSG are owned by Qatar Sports Investments, a subsidiary of the state-run Qatar Investment Authority; and since November 2021, Saudi Arabia’s Public Investment Fund has been in charge of Newcastle. All three of those clubs are owned by investment vehicles linked to those respective states.
Last week, the Saudi Arabian sports minister, Prince Abdulaziz bin Turki Al-Faisal, talked up the possibility of businesses from his country purchasing both clubs, while Bahrain’s Investcorp vehicle entered talks to purchase AC Milan earlier this year before eventually losing out.
The advantages of such a deal for a state looking to sportswash are clear. Their association with one of the two most popular sporting and cultural institutions on the planet would increase their influence around the world and would allow their name to be constantly linked to their success, while investments in sectors including property in the city the club is based can help curry favour with local councils and national governments.
However, previous examples of nation state ownership involve countries purchasing teams which enjoyed at best middling success, before turning them into powerhouses. Abu Dhabi is not just associated with Man City’s success, then, but the club’s journey from the lower reaches of the Premier League to very top of the game.
The “buy low, reap the high rewards later” model would have to be altered significantly for any state wanting to buy a club as expensive as either Liverpool or United. And with most of the Gulf states already in possession of a club, the likelihood is further reduced.
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Individual billionaires
It is of course possible that a solo billionaire could decide that the thrill and fun of owning one of the world’s premier sports teams in enough reason to take the plunge. After all, they have the money, and what else are they spending it on if not a shot at fun and glory?
That was the Abramovich approach to owning Chelsea, after all, and Ineos founder, Jim Ratcliffe, has been linked with United while India’s richest man, Mukesh Ambani, has been touted as a potential Liverpool buyer.
But Chelsea’s precarious financial position at the time meant the Russian didn’t have to shell out billions to make the purchase, and was able to dump the majority of his investment over the years into a scattergun approach in the transfer market.
Some billionaires may be eccentric and prone to making vanity purchases, but the idea of spending the whopping amount it would take to purchase Liverpool or United and then run it alone with little realistic prospect of taking home a profit on that investment any time soon seems to make little sense.
Individual billionaires have become less common purchasers of football clubs over time, as the sheer scale of the money involved has increasingly required multiple wealthy investors.
American consortia
That need for a group of investors is what led to Boehly’s arrival at Chelsea, and plenty presume that the most likely buyer of both Liverpool and United will be more groups of wealthy Americans.
The problem with that, though, is if consortia of Americans have decided that now is the right time to sell Liverpool and United, why would very similar groups of people suddenly decide that now is the right time to buy?
FSG and the Glazer family’s investments have succeeded, from their own point of view, because the value of their businesses have increased exponentially since they were purchased. That is due to financial factors like increased TV rights income, merchandising, sponsorships and advertising.
But those increases are now slowing down. Premier League TV rights income, for instance, appears to be beginning to plateau.
Any American consortium wanting to purchase either club would be doing so in order to make a profit, just like FSG and the Glazers. But while FSG were able to increase the value of Liverpool by around 1,000 per cent in just over a decade, it is hard to see where a huge increase in the value of a club will come from in the next few years.
That is unless new consortium owners would want to return to ideas which were designed to increase the value of big clubs which have already been rejected, like the European Super League clubs and the abolition of the Premier League’s even division of TV rights income among all 20 clubs. Without unpopular changes like that, there doesn’t seem to be a lot of value in a deal for another American consortium.
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One of the unsuccessful bids when Chelsea were on the market was led by Sir Martin Broughton, the former Liverpool chairman who was part of the process which saw it sold to FSG. Two reported investors in that bid were tennis superstar Serena Williams and record-setting Formula 1 racer Lewis Hamilton.
Back in August, Tiger Woods and Rory McIlroy unveiled a new tech-focused golf league which has received investment from an array of American financiers, sports stars and celebrities including Williams, Hamilton, Steph Curry, Gareth Bale, Lando Norris and Justin Timberlake.
Hamilton, to take one example, is already a shareholder in the Denver Broncos NFL outfit, while basketball star LeBron James holds shares in FSG itself.
Super wealthy sports stars are increasingly investing their money in long-term sporting projects, which are both designed to increase their fortunes and the value of the businesses they are buying into by having some of the most marketable people in the world associated with them.
Perhaps, then, a group composed of wealthy financiers with the backing of some sports stars could become minority investors in either Liverpool or United, at around 20-30 per cent. The injection of cash would satisfy either set of owners’ desire for investment, while the potential marketing and digital bonus of some of the world’s most famous people being involved is clear.
This is a potential type of deal which could potentially suit FSG, with the group already composed of many different investors with backgrounds across all sorts of different sports – and its relationship with the LA Lakers’ James showing they see a benefit in working with sports’ most famous faces.
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