How would Liverpool benefit from buying Malaga?

Fenway Sports Group believe there is an opportunity to restore Malaga to the upper echelons of the Spanish and European game and there is huge potential for the only professional team in Spain’s sixth-largest city with a population of around 600,000. 

The team also has a loyal fan base — even when playing in the third tier last season, attendances at its rustic La Rosaleda stadium regularly topped 20,000. That strong support helped the team, coached by long-time club servant Sergio Pellicer, to get promoted back to Segunda in 2023-24, despite the ongoing off-pitch turmoil.

Malaga is also a well-known tourist destination, and the Costa del Sol area is home to a wealthy expat community, bringing opportunities for VIP matchday revenues and international marketing.

Fenway Sports Group is routinely held up as an exceptionally valuable sporting empire, with Forbes pricing the group at $12.95billion in 2024, pitching them as the world’s third-most valuable sporting group at the time.

A little under half of that amount was attributable to Liverpool, and during their time at the helm FSG have restored the Anfield outfit from a dire financial position to one of fairly rude health, especially by the exacting standards of English football. Across FSG’s time on Merseyside, Liverpool have pretty much broken even, and The Athletic expects the club to post a profit in 2024-25, alongside breaking the £700million revenue barrier (the only other English to have done so to date is Manchester City).

Liverpool benefited from £127.3m in owner funding last season, though it came via FSG selling a stake in the business to Dynasty Equity. It is believed, though not certain, the stake sold was only in FSG Football, rather than the wider group. If so, that valued the football arm — which at this stage is effectively just Liverpool — at £4.24bn. That’s more than 18 times what FSG bought the club for in October 2010, and not too far shy of that Forbes valuation.

Sitting on a valuable asset doesn’t necessarily mean FSG is cash-rich, and in truth they’ve been fairly tight with the purse strings at Anfield. That £127.3m injection was the first time since 2015-16 that Liverpool had received funding from their owners and across their time in charge, the total amount the club has received from on high is £263.6m, a long way behind several other English clubs. Yet that’s more a product of the sustainability model FSG have employed than any inability to fund Liverpool.

In their first six years at the club, FSG injected £173.3m in cash, providing the funding needed to get the club moving in the right direction and, crucially in the long term, to support development at Anfield.

How much would need to be spent at Malaga?

A look at the wage bills of the Segunda’s recently promoted clubs is instructive of how much might need to be spent at Malaga to propel the club back into La Liga. In the last three years, seven of nine clubs promoted to the top tier have done so with staff costs between €14m and €30m, though one of the outliers was Espanyol, who were promoted last season with a €44.5m wage bill. Espanyol benefited from a €25.4m La Liga distribution that included Spain’s equivalent of a parachute payment. By comparison, the rest of the second tier received €5-7m from the league (in 2022-23, Malaga’s distribution was €6m).

FSG would have to contend with clubs with greater turnover than Malaga but the gulf is not so large as if they were to buy, say, an EFL Championship club in England. The likelihood of meaningful profit in Spain’s second tier is slim, but the uplift in Malaga’s value were they to get back to La Liga — and stay there — could be significant. 

Importantly, any would-be buyer of Malaga will benefit from already strong support. Those high third-tier attendances were a big part of the club’s finances not nosediving, and the size of the local population makes for an obvious growth area.

Benefits for Liverpool

Where Liverpool would be more likely to benefit is behind the scenes. By bringing a club from mainland Europe under their control, FSG could more easily put boots on the ground from a scouting perspective. Warm-weather training, that favoured mid-season voyage of many clubs, would presumably be made a lot cheaper for Liverpool if their owners had ready access to facilities in the south of Spain.

Be it Malaga or anyone else that FSG choose to take the plunge with, Liverpool will remain the jewel in the group’s footballing crown. Liverpool fans need not worry about their side falling down the priority list. More likely any multi-club venture undertaken by FSG would be done so in the hope of improving Liverpool’s lot.

That being said, any purchase would necessarily require investment in the early stages, much as the buying of Liverpool did. FSG doubtless have the resources to do whatever they choose in that regard, but any Liverpool fans hoping they’ll change tack and start pouring money into their club are likely to be disappointed. The buying up of other clubs would make a move away from Liverpool’s sustainable model even less likely than it already is.

Of course, lots of clubs are doing well without following the Manchester City multi-club model, but it is becoming increasingly fashionable.