British-Indian businessman Amit Bhatia is to become Liverpool’s new vice-chairman and take a
place on the board in return for a minority stake in the 20-times English
football champions.
He is to be joined on an expanded board by Elaine Saverin,
the wife of Facebook co-founder Eduardo Saverin, and Bryan Baum, who is
representing Amazon founder Jeff Bezos rather than Bezos becoming a board
member himself.
The transaction documents provide options and flexibility
for how a relationship may evolve over time, which effectively means that
Bhatia would be in the driving seat to purchase a larger shareholding should
FSG wish to sell more of the club in the future. For now, FSG will retain
majority ownership and there is to be no change in the day-to-day operation of
Liverpool. The transaction is not a direct capital raise for the club, or an
indication of a change in transfer strategy.
The deal remains subject to approval from the new
Independent Football Regulator and those involved must pass the Premier League
owners’ and directors’ test. That could take up to 90 days.
Liverpool announced record revenues of £703million in the
last accounting period, spending about £550million on new signings for the team
over the past 14-months. The club had not been seeking investment out of
financial necessity. Rather, FSG believe the opportunity stood out due to
the calibre of people involved and the experience, relationships and global
links they can bring to help grow the club.
There is an expectation that the consortium will open up
networks in India and across Asia and support Liverpool’s long-term growth
ambitions by bringing together experts from across global business, technology
and investment.
Increasing the club’s turnover would then enable more to be
spent on the team given the Premier League’s squad cost ratio regulations.
These limit the spending of top-flight clubs to 85 per cent of their
football-related revenue and net profit/loss from player sales. In addition,
those who play in European competition, as Liverpool invariably do, must fall
in line with Uefa’s 70 per cent cap.
Bhatia, the son-in-law of Indian steel magnate Lakshmi
Mittal, has been speaking to high-ranking FSG figures for more than a year,
with his interest having been facilitated by Corestone Capital Advisors, who
introduced the relevant parties. He
is viewed by FSG as the primary partner and has subsequently put together the
group of high-profile investors.
1982 Holdings comprises the Bhatia and the Mittal Family
Trusts, K5 Sports, with Bezos as the lead investor in the K5 Sports fund, and
EE Capital, the family office of Elaine and Eduardo Saverin.
FSG president Mike Gordon, who has taken on more of a
day-to-day role in Liverpool following the resignation of chief executive of
football Michael Edwards, said: “Liverpool has always been built by thinking
beyond one season and making decisions with the club’s long-term interests in
mind.
Reaction from supporters’ group
The Liverpool supporters’ group Spirit of Shankly (SOS) has
already contacted the new football regulator and is seeking engagement with
1892 Holdings and Bhatia, who was previously involved with fans’ bodies at QPR.
“As Liverpool supporters, we need zero reminder of the
importance of good governance and club ownership,” said SOS, in a reference to
the tumultuous regime of Tom Hicks and George Gillett, which preceded FSG’s
tenure. “We trust that the current owners FSG realise this, and have carried
out their own due diligence because we as supporters will most certainly do our
own.
“It’s important we take time to understand fully the
long-term implications this deal will have for our club’s ownership and at the
same time what it doesn’t mean — wild speculation about transfers and spending
helps no one. It is vital for the game in general that football clubs are run
sustainably, as LFC has been, and not an arms race funded by mega-rich
individuals or state-backed entities.”
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