The Political Economy of Football V2

There are signs that FSG’s vision of a virtuous circle — where success on the pitch powers commercial revenues, which can then be reinvested into the playing squad and the youth academy — is becoming a reality. Liverpool won the title despite spending less than any other Premier League club across the summer and winter transfer windows, according to Transfermarkt data. Its use of sophisticated data analysis techniques to identify undervalued players — such as midfielder Ryan Gravenberch and defender Ibrahima Konaté, each signed for €40mn — means they have spent less on transfers than all their major rivals since their last title win, in 2020. However, keeping a successful group of players together has required Liverpool to extend contracts and increase player wages. The result is that its wage bill is now the second highest in the league. That puts the onus on Liverpool’s commercial department to increase revenues. Ben Latty, the club’s chief commercial officer, told the Financia...

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 a...

With Christmas approaching two years ago, Fenway Sports Group’s ownership of Liverpool Football Club was at a crossroads. Uncertainty reigned. U.S. banks Goldman Sachs and Morgan Stanley had been tasked with sounding out interest from investors. FSG, the Boston-based firm that had paid £300million ($380m in today’s exchange) for Liverpool in October 2010, had long since been open to the idea of selling a minority stake, but the difference this time was that a full sale was also on the table. The backdrop was key. Having seen Chelsea sold six months earlier to a consortium led by Los Angeles Dodgers part-owner Todd Boehly for £2.5billion — with another £1.75bn committed to investing in the club’s infrastructure — FSG wanted to establish what potential buyers would pay, with Forbes valuing the club at around £4bn. With then sporting director Julian Ward and director of research Ian Graham both serving notice to quit their roles and Jurgen Klopp’s side a fadi...

Liverpool swung from a £7m pre-tax profit to a £9m loss, as revenue was static at £594m, but operating expenses rose £20m (3%) to £632m and net interest payable was up £2.0m to £4.5m. This was partly offset by profit on player sales increasing £6m from £28m to £34m. Although a loss is rarely good news, Liverpool’s £9m pre-tax deficit is actually the third best result to date in the Premier League, only surpassed by the profits made by Manchester City £80m and Brentford £9m. Their sustainable approach is in stark contrast to many other clubs, as some very large losses have already been reported for last season, including Aston Villa £120m, Southampton £87m, Newcastle United £73m, Wolves £67m and Arsenal £52m. Last season was the first time that Liverpool reported a loss (since 2016 outside of the COVID years). In fact, in the five years up to 2019 they had managed to generate nearly a quarter of a billion of profits.     The last three years have not been so impressi...