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FSG have sealed ‘bargain of the century’ as Liverpool in talks for £40m off-pitch deal
Fenway Sports Group have a knack for sealing bargain deals and their latest investment could set Liverpool up for long-term success.
FSG’s cautious approach to investment has at times frustrated Liverpool fans, with the Boston-based group not prepared to bankroll huge losses like the owners of Man City, Chelsea or Newcastle.
But in an era where Profit and Sustainability Rules are increasingly anchoring the football ambitions of US private equity groups and sovereign wealth funds, FSG‘s approach now appears sensible.
Their commercial income is now around £270m per season, while upgrades at Anfield in recent years mean they hope to generate another £100m through the turnstiles annually very soon.
All this is to say, FSG are uber smart when it comes to the business side of football.
But there is one opportunity that the John Henry-led group have so far failed to capitalise on. Until now.
FSG want yet another bargain with Bordeaux takeover
Both FSG and Bordeaux have confirmed that they are in talks regarding a potential takeover of the Ligue 2 club by the multi-sports empire.
Bordeaux are financially distressed under their current owners, with debts of around £40m which FSG would assume responsibility for should they buy the club.
The total cost of the takeover could be around £68m.
They were relegated from the French top flight in 2021-22 and, as they have failed to prove to the French football authorities that they can funds themselves next season, now dace demotion to the third tier.
However, Bordeaux are a historic club with a strong fanbase, an impressive stadium and have a successful academy.
All of those factors suggest that they would be a steal, even if it does set FSG back £68m.
Speaking exclusively to TBR earlier this week, football finance expert Kieran Maguire claimed that FSG got the “bargain of the century” when they bought Liverpool for £300m in 2010.
Conservative estimates would place Liverpool‘s enterprise value at around 10 times that figure – and potentially far more.
And the evidence suggests that FSG are set to reinforce their reputation for securing cut-price deals with massive upside with their proposed acquisition of Bordeaux.
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TBR ANALYSIS: How will Liverpool benefit from FSG’s Bordeaux takeover?
The benefits of the multi-club model are numerous and diverse, ranging from Brexit-busting recruitment advantages to globalised commercial opportunities.
A network of two or more clubs allows the mothership, Liverpool in this case, to pool costs. That can help in terms of PSR compliance.
With post-Brexit rules now blocking Premier League clubs from signing under-18 players from Europe, a multi-club model would also provide Liverpool with a workaround to recruit the best young talent.
Then there are branding benefits. Man City have proved this at City Football Group, wherein they have implemented the sky blue brand at each of their 12 clubs, raising City’s global profile.