At the beginning of last week Liverpool principal owner John Henry put to bed the talk of a full sale of the club.
In a revealing Q&A with the Boston Sports Journal, Fenway Sports Group chief Henry said that a full sale was not being pursued, with the ownership group instead speaking to investors over the sale of a stake in the club as FSG seek to recapitalise the business ahead of what is likely to be an expensive team rebuild.
Liverpool’s value, in the eyes of FSG is, £4bn and above, quite the return from the £300m that they paid to acquire the club back in 2010 from the near ruinous regime of Tom Hicks and George Gillett.
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FSG are, however, in their own words in ‘growth mode’. Liverpool are the most valuable asset in their $10.3bn empire that also includes sporting assets such as the Boston Red Sox MLB team and the Pittsburgh Penguins NHL franchise.
Valuations are predicted to keep on rising still, albeit at a slower rate than has been seen in recent years. Media revenue has been what has aided those soaring valuations in the Premier League, the world’s most lucrative football league.
The bursting of the ‘bubble’ has been predicted for some time, but with rights now more valuable than ever on the next cycle, where international rights and domestic rights combined are worth £10bn over the life of the next cycle, there is some way to go before that happens.
And with streaming platforms now entering the space, with the likes of Apple having started to test the water in the US with Major League Soccer and Amazon Prime Video having already made themselves a part of the UK market, the potential for the premium top end rights to keep growing remain a huge carrot for owners when it comes to potential future revenue growth. That is something that won’t have been lost on FSG in their decision-making process around retaining ownership of Liverpool, one of the major pulls globally when it comes to Premier League broadcasting.
Speaking at the Financial Times’ Business of Sport Summit in London on Thursday, Adam Kelly, president of IMG Media, said: “We are in a very fierce battle for attention and sports rights form part of a much bigger ecosystem that competes against various other media assets, from TV shows, music, to film. Entertainment of all kinds, including gaming.
“But sport has the power to cut through that saturation, and actually the trend has been that saturation has become more and more of an issue. What we are seeing more recently is really sport proving its benefit, proving its power, and that is really exemplified by the investment that streaming companies have placed in sports content.
“In 2023 they will be spending 64 per cent more than in 2022, $8.5bn just amongst the streamers themselves, and that really goes to show that when you look to create this very powerful, live audience that you can account for, sport really is more powerful than almost any other.
“At the high end there really is a long way to go.”
There are threats to that growth, however.
While the pivot from traditional broadcasting to streaming may occur over time, there is a major issue that clubs, owners, broadcasters and the Premier League face when it comes to the rise of high-quality piracy that has arrived in homes, threatening to disrupt the media rights market that underpins the money that flows into the game and pays for the big transfer fees and huge wages.
“There is room for growth but there are challenges and I think that the market is going to have to evolve if it wants to continue to grow,” said Tom Burrows, EVP of global rights strategy at streaming giant DAZN, speaking at the same FT event, said: “We need to move away from a historical, purely transactional model. I think that model has reached, or is about to reach its peak. It can’t just go one way.
“The second biggest threat is piracy. We have got to a point where I wouldn’t say it goes too far to say that it’s a crisis for the sport.
“In the markets that we are in we are seeing piracy now as being professional, being organised and everyday consumers are buying a box and paying a monthly fee and they think that what they are getting is a legal service.
“Gone are the days when what you were watching was someone filming from a TV broadcast, these are professional, organised and high quality services and that is a massive threat. It’s not something we can solve alone, it has to be across rights holders, broadcasters, government agencies and the police.
“In Italy, for example, we are starting to see some real police action and they are raiding these organisations and shutting them down. We see an instant impact on our subscriber numbers for the next match week. If broadcasters and streamers are going to keep investing then that’s a threat they have to solve.”
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