Last week the relationship between Liverpool and LeBron James took another step.
Basketball icon James, who recently became the NBA’s all-time scoring leader, has been entwined with the Reds ever since 2011 when the firm he co-owns with business partner Maverick Carter, LRMR Ventures, struck a deal with Liverpool owners Fenway Sports Group.
At the time FSG had wanted to managed James, then with the Miami Heat, through their Fenway Sports Management subsidiary, but in return for such a deal the current Los Angeles Lakers star wanted an equity share in Liverpool.
That two per cent stake at a £4.7m valuation grew into a one per cent stake of FSG’s entire operation in 2021 at the same time the Reds owners sold an 11 per cent slice of the business to New York-based investment fund RedBird Capital Partners. That one per cent stake, with FSG valued around the $10bn mark means that the initial stake held in the Reds had turned into a near $100m investment for James.
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Following that move the relationship between James and Liverpool has started to grow, with FSG investing, alongside RedBird and Reds kit supplier Nike, in James and Carter’s media and culture company SpringHill, the company behind the Space Jam: A New Legacy movie and 2022’s Netflix hit ‘Hustle’, with Adam Sandler.
James and Nike have been partners since the 38-year-old burst on to the sporting scene straight from high school, and with Liverpool having gone to great lengths at the High Court in 2019 to ensure that they could partner with Nike moving forward it has been a simpatico relationship.
Last month James and Liverpool launched a new merchandise collection with Nike, one aimed at appealing to broader demographics who may not just be Liverpool or even football fans. It is the added value in what James and Nike can bring that is seen as key to Liverpool making the most of the 20 per cent cut on the sale of LFC/Nike branded merchandise globally, with Nike paying around a £35m per year flat rate. Estimations are that the value that potentially exists with the structure of the deal could push beyond the £70m per year mark.
The latest step in the relationship was revealed last week following the annual FSG partners’ meeting in Bonita Springs, Florida. FSG confirmed after the meeting that James inked a lifetime marketing deal in exchange for increased equity in Liverpool’s owners.
An FSG statement read: "FSM [Fenway Sports Management] and LRMR Ventures have extended their longstanding strategic partnership into a lifetime deal that will allow FSM to continue to secure exclusive, global marketing and sponsorship opportunities for four-time NBA Champion LeBron James.
"As part of the agreement, James, and co-founder of LRMR Ventures Maverick Carter will receive additional equity in FSM’s parent company FSG. James and Carter became members of FSG’s ownership group in 2021."
For FSG, whose principal John W. Henry reaffirmed the commitment to Liverpool in an exclusive interview with the ECHO last week, the development is another building block of the relationship between FSG and James, one of the world’s most well known and marketable athletes. It is also a sign of what is to come in the future, with James expected to helm any NBA project that FSG become involved in, with the Reds owners eyeing an expansion franchise in Las Vegas in the coming years.
With FSG currently seeking investment in Liverpool, the inking of a lifetime deal with James, one that gives them unique avenues to explore when it comes to growth opportunities, is something that will appeal to anyone looking to pay a considerable sum for an equity share in the Reds. It also points to a likely very long term collaboration between Nike and Liverpool given the nature of James’ deal with the US sportswear giant, who have been able to deliver record revenues despite the challenging economic conditions that were heightened by the pandemic, with Nike having pivoted successfully to a more focused online direct-to-consumer strategy.
Access to long-term deals that are in place and unique relationships are all part of the process when considering investment. Liverpool offers a unique opportunity in that respect, different to what the likes of Manchester United can provide, or indeed most clubs whose owners are looking to either sell or bring on board new investment.
Having James increase his equity in FSG and tie himself to the company for the future gives more certainty certain deals and opportunities, and that is something that the Liverpool owners will be able to leverage in order to achieve the kind of valuation that they are seeking for the Reds.
Liverpool chairman Tom Werner said in 2011: "There are very few athletes who can match his global reach, appeal and iconic status. We feel the business opportunities for both working and being identified together in emerging international markets will result in unforeseen opportunities that neither would have been able to realise alone."
Having been revealed to have been seeking investment in Liverpool back in November, Henry hinted that the Reds owners had identified potential investors into the club as a result of the process that they began late last year that was led by Mike Gordon and facilitated by US investment banks Goldman Sachs and Morgan Stanley.
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