The tantalising prospect of buying a slice of one of the world’s few crown jewel football brands – just as prestige clubs get set to cash-in on a post‑pandemic commercial boom – has analysts speculating that Liverpool could be valued at as much as $7bn.
Fenway Sports Group, the owner of Liverpool FC, has kicked off a process exploring whether to sell a minority stake to a new investor, a well-timed exercise designed to put a price on a club enjoying on-field success in recent years that have seen their already huge global fanbase surge.
Roman Abramovich’s £2.5bn ($4.25bn) sale of Chelsea to US investors this summer – the enforced nature of the sale following the Russian oligarch being hit with sanctions following the invasion of Ukraine notwithstanding – provided a multibillion-pound yardstick for the ballpark value of a prestige English Premier League club.
The subsequent collapse of the pound to record lows against the US dollar following the disastrous “mini-budget” introduced by the former chancellor Kwasi Kwarteng has created bargain Britain for overseas buyers seeking bang for their buck.
“They are one of the big legacy clubs in the most popular and commercially successful league in the world, an opportunity like this doesn’t come up very often,” said Tim Crow, a sports marketing consultant. “Given the price Chelsea achieved, an auction Liverpool’s owners Fenway [Sports Group] would have watched with huge interest, an investor in Liverpool could give it a valuation as high as $7bn.”
Chelsea’s bankers worked through 200 indicative bids before a deal was reached with a consortium, led by US financier Todd Boehly, underlining the huge global interest in Premier League teams.
Liverpool’s “sales deck”, which is being handled by advisors Goldman Sachs and Morgan Stanley, will make for financially pleasing reading for would-be investors in the club.
Under their head coach, Jürgen Klopp, the club won their first league title in three decades in 2020, following a Champions League win the year before, with trophies essential currency in building commercial revenues.
For the 2020-21 season Liverpool signed a new kit deal with Nike said to be worth more than $39.5m annually, in a deal that included a 20% cut of all sales which the club have indicated will take them past the $100m annual earnings mark.
Last year, Liverpool’s official social media presence on Instagram, Facebook and Twitter shot through the 100 million follower mark – excluding the popularity of individual players’ accounts – cementing their position as one of the top 10 most popular clubs in the world.
“In terms of Premier League clubs if you are looking at the size of the fanbase then Liverpool would be up there with Man United as the two biggest in the business,” says Crow. “They are a long way ahead of everyone else. Purely from the point of view of the attention economy and global fanbase to tap into to monetise, Liverpool is one of the biggest brands in football.”
FSG, then New England Sports Ventures, snapped up Liverpool for a bargain £300m in 2010 as the club teetered on the brink of administration.
Following an estimated £120m revenue hit due to the Covid pandemic, Liverpool are in financially fine fettle. Analysts at football business website Off the Pitch estimate that Liverpool are on track to make a record £602m when they report their next financial results early next year, overtaking rival Manchester United, up a quarter on their last officially reported figure of £487m.
The club are also expected to bounce back into the black, a £4.8m loss last year is forecast to turn into a pre-tax profit of as much as £76m this year.
The commercial lifeblood for football clubs remains TV rights deals and Premier League clubs are reaping the benefits of an international boom in popularity and income. Last year, the US broadcaster NBC paid £2bn for Premier League rights for the next six years – almost double the value of the previous deal.
The World Cup is set to be held in the US in four years time, a huge promotional and commercial opportunity for the sport in the world’s biggest media market. And the Premier League has said that global TV income for the rights to air matches from 2022 to 2025 hit £10.5bn, with international deals with broadcasters outside the UK rising 30% to £5.3bn to overtake the value of the UK market for the first time.
Liverpool are increasingly tapping into the digital, and international, future. The club have opened stores in Thailand and Singapore and in their last financial year said that mobile transactions increased by 89% at their online store.
James Kirkham, founder of the marketing consultancy Iconic and former head of the football agency Copa90, said: “We’ve moved from the time where a club value within the wider world might have been predicated on how many seats it had in its stadium, and whether it could sell merchandise. Now the biggest clubs are becoming hyper-connected, multimedia entities who need to satisfy the insatiable appetite of worldwide consumers.”
