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Liverpool Echo

Sport

Dave Powell & Stephen Killen

When FSG could secure Liverpool investment and what it means for Jude Bellingham transfer

Liverpool FSG Dave Powell John Henry John W Henry Echo Manchester United Football LFC

Investment speculation continues as Liverpool owners Fenway Sports Group look for a minority partner.

In November, FSG released a statement to the ECHO expressing their commitment to the Reds as they began actively searching for interested parties.

Principal owner John W. Henry stated that the focus was on the search for a minority partner, thus ending speculation that the six-time European champions will be sold, ending their 13-year stewardship. On Tuesday, the ECHO published an exclusive interview with the 73-year-old American.

In the chat with Business of Football writer Dave Powell, Henry discussed FSG's plan for the Reds as well transfers ahead of a prospective busy summer transfer window.

Little wonder, then, there were a number of things for our writer to discuss in the ECHO's latest Q&A session with Reds supporters.

What do investors get?

Reds4life: What exactly are 'investors' getting back from their invested money then Dave? Do they get a handsome payout with such small net profits? Do they get a say in club matters, transfers, money to be spent, strategy?

Dave Powell: It's a good question and one that I'm asked a lot. To look at the PE market, investors usually have a timescale of five years, sometimes seven to get a return when considering a long-term investment. How the capital is deployed and the annual profits of the business are often not a consideration if the ultimate play is the return on the investment through a sale later down the line and the gamble on increased valuations. That is the thinking here, however, I do think that the investor that LFC go with, if concluded, is that it would be one with a degree of operational control in terms of a seat on the board. That would be linked to potentially accreting a minority stake in a majority one in the future.

Liverpool investment latest

Nathanquinn23: Do you think the investment is close? Especially with the owners' comments?

Dave Powell: Hi Nathan. The process, as Henry said, has identified potential investors. Selling a minority stake is obviously an easier process than a full sale with a lesser degree of due diligence. It will still take months, but I'm sure the summer will be seen as a date to get something done. As for interested parties, NDAs would be in place but the Liberty Media link, while I've not been told that specifically, would make a lot of sense. A partner that has serious funds and expertise to scale a media business.

How much more of Liverpool would FSG be open to selling?

Leftfooter: Hi Dave. Investment is welcomed but FSG can only visit this well so many times, how much more of the club do you think FSG are willing to sell before an overall sale is done?

Dave Powell: Hello mate. I agree on that front, and I don't think it will be something that they will continuously look to. I'd imagine this would fall between 10% and 20% in this search, but it is who the partner could be that would be crucial to it all. Henry himself said that the process had "identified investors". They will ideally want a partner who can come in and provide capital and expertise to grow the business, but one that would be willing later down the road to accrete a minority stake into a full takeover. Satisfies needs of here and now, removes risk of leaving money on the table and provides a strategic partner that may have the power to conclude a swift purchase in seasons to come at a time that is right for FSG.

Signing Bellingham and summer plans

Jimchamps: If we are spending so much to get Bellingham in the summer, how much will be available to get another world class midfielder and a defender which are areas we need to strengthen?

Dave Powell: There is plenty of headroom for amortisation costs to be factored in for a rebuild, and the wage bill, while heavy this year, will be reduced from next season owing to the absence of bonus payments (although Salah's new deal will feature). The issue is really the capital available to make the initial payments to clubs for these players without severely impacting cash flow. Chelsea were able to rely on a hefty chunk of readily available capital to pursue their strategy due to the position of Clearlake Capital, effectively spending other people's money. Investment for LFC would aid that.

John Henry's 'investment' claims

Rahul21: Do you get the sense that Henry’s comments about ‘investing wisely in the transfer market’ mean the transfer spend we think is required this summer won’t happen? It isn’t the most encouraging of comments.

Dave Powell: I think it's open to interpretation. If a player is signed with the view to them being the lynchpin of a side for the next eight to 10 years then you could argue that's a sound investment if you think of Bellingham.

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