AFCB’s resident football economist Aaron Gordon casts his eye on the prospective sale of Liverpool to new American owners…
As some of you may know, there is big financial news in the EPL this week, with the prospective sale of Liverpool to the New England Sports Ventures (NESV) group. To provide some background, NESV is a group of businessmen led by John Henry who have purchased numerous sports teams in the New England area of the United States, and have a tremendous track record of turning them into victorious, profitable franchises, most notably the Boston Red Sox.
While this deal is far from assured, as many potential sales involving the Hicks group have fallen through, mainly to businessmen from China, Syria and Dubai, this sale seems more promising, since matters are more urgent at this juncture. Although Hicks is set to fight the sale, there is limited wiggle room for his group at this point. Hicks and his cohorts have a week to settle 280 million pounds of debts and fees to the Bank of Scotland, or face administration, which would result in a loss of points. Considering Liverpool is already facing relegation, a loss of points would be potentially catastrophic.
From a personal standpoint, I was born and raised (and am currently writing from) New England. My father has been a Red Sox fan since birth, growing up outside of Boston. It is impossible to overstate the transformation of the Red Sox over the last 15 years under John Henry and NESV. The Red Sox, for 86 years, failed to win a championship, with a stigma of failure looming over their every move. Supporters of the team considered losing a matter of when, not if. The lore of Red Sox history from 1918 to 2003 was ridden with disastrous, soul-crushing outcomes.
Then Henry and NESV came along, and purchased a team with an ancient stadium (barely renovated since the early 1900’s) and a maligned team. They invested in players intelligently, refusing to overpay in the transfer market for questionable stars, but instead opting to develop their own. This pattern of wise investment culminated in the ultimate turn of fate, when the Red Sox defeated their rivals, the Yankees, in the most improbable comeback in American sports history, and went on to win the championship in 2004, and again in 2008. (Note: the American version of Fever Pitch, which should be known to any Arsenal supporter, was adapted for the 2004 Red Sox season. It was an awful, awful movie. Do not watch it.)
Aside from the obvious on-field success, Henry and his group of investors transformed the ancient and outdated Fenway Park into a sports destination in the United States. Instead of building a brand-new, expensive stadium, they invested $100 million (a relatively small amount compared to the $1.2 billion invested in the New Yankee Stadium) into renovating, regenerating, and remaking Fenway Park into an ideal ballpark. It is intimate but charming with a contagious game-day atmosphere. As Joe Sullivan, a local Boston sportswriter said, “They saved Fenway Park. We thought we were going to lose this historic ball park and it would be replaced by some modern facility. They have very intelligently refurbished it step by step. They have an even better ball park than it was. It is a gift to the people of Boston.”
If you think I’m just a biased Red Sox fan, think again. I’ve been a Yankees fan my entire life, their ultimate rival.
As a fan of a rival team who has watched this before, let me declare clearly and fervently; if this sale goes through, it is bad news for fans of Arsenal, Manchester United, Chelsea, and every other EPL team with serious championship aspirations. As the Premier League is currently operating, and as I have made clear in previous posts, fiscal responsibility will be paramount to success over the next decade, at least. This is an area where Henry thrives. He is an expert at determining what types of players are central to on-field success, but undervalued by the market, acquiring them, and building a championship pedigree. He is also gifted at rejuvenating profit schemes for depleted franchises. These are two areas Liverpool FC is in dire need of assistance, and Henry is the perfect businessman to have Liverpool matriculate upwards in the standings while erasing debt. This is great news for Liverpool, but ominous for Arsenal and other top clubs.
It is often said that Manchester United is the New York Yankees of international soccer. Well, it seems Liverpool will be the Red Sox. Let’s just hope Arsenal doesn’t get lost in the fray.
Have your say on Aaron’s article by leaving a comment.