The Owners - FSG

[RER]

@Mascot

As I said, I don’t mind the team selection on his own merits. You can make the argument to play anyone.

The problem is that Klopp spent all the opening months of the campaign moaning about a lack of preseason, cancelling the winter break, fixture congestion. He looked like he was going to deck Des Kelly at one point, fell out with Chris Wilder, and generally had a face like a smacked arse about the whole business.

If you are going to act like that, then when the opportunity presents itself to give the squad a break, you’ve got to take it. Because if you don’t the narrative is going to turn on a sixpence to your massive fucking hypocrite.

Doesn’t help that we lost two players for months.

The decking Des Kelly part came after the Palace game. Which coincided with the last game the wheels fell off. A lot of pundits at the time the said the rant could do more harm then good give the players a reason to fell sorry for themselves.

[Neukölln]

Great post @AnfieldRdDreamer.

There are several interesting articles and discussion today on how/where this money could potentially allocate. No one really knows for certain.

One potential benefit I do see is FSG building a network of clubs similar to Red Bull and City. Developing and nurturing young talent at smaller clubs.

[AnfieldRdDreamer]

@Neukölln

Great post @AnfieldRdDreamer.

There are several interesting articles and discussion today on how/where this money could potentially allocate. No one really knows for certain.

One potential benefit I do see is FSG building a network of clubs similar to Red Bull and City. Developing and nurturing young talent at smaller clubs.

I might be in the wrong but I actually really dislike the idea of LFC being in some form of franchise like City and Red Bull even if we are the lead club. Just doesn’t sit right.

But yeah I think dreams of FSG turning round and saying “here’s £200m do as you please” are unrealistic.

What I expect is that some of that money may be used as cash reserves to turn to for cash payments we don’t really have money for but we have future revenue for, possibly even within the same financial year or two. Cover shortfalls created by the pandemic in the short term till revenues get back to normal and the ship is righted.

In terms of squad value and outstanding finance we are actually in a good place as per my highly uneducated guesswork. In summer 2017 and summer 2018 we spent a lot. Most of those cash payments will be either cleared or last dregs this summer. That frees up room to do more.

But I don’t expect much to be done till we can clear the books. From a sporting point of view Klopp has gone with a much more inflated squad this year than he normally would in an effort to combat the congested fixture schedule. And except for CB I’d say it was working. If it had been Gomez and Matip instead of VVD getting injured for the season at the start of the year, or even Wijnaldum instead of one of the CBs I don’t think we see half the issues with the squad we have. The two it was led to more physical pressure on Matip than he could cope with, Fabinho playing all the time till got injured, Henderson playing all the time till he got injured, those two missing significant time from CM meaning issues there and so on.

I think Klopp needs to clear out a bit and from a sporting point of view needs to stop relying on certain unreliable (Keita, Ox, Matip, Shaqiri) and under performing (Ox, Origi and Minamino) players as key parts of the squad. That clear out will generate more room on the books for future squad costs and for wages than I think a lot realise even with disappointing sales fees.

But if any of the heavy hitters up top move on suddenly we may be in a much better position to bring top targets in than expected because of the way accounting works. Kind of like when Coutinho moved on when he had so little value left on the books, for accounting purposes his fees are almost completely profit and that freed up wages, accounting player costs and cashflow to make some major moves in the market, much more than the actual incoming fee for Coutinho because the incoming business is spread out on the books in this way.

[Mascot]

Top post there from @AnfieldRdDreamer. I’d have gone ‘it’s a bit more complicated’ and left it there.

[sandsoftime]

Think he wanted to deck Des Kelly because he realised that the gormless lucky f*** had been taking Carol Vorderman’s cherry for over ten years.! :0)

[Lowton_Red]

@Neukölln

@Lowton_Red

@AnfieldRdDreamer

Wonder how this will play out;

The report states that the deal is nearing completion, so not a done deal quite yet.

Assuming it does go through a lot will depend on the source of the shares RedBird will acquire i.e. are they acquiring existing shares previously issued and allotted to FSG shareholders, or are FSG as a company authorising / issuing new shares to be sold to RedBird.

If it’s the former, then any money goes directly to the individual FSG shareholders. If it’s the latter, then the money goes into FSG’s account and might become available for investment e.g. in LFC.

I hope it’s the latter!

That’s a little bit of an altruistic oversimplification on what happens to the money if it’s indeed new shares being issued.

Ultimately it’s to pay themselves off and/or so they don’t have to use any of their own money. And “re-investment” is a pretty broad stroke of a term when you consider Liverpool isn’t their only focus. Further, LFC player transfer sales probably isn’t anywhere near their top 10 of what FSG would consider “investing” in with this brand new influx of cash. They will use as very little of ‘new money’ as they possibly have to as a means to underwrite player acquisition. Sell to buy will carry the majority of the water in that regard. And I’m only using the last 5 years of net spend public data to make that statement.

All that said, these are businessmen. American businessmen at that, this is to get them paid and minimize their own exposure. Look at what ALK is doing in Burnley.

EDIT: this RedBird group is investing 750 million dollars. FSG’s books have been vetted by teams of lawyers, accountants, and consultants. They’re investing money for one reason, to make even more money.

First a couple of corrections:

I did not say that there would be investment in Liverpool, I said that money “might become available for investment e.g. in LFC”. Clearly not a definite statement that investment would definitely be coming our way.

Secondly, were the investment in FSG to be by way of Fenway Sports Group LLC issuing new shares, it would be a highly inefficient way for the existing shareholders to take their money out. To maximise their return they (the FSG shareholders) would sell a proportion of their existing, allotted shares to Red Bird.

Perhaps an explanation might help. Let’s assume that the company FSG has authorised share capital of 100,000 shares, of which 54,000 have been allotted and issued to FSG’s shareholders. That leaves 46,000 authorised but unissued shares. (it’s quite normal for a company to have authorised but unissued / unallotted share capital, for example Liverpool FC has authorised share capital of 50,000 shares, of which only 34,825 are allotted)

In our first scenario FSG’s shareholders agree to sell 10% of their allotted shares to Red Bird i.e. 5,400 shares for the consideration of $750 million. Each shareholder receives $13,889 for each of his shares sold. No money goes to the entity Fenway Sports Group LLC, and there is no money for onwards investment.

In our second scenario FSG shareholders agree that Fenway Sports Group LLC should issue 6,000 new shares (taking the total of authorised and issued shares to 60,000) and to sell these newly issued shares to Red Bird. All of the money raised goes into the entity Fenway Sports Group LLC as a cash reserve. The individual shareholders of FSG do not receive any cash.

Now if the shareholders decide to use the money to pay themselves a dividend, as they are quite entitled to do, it will be divided equally into 60,000 shares i.e. $12,500 per share (Red Bird with a 10% shareholding would be entitled to a dividend).

So, not only would the original shareholders’ holding have been diluted, they would have done themselves out of $1,389 per share, or $75 million in total, and Red Bird would have acquired 10% of Fenway Sports Group LLC for the knock down price of $675 million.

I think we can agree that this would not be a particularly cleaver thing to do.

Obviously there are a range of possible scenarios between the two I’ve mentioned; the sale might be through by a mixture of already allotted shares and newly issued shares, with a proportion of the money, pro rata allotted shares sold, going to the shareholders and the balance to Fenway Sports Group LLC.

But the principle is clear; for the existing shareholders to take the maximum out of FSG, they would need to sell their allotted shares, rather than take a dividend after the deal is done.

With regards to any money that found its way into Fenway Sports Group LLC cash reserves, you are correct, there is no certainty that any of the money might find its way to Liverpool.

I said I hoped that some might, not that it would.

And another point on which our opinions appear to converge: what is Red Bird’s motivation for making the investment? What return are they expecting, as surely they are anticipating getting something back over and above the kudos of owning high profile sports clubs?

[Maria]

Excellent explanation ARD , I was going to ask about this forthcoming sale. I get apprehensive when outside sources come sniffing around and I am very wary, after the Hicks & Gilllet almost destroyed our club.

[RedOpium]

Not sure how true this is.

[AnfieldRdDreamer]

It’s bollocks @RedOpium seen it around a lot. Pure guesswork/fantasy a lot of it.

[Kopstar]

Total nonsense.

[AnfieldRdDreamer]

@Maria

I am very wary, after the Hicks & Gilllet almost destroyed our club.

Remember this is only about 10% of FSG, we are only one of the things owned by them anyway. It’s not new owners for us in fact it’s likely to have very little impact on us at all except maybe making sure we don’t run out of cash reserves (which is a main issue of the pandemic). The club may not actually run at big losses but we might struggle to actually make cash payments for things on time without cash reserves. Think of it like having an overdraft available on your bank account. Your pay is going in on Friday but its Tuesday and you need to buy the shopping. Instead of going without you’d use the cash reserve/overdraft to meet the bill now because the revenue/payday is coming and you know what it is. If that future revenue was uncertain maybe you wouldn’t or if there wasn’t a cash reserve you might not be able to.

[DanLFC]

This part FSG sale could be pretty clever given the current fiscal environment ie no crowds at games etc and could be very beneficial for the club.

What did FSG pay for LFC 500 mil ish so now selling a 10% share in FSG for more than they paid in total for LFC. In one transaction they recoup a massive chunk of their total investment in our club and at the same ease any cashflow issues any of their assets may have been feeling without giving up control of any of those assets or taking on anymore debt.

Alot of clubs have sured things up taking on debt or borrowing against future warnings etc which hopefully positions us well to come out of this low revenue period.

If we can sneak top 4(cant believe im typing that) and FSG do reinvest we could be in a very advantageous position come the next window. I say could be. Need top 4 though no CL will be a hurdle on the recruitment front and I think we may see a bit of a rebuild come the Summer window.

They may also not reinvest a dollar and just hold it for cashflow to see out the pandemic too.

[Iftikhar]

@RedOpium

Not sure how true this is.

@AnfieldRdDreamer

It’s bollocks

@Kopstar

Total nonsense.

They blew it by placing Mane below Milner, Keita and AOC.

[Neukölln]

@Lowton_Red

But the principle is clear; for the existing shareholders to take the maximum out of FSG, they would need to sell their allotted shares, rather than take a dividend after the deal is done.

With regards to any money that found its way into Fenway Sports Group LLC cash reserves, you are correct, there is no certainty that any of the money might find its way to Liverpool.

This is my point. I respect what you’re saying and I don’t disagree with literally any of it. FSG have applied a very “American” way of doing business in sports entertainment to how they run Liverpool football club. Easiest way to increase match day revenue is to put more asses in Seats by creating more seats and raise ticket prices. They did both. They are creating and cultivating a brand, they already had a rabid, built in fan base.

They get far too much credit. They struck gold with Jürgen Klopp and the funds used on the sale of Phil to buy the players we did is what transformed us and is what put us into the echelon we are in now. Now, how will that be sustained? Or will we go another 10, 20, 30 years without winning anything?

We can circle back to this at the end of summer or even summer 2022 to see if they’re doing their part.

EDIT: and take some tome to dive into the ALK situation at Burnley. It’s unbelievable.

[Redbj]

robertson and tsisismiskis!!!

[RedForever]

Read an article in the Echo about the new proposed investor, who said the right things.

I don’t know enough about FSG’s background financing to know whether they themselves have the cash reserves to support their interests until normality returns, but taking on a new partner to provide working capital and de-risk makes sense.

If there is one positive this season, it’s the clear evidence just how quickly a squad can flip from one that cannot lose to one that cannot win, and that taking chances in crucial positions can quite easily backfire.

Whether or not this season will have had such a hit on confidence and momentum, not to mention on post injury levels of key players, that the current squad can quickly rebound without radical change is debatable.

But hopefully the owners, and their partners, see that we do need to address the issue of some squad players being such a drop off that they are rarely used, thus working the better players too hard, and that carrying so many injury prone players is not good value for money.

Overall, I’m encouraged by the potential for a new partner, and hopeful that the right things will be done to get us back into the mix next season.

[DanLFC]

Such a difficult balance at the moment, spending on players with no gate takings is risky but there is a genuine need to refresh the squad this summer.

In the Klopp era weve always made good money on sales and its really kept out net spend very low but that wont be the case this summer there wont be any Bournemouths throwing us 18mil for a Domenic Solanke
in fact we’ll be lucky to get that for Origi.

Be interesting to see what they do. Been pretty clever so far with the deals they’ve done. Was a bit disappointed we waited so late in the window to get deals for Davies and Kabak sorted but they are good deals regardless. Just a matter of how long this low revenue period drags on as to how much it affects us. And it may not necessarily be us directly as much as the lower level buying clubs who would normally take our fringe players who just wont have the money to spend.

In normal circumstance I think we would have seen 5 or 6 players sold or leave the club this summer but we may have to make do until things settle down. Again pretty risky going into next season relying on VvD Gomez and Matip as our main CB options given all are coming of major injuries. I can conceive a deal for Salah being accepted this Summer if Madrid come calling. We would have targets in mind in that event and Klopp and Edwards would be able to spend well and not weaken the squad whilst not having to make any significant outlay.

[Mascot]

I think a lot of it depends on whether the club think the market has readjusted permanently, or whether it’s going to bounce back after Covid.

I don’t think Madrid, or anyone else can pay the £150m Salah was worth at pre-Covid. If FSG think his value will be back near that in the near future, they won’t sanction his sale at £75m.

He is also, according to all the data, out best forward and most potent attacking threat. There’s also that to consider.

[AnfieldRdDreamer]

@Mascot

He is also, according to all the data, out best forward and most potent attacking threat.

Should be the end of any discussion of voluntarily selling Salah. If a forward needed selling this summer then Firmino, Mane and Salah would all probably be around the maximum price a club they’d go to can afford. That price would be a lot closer to the real value of Mane and Firmino than it would to the real value of Salah. If a forward needs sacrificing this summer and we’d get roughly the same price it would be illogical to choose Salah. Especially as our attack has been resting on his shoulders this season.

[RedOverTheWater]

I agree with this, with the caveat that if Salah realizes the most cash from a sale, and that cash is used to complete a deal for someone else we may prefer over the longer haul, then I would be OK with Salah being the one to go. But in terms of value to us, the rank is Salah, Mane, Firmino. If Jota continues as he started, he will be more valuable to us than Bobby soon.

I want Salah to stay and hope he does. Reliable goalscorer, and you don’t mess with that. But if Salah went to PSG and Haaland came to LFC, and the former deal directly enabled the latter, I would do it.