Re the debate on the stadium which I am sure will run for years.
It got me thinking about owners and the type of owner who can run a big club like Liverpool in the current environment for the premiership game.
The game has changed in the last 5 years but especially in the last two years. The money coming into premiership football is of an imaginable scale. Yet none of this money is going to the clubs or the owners its almost entirely going to players and their agents. The big clubs spent over a £100m on new players this year and I believe that is the new norm from now on.
Most of the top four clubs make a small profit or even a loss. Therefore as an investment its poor if clubs don't make a trading profit and hence dividends then perhaps they make a future capital profit ?
But even this is now flawed let's say John Henry spends £350m on buying Liverpool and say £150m on re-developing the ground and looks to receive £800m for Liverpool in a future sale.
Who and where would the buyer be? and why would anyone want to buy an asset for £800m that delivers no trading dividend ? It's almost a worthless investment.
As you know I believe Liverpool need and must have a new stadium to compete in the long term but I can see why John Henry would not want to build a new stadium its throwing good money after bad.
So....
And this is my point
Given the way modern football is, is the idea of buying a club as an investment (Glaziers / Henry) now an outdated concept given there is no money to be made? And that the only format now is to have an owner so rich they don't care about blowing crazy sums on the club they own sums that simply laugh at investment appraisal. There is FFP I know but as we know that can be overcome by channelled sponsorship and other means.
An alternative to a multi billionaire individual is some form of consortium perhaps an owner with partners like multinational companies that simply pump money into the club for advertising / branding but also have an equity stake.
The stadium debate we are debating a symptom the base problem is a club like Liverpool is simply too big for a man like John Henry.
I do hear people say well I don't want rich backers I want the club to grow on its own two feet. That's simply ridiculous for me the days of Derby / Forest / Ipswich getting a good manager and working their way up are long gone and they won't be coming back, not ever. Modern football is not even a commercial exercise its really a marketing enabler for third party businesses. The people making money are the TV companies, the agents, the sponsors etc therefore all that matters is that the club has the supply of investment and the more the better. The club is not a business but a marketing brand for other businesses.
In terms of Liverpool FC if you accept my assertions above then it's clear John Henry is not enough. FSG and partners might work though in the absence of finding a super rich individual.
But as things stand I fear for the future of Liverpool FC as we are not adequately financed.
But who is adequately financed, City? Who else, maybe Chelsea but both are being penalised through FFP. Arsenal has the same type of owners as us and though they have a 60k stadium they sell less mechandise than us and as soon as we get to a 60k stadium, our revenues will be more than them. Competing with United will be difficult though unless they stop qualifying for CL for a few years. So we will at least be in the top 3 clubs in terms of revenues and profitability once the stadium completed.This is why we need to spend the minimum to get there (otherwise all additional revenues will go to banks) and make sure we are successful on the pitch.
Good that you have started to see the light because you were talking about a great long term vision even if it meant short term risk of going bust, however, you are having problems to see beyond. One thing you are right is that it would make no sense for an investor to buy from FSG at 800m or more, this is why I don't think that FSG will sell as nobody would buy the club at a premium, unless its a rich arab having too much dosh and is looking for attention. However, an IPO will make FSG very rich if they manage to implement their plan. For that to happen, we need to be successful on the pitch and increase significantly the corporate seats capacity. United has currently a market cap of 2.5 Billion USD (it was 3 Billion USD quite recently), with a stadium and success on the pitch, I am sure we can be worth at least 1.5 Billion easily. It all depends on success on the pitch, once we are quoted we can always raise more money on the market to build a new stadium IF REQUIRED, but again, we'll need to be successful on the pitch.
