Liverpool's multi-club plans: Who should Fenway Sports Group target?

In the weeks since Liverpool have been trying to lure Michael Edwards back to Anfield, an intriguing bargaining chip has been thrown on the table.

The new role will give Edwards greater responsibility within Fenway Sports Group (FSG) and, unlike his first spell, his duties will not be limited to Liverpool. There was an expansion effort, and Edwards could be the one to oversee it all.

“One of the biggest factors in my decision was my commitment to acquiring and overseeing additional clubs and growing this area of the organization,” Edwards said. He spoke when it was decided that he would be appointed as the company's executive director. “We believe we need to invest in and expand our current football portfolio to remain competitive.”

And so began Liverpool's multi-club adventure. It's a venture that Premier League rivals such as Manchester City and Chelsea have already embarked on.

Despite some early concerns from supporters, Edwards and Liverpool have bigger long-term plans. The club's future can no longer be shaped entirely by Merseyside. Modern soccer requires a broader perspective.

“We believe this is the path forward that will help strengthen the club for the future,” Mike Gordon said in an email to Liverpool staff.

FSG's search for a second football club to run alongside Liverpool has previously been exploratory, with special consideration for Brazilian clubs, but efforts are now underway to establish a stable club. It is being said. The search continues with Edwards as the leader.

Liverpool intends to join what UEFA calls one of the “fastest growing trends in football's financial ecosystem”.

European football's governing body estimates that by the end of 2023, 230 clubs worldwide will have joined multi-club investment structures, up from less than 40 in 2012. According to them, this is 13% of all UEFA clubs (105 clubs in Europe). Top Division) currently have a mutual investment relationship with at least one other club, a trend largely driven by American investors.

Boston-based FSG, Liverpool's owner since 2010, was late to join the rush but expects a multi-club operation to begin under Edwards' watch within the next 12 months. has been done.

The most likely first dance will be with a European partner, as Chelsea's American owners did last year when they bought French club Strasbourg.

Strasbourg supporters protest against BlueCo's multi-club ownership model (Sebastien Bozon/AFP via Getty Images)

Now that the UK has left the European Union, this is a logical starting point, allowing us to sign high-quality players without having to meet the restrictive rules that prohibited signing European under-18 players after leaving the EU in 2020. This will provide a platform for young players to develop. Although restrictions have been eased, restrictions remain on who can be awarded a Governing Body Endorsement (GBE) to join an English club.

Perhaps more importantly, European affiliates also offer Premier League clubs the opportunity to develop new talent at a competitive level. The higher it is, the better. Or that theory also holds true.

Take Chelsea and a promising Brazilian teenager as a clear example. Andrei Santos, signed from Vasco da Gama in January 2023, was scouted by Santos last summer and was officially sent to France to join Angelo Gabriel, who moved to Strasbourg on loan in January. The motive is that both players can either move closer to Premier League qualification or enjoy enough exposure to maintain or increase their value. In an era where awareness of financial fair play is increasing, its importance is increasing.

Jordan Gardner, investment strategy consultant at Twenty First Group and former CEO of Danish club Helsingor, said: “A big reason why Premier League clubs seek European partners is Part of it is the level of play.”

“The whole point of having MCO (multi-club ownership) is to develop talent. Chelsea looked at Strasbourg because they are a good club.

“They obviously haven't had a great season (they finally won their first game of 2024 just before the international break, but are still 12th), but they are looking to improve their talent by joining Ligue 1 clubs. Having a feeder club in Brazil is very different from having one, for example.

“It will be part of a much longer-term project to develop talent. Geographically, it is also an advantage for clubs in Western Europe that the clubs are close together and can oversee the development of talent.

“Each market is different, so it depends on what your philosophy is. Perhaps in France more players from the African market will settle more easily. Portugal as well for players from South America. It will be similar. You would expect there to be a fairly consistent strategy behind Liverpool's plans.”

Andrei Santos (left) joined Strasbourg on loan in January after failing to make an impact at Nottingham Forest (Damien Meyer/AFP via Getty Images)

Multi-club ownership is driven by the concept of casting an even wider net. It's about discovering talent for your benefit, directly or indirectly. That reality makes many, including UEFA, uncomfortable. Just last month, study director Andrea Traverso warned of “potential integrity risks.”

There are no plans to crack down, and UEFA has even relaxed the rules for several clubs ahead of next season, but this is simply Liverpool following the lead of other countries. Gordon said FSG's move to multi-club ownership “will help strengthen our overall operation and increase our competitiveness.”

“What most clubs are looking for is a chance to give young talent playing time at a professional level and give them a chance to develop,'' said City Football Group (CFG) takeover of Belgian football. Simon van Kerkhoven of Zurafa Football Capital, who advised on the matter, said: Club Lommel SK in 2020.

“If you look at Portugal and Belgium, you see a lot of young talent moving towards the Premier League, but also direct transfers from those clubs to La Liga and Bundesliga; Immediately showing performance.

“Another aspect is recruitment. Portugal has a Brazilian market, which is very interesting for the ownership group. It's easy for non-European players to come in, and there are also strong links with Brazil. That's very beneficial. In Belgium, many foreign players come to the country at a very young age before transferring to bigger leagues.

“I can see the road clearly.”

CFG, controlled by Manchester City owners Abu Dhabi United Group, has taken over clubs in Spain (Girona), Italy (Palermo), France (Troyes) and Belgium (Lommel) since 2017, making it a multi-club ownership group. was transferred to a new organization. level.

Most Premier League clubs are more cautious and focused on one or two European partners.

Girona are having a great season in La Liga (Joan Valls/Urbanandsport/NurPhoto via Getty Images)

Belgium and France attract most Premier League owners, and Portugal would be an obvious attraction for Liverpool. Liverpool are already keen on Benfica's technical director Pedro Marquez to join their reorganization this summer.

It has long been a popular choice. UEFA, the European football governing body's annual report on the state of club football in Europe, said 16 Portuguese clubs are already part of multi-club investment structures. Nine of the teams are in the Primeira Liga, the country's top division.

Aston Villa are already flying the flag after V Sports, the holding company owned by Nassef Sawiris and Wes Edens, bought a stake in Vitoria 13 months ago. With Villa and Vitoria both qualifying for UEFA competitions this season, its shareholding has been reduced from 46 per cent to 29 per cent, but it remains an important step forward in the global expansion of V Sport's portfolio. ”.

Paris Saint-Germain also own a substantial 29% stake in Braga through Qatar Sports Investments, while Israeli businessman Idan Ofer holds significant stakes in Atlético Madrid and Famalição. Therefore, the connection between the two is ensured. Meanwhile, Estoril are owned by Crystal Palace shareholder David Blitzer.

“Portugal is the obvious choice[for Liverpool],” Gardner explains. “Villa have bought clubs there and it's an important development market for players coming from Brazil. Chelsea are going to France and that would be an option too. For me, Portugal or France would be an option. Seems like the most likely destination.

“New media rights deals have been signed in the Portuguese league and the distribution of television rights is becoming a bit more fair. The idea of owning a club there is more attractive.

“The club's valuations are going up because there's so much interest in that market. (Chelsea co-owner) Todd Boley has been touring Portugal and some of the numbers coming out of Portugal are crazy. But a lot will depend on the size of the club Liverpool are considering.''

If Portugal, France and Belgium are considered the most likely starting points for FSG's European expansion, the next consideration is the size of the clubs in question.

The biggest clubs in domestic leagues are not pursued because of the capital required to acquire and operate, but so are the weaker clubs. There must be some level of confidence that the member clubs will provide their players with the opportunity to compete at the highest possible level.

“The reason Rommel was interesting here in Belgium when he was advising City Football Group on the takeover was because the fan base was so small,” Van Kerkhoven explains.

“We'll probably have 800 to 1,000 fans at the game. It's a very small town, there's no club for the players to go out, there's no distractions. For CFG, this was very important. Practice. The number of pitches is 11, which is more than other clubs.

“It could be the same for Liverpool, who are looking for a smaller club at a professional level where fan protests are kept to a minimum.

“I still haven't heard much about fans loving or welcoming the MCO structures that come to clubs. You have success stories at CFG like Girona, where fans compete for titles. I'm sure you'll be very happy about that.

“If I were Liverpool, I would choose a club that is at least independently sustainable, with a decent fan base but probably not playing in UEFA competitions every year.”

Lommel away supporters celebrate a goal in a 2-2 draw against Beveren in November (David Pintens/Belga Mag/AFP via Getty Images)

That factor cannot be overlooked.

FSG do not want to keep a club in the red in their stable, no matter what benefit it brings to Liverpool. The goal would be to find a new club that would allow him to become financially independent.

“That poses a risk not only to the club but also to the investment itself,” van Kerkhoven added. “Look at Rommel, they're making big losses. Up until then they were a break-even club. That's a big difference.

“They made a successful move by selling Manfred Ugalde to FC Twente for around 4 million euros (about £3.4 million, about 430 million yen) and moving Vini Sousa to Sheffield United for around 12 million euros. We've built a story. There's been success in that (player trade) department and there's a path to it, but the investment (from CFG) was huge.”

Did Chelsea, or American owners Bruco, spend too much on Strasbourg last summer with £65 million? The opening season was not well received.

“It's a difficult balance,” Gardner insists. “If you look at what's happening with Chelsea and Strasbourg, they're being killed by their fans because they treat the club like a minor league affiliate.

“On the one hand, people might say that Strasbourg is too big a club for the MCO model, but on the other hand it is a club that is in Europe and has a good structure. Conceptually, a big club with good infrastructure would be desirable, but that creates other problems off the pitch.

“Premier League clubs use these clubs to develop players and we don't want to drain them of money to do that.”

Patrick Vieira endured a difficult first season as Bruco's Strasbourg manager (Sébastien Bozon/AFP via Getty Images)

Liverpool and Edwards are considering and evaluating how best to develop their abilities.

“They would be a very attractive club to partner with,” Gardner added. “They have a good reputation worldwide. As a small club in European football, I've had this experience. There's only so much you can do with your resources. Not as good as Liverpool. The idea of a club the size of walking through the doors…

“Most, if not all, clubs would find that very attractive.”