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Posts Tagged ‘financial’

• Owner says club’s global following has huge financial potential
• Henry sees similarities with revitalised Boston Red Sox

John W Henry, the principal owner of Liverpool, has acknowledged he knew “virtually nothing” of English football or the football club before his Fenway Sports Group took over at Anfield a year ago this Saturday. Tom Werner, the chairman of Fenway and now of Liverpool, said he too had barely heard of the club, but was aware of the “EPL” – English Premier League – and its popularity, and “certainly knew about Manchester United”.

During three days of exclusive access in the United States with Henry, Werner and key executives of Fenway, which owns the Boston Red Sox baseball team, they explained the prime attraction of buying Liverpool lay in the financial potential of the club’s global following.

Lifelong fans of baseball, whose support is mostly restricted to the US, they began to take an interest in Liverpool after comprehending the scale of international interest in the Premier League on television and via the internet – and the prospects of being able to make money from it.

Asked what he knew about English football, and Liverpool, before an email from a Fenway Park employee alerted him to the Merseyside club’s

• Current deal sees top-flight clubs share billions of pounds
• Liverpool’s managing director Ian Ayre raises alternative

The deal that shares television’s billions equally between Premier League clubs is facing its biggest threat to date after Liverpool announced they would lead a challenge for overseas TV rights to be sold on a club-by-club basis.

Liverpool’s managing director, Ian Ayre, has insisted the break-up of the established broadcasting deal, worth £3.2bn in total to all Premier League clubs for 2010‑13, is “a debate that has to happen”, with the Anfield club in favour of the Spanish model that allows Barcelona and Real Madrid to negotiate individual contracts that dwarf their domestic and European rivals.

Since the Premier League’s foundation in 1992 its success has been largely based on the principle of collective selling, where each club no matter how lowly can expect a fixed share of TV deals with “merit” awards for finishing positions as an add‑on. Changing this model would risk revolt from the smaller clubs who stand to lose most, and thus threatens the league’s very structure.

At present, the Premier League sells domestic and overseas broadcasting rights collectively and more than doubled international revenue in its last negotiations, from £625m for 2007‑10 to £1.4bn for 2010‑13. With the Premier League shown in 212 countries and having 98 broadcast partners around the world, it is expected the next deal will show a similar increase, with overseas rights potentially worth more than domestic for the first time.

Ayre believes the Premier League’s four biggest global draws – Liverpool, Manchester United, Chelsea and Arsenal – deserve an increased share from 2013, with overseas broadcasting having a greater influence on the Anfield club’s financial future than a new stadium. “Personally I think the game-changer is going out and recognising our brand globally,” said the Liverpool managing director. “Maybe the path will be individual TV rights like they do in Spain. There are so many things moving in that particular area.

“What is absolutely certain is that, with the greatest of respect to our colleagues in the Premier League, but if you’re a Bolton fan in Bolton, then you subscribe to Sky because you want to watch Bolton. Everyone gets that. Likewise, if you’re a Liverpool fan from Liverpool, you subscribe. But if you’re in Kuala Lumpur there isn’t anyone subscribing to Astro, or ESPN to watch Bolton, or if they are it’s a very small number. Whereas the large majority are subscribing because they want to watch Liverpool, Manchester United, Chelsea or Arsenal.

“So is it right that the international rights are shared equally between all the clubs? Some people will say: ‘Well you’ve got to all be in it to make it happen.’ But isn’t it really about where the revenue is coming from, which is the broadcaster, and isn’t it really about who people want to watch on that channel? We know it is us. And others. At some point we definitely feel there has to be some rebalance on that, because what we are actually doing is disadvantaging ourselves against other big European clubs.”

It would require 14 of the Premier League’s 20 members to vote in favour of a new commercial arrangement. Though Sir Alex Ferguson recently described the collective deal as “fair”, albeit while insisting clubs deserved more from overseas rights, and La Liga’s system has attracted widespread criticism, Ayre believes the status quo jeopardises the financial might of the Premier League.

“If Real Madrid or Barcelona or other big European clubs have the opportunity to truly realise their international media value potential, where does that leave Liverpool and Manchester United? We’ll just share ours because we’ll all be nice to each other? The whole phenomenon of the Premier League could be threatened. If they just get bigger and bigger and they generate more and more, then all the players will start drifting that way and will the Premier League bubble burst because we are sticking to this equal-sharing model? It’s a real debate that has to happen.”

Liverpool insist their radical proposals are limited to overseas broadcasting, although success on that front could set a precedent domestically in the long term, and the club plans to raise the issue at the next Premier League meeting. Ayre’s frank admission comes almost one year on from Fenway Sports Group acquiring the club from Tom Hicks and George Gillett in the high court and, along with broadcasting revenue, another major financial decision to be resolved by the American owners remains whether to construct a new stadium or redevelop their current home, Anfield.

Liverpool’s managing director insists the club are pursuing “a parallel course” on both options, with planning regulations complicating the redevelopment of Anfield and the financial benefits of a new-build uncertain, although Ayre admits the latter option is only viable with a naming rights deal. “We have been in discussions here and in other parts of the world with a small group of people that we have narrowed down that we are targeting for naming rights. That is an absolute catalyst to building a new stadium. The economics just don’t stack up without it.

“When will the decision be made? It’ll only be when we reach an answer with both. It’s hard to put a time on it. If you put a deadline on the naming rights, then you start to marginalise the deal. We aren’t desperate. We think we have an amazing proposition as one of the biggest clubs in the world. I don’t recall any football club of this size with this international reach that’s ever done a naming rights deal. It is quite unique in that sense. Barcelona, Real Madrid and Manchester United haven’t. Nobody in football has done this at this level. It’s new ground and it will take what it takes.”

Ayre, along with the former Liverpool chairman Martin Broughton, ex-chief executive Christian Purslow and Fenway Sports Group, remains the subject of a £1bn lawsuit filed by Hicks and Gillett over the events surrounding their departure last October. “It’s an unwanted and unwelcome distraction. That’s their prerogative but we remain extremely confident that we did the right thing,” he said. The Liverpool MD offered his resignation to John W Henry following FSG’s victory in the high court, and admits the five-times European champions could have entered administration had Hicks and Gillett retained control.

“Certainly the bank had the power to call in the debt and at the time there wasn’t anyone ready to take on that debt. So I guess the answer to that [would Liverpool have gone into administration] is yes. It’s hypothetical but based on where we were and based on the circumstances at the time that was a very real threat. That was the case in the final hours. That was one of the other routes we could have gone down.”

Premier LeagueLiverpoolBusinessSports rightsAndy Hunterguardian.co.uk

• Liverpool chairman wants to restore ‘lustre’ to club
• Financial fair play essential for ‘competitiveness’

Tom Werner, the Liverpool chairman, has said Fenway Sports Group will continue to invest in restoring “the lustre” of the club but that Uefa’s financial fair play rules must be enforced to enhance the competitiveness of the Premier League.

Liverpool are close to taking their summer spending to £54m with the £6m purchase of José Enrique from Newcastle United and, having paid £57.8m for Andy Carroll and Luis Suárez in January, FSG has sanctioned the biggest spending spree in the club’s history. Not surprisingly John W Henry, the club’s principal owner, has admitted it would be a major disappointment should Liverpool fail to qualify for the Champions League this season. Werner has refused to set defined targets but said FSG’s investment in the club is far from over.

“I don’t want to promise so much,” the Liverpool chairman said. “I know John has said we’re going to be top four and Kenny [Dalglish] says well why can’t we win. But we just want to move forward – we want to be better this year than last year and just keep going on the right track.”

Werner added: “I think the most important thing, and it may seem obvious, is put on a quality product for your fans. These are people who spend their hard earned pounds to come to see the club, and we’ve got supporters all around the world, who expect a quality product, and so it’s been our goal to try to improve our position on the pitch and to try and create an environment for players to say they want to play in Liverpool, and to bring some of the lustre that all the fans know back to the club.”

Liverpool’s chairman has echoed Henry’s view on financial fair play, however. The club’s principal owner recently backed Arsène Wenger’s suspicion of Manchester City’s £400m naming-rights deal with Etihad Airways, tweeting: “A club’s best player has to be worth at least 10% of your naming rights. Mr Wenger says boldly what everyone thinks.”

Werner said: “I hope there’s some teeth in it because I think it’s healthy for the sport. It will make the sport more competitive. Part of our assumption when we came in last year was that financial fair play was coming into existence and that we’d hope it would have some teeth. It will make the performance on the pitch more competitive.”

In an interview with LFC TV, entitled “Tom Werner: Up Close and Personal”, which airs on Friday at 7.30pm, the club chairman also backed Dalglish to continue his dramatic overhaul of the team’s performances this season.

Werner added: “I can’t think of somebody who embodies the relentlessness and the drive and the attitude of excellence better than Kenny. Obviously we knew of him before we met him. I think he is a natural leader; I’ve had the privilege to watch him as he trains the men at Melwood. And I just think he’s so charismatic and I think he’s been able to instil a sense of purpose into the club; and when he says something, I think people listen.”

LiverpoolAndy Hunterguardian.co.uk