Liverpool secure £160m US investment – but there will be no transfer war chest

The Liverpool dressing room before the Carabao Cup third-dound match between Liverpool and Leicester City at Anfield on September 27, 2023
The Liverpool dressing room before the Carabao Cup third-dound match between Liverpool and Leicester City at Anfield on September 27, 2023

Liverpool have sold a minority stake worth up to £164 million to American sports investment firm Dynasty Equity.

The club announced the strategic partnership following a year-long search for funding undertaken by Fenway Sports Group. The deal confirms FSG’s desire to remain Liverpool owners for the foreseeable future, but it will not mean an increased transfer kitty for manager Jurgen Klopp.

Dynasty have bought a small percentage of shares for a figure understood to be between $100 million-200 million  (£82 million – £164 million).

Liverpool say the exact price and percentage shareholding will remain confidential at this juncture as they do not wish to put a definitive price on the value of the club.

The deal has been agreed to strengthen Liverpool’s overall financial health, with the club still recovering from significant losses since the pandemic.

Despite record revenues increases of £107 million announced in the last set of accounts, club profits were at just £7.5 million. That was after a season in which Liverpool nearly won the quadruple and was a legacy of losses in excess of £100 million after Covid-19 halted match-day revenues, in addition to the financial commitment to building the new £80 million Anfield Road stand and a £50 million training ground.

Club sources have indicated the Dynasty deal will pay off these debts so that the business will be back on an even keel. Effectively, the incoming revenues have already been spent.

A club statement read: “The minority investment will primarily be used to pay down bank debt incurred during the global pandemic and capital expenses made to enhance Anfield Stadium, build the AXA Training Centre, repurchase Melwood training ground and, most recently, acquisitions during the summer transfer window. Longer term, the partnership between Dynasty and FSG will also explore further growth opportunities for Liverpool F.C.”

With Liverpool currently paying the price for failing to qualify for the Champions League, a cash injection is timely.

Co-founded and led by Jonathan Nelson and K. Don Cornwell as recently as 2022, New York-based Dynasty say they are focused on ‘providing partnership solutions to support franchises and leagues’.

Liverpool FC owner John W Henry looks on before the Premier League match between Chelsea FC and Liverpool FC at Stamford Bridge on August 13, 2023 in London, England
John W Henry and FSG have a new partner at Anfield - Getty Images/Robin Jones

Among their senior advisors is David Ginsberg, Liverpool’s vice-chairman.

Liverpool will become their first major investment, although the co-founders have an established history working within sports markets.

Cornwell, Dynasty’s chief executive officer, said: “Liverpool is one of the most iconic football clubs in the world with a passionate fanbase and significant global reach. Dynasty is privileged to support the club and work alongside FSG to execute on the tremendous growth opportunities ahead.”

For Liverpool, the deal draws a line under a process which picked up pace a year ago.

Liverpool were pitched to investors by bankers Goldman Sachs and Morgan Stanley, prompting speculation FSG were preparing to sell the club.

From the outset, the hierarchy played that down insisting they were searching for partners, not buyers. That was reaffirmed with Thursday’s announcement.

“Our long-term commitment to Liverpool remains as strong as ever,” said FSG President Mike Gordon.

“We have always said that if there is an investment partner that is right for Liverpool then we would pursue the opportunity to help ensure the club’s long-term financial resiliency and future growth. We look forward to building upon the longstanding relationship with Dynasty to further strengthen the club’s financial position and sustain our ambitions for continued success on and off the pitch.”

This is about security, not lavish spending

Jurgen Klopp always said he wanted to create an Anfield dynasty. Now the club’s ownership has partnered with one.

After Liverpool’s prolonged investment hunt, New York-based Dynasty Equity’s purchase of a minority stake might be received as an underwhelming climax for those dreaming of a Sheikh or Todd Boehly turning up at Anfield with a blank cheque.

But there are two takeaway headlines:

First, the deal does not mean Klopp has an extra £164 million to spend in January.

Second, Fenway Sports Group are no longer proactively involved in a ‘sale process’ and insist they retain a long-term commitment to owning the club.

In effect, the Dynasty money has already gone, preserving the immediate and long-term health of the Merseyside club. For their part, Dynasty’s personnel bring experience and expertise in assisting the financial health of sporting institutions, even though they are a fledgling company founded in 2022.

With regards to Klopp’s future transfer kitty, it is business as usual. FSG are sticking with their self-sustainability model and remain adamant they will never put the club’s finances at risk because of the whims of an increasingly expensive, volatile and frankly bonkers transfer market.

Expectations were raised of a potential club sale last November when the banks Goldman Sachs and Morgan Stanley launched what amounted to a fishing expedition to ascertain the true level of market interest in Liverpool. Rather than advertise Liverpool’s preference for a minority partner, the banks wanted to establish the club’s value in the wake of Chelsea’s £5 billion sale. Suffice to say if a suitable buyer emerged prepared to match or eclipse that, FSG’s shareholders - especially the minority ones - might have been on the phone to JW Henry asking about retirement cheques.

Retrospectively, members of the FSG hierarchy acknowledge that the process had a rocky start as their true intentions were misunderstood. As well as supporters, club staff were anxious about their futures until Henry assured them FSG were staying put.

Liverpool's manager Jurgen Klopp gestures during the English League Cup third round soccer match between Liverpool and Leicester City at the Anfield stadium in Liverpool, England
The benefits of this investment for Klopp relate to stability rather than player investment - AP Photo/Jon Super

“Will we be in England forever? No. Are we selling LFC? No,” Henry said last February.

“Are we talking with investors about LFC? Yes. Will something happen there? I believe so, but it won’t be a sale.”

Liverpool say there were plenty of interested parties. Initially there were noises about a media partner to add value to the business. But - as with their player acquisitions - FSG were adamant they were looking for the right fit, not necessarily the biggest pockets eyeing a large stake holding. FSG wanted like-minded entrepreneurs, and are more conscientious than many care to believe about their legacy when they do eventually sell outright.

Questions are bound to be asked if the Dynasty injection is enough in a world of £115 million defensive midfielders and where the wait goes on to see if Manchester City face a reckoning for the 115 charges against them after alleged overspending to gain a competitive advantage. City deny wrongdoing.

There may be an existential question for Liverpool to ponder later if the Premier League becomes awash with state-owned clubs who circumnavigate what increasingly appear to be no more than ceremonial regulations.

FSG embarked on their investment search acutely aware that the heart of their fanbase would only ever accept a country buying Liverpool if the alternative was being left behind. That day has not come yet, but the storm is gathering.

Whatever FSG’s critics say about the financial limitations compared to rivals - unchanged after this deal - it can be reported without fear of contradiction that for Klopp, the American owners’ pledge to keep building the club incrementally only brings reassurance. His strong working relationship with the FSG hierarchy has been a critical factor in his regular contract extensions.

A change at the top had the potential to cause uncertainty and erode trust.

Liverpool also find themselves in a better place now than had the Dynasty deal been announced during the summer, when there was still fretting about their transfer activity.

Eight games into this season, a young side is rapidly emerging, giving the impression that if it can be kept together - for the next five years at least - it will need the occasional tweaks rather than a fundamental rebuild. Whatever Liverpool is worth today could be significantly exceeded by 2028.

Thursday’s deal is about economic security, not the ushering in of an era of spectacular player spending. Those with memories of what preceded FSG, and with a close eye on upheaval elsewhere, understand you cannot put a price on that kind of stability.

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