Is John Henry's Fenway Sports Group selling Liverpool? Everything you need to know
Rumours have emerged linking Redball Acquisition Corporation with a takeover of Fenway Sports Group, Liverpool and Boston Red Sox's owners. We explain the ins and outs of a potential change in ownership and what it could mean for the club's future.
Report from the Financial Times suggested that Liverpool are the subject of a reverse takeover by RedBall Acquisition Corporation. Eurosport looks at what that might mean for the club’s future and its fans.
What is RedBall?
RedBall is a SPAC (see below for explainer) set up by Billy Beane and Gerry Cardinale - a prominent figure in the private equity industry - in order to find a sporting club or clubs to invest in. They want to spend around $1.5 billion to buy a quarter of Liverpool, which would float the whole entity on the stock market.
Fenway Sports Group are long-term investors in sports clubs, so this move does not necessarily mean that John Henry is selling out of the club entirely.
By taking his company onto the public market, it means that other investors will be able to buy and trade shares in the company, but FSG could retain as many of their shares as they want. They could ensure they own more than half of the company so that no other investor could challenge the direction they take clubs under their control. They could also sell a majority of the shares and trust that new shareholders are willing to trust their management. So far, that would appear to have been a reasonable decision.
Putting the shares on the stock market in this manner is an easy way for Henry’s group to realise some profit now, and should they ever want to move on to other ventures then selling on the stock market is probably going to be easier and quicker than finding a single super-rich investor to take it off their hands.
Liverpool celebrate in the dressing room with the premier league trophy after winning the Premier league at the end of the Premier League match between Liverpool FC and Chelsea FC at Anfield on July 22, 2020 in Liverpool, England.
Image credit: Getty Images
What is a SPAC?
SPACs are special purpose acquisition corporations. They can be as simple or complicated as anybody in charge of the SPAC wants to make it.
In broad terms, shareholders give SPACs their money and hope that those in charge then go and find a good company to buy. One of the most famous examples of a SPAC in recent memory is a company that bought Twinkies out of bankruptcy. Another, Trine, has bought a company that does 3D printing of metal objects.
Image credit: Getty Images
SPACs have often been criticised in the past for a lack of oversight and poor performance for investors in the past, but a recent flurry of deals since the Covid-19 pandemic have found the method of taking companies public popular once again.
Who is Billy Beane?
Beane helped the Oakland Athletics out of the doldrums after he led the charge to change the way people looked at data in baseball. The film and book Moneyball illustrated a concept of using statistics that actually make a difference in identifying underrated and undervalued talent and performance metrics, something that has been rapidly moving into football clubs, including Liverpool.
Beane also owns part of Championship club Barnsley and Dutch club AZ Alkmaar.
Billy Beane (right)
Image credit: Getty Images
What does this mean for Liverpool?
So far it is unclear. It could, in theory, mean the end of Henry’s involvement in Liverpool in the near to medium term, but it could simply be an effective way to raise further funds to expand FSG. Those funds could be used to reinvest into Liverpool and the Boston Red Sox, or to buy other sporting franchises and challenge Manchester City’s collection of franchises across the world.
The arrival of Beane might see him become more closely involved with the scouting of new players using data to identify best practises on the training ground, during a game, and scouting for younger or more established players. As these methods become more accepted and nuanced across modern football, new areas of marginal gains will need to be identified.
Is a deal agreed?
No. Nothing has been finalised and the Financial Times report that negotiations are not guaranteed to end in an agreement. Cardinale has bought Ligue 2 side Toulouse, but was rebuffed in his attempts to take charge of Italian side Roma. That could lead to potential conflicts of interest down the line, with footballing authorities taking a dim view of, and sometimes outlawing, sides owned by the same figures competing in the same competition. Beane may have to end his involvement with the Oakland Athletics given FSG's ownership of the Boston Red Sox.
What does this mean for LeBron James?
In 2011, James bought two percent of Liverpool for $6.5 million, which was estimated to be worth $32 million. It will be worth even more now.
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Can I buy shares in Liverpool?
If the deal goes ahead then most people should be able to buy at least one share of the club, but whether that would make them any money is another matter entirely. Manchester United’s Supporters Trust and other similar setups have advocated fans buying and collectivising their stakes in their respective clubs to exert some influence on their sides, but it rarely makes a difference.