Major update for Liverpool owners FSG as chiefs in the US set £92m budget

It has been another sedate transfer window so far for Fenway Sports Group, with Liverpool one of a small handful of clubs who will likely finish 2024-25 with a positive net spend.

Four other clubs – Aston Villa, Newcastle United, Wolves and Crystal Palace – have made more through sales than they have spent, although things are liable to change ahead of tonight’s 11pm deadline.

Three of those – Palace are the exception – have effectively been forced to make player sale profits because of their position under Profit and Sustainability Rules (PSR).

The Premier League’s system limits clubs to losing £105m over a rolling three-year period, but Liverpool are nowhere near that limit with almost £200m worth of headroom this season by most estimates.

Far from being driven by regulatory restrictions, Liverpool’s modest spending is strategic and is being dictated directly from FSG’s headquarters in Boston.

And while some supporters have been frustrated by the lack of expenditure, FSG’s risk-averse philosophy is undoubtedly paying dividends.

Arne Slot’s side have breathing space atop the league and, perhaps with the contract uncertainty around Mohamed Salah, Trent Alexander-Arnold and Virgil van Dijk aside, could barely be having a better season.

With the Merseysiders having already banked north of £80m for finishing first in the revamped Champions League format and with commercial and matchday income soaring, liquidity isn’t an issue.

Liverpool’s relative inaction in the summer and January is instead simply because Michael Edwards, Richard Hughes and the rest of FSG’s deputies in L4 think there simply haven’t been market opportunities.

While others are held to ransom in the mid-season window, the Reds don’t have an itchy trigger finger and prioritise long-term planning.

It makes business sense to do so in a football finance ecosystem where wage inflation has been obscene in recent years and revenues can be volatile from one season to the next.

FSG don’t have to deal with the same problems in their outposts in US sports, where salary caps and the collective approach means costs are all but fixed and profits guaranteed.

However, there are signs that John Henry, Tom Werner and the rest of the FSG clan are shuffling the pack when it comes to their business in the States.

Now, the latest major sports business news might explain why.

FSG hit with salary cap news in the United States

After Liverpool an the Boston Red Sox, the Pittsburgh Penguins are probably the most valuable asset in FSG’s portfolio in a crowded field.

The National Hockey League team are valued at around £1bn, up from the approximately £700m FSG paid for them in 2021.

FSG are now exploring the potential sale of a minority stake in the Penguins with the aim of realising some of the value of their investment after just a few years.

As relayed by Forbes, the NHL salary cap is now set to rise over the next three years to £92m, a huge leap forward from the £70m it currently stands at.

As the single biggest expense in running the franchise, this will impact FSG, who currently spend just under the salary cap.

And while they will not be forced to raise salaries beyond the established salary floor as a result, the cap hike will increase competition in the league and the player trading system.

Unlike with the Red Sox and – to an extent – Liverpool, FSG are relatively uncontroversial owners among supporters of the Penguins and not perceived as particularly frugal.

Liverpool’s multi-club ambitions: Why haven’t FSG taken over a new club yet?

Just as FSG are currently seeking minority investment in the Penguins, they took on a new minority equity partner in Dynasty Equity in 2023.

It appears that some of the £150m or so raised as part of that sale are being diverted to the creation of a multi-club network, with Michael Edwards brought back to the club as CEO to lead the process.

The Red Bull and City Football Group networks are the most famous multi-club empires, but hundreds of clubs around Europe are now under multi-club umbrellas of some description.

FSG were in talks to acquire historic French side Bordeaux in July, although that would-be deal eventually collapsed because of reservations about the club’s financial situation.

Just like they are with their approach to recruitment and retention, FSG are treading carefully when it comes to which clubs to bring into the multi-club fold.

Mergers and acquisitions talks take time, as do the legal and financial complexities that surround taking over a new club.

As for the markets that FSG could target, TBR Football has always been told that they favour leagues which the FA classify as Tier 2.

That is the Portuguese Primeira Liga, Eredivisie, Belgian First Division A, the Turkish Super Lig, all of which could be suitable bases.

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