For Fenway Sports Group, Liverpool Is the Real Moneyball

What does Liverpool FC add to the Red Sox empire? A lot more fans—and an even bigger stage on which to choke
Photo illustration by 731; Photographs by Andrew Powell/Liverpool FC/Getty Images; Winslow Townson/Getty Images

On an oddly steamy night in April, Fenway Park is gussied up with bunting as the Boston Red Sox prepare to host the Texas Rangers. The owner’s box is a mix of corporate and academic types, including hedge fund managers and the president of a nearby liberal arts college. The atmosphere feels more book party than bleacher brawl. Red Sox co-owner Tom Werner holds court in the center of the room, recounting the experience of witnessing one of the two other teams he co-owns win a big game—well, a sort of big game. “People say it must have been fun, but watching the game was hell,” he says. “The fun came later.” The trophy his players captured that February night is the marginal Carling Cup, and the team is Liverpool Football Club of the English Premier League. Although it lacked the prestige of a Premier League title, the cup helped fans warm to the team’s new custodians.

As chairman of Fenway Sports Group (FSG), Werner, along with his partner John Henry, took control of Liverpool in October 2010 for a cut-rate price after paying off about $300 million worth of the club’s debt. Henry concedes they knew “virtually nothing” about the Premier League, or soccer for that matter, before buying the club, but recognizing the global reach and moneymaking potential of the sport didn’t require much expertise. The U.S., soccer-resistant for so long, is now home to the owners of five of the 20 clubs in the English Premier League. Manchester United, owned by the Tampa Bay Buccaneers’ Glazer family, is the most valuable sports team in the world, according to a Forbes estimate. Arsenal, controlled by St. Louis Rams’ Stan Kroenke, is the fourth-richest club. Liverpool is the eighth.

Henry, left, and Werner with the Carling Cup in February
Photograph by Rex/AP Photo

On July 25, Werner will preside over a rare collision of worlds as Fenway’s pitcher’s mound and foul lines will be replaced with penalty areas and soccer goals. In one of 39 games being played in North America this summer by high-profile foreign clubs, Liverpool will battle Italian stalwart Roma, which happens to belong to a Red Sox minority owner, Thomas DiBenedetto. No doubt Werner is hoping some of the Fenway magic will rub off on his soccer team, and not DiBenedetto’s.

While he and Henry weren’t exactly welcomed by the Red Sox faithful in 2002, when they bought the team and New England Sports Network for $700 million, their ruthless methodology of sourcing untapped streams of commercial revenue helped secure top talent and usher in the franchise’s most successful era. The Red Sox won the World Series in both 2004 and 2007 and remain a perennial contender. In the past decade the number of corporate sponsors jumped from 35 to 95. “[Werner and Henry] spent money, reorganized the team, and fixed a ballpark that everyone said couldn’t be fixed,” says Massachusetts-born Bill Simmons, editor-in-chief of ESPN’s online review Grantland (to which I regularly contribute). “They couldn’t have been better owners coming out of the gate.”

Starting in 2007, FSG began expanding its portfolio, buying a 50 percent stake in Nascar team Roush Racing for $50 million. Seeking an acquisition with more “worldwide appeal,” says Werner, it turned to Liverpool, a club teetering on the verge of bankruptcy after North American owners Tom Hicks and George Gillett drowned it in debt. “Someone mentioned Liverpool’s games against Manchester United draw an estimated 500 million global television audience,” says Werner. By contrast, only 16 million people, on average per game, watched the 2011 World Series. “Coming from MLB, we simply could not relate to that number.”

Werner was also attracted to the fact that the Premier League operates without the curious socialism of America’s sports leagues: salary caps, organized drafts, and revenue sharing. “In baseball, when you acquire a franchise, you are one-thirtieth of an industry,” he says. “If we sell a Liverpool jersey to a supporter in Jakarta, we keep 100 percent of that.” Sam Kennedy, president of Fenway Sports Management, says the Liverpool deal opens new markets to Fenway’s corporate partners, including Boston-area companies such as New Balance and Dunkin’ Donuts. “Red Sox Nation can only expose a sponsor to six states,” he says. By enabling FSG to expand its corporate relationships worldwide, Liverpool can act as a global amplifier.

New Liverpool fan LeBron James
Photograph Andrew Powell/Liverpool FC/Getty Images

The final piece of FSG’s worldwide marketing machine came in April 2011 with the signing of LeBron James. In exchange for acting as James’s global marketing representative—the Miami Heat star may be divisive at home but is widely beloved in Asia—FSG offered him a minority ownership share in Liverpool Football Club. (Asked why James eschewed more traditional agencies, his business manager Maverick Carter said, “I admire [them] but they don’t own sports franchises last time I checked.”)

Liverpool is far removed from its glory days. Beginning in the ’90s, the historically great club struggled to adapt to the globalization of English soccer, and was eclipsed by Manchester United both on the field and commercially. Werner is confident he, using the methodologies perfected at Fenway, can restore Liverpool’s fortunes—even though he’d never been to a Liverpool game before buying the team.

Results have been mixed so far. Before the 2011 season, FSG splashed $179 million on a crew of underperforming players, who failed to qualify Liverpool for the elite European tournament, the Champions League. In May the club posted an $80 million loss for 2011. “No supporter will take pleasure where we are right now,” says Werner. Henry concedes the last 18 months have been humbling. “Our first year and a half was spent learning as much as we could, and we are just now really beginning to understand what we have to do differently.”

A die-hard Liverpool supporter
Julian Finney/The FA/Getty Images

In January 2012, Liverpool announced the most lucrative jersey deal the sport has ever seen, a $40 million-a-year partnership with a New Balance subsidiary called Warrior. And over the past three months, FSG executed a radical overhaul of Liverpool’s management team. They fired manager Kenny Dalglish, a man worshipped by players and fans, and hired the young coach Brendan Rodgers. “I genuinely think a club of our status and value to the football world, we can go [win] again,” says Rodgers, before adding, rather ominously: “But it’s going to take time, and whether it will be in my time, I’m not so sure.”

Having suffered through the Red Sox’s collapse last September and slow start this season, ESPN’s Simmons wonders whether the expansion into English soccer is wise—or if it’s pulling focus from the daunting enough task of beating the New York Yankees. “I think [the Red Sox success] went to their heads,” he says. “They got a little greedy, almost like someone who wins a ton of money gambling in Vegas and starts to think they’re invincible.”

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