Forbes: Liverpool reach billion-pound value for first time

While current owners Fenway Sports Group have been under scrutiny for some time now, one aspect of their tenure has been overwhelmingly popular for the vast majority of Reds fans – their financial prowess.

Forbes: Liverpool reach billion-pound value for first time
(photo: Getty Images)

Forbes, the American business and financial magazine, has released their yearly valuations of sporting clubs, ranking Liverpool FC at £1.04 billion ($1.55 billion). It’s the first time Liverpool have achieved such a high appraisal.

Liverpool now rank 41st in the sporting club world, and have maintained their position for football clubs at 8th.  The club’s value rose an astonishing 58% since Forbes last ran their “The Business of Soccer” appraisal series 12 months ago.  At that time, Liverpool were valued at £644 million, which supported a stout 42% increase in its own respect.

Once again, Fenway Sports Group’s acumen in the marketplace has been put on display not only in the realm of football, but in the general sporting world as well. Since the ownership group took over in October 2010, the Merseyside club has nearly doubled its value, rising to its current status from £530 million (Liverpool Echo).

The value of sponsorship

Largely, Liverpool have appraised for more due to the variety of sponsorship deals that have come through since John Henry & Co. have taken the helm of the club. After the main club sponsor changed from Carlsberg to Standard Chartered, the revenue stream accelerated. 

Today, after six years of partnership, the current Standard Chartered deal is worth around £32 million (Echo). Though, in terms of sponsorship, £32 million seems to be a well-worked deal, it’s a value that makes up just below 10% of the commercial income that Liverpool now receives. 

There are others as well, between kit sponsorship by New Balance and partners that range from Carlsberg and Dunkin’ Donuts to Draft Kings and Nivea, pull together a bigger percentage of incoming money.

The aforementioned £1.04 billion is largely comprised of a £367 million commercial revenue stream.  This figure, as Forbes states in their footnotes for the valuation, includes sponsorship deals, merchandising, and other commercial revenue that the club brings in.

Completing the billion-pound figure, Liverpool also earns its income from match-days - whose gate receipts alone are valued at £202 million – and the broadcasting of the club’s fixtures, bringing in a whopping £442 million in revenue.

Everyone wants to watch

The TV deals accepted by the Barclays Premier League in recent years have played a conspicuous part of the value hikes of its clubs, and Liverpool has been no exception.  For UK coverage alone, Sky Sports and BT Sport will have paid a record £5.14 billion for television rights.  Without considering the Unites States, other European countries, and beyond that pay for coverage of the Premier League, all clubs’ worth have skyrocketed.

Liverpool have specifically targeted other areas of improvement in terms of net worth.  The aforementioned sponsorship deals have increased in number several times over since FSG have stepped into the ownership role. Another area they’ve targeted is the new main stand at Anfield, which is aiming for completion before the kickoff of the 2016/17 campaign.  The main stand is just phase one of the Anfield expansion, slated to take place over the next three to five years.

The rub

All this in six years’ time. After the valuation increases over the past 24 months, FSG have begun a reconstruction process that has borne fruit.  In perhaps other areas of their ownership tactics, there will be those with mixed opinions on their success, progress, and production.  But, in the end, the numbers don’t lie.