FSG discussion

Overview: Here I'll explain my thoughts on financial fair play (FFP) and what's happened since the Fenway Sports Group (FSG) took over at Liverpool, as both are "hot topics" considering the last two successful seasons the club has had with Jurgen Klopp at the helm.

Starting with the owners, I don't have a massive level of in-depth info about them, or the previous owners. What I'll say, however, is the facts seems to be that the previous owners were putting the club into debt because they spent money they didn't have, and FSG came in before the club would have gone into administration. That concept was foreign to me until I started listening to people talk about the financial side of football. Basically, it means the owner(s) can't run the club, so they put it into the hands of administrators, who charge a ridiculous fee to oversee the club until new buyers come in. There are penalties for doing this, hence why a team like Wigan (best recent example) are screwed. Thus, when discussing FSG, the way they run has always been to not put their own money into the club, at least on the side of player acquisition. In essence, they run it like a "fan-owned" club. By that, I'm putting in firm contrast the likes of Chelsea, City and PSG, whose owners don't care about rules and spend when they feel like it. Granted, at least over the past two seasons, Chelsea didn't spend much and made some ridiculous sales, such as Hazard and Morata.

Long story short, FSG have been slightly lucky, but more-so intelligent, with the way they've found success in the form of trophies. Usually, and I explained this in my article on Ajax and Dortmund, the sell-to-buy (sustainable) model doesn't allow clubs to keep players long enough to win meaningful trophies. In this situation, the fact is Klopp plus shrewd transfer activity has allowed Liverpool to "overachieve", as it were. A quick trip to Transfermarkt will give you an idea of how much they've brought in from transfers, as well as what they've spent. The way I'll sum that up is every time they had what you'd call a "big summer", as in spending more than they sold, it was due to a big name going out. In particular, the three names in the aforementioned windows were Suarez, Sterling and Coutinho. Having a clear grasp of amortization, I know realize what they did it like that. They're good businessmen. The point is, unless they sell a player or two for a high "plusvalenza", or profit, they won't go in hard in the transfer market. The problem with this, and it hasn't happened yet, is guys like Coutinho and Sterling were sell-able for those values due to age, and the current squad is established. I personally don't think there's one age that automatically means a player's resale value plummets, but the front three are all 28, Wijnaldum van Dijk and Matip are 29, Fabinho and Robertson are 26 and don't look like leaving any time soon. I'd be shocked if Trent was sold, ever, unless he seriously pushed for a move, so that leaves fringe players like Wilson, Grujic, Shaqiri, and Origi as the ones to be moved on. This means the squad depth is guys who are oft-injured (Ox and Keita), the guys I mentioned who rarely play, and a bunch of kids. My take is the owners saw the Leicester situation when they won the league and realized the only proper competition would be Chelsea and City, simply because they have bottomless funds. Arsenal and Spurs are messing around and don't have money, and United still need to get their act together.

Finally, I'll quickly mention FFP, and why its loosening is bad for FSG. Like I explained above, these guys have no intention of spending their own money or creating debt through transfers in. Thus, a rule that's supposed to limit the amount teams can spend is music to their ears. The actual levels vary depending on the competition. For instance, the EFL (Championship through League 2) has more stringent FFP rules because the TV deals are significantly less, and they don't want every club gambling to go up, thus ending up bankrupt. The Champions League has a limit of something like 30 million euros per season a club can lose from transfers, and still be fine. It also works over a three year period, so one summer of spending (Chelsea) can be compensated by two quiet ones. The Premier League rules are even more lax, so a club like Wolves, who aren't playing in Europe, could feasibly spend something like 100 million without breaking the rules, as long as they sell x amount (I think I heard it's like 90 million a season). This is also how teams like Fulham and Villa came up and spend shit loads of money without consequence. With clubs losing various streams of revenue with the current circumstances, as well as FFP being relaxed after the City ruling, it's only increasing the divide of teams willing/able to spend versus not. I mean, Newcastle are spending, and Mike Ashley has been slandered for over a decade for being a cheapskate, so that tells you how important staying in the league is.

My personal take on FFP, quickly, is that it's a joke and always has been. I get the premise, which is that it's about ensuring the longevity of clubs, rather than to see them spend tons in hopes of winning things, but suffering in the long run. On the other hand, it also keeps the status quo going. Chelsea in the early/mid 00's, and then City and PSG a little while after, were the reason for FFP. They had massive cash injections which raised their level to competing in Europe, and the "big clubs" didn't like being challenged.

You can also throw Milan in as one of, if not the biggest victim, of this rule change. They had success when Berlusconi spent millions, but that time ended around the time the others I mentioned were improving. The squad was old, they had no assets, and the stadium was (add still is) owned by the city. That's what led to the decline. Add to that the fact that a new owner would be limited in what he/she/they could inject, and you see why it's taken so long to even start to properly rebuild.

I'm not part of an ownership group, nor do I own a season ticket, so I couldn't care less about the finances of a given club. It's rich seeing fans defend billionaire owners, especially when they chose to "support" a super club because they win trophies.

The takeaway here is FSG have essentially run the club like a "fan-owned" entity, which to me begs the question of why the club even has an owner. Initially, they may have helped with the debt left by the previous owners, but now they're in for a significant profit when they decide to sell, which would have been the plan all along. For fans, my take is this is going to be the peak, so ride that wave as long as it lasts. Klopp is special, as is the current squad, but that may last one or two more seasons before drastic changes will need to be made. The other clubs won't stop spending, and I don't see the rules coming to your rescue in the future.