News has emerged that FSG is exploring the possibility of buying the Spanish second-division team Malaga. But why?
When Michael Edwards returned to working with Liverpool, it was not to be employed by the club. Instead, the former Reds sporting director has an expanded role compared to the one he left behind in 2022.
Edwards is now the CEO of football for Fenway Sports Group (FSG) and one of his biggest tasks when he ‘returned’ was to identify another soccer club to purchase. In the multi-club model, Edwards will then help run that new team.
It is a change of approach from FSG but in many ways, it should not be a surprise. The US group — and Edwards — have long admired arguably the most successful version of that model: the Red Bull group.
FSG also appointed former Benfica technical director Pedro Marques. Previously at Manchester City alongside ex-Liverpool sporting director Julian Ward, Marques is described as an expert in acquiring global talent. It isn’t too hard to see why he might be useful.
Why is the multi-club model advantageous?
In simple economic terms, the diversification of resources makes sense for owners looking to spread out the risk. But it is unlikely that buying a smaller team would mitigate that if anything drastic were to change at Liverpool or in the Premier League. Instead, the gain is likely to be more in shared information and expertise.
It could also be a way of getting around the post-Brexit difficulties in the transfer market. With what could essentially become something of a feeder club, players could still be brought into the football group even if the chance to bring them to Anfield immediately is now gone.
When Stefan Bajcetic was signed as a 16-year-old from Celta Vigo, for instance, Liverpool had to rush through that deal before the Brexit rules changes in order for it to be allowed. It would no longer be possible, but the next Bajcetic could be signed by a club owned by Liverpool’s owners in another European country, and then moved across when they have accumulated enough experience to be given a work permit.
It could also be a way into the South American market. Liverpool has never been keen to spend big in the same way that Real Madrid has with the likes of Vinícius Júnior and more recently Endrick. But if Liverpool had more connections there, it is clear that it can be beneficial. Vinicius cost $48m (£38m/€45m) to sign from Flamengo as a 16-year-old; a lot of money at the time, it now looks like a bargain.
(Image: (Photo by João Guilherme Arenazio/Getty Images))
Plenty of clubs, including Chelsea, believe that the current loan system doesn’t always work in the optimal way. A player might go and not get minutes (something Liverpool has tried to combat with financial penalties being including in loan arrangements if a player doesn’t get enough time on the pitch) but even if they play, it might not be in the same formation or tactics.
Harvey Elliott was on loan at Blackburn one season and Leighton Clarkson the next, for instance. Even under the same manager at the same club, the tactics changed and it wasn’t such a good fit for the latter.
Liverpool has relationships with the likes of Blackburn but this could be a more direct way of guaranteeing the same playing style and enough minutes. It is possible that could work for players who are not on loan and even managers, too. Assuming each club plays in the same way, the idea is that there is a pathway of progression, like between Salzburg and Leipzig.
And then there is a slightly more boring benefit: the potential to increase revenues. Because sponsors can sign up to be involved with multiple clubs at once, this is more appealing to big businesses. Manchester City’s sponsorship is spread across the 13 clubs in the City Football Group, as an example, and is valued higher as a result.
Similarly, executives can be paid by a group rather than a club, which helps with accounting. Edwards is being paid a substantial salary, but that is paid for by FSG rather than Liverpool and therefore goes on the accounts in that way.
What might it look like for Liverpool?
It would need to be very different to what Chelsea and Strasbourg had this time last year but it is safe to assume that FSG would want to implement this model in a way where there would be as little friction as possible. In France, the Ligue 1 side had been struggling and protests against being owned by Chelsea have been regular. Clearly, that should be avoided.
The feeling at the time was that Strasbourg was struggling because it now exists only to produce players who will head to Stamford Bridge (if they are good enough). Strasbourg opted against signing a midfielder because Andrey Santos was heading there on loan for the season, for example, and was languishing lower than it would have expected to be in the table. This year, it should be noted, it is sitting in fifth place and has been much improved.
More likely, though, any Liverpool-associated multi-club group would be more efficient and well-run. The Red Bull group would seem a more likely thing to envision, where the benefits listed above are genuinely felt. Sending players to a struggling Strasbourg feels less beneficial than sending them to a thriving team, for instance, though Todd Boehly would argue that has now changed.
Where might be targeted?
FSG looked at Bordeaux last year and is now looking in Spain. Portugal would make sense too. Liverpool has shopped in the Portuguese market a lot in recent times for the likes of Darwin Núñez and Luis Díaz, among others.
The country is a popular route to Europe for the best South American talents, such as Enzo Fernández, who signed for Chelsea for a fee of $135m (£107m/€125m) only around six months after moving to Benfica from River Plate.
But there could be plenty of other options as well. “The requirements to get a work permit to play in Belgium for non-EU players are among the lowest in all of Europe, so players who would not get a permit in England could build up their credentials while playing for a Belgian team,” Shiv Jhangiani, head of Strategy and Mergers & Acquisitions at sports consultants Sportsology, told ESPN.
“It’s an easy market to operate in for American or British owners because of proximity, but also advantageous tax laws regarding player wages and how the style of play in Belgium correlates well with the English game. The French market also sees high penetration of multi-club structures.
“France is the biggest exporter of talent in Europe — second only in the world behind Brazil — and offers direct access to major African talent hotbeds. Portugal can also be strategic with access to the Brazilian market but the cost of club acquisitions in Belgium is very attractive.”
The multi-club model is the idea of the moment within soccer, and is typically associated with US owners, though is far from exclusively championed in that part of the world. Around half of the Premier League’s clubs are part of multi-club models: Chelsea, as mentioned, got involved with that in 2023, and Newcastle United has explored it.
That appears to be the way that the sport is heading and therefore Liverpool will not want to get left behind. Is it the future? It remains to be seen, in truth, but what you can say with certainty is this: it looks like a substantial enough number of owners think it might be to make it crucial FSG ensures it doesn’t get left behind.
