What would the Bezos deal mean for Liverpool? | The Football Boardroom

0:00Henry:So, is Mr Amazon buying into Liverpool in its prime? We're going to take a look at the deal, the timing, the people, the context. What does it really mean for Liverpool Football Club?

0:17well Christian can I rewind 16 years to events just around the corner from here where a high court judge reinstated you on the board of Liverpool Football Club which allowed you to sell to Fenway you've not aged in those 16 years you're still the Robert Redford of the the private equity background. I've definitely aged. But what has also moved on exponentially is the revenue, the size, the stature really, of Liverpool Football Club in the intervening 16 years under Fenway. And what is happening now?

0:59Henry:Well, it's a remarkable story. I couldn't have imagined for sure in 2010 that 16 years later, Fenway would still be the owners of the club. I don't think I would have guessed that. And no, I probably wouldn't also have guessed that when, you know, they bought the club for about£300 million, that they would be potentially selling a stake in the club, valuing the club at over£4 billion. So for our audience benefit, let me just explain what we know today. There's been plenty of press on this, and it is essentially clear and confirmed that Liverpool's owners, Femwe, are in conversations with a consortia led, managed and represented by a man called Amit Bhatia, former chairman and co-owner of QPR, to acquire a strategic minority stake in Liverpool.

1:56Henry:That stake is estimated to be 30 % of the club and the price talk in the media is that that 30 % stake will be valued at about£1.4 billion, valuing the whole of the club at about£4.5 billion. And this has bubbled away for about three weeks and more recently it became clear that Mr Batia's consortia also contains one extraordinarily high-profile businessman, a man called Jeff Bezos, the founder of Amazon. This moves around every week, but currently number three in the world in terms of the world's richest people. How much sort of money are we looking at? A man worth about 200 billion pounds just on his publicly acknowledged wealth.

2:50Henry:And by the way, the other less high profile tech titan in Mr. Batia's consortia is a man called Eduardo Saverin, who was the co-founder with Mark Zuckerberg of Facebook, famously portrayed in the movie about the split between the Zuckerberg and Saverin, but who for the last 20 years has run his own investment fund. he's worth about 30 billion dollars as well so so a really illustrious crew of multi multi multi billionaires working together in a consortium to buy this stake in Liverpool just on the three of them two of them not necessarily huge football fans Bezos and Savarin but I think Bate and I'm sure a lot of Liverpool fans will be looking at this he I mean you talk to people at QPR where he was for almost 19 years they consider him a a genuine football fan and b was a force for good for the club so there is these are not sort of not faceless but these are not uh people without a sporting element to them everyone's seeing this as a financial move but obviously Mathieu to be fair to him he obviously is very interested in football as a sport as well as obviously I think Well, I think the fact that the statement by Liverpool to confirm these conversations, the fact that it describes the consortia as being managed, led and represented by Mr Batia, leaves us in no doubt in the language of deals.

4:28Henry:what that really means is it's Batia they're dealing with. And I suspect that Jeff Bezos and Eduardo Severin are much more passive investors in that consortia. We actually don't know much about that at all. We certainly don't know, for example, of the£1.4 billion that they will be spending to buy this stake. We don't know how that splits between Mr Batia and his other investors, but I couldn't help but do the math this morning on the train. If it were the case that they were splitting it a third, a third, a third, and I would be very surprised if that was true, given that it is being fronted by Mr.

5:09Henry:Batia, that would put Bezos's investment at 350 million quid. Sounds like an enormous amount of money, but for a man worth 200 billion pounds, it really is a drop in the ocean. Let's put it this way, as a fellow 62-year-old, in fact, Bezos is three weeks younger than me age. You've aged better. Well, as a recent retiree, if I had, you know, 100 grand of life savings and someone knocked on my door and said, look, do you want to take two grand, just under two grand of your life savings, have a stake in Liverpool. Don't worry, you don't have to do anything with it because it's a really well-run club.

5:51Henry:But one day that two grand might be worth 20 grand. That's kind of what's going on here, I think, with Bezos. It's a relative drop in the ocean compared to his wealth, an interesting investment. But as you imply, H, I think this is being led by Mr Batia, who's got genuine experience in professional football in the United Kingdom. It's fascinating. I always look at these moves and think, why now? Is there an element that Liverpool are at a crossroads? obviously got a new manager in Areola. You know they won the title but their last season didn't go well for them slot left. They spent a lot of money, 400 odd million and Isaac pre-season has been playing well Florian Wurz has been playing well but they're still question marks.

6:38Richard Hughes is leaving, there's that element there. There's an element of crossroads, of fluidity of uncertainty in a way.

6:46Henry:Well I think you can draw a pretty major distinction between day-to-day short-term considerations which you which you in in in your life would be naturally more focused on than than perhaps um you know global investors of the magnitude of batia bezos and severin they are taking uh a five to ten year view not a five to 10 game view and they will be looking at my old favourites, strategy, people, finances and they are looking at Liverpool Football Club today and saying under current management, the management of Fenway, over the last 16 years this club has been very well run, the strategy they've pursued has been working and this is an opportunity to invest behind an extremely successful and well-run management team running one of the most successful football clubs in the world and I think there are underlying features of Liverpool as an investment opportunity that would make it attractive to investors of this magnitude.

8:02Henry:Warren Buffett, one of the world's most famous investors, famously used the phrase an economic moat, an economic moat around a business that I think he used that phraseology to explain businesses that had extremely strong long-term defensibility, long-term protections, long-term guarantees of their competitive position. Which are what? And I would say in Liverpool's case, it definitely has a really meaningful moat around it. It has one of the great brands in world football. How would that be measured? I think twofold. A huge, loyal, global fan base built over decades, not over recent years. it consistently features wherever they finish in the Premier League one good little metric is take a look at when the TV companies pick their live games look at where Liverpool features in the facility fee payments of the Premier League it's always right up there because the TV companies know what their demand is even when they've had a dip even when they've had a dip they'll be up there in the top 1, 2, 3 in terms of being picked for those big games and then I think some other important features that maybe go to your question on timing H.

9:28Henry:We are at a moment, we're not just at a crossroads in terms of perhaps some of the on-field issues you've mentioned with Liverpool, which I think are less relevant, but we're also at a crossroads where we're seeing the next wave of financial regulation in football, a transition to the so-called squad cost rules. Liverpool Football Club under the original FFP rules, under profitability and sustainability, under Fenway's management has been literally a poster child for compliance with financial regulations. For financial reasons or ethical reasons? For business reasons, because they are the primary, probably with Manchester United, the two primary beneficiaries of a rules regime that links your ability to spend to your generation of revenue.

10:18Henry:And this club has a natural level of revenue generation associated with those aspects of its global following that I've referred to that mean it will always be able, always be in a position to invest more than many of its rivals, particularly its new challenger rivals. And an SCR. Sorry, it's self-interest. Well, that's it. That's one way of looking at it. It was a feature that Fenway would have seen when they bought Liverpool in 2010. It would have contrasted, frankly, to their experience of US sport, where owning the Red Sox, as they had done for several years already. So deep experience of a comparably iconic franchise in American sport, but in a sport in America where, frankly, revenues were much more evenly split.

11:12Henry:and the ability to invest in talent is much more of a level playing field. And I think they looked at the English Premier League and they looked at Liverpool even then and realised that actually European football is a rather different ecosystem, a system where the very big clubs with strong global followings and strong revenue generating capabilities have an inbuilt advantage. I remember talking to John Henry in the days and weeks before that deal happened about the new financial regulations that were then literally one to two years old, the first generation of FFP. And he instinctively understood they could be very, very helpful to a club that could be a leader in terms of its ability to generate revenue.

12:05Henry:So I think that this idea of Liverpool having a really deep, wide moat around it does link to a world where external investors would look at Liverpool and say all the evidence is that European and Premier League football is being more actively regulated. Those rules are protecting clubs like Liverpool even more. Or, you know, we're set fair for a situation where it would be very difficult for new entrants to really permanently unseat Liverpool from the top table of European football. I think that's an attractive ingredient for an investor. And as I say, backing a management team strategy that has been pretty damn successful.

12:56very successful very good management team as you say I mean I don't know whether you can go sailing in a moat but it's not all been plain sailing for Liverpool and for Fenway I mean ticket prices that the fans obviously reacted to that the European Super League five years ago John Henry was one of the main proponents of that but they seem to have seen which coming back to our sailing which way the wind was blowing and actually reacted very quickly on ticket prices and obviously on Super League. But if we contrast them with the Glazers, they are considered Fenway, and you know these characters, Tom Verner and John Henry.

13:40They've been considered custodians. It's difficult to use that phrase with modern owners, but they have been considered, they are good owners, aren't they? That's fair to say.

13:49Henry:Look, I think if we do the scorecard of their 16 years, there's a hell of a lot to like. As I've said, they've not just stuck to the rules. They have been an exemplary exponent of living within their means. but just you know this is a football club we're talking about they have um you know their first five years were i think a period of getting to know english football in the premier league but i think they're two they're two transformational decisions which have yielded spectacular results success and ultimately culminated in this potential to sell a stake in the club at a huge up value from their entry price.

14:37Henry:I think the two signature decisions are the decision to refurbish Anfield not to move. When they bought the club, plans were in place for a brand new stadium next door. They scrapped those plans pretty quickly and copied the playbook from their ownership of the Boston Red Sox, where they refurbished the iconic Fenway Stadium to great success. And I think their expansion of Anfield has been a huge success for the club. And the second and most important decision, and I'm sure they would agree with me, would be the decision in 2015 to hire Jurgen Klopp, who I think really epitomised what it is to be a Liverpool manager and achieve great success.

15:28Henry:So, look, they had a case study in how not to manage a football club. You know, when I sold them the club, they were replacing some of the most unpopular owners in Premier League history. Hicks and Gillette. In Hicks and Gillette. And so there was never an excuse for those new owners to repeat those mistakes. They were writ large. It was those mistakes that, in fact, enabled them to buy the club when they did. And yes, I think your comparison with Manchester United is a fair one. I couldn't help but notice that the valuation that we're talking about on this deal is pretty similar to the valuation that Jim Ratcliffe paid for his large minority stake in Manchester United.

16:11Henry:But I certainly think it's fair to say that the Fenway ownership has been better received at Anfield than the Glazers ever have been at Old Trafford. Just before we go back to the deal, taking you back into your own world when you were a Baker scholar at Harvard, if fast forward to now, do you think at some point there will be classes, lectures, tutorials, theses written on Manchester United's takeover by the Glazers and Fenway's approach and takeover of Liverpool? And obviously that is. Comparisons. And comparisons and contrast. And will there be an element of actually you can do it either way?

16:57Because the Glazers are going to come out with a fistful of dollars and John W. Henry and Fenway are going to come out with a fistful of dollars. And if that's their game plan, then they both win. The Glazers come out as one of the most unpopular owners in English history. And John W. Henry, if it then transpires, he leaves further down the road, actually comes out with people saying, actually, you did a good job.

17:19Henry:Well, the more direct comparison would be the takeover of Man United by the Glazers and the takeover of Liverpool by Hicks and Gillette. Right. Those are the directly analogous because they were and Liverpool fans know my very strong views on this. They were both to give them their technical name, leveraged buyouts, meaning payment in cards. Meaning, no, I think the best way to think about it is buying a football club with an enormous mortgage, not much of your own equity. In the Manchester United case, none. And in the Liverpool case with Hicks and Gillette, none also. Using the club's revenues to cover the interest cost on that mortgage, hoping that the business grows in value.

18:07Henry:You look horrified when you say that. I risked a hell of a lot of my life to go in and get rid of Hicks and Gillette because I believe it's so wrong to use leveraged finance as a basis for buying a football club. I think it's wrong at every level. And my proudest moment in my life is seeing those debts paid off by Fenway and giving Liverpool the clean start. The fact that they've gone on to be pretty effective and successful owners, I could never underwrite that. I could never be certain that that would be the case. They did have some pretty direct, relevant experience in Boston and they've made mistakes along the way.

18:50Henry:But on balance, the most important thing was to clean up Liverpool and get rid of those, get rid of the debts which were killing the club. The Glazers story is different. They were able to sustain those debts because of astonishing on-field success under Sir Alec Ferguson and they kind of got away with it. And what is comparable is the level of profits that have been generated by those two ownership groups, because obviously we should we should point out that if this deal is as billed today, then in effect, Femwe will be. By my calculation, they spent 300 on the way in. The club currently owes Femwe maybe about 250 million pounds more.

19:38Henry:So they're they're about 500 million pounds of cumulative investment. And if this group buys a third of the club for£1.4 billion, in effect, they'll get their£500 million back, a profit of nearly a billion pounds, and they still own 70 % of the club. So it's been a phenomenally successful. Deal of the century? Well, matched probably, beaten only maybe by members of the Glazer family because when Jim Radcliffe bought a quarter of Manchester United, those members of the Glazer family who sold to Jim Radcliffe had effectively an infinite return on their investment because they really hadn't put any money in and they got a huge return on their investment.

20:25Henry:Those two deals are the standout profitable investments in football, in British football history. I take your point about they've absolutely done a fantastic deal. But why is John Henry selling? And are we moving down the road to a full sale? Because he's 76, he looks in terrific health. Does he want the travel? I mean, these are sort of, you know, maybe what you would consider sort of separate issues. But why? I mean, it's going to continue going from four and a half billion to five and a half billion with television and streaming. And as you say, this extraordinary moat they've got. Why? Why are they selling?

21:13Henry:Well, the timing, as you've implied, is interesting because, you know, it's been widely known that they were open to external investment for the last three or four years. And so I think we have to look at the underlying features of this particular investment that seem to appeal to John Henry Tomburner and the Fenway gang. And I think there are a couple of things. So the first is there's no running away from the fact this is an absolutely elite. There is no metric on which you wouldn't value these investors as as uber elite. You are talking about the third richest man in the world and one of the world's most successful ever entrepreneurs.

22:02Henry:And that's just Bezos and in Batia and in Severin, people who also feature in the 50th, top 50 rich men on the planet and successful people. So at one level, it's very flattering to Femwe that a group of investors of this scale and magnitude would like to invest in Liverpool. I think that probably from Fenway's point of view, their ideal investors would be extremely deep pocketed so that if required, they can carry some of the water for Fenway in the coming years. What does carry the water mean? Well, let's look at last summer. Fenway, we talked a lot on this show earlier in the back end of last season about the fact that, slightly out of character for their 16 years in office, Fenway invested well over£400 million in the summer of 25 on the back of Arnie Slott's title win to build on strength to try and take Liverpool to the next level.

23:08Henry:undoubtedly to create what the Americans would call a dynasty, a title repeating football club. And lo and behold, they finish fifth, go out of the Champions League, you know, without much, without much of a fight, let's be frank. All in all, a really disappointing season that remarkably results in the title winning manager losing his job at the end of that season. So as a strictly matter of business it's unarguable that ownership spend 400 million quid uh that look like a one-way bet to more success and the club go backwards do you think john henry would have looked at that and thought hang on a sec these are this is my money or the club's money but he's club and actually i want someone else is this where the water carrying the the deschamp analogy comes in that's a lot that's a lot of investment a lot of water to carry investment and lo and behold at the And it didn't work.

24:07Henry:OK, what does that tell you? It tells you, firstly, there are absolutely never any guarantees in investing in player recruitment, investing in football clubs in the Premier League. There are never guarantees of success. But the cost of competing is rising all the time. So that's one factor that might explain Fenway's willingness today in the summer of 2026 to entertain new investment from hugely, deeply pocketed co -investors. But I think the strings that would be attached to that investment would also be really important for Fenway. and I would be a man knowing Tom Werner as I do I know him much better than I know John but knowing knowing Tom and Billy and the management team as I do they would not want to countenance new investors who were going to be interfering in the day-to-day management of the club getting in the way of quick effective decision making but sorry if you're investors and you come in why would you necessarily want to interfere in something that's running very smoothly anyway.

25:20Henry:Well, that's one way of looking at it. I can promise you that in the tough old world of private equity and venture capital investing, most 30 % shareholders, we're not talking about 3 % or 5 % or 10%, most 30 % shareholders would expect a meaningful amount of voice, participation governance a seat at the table and I think as Fenway will have had plenty of expressions of interest in the last three or four years about investing in Liverpool because of this economic moat analogy I've used the fact that it is truly truly in a tiny group of trophy assets in the world of sport in the world of professional football within the Premier League by far the most attractive club league in the world, Liverpool would have had plenty of expressions of interest.

26:19Henry:Why pick this group? The combination of deep pockets and, I suspect, a willingness to be relatively silent partners, not, by the way, we want a seat at the table, I want to be on the transfer committee, I want to be chatting with, you know, Irayola about team selection, all that stuff. I don't think Fenway would entertain that kind of investment. And so I suspect it's that combination that could make the leaving aside. Let's be quite clear. You know, John Henry was was was and is at heart a professional investor. And this is going to be one of his greatest ever investments. I'm not party to just how much money John made or didn't make in the commodities trading world.

27:08Henry:But I can tell you right now, you know, buying a business for 300 million and selling a stake in it for about 1.4 billion pounds 16 years later is one of the great home runs to use a baseball term in investing history. And so let's not beat about the bush. It's all very well saying we've done a great deal on Liverpool, but realising some of that gain, taking some of your money off the table, in this case, taking all of your money off the table and a profit and still keeping 70 % of the club and having full day to day control. that is a brilliant outcome for any professional investor full stop but I'm trying to leave you with the impression that there have been plenty of people interested investing in Liverpool and they seem to have homed in on a grouping that is particularly well healed and I suspect willing to basically say you get on with it I'm Jeff Bezos this is 0.175 % of my net worth OK, and I'm focusing on trying to get people on the moon.

28:17Henry:You keep on doing the job you're doing at Liverpool, which is constantly improving the value of that football club. I think that's the deal on the table. Well, if he's been to the moon, he'd be absolutely delighted with the atmosphere at Anfield, which is 100 times better. Just on the atmosphere at Anfield and the people who generate it and the supporters. And I understand you look at things from a financial perspective. but will there be will they do a due diligence into whether a character like Bezos who's you know he doesn't completely own Amazon anymore he's but you know as you say he was the founder will his principles and practices that have sort of been along the way in his career will they chime with the cop or is that actually an issue anyway I don't think they will necessarily chime with sections of the club's support.

29:17Henry:I've been asked about this a lot over many years, really how to some extent for American professional investors, it takes time to understand that in many, many English football clubs, and I think Liverpool perhaps more than most, There is a different attitude towards commercial exploitation, profit, wealth creation, all of the standard practices of the capitalist investment world. I think there is a more problematic relationship with football fans in this country. And I think it's fair to say Fenway will have learnt those lessons. As I say, they had an absolute case study in how not to do that from their predecessors.

30:15Henry:And I think they've been very respectful of fans when they've made mistakes. They've quickly corrected them. They haven't loaded the club up with debt. They have, in general, been somewhere between respectful and wary of their fan base. Do Bezos, Severin and Batia, sitting here today, fully understand those issues? I suspect not. It's important to point out that as minority investors, sleeping partners, silent partners, not people running the club day to day. I don't think that we should be looking at them through the same lens as you might the controlling shareholder or the chief executive or the chairman.

31:05Henry:But nevertheless, there's no running away from the fact that this perpetuates for Liverpool a business model which is about long-term creation of value. You don't put 1.4 billion in for a 30 % stake in anything without hoping that the 1.4 billion will one day be worth 2.8 billion. Or the end game is they take the whole place over. Well, that's a very important point. That's a very important point, a slightly different point. And that is what rights might this group with 30 % need, require, want? This is quite technical. So explain it to me in layman's terms. OK. I would suggest that whoever you are and however rich you are, if you invest£1.4 billion into a private company, you need to know at some point in future you can get that money out.

32:14Henry:Investors call that a route to liquidity, maybe a exit route, two phrases you hear in the deal business. And it would be quite normal for when that investment is made that the controlling shareholder, in this case Fenway, and the new minority investor, the Bhatia Consortium, to enter into a set of arrangements in what's called a shareholders agreement that contain provisions around how that minority shareholder will at some point in future have the ability to get their money out. And that can take multiple forms. We recently talked on this show, H, about West Ham and a very similar transaction, actually, to what we know about this Bartia consortia deal into Fenway and Liverpool when Daniel Kratinsky bought 27 % of West Ham in 2021.

33:18Henry:And we've discovered only in recent days and weeks that there were significant strings attached to that investment that relate to a potential exit. I would say in this case with the Batia Consortia, let's look at the possibilities. One possibility would be that in five to 10 years time, I think minimum five years, maybe 10, that if the club is not sold in full, i.e. if 100 % of the club is not put up for sale, which would enable both Femwe and the Bhatia Group to realise their investment, then maybe Femwe would have to buy the Bhatia Consortia out. Another possibility would be that the Bhatia Group would have the ability to buy Femwe out.