Liverpool and FSG approve of Premier League vote that has upset Man City

Liverpool’s stance on sustainable growth within the boundaries of the Premier League’s rulebook has been clear from the first day that Fenway Sports Group took ownership of the club.

FSG principal John W. Henry has long been an advocate for greater financial control in the top tier of English football, with the Liverpool owners having initially expected the Premier League’s profit and sustainability rules (PSR) and UEFA’s now changed Financial Fair Play rules to have had more bite to stop clubs finding ways around the rules to spend more.

Liverpool have succeeded on and off the field in recent years, but the gap between themselves and Manchester City in terms of financial might has grown, with City leveraging their success on the pitch to great effect.

Speaking exclusively to the ECHO last year, Henry said: “You are right that there are ever-increasing financial challenges in the Premier League.

“The league itself is extraordinarily successful and is the greatest football competition in the world, but we’ve thought for some time there should be limits on spending so that the league doesn’t go the way of European leagues where one or two clubs annually have little competition.

“Excitement depends on competition and is the most important component of the Premier League.”

League for 115 alleged breaches of PSR, with a large number of those allegations focused on inflating sponsorship deals.

In the same week as the anniversary of that announcement, City was named by several media outlets as the club seeking to mount a legal challenge against the Premier League after changes to associated party transaction (APT) rules were voted through by a majority of clubs.

While the Premier League champions have declined to comment, the club is said to be seeking arbitration to try and prevent the adoption of the new regulations, with reports claiming the club believes them to be in violation of competition law.

Liverpool, the ECHO understands, voted in favour of tighter restrictions on APT.

The issue has come into sharper focus in recent times with the City case, as well as changes in ownership at Newcastle United and Chelsea seeing simpatico business relationships scrutinised in order to meet the Premier League’s definition of fair market value.

Rules around APT are in place to stop clubs using companies in which they have interests to come on board as sponsors at inflated sums to allow clubs the ability to reduce their PSR concerns and spend more on players, thus improving their chances of on-pitch success.

The strength of a club and its true global appeal can often be seen in the kind of commercial partnerships in which it engages.

In Liverpool’s case, the club has, arguably, the strongest number of recognised ‘blue chip’ brands as part of its commercial partners in English football.

They have a broad scope of partnerships from non-related companies across a multitude of industries, including Standard Chartered, Expedia, Google Pixel, Coca-Cola, UPS, SC Johnson, Peloton, EA Sports, and many more.

“In terms of how and why we have seen success, I think we have all the ingredients we need to have success and continue that success,” Liverpool’s commercial director Ben Latty told the ECHO last year.

“When I talk about ingredients and what makes you an attractive partner for a blue chip brand, we have first and foremost really strong values. We have a respected and responsible ownership group who I believe, and I’m sure many others believe, run and operate the club in the right way and invest in the right areas that need investment, whether that’s infrastructure or resource. We have a strong leadership team within football, a commitment to the women’s game, award-winning sustainability strategy, a super-skilled sales team who instil trust from the beginning with partners, and we deliver for partners.

“We have unrivalled reach as a football club through our owned and operated digital channels and the TV audiences that we attract. When you throw all those ingredients into the mix I can’t think of another rights holder, let alone another football club that has all of those ingredients, and we are seeing all of that come to fruition

Liverpool, unlike a number of their rivals, has not gone down the route of engaging in deals with what are seen as rather opaque companies in emerging but in some cases unregulated industries.

Revenues have grown across the board while remaining compliant with regulations. However, keeping pace with Manchester City has been a major challenge for the Reds and FSG in recent years, with City’s most recent commercial performance coming in at £341.4m for 2022/23, a figure £95m higher than what Liverpool, who are set to publish their accounts for that period by the end of the month, posted for 2021/22, a sum of £246.7m.

That commercial figure will be higher for the Reds for 2022/23, but the task to keep pace gets tougher. How the Premier League’s battle with Manchester City over the 115 charges plays out, as well as the potential for bumping heads over APT, could determine the future trajectory of those numbers.