FSG sells minority stake in Liverpool and ends search for investment.
- US private equity firm Dynasty Equity pays about $100m-$200m
- Money used to pay off debt and will not go into January transfers
Fenway Sports Group has sold a minority stake in Liverpool to the US PE Firm Dynasty . The deal ends FSG’s search for investment and will be used to pay off debts. FSG and Dynasty, an investment firm that specializes in buying minority stakes in sports franchises, have not revealed the financial details of the deal but it is in the region of $100m-$200m (£82m-£164m). The investment does not equate to a “transfer war chest” for the manager, Jürgen Klopp. It will pay down bank debt incurred during the pandemic, capital expenditure on the new Anfield Road stand, the new Axa training centre and the repurchase of Melwood training ground, and acquisitions in the recent transfer window.
Liverpool’s debt before the repurchase of Melwood and this summer’s transfer spend was about £150m. FSG is uncomfortable carrying that amount of debt and began considering outside investment after the pandemic. The appointment of two investment banks to lead that search, Morgan Stanley and Goldman Sachs, prompted inaccurate reports in November 2022 that FSG was looking to sell Liverpool.
The club’s owner, however, wanted a minority investor and held talks with several interested groups before reaching a deal with Dynasty. Its involvement is said to be small and passive, and does not affect the operation of the club or represent the first step towards a sale. In the long term, Dynasty and FSG will explore further growth opportunities for Liverpool.
FSG’s president, Mike Gordon, said: “Our long-term commitment to Liverpool remains as strong as ever. We have always said that if there is an investment partner that is right for Liverpool then we would pursue the opportunity to help ensure the club’s long-term financial resiliency and future growth. We look forward to building upon the longstanding relationship with Dynasty to further strengthen the club’s financial position and sustain our ambitions for continued success on and off the pitch.”
Dynasty is run by its co-founders, Jonathan Nelson and K. Don Cornwell. The pair were experienced investors in sports and entertainment before establishing the company, including through collaborations with leagues and franchises.
“We are honoured to partner with FSG and support the remarkable legacy of Liverpool in a strategic partnership that builds upon mutual respect and deep relationships among our respective teams,” said Nelson, Dynasty’s executive chairman.
From the Athletic
Liverpool owner Fenway Sports Group (FSG) has sold a small stake in the club to American sports investment firm Dynasty Equity.
The deal is worth between $100million (£82m) and $200m (£164m). Based on Forbes’ $5.3billion (£4.3bn) valuation of Liverpool, that represents a minority investment of between 1.9 per cent and 3.8 per cent.
The influx of cash will be used by FSG to heavily reduce bank debt and cover the cost of projects such as the Anfield Road Stand redevelopment and the repurchasing of the Melwood training ground for the club’s women’s team.
It will not result in a significantly enhanced transfer kitty for manager Jurgen Klopp.
Senior FSG figures insist this is about managing the financial health of the club and it brings to an end their long search for fresh investment. They are adamant this is not a stepping stone towards selling the club.
The Athletic revealed last November that the Boston-based group, who bought Liverpool for around £300m in 2010, were open to offers with a full sales presentation produced for interested parties.
However, by January it became clear that selling a minority stake rather than a full takeover was their favoured option and they held talks with a range of interested parties before deciding to link up with Dynasty Equity. Morgan Stanley and Goldman Sachs served as financial advisors to FSG on the transaction.
“Our long-term commitment to Liverpool remains as strong as ever,” said FSG president Mike Gordon.
“We have always said that if there is an investment partner that is right for Liverpool then we would pursue the opportunity to help ensure the club’s long-term financial resiliency and future growth.
“We look forward to building upon the long-standing relationship with Dynasty to further strengthen the club’s financial position and sustain our ambitions for continued success on and off the pitch.”
New York-based Dynasty Equity was co-founded by Jonathan M. Nelson and K. Don Cornwell last year and this is their first major sports investment. David Ginsberg, who is vice-chairman of FSG, is also a senior advisor at Dynasty.
“We are honoured to partner with FSG and support the remarkable legacy of Liverpool in a strategic partnership that builds upon mutual respect and deep relationships among our respective teams,” said Dynasty executive chairman Nelson.
Dynasty CEO Cornwell added: “Liverpool is one of the most iconic football clubs in the world with a passionate fanbase and significant global reach. Dynasty is privileged to support the club and work alongside FSG to execute on the tremendous growth opportunities ahead.”
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