Liverpool and FSG now set to keep a close tabs on Manchester United concerning their transfer deals

When it comes to big behind-the-scenes deals, Liverpool have a keen interest in what Manchester United are up to.
United have been commercial giants for so long and the lack of success on the pitch compared to their time under Sir Alex Ferguson has meant the Reds have been able to capitalize on their resurgence over the last decade and turn it into revenue streams superior to what the Old Trafford team did. .
While United’s current sale talks focus on a valuation of over £6bn, some £2bn above that on which Liverpool’s valuation is based, even if privately seen as above that figure, the The Reds’ revenue has surpassed their Manchester rivals, with Liverpool reporting £594m for the previous 2021/22 financial year, compared to £583m for United.

The Glazer family’s deeply unpopular ownership of Old Trafford appeared to be coming to an end when it was announced, just a week after the owners of Liverpool Fenway Sports Group had done the same, that they were reviewing strategic options including a partial and full sale of the soccer team . United continued that plan with advanced talks with Qatari Sheikh Jassim bin Hamed Al Thani and British billionaire Sir Jim Ratcliffe still in the hunt. Liverpool, on the other hand, quickly opted for an investment search rather than an outright sale, which remains on the agenda. Talks are ongoing, but as it stands, they are far from over.

The sale of Manchester United is seen as powerful for the Reds’ own investment quest as it gives the market a clear indication of the value of a scarce asset like United. Many team ratings have been made by turnover multiples of six, seven and in some cases eight, which has seen them rise sharply in recent years. Selling a club like United would allow for a more realistic valuation of a club like Liverpool and bring more clarity to potential investors and owners.
But it’s not just the potential acquisition of United, which may not yet materialise, that will spark interest from FSG bosses. Next year, Liverpool will begin some early talks with kit partner Nike about what happens when their current five-year partnership first ends in 2025. It’s a collaboration that has been seen as a success so far, aided by growth fueled by the end of pandemic restrictions and opening of sales opportunities. There have been collaborations with basketball icon and FSG partner LeBron James, while a range has also launched with Converse, a brand owned by Nike. There are simpatico relationships that exist in the Nike/Liverpool partnership, such as investments between Nike, FSG and RedBird Capital Partners in James’ SpringHill Entertainment Company in 2021.

It is hard to imagine parting ways with Nike in 2025 and it is very likely that the partnership will be extended and the sportswear giant will become a long-term partner of the football club. That’s certainly the hope in Liverpool, with Nike’s position as the world’s largest sportswear company, a business that has seen its direct-to-consumer online business flourish over the past three years and can provide scale and reach for the Reds around the world, something that is invaluable to Liverpool’s growth plans.

At present, the deal is believed to be worth around £30m, a lower figure than what the club previously received from New Balance. But it’s the extra 20 per cent from the sale of Nike/LFC merchandise that’s so valuable to the Reds with the deal, with the hope being that when he hits his peak he can deliver north of £75m.

Watching what Manchester United would do with kit partner Adidas would have been of great interest at Anfield and FSG’s home Boston. On Monday, it was announced that United had agreed a new 10-year deal with Adidas which included a minimum cash guarantee of £900m to see them through to 2035, a sum of £90m per season. The deal is “subject to certain adjustments” which are not described in more detail. At present, the deal with Manchester United is worth around £75m and includes clauses that would reduce the value of the deal by 30% if the club fails to reach the Champions League for two years, meaning that an element is the risk associated with the uncompetitive club on the pitch.

United followed the tactic of getting guaranteed amounts over a longer period of time from their biggest trade deal and the biggest commercial deal in Premier League history, giving them greater financial security. In terms of inflation, a £75m deal signed in 2015 would be worth an inflation-adjusted £98m in July 2023, more than the annual amount provided by the Red Devils. In a few years that £90m annual figure may not be as attractive compared to what some rivals can offer, and they would be tied up for a long time, although there will certainly be some exit clauses for a large sum.

For Liverpool there will be a need to see the value of their Nike deal raised when 2025 comes along, although whether a length of deal such as United’s remains to be seen. But given how the club have managed to achieve success in terms of their kit partnership over and above inflation, with the £40m per year New Balance deal struck in 2015 having been around £58m if adjusted for the present day, and Nike delivering, or set to deliver, well above that figure, there will be confidence that the value can keep rising.

The Adidas deal will also be of interest in terms of the potential sale of the club, with the Red Devils securing their largest ever commercial partner on such a long deal, giving cost certainty for ownership and potentially being obstructive to the plans of any future owners, pointing to the Glazers not yet being completely sold on exiting Old Trafford.

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