Liverpool's Owners: Weighing the Good Against the Bad of the John Henry Era
Liverpool are fast approaching the two-year anniversary of having been taken over by John W. Henry and his Fenway Sports Group, with some fans asking whether or not the owners have been good for the club or not.
Owning a top Premier League football club is a huge, complex and unique situation of course, even for those experienced in the game—much less Americans with no prior knowledge or time spent in the sport.
Henry, the principal owner of Liverpool FC, has been through an awful lot already in his relatively short time at the club but has repeatedly stated the intentions of his group to return the club to the highest standing in the global game.
Here is a balanced look at the good and the bad of the club since FSG took over, back in October 2010.
On-Field Results in the Premier League
Most important for any football team must be their league performances, results and, by association, position.
Quite frankly, that hasn't been good enough since 2010, but that has not necessarily had an awful lot to do with FSG's leadership.
Liverpool dropped from second in 2009 to seventh a year later, and had barely begun their first misguided attempt at rebuilding before John Henry and Co. swooped in to make the club their own.
A season of instability followed with a further change in the dugout, ending in the Reds finishing the season sixth.
Last season, 2011-12, the Reds ended a dismal league campaign in eighth place.
Performances were not of the standard such a finish would suggest, and poor luck and finishing played a huge role in seeing the Reds drop at least a couple of places, but overall they were still below the level of improvement which was required.
The start of 2012-13 season has seen another upheaval and results have not started glowingly—but performances have, at least, been encouraging for the most part.
Verdict: Poor. Liverpool have won only 30 of their 73 Premier League matches since FSG took over—a 41 percent win ratio. A big improvement is needed in this regard.
The first season didn't really count for Fenway and John Henry; Liverpool were already out of the League Cup (an atrocious defeat to Northampton) before the Americans bought the club, and in the FA Cup they faced Manchester United at Old Trafford, a match which they lost after going down to 10 men early on.
A poor Europa League campaign topped off the year.
In 2011-12 Liverpool were all about the cups; the real success of the John Henry era on the pitch has come in domestic cup competitions so far.
The Reds enjoyed a good run to the FA Cup final, though they lost to Chelsea after a disappointing defeat—but success came in the League Cup as Kenny Dalglish led his team to the club's first silverware since 2006, beating Cardiff City on penalties at Wembley.
As a result, this term Liverpool will compete once again in the Europa League as well as the two domestic cup competitions.
Verdict: Good. The first year was a write-off due to the substandard squad put together, and last year Liverpool reached both domestic cup finals. Further success this year would go some way to helping the new manager settle into the club—but the main focus must be elsewhere.
This is a curious case.
John Henry—and chairman Tom Werner—have been vociferous in their backing of all three managers who have presided over the first team during FSG's time at the club, but they have also been demanding and expectant.
Roy Hodgson was obviously never suited to the role, and the fans let the owners know that just as much as results on the pitch did, and they quickly dispensed with his services.
Kenny Dalglish was appointed, first on an interim basis and then "permanently," before he too was fired after just a single season in full charge.
Verdict: Perhaps the goals have moved, perhaps there were off-field considerations. Whatever the score, FSG quickly lost faith in Dalglish and now must show absolutely nothing less than iron-clad confidence in Brendan Rodgers for the club to move forward. Hard to call whether this has so far been poor, or simply demanding. They certainly could be seen to have had reason for their actions thus far with regard to managers.
The appointment of Kenny Dalglish in hindsight was seemingly part convenience, part fan request and part inevitability after the King turned around Liverpool's fortunes in such dramatic circumstances at the end of 2010-11.
However, the three-year deal always looked a little circumspect and there was something of an inevitability also about Dalglish's exit.
Brendan Rodgers has now been chosen as the man to bring about a new Anfield dynasty and, as their rightful own man, FSG have to have the patience, confidence and trust in him to do the job he has been employed to do, at least over a period of two to three years.
Verdict: Good. Some fans might have a difference of opinion, but at the time, Kenny Dalglish was the only way to go. Brendan Rodgers has a big job on his hands now, but he is more than capable and is a sound, logical and long-term appointment who can go on to have good success.
The Stadium Issue
Where to start? This is the biggest bone of contention of John Henry's era at Liverpool for many fans.
There were no promises of "spades in the ground," only that a thorough assessment of the available options would be looked at by the owners, but the fact remains that almost two years on, Liverpool are essentially still in exactly the same position now as they were when Hicks and Gillett were owners of the club.
Whether Liverpool move to Stanley Park or redevelop Anfield is no nearer to being known, no nearer to being chosen and certainly no nearer to being started, much less finished.
Liverpool need increased match-day revenue one way or the other and this simply must be objective No. 1 for FSG moving forward.
Verdict: It's a massive decision, one which will affect the club for the next few decades, but it must be made sooner rather than later. So far, neither communications nor decision-making has been good on this score from Fenway Sports Group. In fact, we can score this as so far, so bad.
Relationship and Communication with the Fans
This has perhaps been a hit-and-miss area.
The creation and implementation of Liverpool's supporters' committee initially looked promising but very little seems to have been heard of it since. Certainly there has been no indication of major decisions being taken as a result of consultation with them.
John Henry's open letter following the closure of the transfer window seemed to throw up more questions than it did offer answers. Fans might have rather not get any information at all instead of hearing the same messages repeated once it was too late to do anything about their intended targets for the first-team squad.
Verdict: Fans aren't supposed to hear anything from the board. That's the way it always was—but it seems times have changed and some supporters seem to think they need to be answered directly, often and at will. Therefore plenty will disagree but I'm going for "good"—on account of the consistency of certain messages. Certainly room for improvement, though.
Senior Hierarchy of the Club
Here's the second major issue.
Former commercial director Ian Ayre was chosen as Liverpool FC's chief executive, but Ayre is almost exclusively backgrounded in commercial operations and has no experience of the day-to-day, football-based running of a club.
He's local and he's "on the ground" as it were, but he appears to not have the full confidence or authority delegated to him from FSG, or else he is simply incapable of putting their plans into action in the short term.
There is the worrying scenario of the so-called "football committee" which never came to fruition, the implementation and almost-immediate discarding of Damien Comolli's director of football position and plenty of other senior setup posts which have either been left unfilled or else chopped and changed.
In a recent discussion between prominent journalists and supporters of Liverpool, this was one of the areas which was seen as most worrisome.
Verdict: Bad. Nobody seems to know what FSG's plans for the club are in this area. Brendan Rodgers has stated he won't work with a director of football, nobody seems in place to work on the transfer area specifically and no direct link with FSG is in place, making key decision-making slower than it needs to be. This is an area which needs sorting for the long-term stability of the club.
Back to the positivity.
Going back only a few short years, Liverpool were a local-based club trying to operate on a global scale with multinational corporations as competition, and it wasn't working.
From just a small handful of club partners and sponsorships, Liverpool FC now are established alongside an entire fleet of global brands, including betting companies, major vehicle manufacturers, clothing producers and more.
There is also the matter of the record-breaking kit makers deal with Warrior Sports and a lucrative shirt sponsor agreement with Standard Chartered.
John Henry and his team want Liverpool to be self-sustaining, and massive strides have been taken on the commercial side of operations to make it happen.
Verdict: Very, very good. Undoubtedly there is still more to come and this will be boosted significantly when the Reds start showing success on the field, but the number of club partners and big sponsorship deals are imperative to bring in further finance to the club on a yearly basis.
Let's break this delicate area down into two sections.
First up, we'll look merely at the spending of the club. Have Liverpool had funds released to buy players under John Henry and FSG?
Fans can moan all they want about not being able to bring in someone for £30 million on deadline day, but the fact is there are plenty of Premier League sides—and other major European leagues—out there who have to sell to survive.
Liverpool have always been able to go out and spend the money they have under FSG and this summer was no exception, with Joe Allen (£15 million) and Fabio Borini (£11 million) good examples.
Verdict: Good. While not competing in the Champions League where significant extra revenue is gained, Liverpool might have had their spending curbed. It hasn't been, and being able to buy players at all is a plus point.
Now onto the trickier net spend.
The tricky part comes not from knowing how much each player is sold or signed for, but in knowing and understanding which parts of a transfer deal the club takes into account when deciding how much they can spend.
Let's look at it one way: Dirk Kuyt left Liverpool for an estimated £800,000 this summer (€1 million). Does that £800,000 go into Liverpool's transfer kitty? Or does it mean that, with a yearly salary of around £4 million saved from the Dutchman's exit, Brendan Rodgers had £4.8 million made available to him to spend?
And with Borini costing £11 million, do his estimated £30,000 a week wages (£1.5 million per year) get taken into account and subtracted from the overall figure? What about estimated bonuses? Signing on fees? Agent payments?
In the end, looking in from the outside you can effectively do no more than intelligently estimate. Taking reported wages into account is fine, but it's still not necessarily an accurate assessment.
Liverpool this summer (first team only) released Fabio Aurelio (£20,000/wk), Maxi Rodriguez (£80k/wk), Craig Bellamy; (£40k/wk) sold Kuyt (£0.8m, £80k/wk), Charlie Adam (£4m, £40k/wk); and loaned out Jay Spearing (£20k/wk) and Andy Carroll (£1m fee, £70k/wk).
That amounts to an income of around £6 million and a wage spend saving of around £18 million—a total of £24 million effectively available for the transfer market.
Alberto Aquilani was also sold, though it is thought that the fee Fiorentina paid Liverpool was merely to accommodate what the Reds will have to continue paying the Italian for what would have been the remainder of his contract; so his values can be dismissed here.
Coming into the club was Allen (£15 million, £50k/wk), Borini (£11m, £30k/wk), Nuri Sahin on loan (£5m fee, £80k/wk), Oussama Assaidi (£3m, £20k/wk) and Samed Yesil (£1m, unknown wage structure).
That amounts to an expenditure in excess of £34 million even without taking suspected wages into account from the incoming players.
Verdict: It certainly isn't anything approaching the £25 million net transfer kitty which was being speculated about, but Liverpool have certainly spent more than they brought in this summer. The verdict here, then, must be good.
Much depends on the true ideas and intentions of John Henry and Tom Werner.
They have repeatedly stated their desire to improve the club, that they are in it for the long haul and that they have a plan they wish to implement to return Liverpool to its former glory.
Success over the next couple of seasons for Liverpool would be a return to the top four and further challenging for domestic cup success; over the longer haul, the first team would require greater investment in the transfer market and at least two players every two seasons making the breakthrough from the Academy system into the first team.
Brendan Rodgers has to be given far more time to implement an entirely new tactical system than his predecessors got, rightly or wrongly, and he must be publicly backed when appropriate.
Verdict: There's nothing to be done but go on what FSG have said publicly, no matter how many misgivings any particular person might have about their sincerity, or otherwise. Good—but the words must be backed up with actions.
Fenway Sports Group are in it for the long haul.
That's what they say, and that's what this writer believes. That it will be a long, bumpy and at times frustrating ride isn't exactly a new idea—it already has been, in less than two years, after all.
Consistency at all levels of the club is what will be key now going forward.
Big decisions need to be taken at board level over the direction of the stadium issue and also of whether to put in place a new CEO or other senior structure—but somebody with links to FSG, with full authority to make club-wide decisions and with the business and football nous to run the club needs to be locally based.
Once that person, or team, is in place, everything else can and should move forward quicker.
Decisions can be made, situations reacted to and problems overcome that much quicker, and without the need for public and media interference.
FSG are still learning about the brutality and the public way that the game of Premier League football is played out, and they have made mistakes along the way—that much was evident and obvious right from the very beginning.
What is important now is how they react to those mistakes and ensure steps are taken to avoid repetition, on and off the field.
The last two years have been a learning curve and a minefield of issues for all involved—the next two years need to be based on solid business footing, consistent staffing in all areas of the club and a clear direction for both football and business operations to follow.
From there, success is only hard work away.