Fenway Sports Group are worth £5BILLION and own Liverpool AND the Boston Red Sox… so with club chairman John W Henry worth £2bn alone and the proud owner of a £68m super-yacht, it’s no wonder their decision to furlough staff is so despised
- Liverpool announced they would be furloughing non-playing staff on Saturday
- It rankled, given their financial successes that were announced this year
- They are part of Fenway Sports Group – third richest sports group worldwide
- With the MLB season delayed, there will be concerns across the organisation
As the news broke over the weekend that Liverpool would be putting their non-playing staff on furlough, a quote from chief executive Peter Moore from last year started doing the rounds.
‘We had this historical figure, Bill Shankly, a Scottish socialist, who built the foundations. Today too, when we speak about business questions, we ask ourselves: ‘What would Shankly have done? what would Bill have said in this situation?”
Last month, Jurgen Klopp made it clear where he stood on coronavirus: ‘The first thing you have to do is be generous: generous with words, generous with feelings and generous with money of course as well. That’s what we do, that’s clear, wherever we can help we try to help, 100 per cent.’
Liverpool announced they would be putting their non-playing staff on furlough this weekend
The Boston Red Sox have also seen the season postponed amid the coronavirus crisis
The two teams are owned by John W Henry and his company, Fenway Sports Group
Fenway Sports Group were founded as New England Sports Ventures in 2001 when John W Henry joined up with Tom Werner, Les Otten and the New York Times Company to bid for the Boston Red Sox.
They became Fenway Sports Group in March 2011.
FSG own the Red Sox, Liverpool, Fenway Sports Management, the Salem Red Sox, 80 per cent of the New England Sports Network and 50 per cent of Roush Racing.
Moore’s words were a nice idea but the truth of the modern Liverpool is that they are the product of ruthless capitalism. They are, after all, part of the third biggest sports conglomerate on the planet.
This is an organisation valued in the billions and now they are using taxpayer money to prop up an arm of the business.
John W Henry has been the owner of Liverpool since 2010, when he took over from the failed Tom Hicks and George Gillett Jr regime.
He made his money in the financial markets and quickly moved into sports ownership. There was his stint owning the Tuscon Turos, a minority stake in the New York Yankees and then the purchase of the Florida Marlins before the end of the last century.
Henry’s real announcement that he was on the scene was buying the Boston Red Sox along with Tom Werner in 2002. They are one of the most storied franchises in MLB and under Henry and Werner, have tasted serious success.
Werner was an executive producer for television shows and had that role on The Cosby Show, Roseanne, 3rd Rock from the Sun and That 70s Show.
Henry owns the two giant teams alongside his partner in FSG, Tom Werner (right)
Henry and Werner have already turned the Red Sox into one of the modern powerhouses
Together they have crafted the first team in the 21st century to win four World Series, ending the 86-year ‘Curse of the Bambino’ in the process.
Their company, Fenway Sports Group, is named after the Red Sox’s stadium. That umbrella organisation also owns Liverpool. At a lower level, they also run Roush Fenway Racing from NASCAR and minor league baseball sides the Pawtucket Red Sox and Salem Red Sox.
Combine a serial winner in MLB and a team that took the Champions League last season and looks set for the Premier League this campaign and you can understand why FSG was valued at $6.6billion (£5.3bn) last year by Forbes.
That’s only behind Arsenal owners Kroenke Sports – $8.4bn (£6.8bn) – also owners of the LA Rams, the Denver Nuggets and the Colorado Rapids, and Dallas Cowboys owner Jerry Jones – $6.9bn (£5.6bn) – in terms of ownership groups worldwide.
Like Liverpool, the Red Sox are facing significant lost revenues amid the coronavirus crisis
Within that, there is also 80 per cent ownership of the New England Sports Network, and control of the Boston Globe, although the value of those stakes pale in comparison to Liverpool and the Red Sox.
Henry himself was estimated to have a personal net worth of $2.6bn (£2.1bn) in November 2018 on the back of his sporting success. Last year he listed one of his properties – known as the House of Peace – at $15m (£12m). It featured seven bedrooms, a home cinema, a sports bar, a library, a gym and an outdoor kitchen.
According to the Liverpool Echo, he also splashed out £68m on a luxury super-yacht in 2016 – which can accommodate 12 overnight guests and has an ornate fireplace in the main saloon, an infinity pool located aft of the main deck, an elevator, a spa center, a gym and a helipad.
Those numbers are all well and good when the global situation is normal, but the truth is that Henry and FSG must be feeling some of the pressure brought about by coronavirus.
The 70-year-old has seen assumed revenue from the rest of Liverpool’s season – plus the benefits of a new kit deal with Nike – go up in smoke, while the baseball campaign has been suspended until at least the middle of May. There are serious concerns it might not go ahead at all.
There is no current indication of when the Premier League might return to action
MLB’s commissioner Rob Manfred announced a delay last month, while the Centers for Disease Control and Prevention in the US have recommended against gatherings of 50 or more until at least May 10.
Last week, an agreement was rapidly reached between players and owners across the league that saw both sides agree to concessions.
Players will receive $170m (£138m) in salary in advance over the next two months – which pales in comparison to what they might expect to earn – and ‘service time’ credit, which sees players edge towards free agency.
Red Sox pitcher David Price, for example, rakes in £485,000 a week, or £2.1m a month. Split with the rest of the division, he will not receive anywhere near the £4.2m he is meant to between now and the end of May.
There has been no indication that non-playing staff might be hit at the Red Sox as it stands. Clubs across the league promised full-time employees will receive their salary until April 30 with nobody to be made redundant.
The Red Sox were in the middle of spring training when they had to postpone activities
WHAT DOES FURLOUGH MEAN?
When an employee is placed on furlough they are temporarily put on a leave of absence and not paid, although they remain on the payroll, meaning that they do not lose their job.
This could be because there is no work for these employees, or that the company is not able to afford to pay them, because of the effects of the coronavirus crisis.
In the United Kingdom, the Government is offering to pay 80 per cent of a furloughed employee’s wages, up to £2,500 per month, until they are able to resume their job full time.
The Coronavirus Job Retention Scheme will last for at least three months from March 1.
That said, some employees in MLB have received a warning letter to give a 60-day notice on potential mass redundancies.
Like in England, there is a lot at stake financially. There is a potential $1bn that will be lost in broadcast advertising revenue for America’s top three sports leagues amid the pandemic, according to Media Radar. It matches the Premier League’s potential TV rights bill of £762m.
That would be a particular concern for Henry, given his ownership of New England Sports Network, which broadcasts games from the Red Sox and the Boston Bruins.
A solution that has been pitched is playing behind closed doors in empty spring training ballparks in Florida and Arizona, while quarantining players.
But in a similar vein to the Premier League’s own plan for a possible ‘festival of football’, that depends on how the pandemic develops. The disease does not follow the best laid plans of mice and managers.
A stark warning came last week when a Boston Red Sox minor league player tested positive for coronavirus. That meant they had to shut down the South Player Development Complex and give it a deep clean. An organisational hub of this franchise had been hit.
Henry and Werner will have concerns about what the coronavirus crisis means for their teams
Yet back on these shores, the decision to turn to the government to pay 80 per cent of non-playing staff wages will rankle. Their statement explained: ‘Liverpool FC has placed some staff who are impacted by the Premier League suspension on furlough.
‘The club has confirmed those staff will be paid 100 per cent of their salaries to ensure no member of staff is financially disadvantaged. Last month the club also confirmed that it would pay its matchday and non-matchday staff while the Premier League is suspended.
‘Even prior to the decision on staff furloughing, there was a collective commitment at senior levels of the club – on and off the pitch – with everyone working towards a solution that secures jobs for employees of the club during this unprecedented crisis.
‘There is ongoing active engagement about the topic of salary deductions during the period matches are not being played to schedule. These discussions are complex and as a result the process is ongoing.’
That is especially the case given Liverpool posted pre-tax profits of £42m in 2018-19 and publicised that in February this year. Sure, they might be topping up staff wages themselves but it is a plaster on a bullet wound.
And while there might be problems across Fenway Sports Group if this crisis continues to develop, the most any Premier League side is estimated to potentially save from furloughing staff is £1.3m per month. That’s 1/4000th of FSG’s value.
Piers Morgan slammed them on Monday. ‘Liverpool Football club built up such a good reputation in recent years under Jurgen Klopp, and winning the Champions League, this dynamic wonderful team, everyone was proud, everyone loved what Liverpool were standing for,’ he said on Good Morning Britain.
‘All gone, all gone, because their billionaire owners in America decided that this was the time in a year when they made £45m profit that they were going to furlough their staff at Liverpool Football Club.’
Henry pictured with wife Linda Pizzuti (second left), Jurgen Klopp and Werner in 2016
Jamie Carragher also tweeted over the weekend: ‘Jurgen Klopp showed compassion for all at the start of this pandemic, senior players heavily involved in players taking wage cuts. Then all that respect & goodwill is lost, poor this @LFC.’
Former player Dietmar Hamann was equally taken aback, adding: ‘Astonished by the news that @LFC takes advantage of the furlough scheme to claim 80 per cent of non-playing staff wages back off the government. That’s not what the scheme was designed for. Contrary to the morals and values of the club I got to know.’
According to reports, there had already been talks about how sacrifices could be made to help all staff and society on Merseyside while this crisis goes on. The move on Saturday diminishes that and the charitable efforts of the Liverpool players, with the squad yet to agree to a pay cut.
Some people have pointed out that it makes simple business sense to use a scheme open to businesses – it will protect Liverpool in the long-term. At the same time, though, it also clearly shatters the image that Moore and Liverpool have created for the organisation.
Henry, Werner and the whole of FSG now have a lot on their plate across their various ventures. This furloughing, in financial terms, is just a small portion of that.
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