Billionaire threw out the stars — and the icon is in profit

He increased revenue and got rid of overpaid players. That is also why the team of American businessman John Henry ended up in the black.

“We will never put the club into the precarious situation it was in when we took it over from the previous owners.” Those were some of the first words of American billionaire John Henry after buying one of England’s most famous teams, FC Liverpool, in 2010. The team, which also includes the captain of our national team Martin Skrtel, was in debt and was struggling mainly with excessively high player wage costs. Today, it can be said that businessman Henry, through his company Fenway Sports Group, has managed to heal Liverpool. For the first time in seven years, the club has ended up in the black. From the beginning of June 2013 to the end of May 2014, it recorded a profit of £0.9 million. “It’s great news for the club that it is being run economically. Modern football is very much about money, and the outlook for the future is certainly better when you have a healthy club,” former Liverpool icon Vladimir Smicer told the Economic Daily.

The foundation of success? Revenue growth
The key factor in Liverpool achieving its first profit in several years was a massive increase in revenue. Since Henry took over, it has grown by 73 percent. Specifically, in 2010 the club’s revenue was €225 million; after last season, it reached €306 million. “There is a visible influence from the American owner — for example, the increase in ticket prices,” sports analyst and football agent Jozef Tokos told the Economic Daily. And since billionaire John Henry has been the owner of the Boston Red Sox baseball team in the USA for over a decade, he tried to transfer a successful business model from American sports to the English football club. “They are used to running their teams economically and not indebting them at the expense of possible sporting success. They pay attention to the things where influencing them can bring a better financial result,” says Tokos. During Henry’s more than four years in Liverpool, the club parted ways with nearly ten highly paid players, such as goalkeeper Pepe Reina, striker Andy Carroll, and midfielders Joe Cole and Alberto Aquilani. The result of these wage cuts was clear: while the club’s revenue rose sharply, player wages remained at roughly the same level. The figures speak for themselves: in 2010, player wages accounted for 74 percent of the club’s income; last year, it was only 59 percent.

Heading for the Champions League
Right now, Skrtel and his teammates have a clear goal: to finish in the top four of the English Premier League and secure a place in next season’s prestigious Champions League. “After last season’s success, when the club finished second in the league, just two points behind champions Manchester City, expectations were high. They haven’t quite been met, but the end of the Premier League could still belong to them,” says Vladimir Smicer. After Wednesday’s victory over Burnley, Liverpool extended their winning streak in the Premier League to four matches. They are now only two points behind fourth place, currently held by Manchester United. “From an economic point of view, the management has succeeded after the announcement of the latest financial results. Now it’s time to achieve sporting success as well — in the coming weeks, that means breaking into the top four in England and trying to win the FA Cup,” said Tokos. Confirming that Liverpool is on the right track from a business perspective is also its rise in Deloitte’s Football Money League rankings, where it jumped from 12th place last year to the current ninth position.