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We'll see what the future holds' - FSG chief Sam Kennedy makes 'extraordinary' Liverpool admission
FSG CEO Sam Kennedy was quizzed on the state of play with regards to Liverpool's investment search
Speaking on the Private Equity Deals Podcast with
Capital Allocators, FSG CEO Kennedy revealed he did not know what would happen with the 'investment' into the club and that it would be a case of seeing what the future held.
"We did a while back engage investment banks, we've been open about that," Kennedy told host Ted Seides.
"We've been open in our willingness to take on investment into the club, will it happen or not, I don't know. But we share a common vision with all of our partners and that is long-term. John (Henry, FSG principal) and Tom (Werner, Liverpool chairman) have been at this for 21 years but you would think they had been at it for 21 days. They are enthusiastic and excited for everything at Fenway Sports Group and think about what's next.
"We do focus a lot on ways that we can help increase revenues (at Liverpool) and the growth we've seen over in Liverpool has been extraordinary, and I think that's because markets like the United States are just sort of catching on to the excitement around this league.
"We'll see what the future holds for Liverpool but it's been an amazing business."
Kennedy was also quizzed on where the value proposition lay within the ownership of the teams in their $10bn portfolio, which include Liverpool, the Boston Red Sox MLB team, the Pittsburgh Penguins of the NHL and NASCAR team RFK Racing. In his explanation, Kennedy revealed the kind of investor who may fit the bill for what FSG are looking for with Liverpool.
Kennedy said: "We are a platform company designed to win championships with the teams and clubs it owns and operates. That's first and foremost because the business flows and the value creation flows from winning. That is our north star, winning championships and being involved in markets that have incredibly avid fan bases that care deeply about their teams.
"We have a revenue first mentality here where we are trying to generate as much revenue as possible from every source, and then we have been re-investing it into the product on the field and into the venues in which we occupy.
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Fenway Sports Group as a company has great revenues and growth and profitability, but the individual sports team assets have years that are up and down, that are break-even, that are cash losses, and I think it takes a really special type of investor, someone who really has gone into the space and who understands the space to see where the value creation comes from. It's not a quarterly look at EBITDA or cash flow, it's really building long-term equity value through investing those revenues back into the product."
Sources close to the situation in the US maintain that the preference for FSG is to find a minority partner, their desire to open themselves up to the market born from the perceived overvaluation of Chelsea last year and the desire for some minority partners to assess their options with regards to divesting and cashing out, a move that would free up equity to sell.
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