The mooted sale of Liverpool Football Club confirms an uncomfortable truth: No-one really makes any money owning a soccer club, they only profit from selling it.
Fenway Sports Group Holdings LLC, which also owns Major League Baseball’s Boston Red Sox and the National Hockey League’s Pittsburgh Penguins, is exploring a sale of the English team. Liverpool could fetch more than $5 billion, Bloomberg News reported, citing an analyst estimate. A deal of that size would represent an incredible return on the £300 million ($345 million) that FSG paid back in 2010. But without a sale, Liverpool would be a pretty poor investment.
Liverpool is a better-run club than most, with tight controls of its costs. But in more than a decade of FSG’s ownership, the team has still only made a cumulative profit of £27 million, representing an annualized return of just 0.8% — pitiful by almost any standards. Assuming the reinvestment of dividends, the S&P 500 has returned 13% a year to investors over the same period.