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% ¡ª 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.
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