FSG future plans, £538m investment and what's next for Liverpool and John Henry

The phrase 'FSG 3.0' has been trotted out on more than one occasion in the past few weeks.

Boston Red Sox president and CEO Sam Kennedy has used the term to describe what the next decade of sports team ownership looks like for Fenway Sports Group, founded 30 years ago under the guise of New England Sports Ventures.

FSG principal owner John W. Henry had made his billions in commodities trading in the 1980s and 1990s and had small stakes in the New York Yankees baseball team before acquiring fellow MLB side Florida Marlins in 1999, selling it two years later.

That moved paved the way for a purchase of the Boston Red Sox in 2002, with the acquisition of Liverpool from the grip of Tom Hicks and George Gillett following eight years later for a sum of around £300m.

For FSG the past two decades have offered something different.

The first saw them place more emphasis on data analytics and the 'Moneyball' method, something that Henry was enamoured with from early on, with that change in approach delivering a first World Series for the Red Sox for 86 years, with another following three years later.

The following decade started with the purchase of Liverpool, FSG once again putting their trust in hiring the right people to give them an edge, with Michael Edwards' success in recognising undervalued talent and ability to create a high watermark when selling players reaping the rewards.

The hiring of Jurgen Klopp in 2015 proved a masterstroke, with Klopp delivering a Champions League win in 2019 and Premier League title - the first English league title for the Reds in 30 years - in 2020.

All that suggests a picture of nothing but smooth sailing and remarkable success.

But there have been numerous episodes of poor judgement over the years, the most recent being the failed European Super League plot that added to decisions made to furlough staff last year and raise season ticket prices in 2016. All three of those decisions taken have required an embarrassing climb down from FSG.

On both sides of the Atlantic they have been accused of penny pinching when it comes to investing in talent, and on both sides of the Atlantic they have been accused of having a greater preference over either the Red Sox or Liverpool.

Heading into 'FSG 3.0' as Kennedy, a recent addition as an FSG partner, puts it, is not arriving with all in fine shape with Liverpool, with the fan anger still very real and the emotions raw from the club's part in the Super League plot. Throw into the mix the financial ramifications of a global pandemic and the likelihood of missing out on Champions League football and the riches it brings next season, 'FSG 3.0' will have to really deliver if it is to win over a fan base at odds with the owners of their club.

Kennedy, speaking to MassLive's Fenway Rundown podcast, said: "We're tripling down, we're entering our third decade together and we're calling it FSG 3.0 and are trying to reinvent ourselves, reimagine the business, think about ways we can grow and take on new opportunities."

So what might those opportunities mean for Liverpool?

The first signs of what the future holds came via the decision to sell 11 per cent of FSG to Gerry Cardinale's RedBird Capital Partners private equity firm for £538m, as well as bringing on board basketball icon LeBron James and his business partners Maverick Carter and Paul Wachter as minority partners.

While the RedBird investment affords FSG the chance to capitalise the business in the middle of a pandemic and continue to press ahead with business as if it were a close to normal year, it also presents a number of likely developments in the coming months and years.

Adding more sports teams to FSG's portfolio is pretty close to the top of their list.

For Liverpool it opens up the possibility of being part of a number of clubs, much like Manchester City and RB Leipzig, where players and resource are shared between clubs, with Liverpool sitting at the summit and the arrangement geared in their favour, whether it be through allowing them to get around Brexit red tape with signing players for the future or getting valuable experience for their own stars in a system that is uniformly played across clubs to replicate Liverpool's.

This idea was central to the failed talks between FSG and Cardinale and Billy Beane's special purpose acquisition company RedBall, but given Cardinale already has a controlling stake in French side Toulouse and a keen interest in European football it is highly likely he will be a driving force for such a move, especially given he had looked at over 80 European clubs in depth before purchasing the Ligue 2 side last year.

It won't just be football teams either, with FSG looking at teams in the NBA and the NHL as they look to add to a roster of sports teams that also includes NASCAR team Roush Fenway Racing as well as Liverpool and the Red Sox.

Then there are the other potential avenues that Cardinale will aid FSG's exploration in.

Cardinale is someone with a proven track record in the US in delivering strong revenue and growth around sports content, most notably through his work with the YES Network, America's largest regional sports broadcaster that showcases games from the major teams across the New York area.

Cardinale has previously spoken on the importance of being the rights holder when it comes to broadcast content, having more control over the TV and broadcasting rights around the club.

That was a key part of the talks to reform the Champions League as well as being key motivation being the Super League proposals, and while FSG may have said sorry over how they went about the Super League saga, one area that it is likely they will still try to make some headway is how they gain a greater say around broadcast right so that they can extract greater revenues.

James' addition is also a likely factor in what happens moving forward.

In the US there are a number of sporting projects at play that are using the power of superstardom as leverage, the most notable being a third attempt to get the XFL off the ground properly, a project in which Hollywood actor Dwayne Johnson has linked up with his ex-wife, entrepreneur Dany Garcia, as well as RedBird's Cardinale.

FSG hope that James' involvement will allow them to do things with some of their commercial partnerships that sets them aside from many of their competitors.

Nike is the obvious focus for that, and with self-confessed Liverpool fan James having penned a lifetime $1bn deal with the American sportswear giant, and Liverpool having entered into a multi-year deal where they can drive up revenues through the incentivised nature of the deal, it is a simpatico relationship.

Further redevelopment of Anfield is planned to allow more revenue streams to be brought on board, such as more concerts held during the close season, with plans for real estate development taking place around the Boston Red Sox's Fenway Park home.

But will this decade see the shift as to what the future may look like post Henry?

By the time FSG 4.0 arrives, Henry will be in his 80s. Will he still have the appetite to drive forward the business? Given he made his fortune elsewhere, is this merely a hobby that he will be happy to helm for as long as he can?

There already seem to be structural changes occurring.

James has an interest in future sports team ownership and his FSG relationship allows him to get, to use an American parlance, a peek under the hood.

Then there is Cardinale with the not insignificant stake of 11 per cent in the business. Will we see that grow over the coming years to a point where there is transition from within?

FSG, despite the pressure they currently face, aren't ready to sell Liverpool, nor are Henry and Tom Werner ready to relinquish control.

But given that they have sought to shake up their group of partners to hand a stake to individuals who may be able to offer a better chance of maximising revenues into a new decade, where new commercial opportunities are presented and the way fans consume sports is ever changing, it does suggest that, bit by bit, there is a transition at play that has to happen if the company are to remain relevant and be able to keep their teams competitive at the very, very top.