Reg » Thu Mar 22, 2018 4:44 am wrote:There's been some confusion in other posts with folks stuck on the owners selling players to make money. Let me explain the strategy of club ownership in as few words as possible.
1. The owners do not make money from selling players, they save money both in terms of having a kitty to make adjustments elsewhere and less of a call on cashflow.
2. The owners make their money from the VALUE of the CLUB not selling players, ie the business.
3. We built a new main stand, we have more sponsors, we are making more match day revenue, we're making more tv money all this adds to the value of the club. The players are simply the tool to raise the value of the club by creating more revenue opportunities.
4. The club reaches a plateau of effectiveness - tv income, sponsorship income, match day income etc.. until the team success propels us to a higher level of play/excitement/interest.
5. To do this we need the right manager, funds and decent players. And prawn sandwiches. The owners aren't stupid.
6. So behind the scenes Barca say to LFC 'we'll give you 143m for Couts' LFC say 'we'll have to make a dance of it but yes you can have him' and lock in Keita, VVD, Mo and the Ox. FSG ask Klopp what else he needs, he says probably a keeper but he's ok for now.
7. The team and Mo do well and we're suddenly in the 'high interest' end of football - BINGO - sign new sponsorship deals, talk of the new Annie Road, Champions League revenue - the VALUE of the CLUB increases - owners happy, owners say to Klopp 'we need to keep this going, give Mo a new contract and speak with Dortmund or PSG to buy who you need to ensure we maintain this level and don't slip back'.
7. So the owners angle is now to give Klopp whatever he needs to win the league next season to maintain the growth in revenue and the value of the club.
8. Selling players for profit is not on the agenda unless dickwad Madrid come in with 200 for MO and Klopp says we can still maintain growth potential (haha that made you squirm) without him because he has another discovery lined up.
It's simple. The more we grow the value of the club, the more Klopp will have to spend, the better the playesr we'll bring in and hopefully the more successful we'll be. Easy.
All stand.
Hi reg!
You're spot on. The problem is a lot of fans are kind of naive when it comes to understanding how businesses operate. They think that taking loans or using intercompany loans are evil things because they expect owners to use personal money to invest, which never happens anywhere in the world, well at least in 2018!! A lot are still stuck in the past when owning a football club was more about passion and football and less about the business. I'm sorry to say but the truth is today clubs are businesses and if you don't manage your business properly you will put your club at risk of financial distress. We stagnated under Moores because he had no idea how to take the club forward in terms of revenues while clubs like Manchester United overhauled their business model and structure to keep up with the trends of the 90s and the early 2000s, that's why they were able to spend money bringing good players and expanding their stadium to a 75k seater stadium! With Moores we had a business model that is so outdated that even John Henry was shocked to see how it operated when he bought the club in 2010.
FSG are not and will never be the Abu Dhabi group of Man City, they don't have as much capital as they and probably never will, but all I know that FSG are a strong sports investment group with a track record of success in racing and baseball, so their idea is to have LFC successful in the long term.
Even Roman Abramovic doesn't give Chelsea his own cash just because he loves the club, he loaned Chelsea a lot of money to buy players and he is asking those money back with high interest! It's how it works.