Liverpool owners Fenway Sports Group were considering a possible deal to buy a South American football team earlier this month, according to reports in Brazil.
The name of the US owners of the Reds has been verified as an interested party in acquiring some of the shares of legendary Brazilian club Cruzeiro after Serie B became the first Brazilian club to switch from a non-profit entity to a company as part of an offer to restructure its finances.
The move from a non-profit organization to a “Sociedade Anônima” (SA) was done to attract investors to the club, which had been banned under the non-profit model that had been harshly put to the test. ordeal during the pandemic, exacerbating an already difficult financial situation. The SA is now able to sell 90 percent of its shares, and at the club’s general meeting of members, one of those who played a key role in the transition claimed that the owners of Liverpool were a interested party.
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But barely had the interest of Liverpool owners in the club fallen into the public domain, Brazilian legend and former Barcelona hero Ronaldo took a controlling stake in Cruzeiro, investing $ 70million in the club where he moved. started his professional career.
The links with the FSG arose out of a report by the main Brazilian media Superesportes which quoted the former superintendent of the mediator and internal audit of the change of structure at Cruzeiro, Aloísio Vasconcellos, who said: “The negotiation is international. There will be proposals from all sides.
“I support the proposal of the Bank of Boston, which has links with XP (Investments). They own Liverpool, which is the best organized and managed football club in Europe. It has even been a world champion.”
The report makes the connection between FSG and Cruzeiro, although it was not reported that the “Bank of Boston” disappeared in 1999. FSG has used Bank of America on occasion, more recently with the agreement of the Pittsburgh Penguins, when negotiating takeovers. There is no indication that Bank of America is involved in these negotiations. XP Investments has links to the US market through the New York Stock Exchange.
After the deal was struck with Ronaldo, XP Investments partner Pedro Mesquita reportedly told Brazilian radio Rádio Itatiaia that FSG was not part of the bidding process.
But it was a deal that seemed logical to Liverpool owners on many levels, and would have been the first step towards a potential multi-club model that has been seething in the background since RedBird’s $ 750million investment. Capital Partners for 11% of the FSG empire in March.
And given that another Brazilian team, Botafogo, was linked with a purchase of FSG last week, it’s a market that offers many benefits, although Crystal Palace shareholder John Textor is on the market. point of acquiring the Botafogo SAF.
The FSG has been interested in the idea of a multi-club portfolio for some time. They own a number of teams from different sports thanks to the ownership of the Reds, Boston Red Sox baseball, Penguins ice hockey team and RSK Racing NASCAR team, but they do not have still taken steps to acquire another football team.
There are efficiencies within the multi-club model that are attractive to the FSG, especially in South American football.
“One of the things that come to mind is the efficiency gains and the economies of scale,” Daniel Geey, a prominent sports lawyer and author of the book Done Deal, told ECHO. “.
“For example, if the group has a very large sales department, these sports rights properties can be marketed and spread over many territories and jurisdictions, and if you have a very good relationship with the brand, that obviously helps.
“If you have a centralized entity that takes care of everything from data to scouting to talent identification, that can have its advantages. All these central hub issues combined, it can be a major benefit for an entity. looking to acquire clubs in different jurisdictions. “
There is also the benefit of a wealth of talent that exists in undervalued South America, as well as a very engaged audience through Brazil’s love affair with football.
It is a market that others have already exploited.
Red Bull Bragantino, owned by the company that owns RB Leipzig and Red Bull Salzburg, among others, has also become an SA, while the owners of Manchester City City Football Group, which owns a number of clubs around the world, owns a majority stake in two South American teams; Montevideo City Torque of Uruguay and Club Bolivar of Bolivia.
City have focused their attention on South America for the past two years, with their scouting network identifying talent and the club taking action to bring them into the club.
Seven players have arrived, or are expected to arrive, in recent months. Eighteen-year-old Nahuel Bustos, Yan Couto, Diego Rosa and Metinho all joined last year for a combined £ 21.5million. They will be joined by teenagers Dario Sarmiento, Kayky and Kluiverth Aguilar, with the combined cost of the trio rising to just over £ 14million.
All have left the Etihad directly or are ready to arrive when they arrive.
City’s multi-club ownership model saw Bustos and Couto spend the last year with Girona, while Rosa and Aguilar went to Lommel. Kayky, Sarmiento and Metinho will also visit one of the European clubs belonging to the CFG to begin their journey to the continent and give them the basics that the city bosses say will serve them well enough to challenge a place in the first team. . or see their value increased significantly to see a return on their investment.
And that’s where the value lies.
Not all players who walk through the doors when they are young will be successful at the first level of the team. Finding talent like Trent Alexander-Arnold is rare and the Academy is as much about getting players to perform at their best and providing them with a career and a net profit for Liverpool as it is about finding players for the first team quite simply. is not the possibility for all of them to make their Anfield dreams come true.
But with Britain’s exit from the European Union, new regulations had to be introduced in January this year regarding the signing of young foreign talent, as was the case recently for Liverpool with Mateusz Musialowski. and Billy Koumetio, the Reds may need to work smarter and having a foothold in a market like Brazil could be a factor in that regard.
When they signed both players were able, due to playing for EU member countries, to move freely to the UK and get their Reds moving. Now, after Brexit and with the introduction of new Home Office rules from the start of 2021, clubs are prohibited from recruiting foreign players under the age of 18, and even if they are 18 years old. , they must abide by a strict approval from the Board of Directors (GBE), where the decision whether or not to obtain the green light is based on a scoring system that takes into account the senior matches played, international selections and the strength of the team. competition, among other things.
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For big European signings, the required 15 points are easily met, but for young players, for whom high-level matches in European football and international honors at the age of 18 are hard to come by, this means the way to the Premier League is no longer so easy to navigate.
Neither Musialowski nor Koumetio would have qualified for a GBE.
Then there’s the Brazilian connection that already exists in Liverpool, a connection that has developed over the past year.
Both Alisson Becker and Fabinho are key first teammates for Jurgen Klopp, and Alisson’s own influence was evident in the signing of young Brazilian goalkeeper Marcelo Pitaluga, with whom he spent time training before moving on. signing, as well as influential Reds number one in Brazil legend and World Cup winner Claudio Taffarel joins the staff as goalkeeper coach. They will know the potential that exists in Brazilian national football.
Pitaluga arrived after Brexit, but his move was made easier by the way South American competition is weighted for GBE points, and also by the fact that opportunities for young players are more abundant in the main national competitions of the continent as opposed to in Europe. If the teenagers play top European football on a regular basis and stand out, you can guarantee that they also come with a pretty steep price tag.
This is why Premier League clubs are now focusing on the South American market, where it is easier to get the required GBE for players who are also cheaper than in Europe.
In Pitaluga’s case, the goalkeeper had represented Brazil in all age groups and was part of the Brazilian squad that won the FIFA U-17 World Cup in November 2019, an achievement that did not does no harm to his GBE. He also benched his former club Fluluminese in the Brazilian Serie A at 17.
With Liverpool, a club that seeks value in the players they bring, able to throw their nets further and get their hands on the best young talents who could flourish in a first team that saves millions or in a player who would make a significant profit if they were judged to be just below the required standard, this is an attractive proposition.
The interest reported has never manifested in a purchase for FSG, but there is a clear rationale behind it that would tick a number of boxes for Liverpool owners, both financially and competitively.