Back in February 2012, Liverpool FC's principal owner John Henry stood pitchside at Wembley in London, taking in his first experience of success in English football.
It was a joyful scene out on the pitch as Kenny Dalglish and his Liverpool players celebrated with the Carling Cup trophy – Liverpool’s first silverware in nearly six years.
A team including players like Charlie Adam, Stewart Downing and Andy Carroll had won the cup on penalties after drawing 2-2 against Championship side Cardiff City. Liverpool missed their first two penalties in the shootout, but won anyway after Steven Gerrard’s cousin Anthony missed the fifth for Cardiff.
Sky’s touchline reporter Andy Burton sought out Henry on the sideline to get his take on the moment. Will this be big news back in America?
Straight-faced, Henry replied: “No.”
Three months later Henry would sack Dalglish. King Kenny’s advocates could have made the case that a League Cup plus an FA Cup final appearance constituted a respectable return and a good platform for improvement: a lot done, more to do.
Henry’s view was that the League Cup, “silverware” though it might be, doesn’t count for much when you only take 52 points from 38 Premier League games. He thought Liverpool should be capable of much more.
Last week Liverpool wrote off the League Cup by sending a youth team to lose the quarter-final 5-0 at Aston Villa. Their priority was the Fifa Club World Championship, which they won after beating Flamengo 1-0 in Saturday’s final.
If the new world champions beat Leicester City on St Stephens’ Day they will equal Dalglish’s 2011-12 final tally of 52 points in the league, and it will have taken them only 18 matches to do so.
World domination
The 2010s have seen Liverpool go from near-bankruptcy to world domination. The club Henry bought for £300 million in October 2010 was valued at £1.7 billion by Forbes in May 2019, and that was before they won the Champions League and concluded a new kit deal with Nike worth an estimated £70 million a year.
The first thing to say about success is that there's nothing like a windfall to get the ball rolling
Remember that in the first year of Fenway Sports Group's ownership Adidas declined to renew its £12 million a year kit deal with the club on the basis that "what Liverpool were asking and what they were delivering was not in the right balance".
Henry’s Liverpool have, therefore, become a case study in success, the sort that management books are written about. What general principles of running a football club can we take from an analysis of Fenway Sports Group’s decade in charge?
The first thing to say about success is that there’s nothing like a windfall to get the ball rolling. Liverpool have benefited from a general rising tide in the financial power of the Premier League.
The enormous TV deals that began in 2016 – Jürgen Klopp’s first summer in charge – allowed the English top-flight clubs to pull away from European competition. Until the summer of 2016, Liverpool had only spent £25 million or more on a player four times in their history. Since then they have signed 16 first-team players for a combined outlay of £416 million – so £25 million is now the average price of an incoming Liverpool player.
Of course, the other Premier League clubs have also benefited from the same rising economic tide, and spending alone cannot guarantee success. Liverpool know that better than most clubs. They had already gone 20 years without winning the league title when Fenway Sports Group took over.
Player salaries
Most Liverpool fans would probably say that the main reason why they did not compete in those years was that they could not compete economically with the power of Manchester United and latterly Chelsea, but this is not really true.
For most of the 1990s Liverpool spent more than Manchester United on player salaries, and it was only from the 2001 season onwards that United pulled decisively ahead.
Liverpool’s seventh-place finishers of 1999 were paid around 20 per cent more than United’s treble-winning team of the same season. The real difference was that United were run by Alex Ferguson, who did not tolerate mediocrity, while the lack of direction at Liverpool was summed up by their decision to start that season with two managers.
The ruthlessness has been evident in how they have dealt with managers who did not come up to the mark
The pattern of muddled thinking continued at Liverpool for most of the following decade. Gerard Houllier should have been let go after failing to qualify for the Champions League in 2003, but was allowed to continue for another season for what seemed largely sentimental reasons.
In 2007 the club that had pioneered the two-managers strategy embarked on a two-owners strategy that proved a much more damaging failure, though it ultimately led to FSG’s cut-price takeover.
If there is one quality that FSG have provided since then it is clarity of thought. This is not quite the same as deciding on your principles and sticking to them no matter what. Rather it’s a willingness to design a long-term plan and follow it through, tempered by a readiness to adapt if your original plan proves faulty. More often than not they have struck the right balance between ruthlessness and flexibility. The ruthlessness has been evident in how they have dealt with managers who did not come up to the mark. Roy Hodgson was sacked within two months of the takeover. Dalglish was sacked three months after winning that League Cup. Brendan Rodgers was sacked 17 months after nearly winning the league. Failure is no longer indulged.
Flexibility
The flexibility can be seen in their evolving approach to the transfer market. FSG’s original idea was to use data analysis to find young players with potential – the much-mocked Moneyball method. When they realised after a couple of years that this was not working, they changed to a hybrid approach.
They would still crunch the numbers to firm up their understanding of what players could offer, but sometimes, when the solution was staring them in the face and the solution’s agent was demanding a gigantic commission to make the deal happen, they would accept this as the cost of doing business.
From elite tactical insight to motivational fervour to outright cheesy schmaltz, there seems to be no area in which Klopp does not excel
The fact that world stars like Mohamed Salah, Virgil van Dijk and Alisson Becker play for Liverpool today is not unrelated to the fact that Liverpool have paid more money to agents than any other Premier League club for three of the last four years.
Yet you still doubt, even with years of good decisions behind the scenes, whether any of this success could have happened without the unique input of Jurgen Klopp.
From elite tactical insight to motivational fervour to outright cheesy schmaltz, there seems to be no area in which Klopp does not excel. He is that rare example of a massively successful professional who is simultaneously humble, sincere and authentic.
Of course hiring him was a good call by FSG, but after what Klopp had already achieved at Mainz and Dortmund it’s not as though he would have had to wait much longer for a big job if Liverpool hadn’t called when they did.
So there it is – the Liverpool formula for success: start building momentum just as your league signs a bunch of incredibly lucrative new TV deals, sign a series of brilliant players, and make sure it’s all overseen by one of the greatest managers of his or any other generation. Good luck to everyone hoping to follow the recipe.
