Tuesday, May 22, 2012

Liverpool FC Fires Manager, Hires Bobby Valentine

Only one part of that post title is accurate. Although maybe Bobby V will manage Liverpool when they come to Fenway. After all, Bobby V invented bangers and mash.

Liverpool fired manager Kenny Dalglish after finishing 8th (out of 20 teams) in England's Premier League. We're still waiting to see if there have been reports of drug abuse leaked to British newspapers.

Liverpool are struggling. On the field and off it. Liverpool lost about $80 million in 2011. That's net. Most of that was due to costs associated with an abandoned plan to build a new stadium. Not to mention the severance package given to former manager Roy Hodgson, who was hired then fired after 6 months.

When Fenway Sports Group bought the Red Sox in 2002, they only had one New York Yankees to compete with. Liverpool has to compete against several giants in their league. There's Manchester United, the most valuable sports franchise in the world. There's also a team owned by a Russian oil baron (Chelsea FC), the current champions are owned by an Arab sheikh (Manchester City). The spending of these eccentric billionaires make George Steinbrenner look like Jeremy Jacobs. Imagine Mark Cuban with a royal title and billions in oil money.

And there's also Arsenal, Everton, Tottenham, and Newcastle United to compete with. Teams with more "traditional" owners, but are also well funded, well run, and well managed.

To compete with these teams, Liverpool will need to spend money. They need cash to buy better talent (in soccer, players' contracts are bought and sold, they call it transferring. It can be expensive). In Europe, even developing and acquiring young players requires hefty contracts and transfer fees. It's a completely different animal over there and I don't think John Henry or the Fenway Sports Group knew what they were getting into.

Unfortunately for Liverpool, winning is how teams make money. For instance, the top 4 teams in England are invited to play in the Champions League, a tournament among the top teams from across Europe. Participants receive a share of the huge TV revenues, and also receive cash rewards for winning and advancing through the competition.

Liverpool will have to make due with just their basic revenues. Furthermore, the top players in Europe want to compete in the Champions League. Liverpool can't offer them that.

And with the recent success of Manchester City, there's less domestic money and attention for Liverpool to capitalize on. And across the world, sales of Manchester City merchandise is skyrocketing. Finishing 8th place and being an historically powerful team doesn't do much to help your revenue stream abroad.

So far, John Henry's investment in Liverpool hasn't worked out. The team hasn't improved. The balance sheet is still as red as Liverpool's jerseys. Firing the manager is a step, but Daglish wasn't the problem. Liverpool simply didn't have the talent to compete with the stars on Manchester City or Manchester United. Nor were they solid or deep enough to compete with the well-rounded Arsenal or Tottenham.

Liverpool must spend or die.

The Fenway Sports Group would never directly take profits from the Red Sox and use the money to improve Liverpool. Conglomerates don't do that.

However, Liverpool will receive direct investment from Fenway Sports Group. The Sox won't. The Sox will have to make do with what they can make on their own, minus what John Henry withdraws and places in his crocodile skin wallet. Fenway Sports Group doesn't care about improving the Sox anymore. They're all set with the Sox. They want to improve Liverpool. They want to play Barcelona in the Champions League Final one day.

Fine. Whatever.

Maybe the Sox needed to go on a leaner spending diet. Look what Felix Doubront is doing compared to John Lackey. Or Cody Ross compared to Carl Crawford.

It's not the overall money spent that irritates me, it's what the lack of spending signifies. It demonstrates a lack of interest in winning. The Sox didn't even try to keep Papelbon. They didn't go after a frontline starting pitcher. This was a 3rd place team for back-to-back seasons that hasn't won a playoff game since George W. Bush was President. But the Sox did next to nothing to improve themselves. They fired their manager, lost a closer, put John Lackey under the knife, and had a 100th anniversary celebration.

And despite whatever fake sellout streak the Sox try to convince us they have going, there are less people at the ballpark, and there's less money being spent by fans on this team. As a business, the Sox are currently in great shape. Today. But the future is uncertain. If they finish 3rd this year, what happens to the Sox' valuation? What happens if it stops becoming trendy to go to Fenway?

That's the thing about building the coolest bar in town. If people go there because it's cool, it has to remain cool.

If Liverpool continues to struggle, I'll hate the Sox owners for investing in failure. If Liverpool does well, I'll hate the Sox owners for siphoning success from Boston to Liverpool.

But if the Sox do well, I can't hate the owners for anything, regardless of what Liverpool does. And by "do well" I mean compete for divisional titles, make the playoffs, make the LCS. That's doing well.

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