Elon Musk could make Liverpool the most valuable football club in the world but it would mean price rises and controversial sponsorship deals for fans, according to football finance expert Dr Rob Wilson, formerly Professor of Applied Sport Finance at Sheffield Hallam University.
In a week that has seen the incoming US President, and close associate of Musk, Donald Trump signal his intentions to annex Canada and Greenland, Musk’s own father has suggested that the South Africa-born billionaire wants to purchase Liverpool FC.
John Henry’s Fenway Sports Group, the current owners of Liverpool, are seeking strategic investment in the club rather than an outright sale but the prospect of the world’s richest man (at least on paper) buying the Premier League leaders is an interesting one.
However, according to Dr Wilson, who spoke exclusively to Slingo about a potential Musk takeover, the 53-year-old owner of companies such as Tesla, SpaceX and X, the social media network formally known as Twitter, would not make an instant impact at Anfield.
Liverpool could cost Elon Musk up to $10 million but he may need to make an offer well in excess of that as the club is not up for sale
Dr Wilson said: “The US continues to be a fertile investment ground for UK soccer teams so it’s no surprise to hear that someone, with the net worth of Musk, could be interested in one of the most prestigious sports properties in the Premier League.
“For FSG he might be the type of investor that they’re looking for - someone who they have failed to attract so far - to take a strategic investment in the club.
“Given the profile of the team, especially with its current EPL form, it’s unlikely that they’d want to hand over full control. That might be a sticking point for Musk - his major investments signal his intent for control.
“The value of LFC currently sits around the £4-4.5 billion mark. Someway behind arch rivals Manchester United. A reinvigorated LFC, with new investment, playing success, new sponsors and a more cost effective staff base (including players) could see the club push on toward a value surpassing £5 billion in the short term.
“Much like United, a $10 billion valuation in the US for the club, or £8-8.5 million back in the UK, wouldn’t be out of the question if everything aligns like it needs to and they capitalise on new opportunities and trophy success.
“No investor comes without political baggage. Musk polarises opinion for many but football fans are more interested in on-field exploits than what’s happening off it, often turning a blind eye to the indiscretions of their owners if the team is winning!”
Musk is a move fast and break things disrupter but he wouldn’t be able to make an immediate impact on Liverpool as he’d like
Dr Wilson continued: “For Liverpool the reality is that any investment would make little difference.
“While fans continue to beg owners to spend more, the harsh reality is that’s not achievable in a world of PSR. Liverpool are a financially well managed club and there is no point in jeopardising that for the sake of appeasing fans who don’t care about the economics of a team.
“Successful businesses, like Tesla, SpaceX and X exist because they adhere to smart business principles and do not plunge themselves into financial instability.
“His interest might also scare off other would-be investors, such is his financial prowess and it’s unlikely that the club valuation will go much higher as the sensible option would be to pull out of any race, rather than get caught up in a bidding war.
“I don’t see a significant rise in the short-term for LFC’s value. To achieve that the club needs further on-field success and to capitalise on international markets. They’re by no means off the pace, but still £2-300 million behind the likes of United and City in revenue terms annually.
“They need an uptick to influence value and Anfield needs some more work - more seats, more fans, and less leaking roofs.”
Musk could make Tesla or X a shirt sponsor to pour in an extra £20 million a year and bring the UFC to Anfield to increase revenues
Dr Wilson added: “There are huge opportunities to leverage Musk's connections. Whether that’s with Trump and his political connections or through other associations with the likes of Dana White and the UFC. This presents the chance to deliver cross sport initiatives.
“Staging UFC fights at Anfield, enhancing US tours for LFC and of course the sharing of expertise and information across major sport organisations.
“From a sponsorship perspective, LFC could look to leverage the Musk connection to show an improvement on their shirt deal with Standard Chartered.
“These deals could be well placed to add sponsorship revenue to the bottom line, and give the club added flexibility in the transfer market. Who knows, perhaps X would become a multi-million dollar shirt sponsor. Eclipsing their current arrangement and keeping pace with arch rivals Manchester United off the field.
“Premier League rules would review any bumper deal under PSR but there’s no reason why LFC, alongside this season’s on-field success, couldn’t add another £10-20 million per year in shirt sponsorship if they switched to Tesla or SpaceX.
“This would push LFC to the top of the shirt revenue tree towards £70 million a season - beyond Manchester City at £67 million and United at £60 million.”
Musk could look to make unpopular cuts at Liverpool similar to how Sir Jim Ratcliffe has approached United based on his strategy at X
Dr Wilson continued: “LFC fans should be wary. When Musk took control of X he dumped many executives on high salaries alongside a host of functional staff. He saw the organisation as being bloated and wanted to drive efficiency.
“The profile of INEOS principal Sir Jim Ratcliffe is not dissimilar to the modus operandi of Musk. Efficiency drives across the board have led INEOS to downsize a ballooning staff base at Old Trafford.
“LFC are in a better place with their headcount - FSG have already cleared the decks, but we’d expect more efficiency gains with any US investor. There will be an inevitability regarding staff change and he will downsize to drive up margins.
“Revenue then becomes king - price rises, new commercial opportunities and new markets all exercised to squeeze more revenue.
“For those hoping that any outside investment will accelerate contract negotiations with star players like Mohammed Salah, I’d think again.
“With the contract negotiations with star players stalling - and in reality offering no off field value to LFC ie Salah would cost too much to renew and has no resale value - expect a significant change with the playing squad. Perhaps they’ll follow Chelsea in ripping up the rule book. Only time will tell.”
Musk would have little patience for Mohamed Salah and Trent Alexander-Arnold’s contract hold ups
Dr Wilson added: “Liverpool are in a lose lose situation with him, and others. It makes no financial sense to award a multi year, multi-million dollar deal to him. The best they can hope for is a compromise agreement because of his love for the club.
“More likely is an exit for him, and others for higher financial rewards following a Premier League winning season, as looks most likely.”
