The following is excerpted from THE CLUB: How the English Premier League Became the Wildest, Richest, Most Disruptive Force in Sports © 2018 by Joshua Robinson and Jonathan Clegg. Reproduced by permission of Houghton Mifflin Harcourt. All rights reserved.
As far as John W. Henry was concerned, there was no question who should pay for lunch. The guy across the table owed him that much.
Just one day earlier, Henry had pumped some $50 million into one of the businesses owned by his lunchtime companion. So when a waiter came to present the check on a warm June day in the summer of 2017, the owner of the Boston Red Sox leaned back in his chair and waited.
Henry had known James Pallotta for years. They were members of Boston’s clique of finance billionaires turned sports owners. Henry had his ballclub; Pallotta had a stake in the Boston Celtics. But in recent years, their enthusiasm for spending large sums on sports teams had taken them across the Atlantic, to a place where they found that their decades of American business experience were easily lost in translation.
Henry had acquired Liverpool Football Club in the English Premier League, while Pallotta picked up AS Roma of Italy’s Serie A. Which is why the two men were now sharing war stories at a swanky Boston restaurant.
Earlier that week, their clubs had successfully negotiated the transfer of a 25-year-old Egyptian forward from Roma to Liverpool. His name was Mohamed Salah and Liverpool had spent 42 million Euros of Henry’s money to pry him away.
“It seemed like a lot of Euros at the time!” Henry says now.
In hindsight, it was a bargain. Over the next 12 months, Salah would bang in 32 goals in 36 league games for Liverpool, lighting up English soccer with a combination of creativity, ruthlessness and blistering speed not seen since Cristiano Ronaldo left the Premier League for Real Madrid a decade before.
In the history of Henry’s tenure as owner of Liverpool, the deal to sign Salah would be seen as a turning point, the moment when Liverpool re-emerged as a genuine force in European soccer. Today, Liverpool is hot on the heels of Abu Dhabi-funded Manchester City and looks like the only club capable of preventing a oil-soaked dynasty from settling on the Premier League.
But for Henry, the Salah deal marked another turning point, the time when a hedge fund billionaire who had made a fortune in the markets, and later won four World Series rings by outsmarting the rest of baseball with an innovative data-driven approach finally came to embrace a cold reality.
No matter how clever you think you are, there is only one tried and tested way to succeed in the English Premier League: You have to spend a fortune.
The Club: How the English Premier League Became the Wildest, Richest, Most Disruptive Force in Sports
by Joshua Robinson and Jonathan Clegg
How did English soccer’s Premier League become the wildest, richest, most popular sports product on the planet? This is a sports and business tale of how money, ambition, and twenty-five years of drama remade an ancient institution into a twenty-first-century entertainment empire.
In 2010, spending tens of millions of dollars on soccer players was the furthest from John Henry’s mind. He barely knew anything about the English game, much less about the English game’s most historically successful team. In fact, he’d never even heard of Liverpool Football Club.
But Henry, a wispy, gray-haired trader, did know a thing or two about cashing in on storied teams with massive fan bases, celebrated stadiums and long championship droughts. As the owner of the Red Sox, he had delivered the team its first World Series title in 86 years. His introduction to Liverpool came from an unlikely source: a text message from an employee in the Red Sox corporate sales department named Joe Januszewski. It contained a simple request. “Save my club!”
That was the gist of it, anyway. In a follow-up email, Januszewski outlined the parlous state that Liverpool—the most successful team in England in the 20th century but without a league title since 1990—had fallen into under its current owners, Tom Hicks and George Gillett Jr. Their takeover of the club, through a leveraged buyout, had saddled Liverpool with eye-watering debts of £351 million. The club faced a genuine risk of bankruptcy. With the deadline for repayment looming, its loans had been moved to the Royal Bank of Scotland’s toxic-assets division, and the Anfield boardroom had descended into open warfare. The co-owners were no longer on speaking terms; the club was being run by a three-man board that was currently negotiating to sell the team to one of four interested parties despite furious opposition from Hicks, who had unsuccessfully attempted to have them all fired. By speakerphone.
For Liverpool fans, this unseemly squabble represented a threat to their beloved club’s future. For a sharp-eyed investor, however, it represented a tantalizing opportunity.
“In my opinion it would be the deal of the century,” Januszewski wrote in his email. “Liverpool FC are a top-five sports brand worldwide and are just begging to be properly marketed and leveraged globally among the soccer-mad masses.”
Liverpool had missed the Premier League’s first marketing explosion, but Januszewski was right. The club embodied the authenticity and ancient tradition that new Premier League fans around the world found themselves drawn to.
For any Premier League investor in the market for something iconic, this was the club.
On October 15, 2010, exactly 66 days after Januszewski’s email dropped into his in-box, Henry was introduced as Liverpool’s new owner.
“We have a history of winning,” Henry declared after completing his takeover. “And today we want Liverpool supporters to know that this approach is what we intend to bring to this great club.”
It didn’t take long for Henry to realize that the winning might have to wait a while. The $487 million that FSG (Fenway Sports Group) had spent to acquire the club, he realized, had bought a lot of headaches. Hicks and Gillett had left Liverpool with a mediocre squad of aging players, a deeply unpopular manager and absolutely no idea what to do about the team’s fabled stadium, which needed to be redeveloped to bring it up to modern money-making standards or else abandoned in favor of building a new venue altogether.
Still, Henry wasn’t unduly fazed. The Red Sox had been faced with similar problems when he arrived there, and as he learned more about his new team and the broader landscape of English soccer, he began to feel certain that the same tricks he used in Boston would work 4,000 miles away in another cold northern city with rabidly loyal supporters—Liverpool Nation—and its own 90-year-old stadium.
“It became clear to me there were a number of similarities between the Reds and the Red Sox, as well as Liverpool and Boston and their respective fan bases,” Henry said. What English soccer needed, he decided, was some good old-fashioned American innovation.
The first challenge was to improve Liverpool on the pitch. It was no secret how the owners had done this in Boston. In fact, they were shooting a Hollywood movie about it.
Technically, Moneyball was about the Oakland A’s and their stats-obsessed general manager Billy Beane, not the Red Sox. But no team in Major League Baseball had stuck to its central thesis—a data-driven approach to identifying value that others have missed—more scrupulously or successfully than the Red Sox. One of Henry’s first moves after buying the team was to try to hire Beane, though the job ended up going to Theo Epstein, who picked up a bunch of players for relative peanuts and helped the Red Sox win the World Series the next year.
Henry knew the formula that built Boston into a baseball champion couldn’t be imported wholesale into English soccer. But he suspected that the embrace of data analytics to drive team-building strategy could yield similar results. So when it came to hiring an executive to oversee player recruitment at Liverpool, Henry knew just the man to talk to.
“Billy had been closely studying the Premier League,” Henry said. “[He] called me shortly after the acquisition to recommend Damien Comolli as someone who had a similar viewpoint to his way of approaching baseball.”
Which is how Comolli, a bookish Frenchman, ended up as director of football at Liverpool not long after the FSG takeover. With Comolli in charge of recruiting players, Liverpool now needed someone to coach them. Eager to get the fans back onside, Henry replaced him with a bonafide legend: Kenny Dalglish, back for a second spell as manager some 20 years after walking away in the wake of the Hillsborough stadium tragedy.
The playing side now set, Henry could turn his attention to the club’s commercial operations, which he felt were sorely in need of some U.S. sports know-how. Despite a huge global following, Liverpool lagged far behind its rivals in worldwide sponsorship and commercial revenues.
“We thought we could significantly boost revenues and work toward getting to a level playing field with Manchester United,” he said.
Henry felt confident about turning Liverpool around because he trusted his own decision-making process. The other Premier League owners were mostly impatient and undisciplined. But Henry would operate with the same deliberate, analytical approach he had always relied on.
For once, it turned out Henry had made a small miscalculation. What he would soon discover—to his not inconsiderable cost—is there are few benefits to be gained from a rational approach if you aren’t operating in a rational environment. And whatever else has been said about English soccer over the years, no one has ever accused it of that. Before long, Henry realized his error. The Premier League was a madhouse.
Within days of acquiring Liverpool, he was accused of orchestrating an “epic swindle” by former owner Tom Hicks, who filed a claim for £1 billion in damages in a Dallas court.
Those claims were summarily dismissed, but it wasn’t long before Henry found himself battling a controversy that was harder to shake off. In a high-profile clash against Manchester United in 2011, Liverpool’s star forward, Luis Suarez, racially abused United defender Patrice Evra.
Back in Boston, Henry watched events unfold with a mixture of disbelief and dismay. He had seen some deeply strange things in his time at the Red Sox. He had employed Manny Ramirez for seven years. But nothing in his time in baseball had prepared him to deal with this sort of unholy mess.
On the field, things were proving just as delicate to navigate. Henry’s championship Red Sox teams were built on identifying market inefficiencies. But two years into Henry’s ownership, Liverpool’s efforts to unearth similar inefficiencies in the Premier League were beginning to look like an expensive mistake.
In the two years following FSG’s takeover, Liverpool had embarked on a $170 million spending spree that amounted to a pricey bet on their data-driven approach. The strategy behind the moves seemed clear, if a little simplistic. One year after finishing sixth in the Premier League partly because of scoring just 59 goals in 38 games, Liverpool had recruited some of the most prolific creators of chances in English soccer. The club’s internal data revealed that three of its new signings had been ranked in the top eight in chances created the season before.
The Red Sox had won games by getting runners on base. Now Liverpool was going to try to win games by creating shots on goal.
It all sounded good in theory. Tom Werner even invoked Theo Epstein’s name when praising Liverpool’s transfer dealings that summer. “There is no question that Damien Comolli is cut from the same cloth as Theo,” Werner said.
But within a few months, it became clear that Liverpool’s fancy algorithms needed some work. The club’s mission to create more scoring chances ended with Liverpool’s tying the record for the lowest number of league goals in their history. At the end of the season, Comolli was fired and followed Dalglish out the door.
“He did not really turn out to be someone who believed in the Moneyball-type of approach,” Henry recalled.
What Henry was starting to understand was that the laws that govern U.S. sports—or the worlds of business, finance, or basic math, for that matter—frequently don’t apply to English soccer. And even those that do weren’t applied frequently enough for Henry’s liking. Take player contracts. When Liverpool acquired Suarez, he signed a five-year contract, and Liverpool were expected to pay him for the duration of that contract regardless of injury, loss of form, or a sudden proclivity for biting opponents. But if Suarez decided he wanted to move on before that five-year contract expired, he was basically free to do so. Liverpool would receive a fee, of course. But in the world of soccer, contract law went out the window when a player—or his agent—decided it was time to go. No club could hold a player who wished to leave for long. They would eventually go. They always did.
Henry didn’t think much of this arrangement. When Suarez decided it was time to move in the summer of 2013, his preferred destination was Arsenal. Liverpool didn’t want to lose Suarez—especially not to a Premier League rival—but there was one minor catch. His contract contained a release clause that stipulated he was free to leave if any club bid more than £40 million. Which made it rather awkward when Arsenal submitted an offer for Suarez in July for exactly £40,000,001.
By the terms of his contract, Suarez was free to leave Anfield. But, back then, Henry was still convinced he could change the way these games were played. So he took a leaf out of the players’ manual.
“What we’ve found is that contracts don’t seem to mean a lot in England—actually, in world football,” Henry later explained. “Since apparently these contracts don’t seem to hold, we took the position that we’re just not selling.”
The audacious move infuriated Arsenal and delighted Liverpool’s fans. When Henry tweeted about the developments later that day—“What do you think they’re smoking over there at Emirates?”—it infuriated Arsenal and delighted Liverpool’s fan even more.
But if Henry hoped his hard line would help to usher in the sort of binding contracts that exist in U.S. sports, he would be disappointed. His stance toward Suarez—and later toward the Brazilian playmaker Philippe Coutinho—succeeded in keeping them at Anfield, but only temporarily. Both ended up joining Barcelona.
As he approached the end of his first decade in English soccer, Henry had long given up searching for Moneyball bargains. He had a new plan to turn Liverpool into title contender, and this one involved mountains of cold, hard cash.
Months after signing Salah, Henry broke the club’s transfer record by spending $90 million on defender Virgil van Dijk. He followed that the following summer by enacting its plan to win immediately and pulled the trigger on $211 million worth of transfers, more than any other club in England. That included nearly $70 million for a 23-year-old from Guinea named Naby Keita and $72 million for Brazilian goalkeeper Alisson Becker, then a world record for the position.
So far, Henry’s new tack appears to be working. Liverpool sits in first and is the last remaining undefeated club in the Premier League this season after Manchester City's loss to Chelsea. It only took Henry eight years to realize that cracking English soccer was a little bit trickier to than solving Major League Baseball.
“I don’t believe you can find a more challenging enterprise,” Henry said, “than to try to win in English football.”