The shortened EPL summer of 2020 is all about the players that moved and should have moved. But for Liverpool, appointing Billy Hogan to replace Peter Moore as chief executive is of more significance than any player could be. This move, which has flown under the radar, is actually a clear indicator of the direction that Liverpool are setting and where they plan to be in the future.
Peter Moore has been the chief executive of Liverpool since 2017 and oversaw one of the most exciting periods for the club. The dynamic Jurgen Klopp led Reds won the Champions League title and the first EPL title in 30 years, and fans will remember this time with exuberance for those reasons. But another sensational achievement happened that the average fan hasn’t noticed but will be even more significant in time: the significant increase in commercial revenue that Liverpool has seen.
Enter Billy Hogan
To be clear, Liverpool commercial revenue is still not in the same ballpark as teams like Manchester United, Barcelona and Real Madrid. But here has been a concerted effort to work up to that level, and the new sponsorship deals are an example of that. In fact no deal is more demonstrative than the new Nike deal which is meant to raise not only money for the club but also the cache and brand recognition.
The deal is unique in that is has a lower base than other teams but compensates with higher payments based on sales. And the crowning glory is the added stipulation that other Nike sponsored athletes will wear the Liverpool shirt as well, which has already been seen with part owner Lebron James sporting the new look. And now with sales looking strong and with the potential for the deal to spread Liverpool umbrella even further, it is of little surprise to find that Hogan presided over the negotiation of the deal.
But this move is not just about this individual negotiation. It is about the direction that Liverpool is looking at in the future. Hogan was the chief commercial officer for Liverpool, and the future of the team is at least as much about the fan base as it is about the players on the team.
The money from commercial sponsorship deals keeps flowing regardless of whether the team wins the title or not. Liverpool will lose about £37M compared to 2018-19 because of their Champions League loss in the round of 16. Meanwhile a team like Manchester United who didn’t even qualify for Champions League, will hold a significant advantage in commercial revenue compared to Liverpool. And that’s the key gap that Liverpool is looking to bridge. Especially since Liverpool’s owner is unfortunately not at the level of some owners where he can pump endless money into the club.
And while to some it might seem that promoting Hogan is just a simple decision, consider who replaced Steve Jobs at Apple. Jobs was a dreamer and an innovator (among other things), however that was not who they promoted to replace him. The new head of the company became Tim Cook who was previously head of supply chain; while developing the products is important, and Apple’s size and product complexity, the most important person in the company is the person that can deliver the millions of product units to the customers.
The same holds true with Hogan, who is viewed as having the potential to deliver even greater commercial wins which in time will be the key to Liverpool competing at an even higher level. And that is all part of a long term strategy that is seeing Liverpool making decisions that could hurt in the short term but will benefit the club long term.
For example Liverpool still have not signed a sponsor for the sleeve of the jersey. The previous sponsorship with Western Union ended and there will most likely be a new one. But it will have to be the right partner and Liverpool will wait for that right partner. In fact the team has said they “may even start the new season without a sleeve partner,” as there is no desire to “rush the process.”.
All of this is part of the larger strategy that will pay off down the line. And installing Billy Hogan as the chief executive is a big part of that process.
Daniel is a professionally designated accountant who has spent 20 years in the finance and data analytics field which has skewed his view of the sporting world. Instead of seeing simply an athletic competition, he sees a financial exercise waiting to be unlocked by data analysis. He enjoys reading professional publications such as the annual deloitte football report and team financials as well as spending hours putting together and analyzing football data, which saves his readers from having to do it themselves.
