Liverpool’s financial power play

This week, Ferrari racing driver Lewis Hamilton popped up in London to cut the ribbon at Fanatics’ first ever collectibles retail outlet — a shiny temple to the trading-card culture that has been a feature of US sports fandom for decades but is relatively new to Europe.

Inside the store on Regent Street, one glass case houses some of the most prized cards in the world — ultra-rare editions featuring the British seven-time Formula 1 champion himself. One of them previously sold for $1.1mn. Football-related offerings included signed cards of football stars ranging from Ronaldo (the Brazilian one), to Lamine Yamal, Jude Bellingham and Kylian Mbappé.

At Thursday night’s pre-opening party, there was certainly buzz. So much so, that the noise forced former Manchester United captain-turned-pundit Rio Ferdinand to halt his podcast recording with Fanatics founder and CEO Michael Rubin several times. Before he took to the mic, we caught up with the US billionaire to find out more about Fanatics’ booming trading card business. More on that below.

But first we go early with a look at Liverpool FC’s finances ahead of the team’s expected Premier League coronation this weekend. Do read on — Josh Noble, sports editor

Liverpool’s commercial engine revs up for glory

It remains scarcely believable that Liverpool came back from 0-3 to beat AC Milan on penalties in the 2005 Champions League final. That’s why it’s called the Miracle of Istanbul. In a perhaps apocryphal story, Liverpool’s souvenir shop was apparently closed for business the day after that triumph.

Having failed to qualify for the Club World Cup, the two sides will instead commemorate the 20th anniversary of the game later this year by going head to head in Hong Kong. The winner will receive the Standard Chartered trophy, a prize awarded by the Liverpool shirt sponsor, while the English side’s staff and squad will fly with Japan Airlines, the club’s official airline partner.

Barring a shock dip in form, Liverpool will travel to Asia as Premier League champions. The Reds will be crowned on Sunday if they avoid defeat against Tottenham.

Under the ownership of US billionaire John Henry’s Fenway Sports Group, which bought the club for £300mn in 2010, Liverpool have made the most of the commercial opportunities that arise from on-pitch success. Winning has powered growth in the club’s commercial revenue, which exceeded £300mn for the first time in 2023-24, roughly half of overall revenue.

In a world where media rights growth is under pressure and ticket prices are already pushing the limits of fan patience, commercial revenue is increasingly critical to funding success. Owners also need to limit losses to comply with the financial regulations set by the Premier League and Uefa, European football’s governing body.

While Liverpool have dominated this season despite spending less in the transfer market than most rivals, their wage bill has climbed sharply in recent years — highlighting the cost of keeping their star players.

The club has just agreed contract extensions with Egyptian forward Mohamed Salah and centre back Virgil van Dijk, two of the team’s top earners.

Commercial revenue from club sponsors, including insurer AXA, phonemaker Google Pixel, beer brand Carlsberg, and state-owned enterprise Visit Maldives, means the money should be there for replacements when the time comes.

More partners are coming. Next season, German brand Adidas will take over from US group Nike as kit supplier, another deal that bodes well for the commercial department.

Football finance analyst Kieron O’Connor, who writes the Swiss Ramble newsletter, estimates Liverpool’s revenues for the 2024-25 financial year will surpass £700mn.

But for now the focus will surely be on savouring what will be only the club’s second title since the Premier League launched 35 years ago. Presumably the club shop will be open on Monday morning.

Q&A with Fanatics founder and CEO Michael Rubin

Trading cards have become big business, especially for US sports merchandising giant Fanatics. Last year the division brought in $1.6bn of the group’s total revenue of $8.1bn. Scoreboard caught up with the billionaire founder and CEO Michael Rubin in London this week at the opening of the company’s first collectibles retail outlet, which he hopes will propel growth outside the core US market.

Why did you choose London for your first retail outlet?

Michael Rubin: There’s more than 1,000 great hobby shops in America that represent collecting in a really positive way. In England, there’s only a few hobby shops in the whole country. And so we want to show what’s possible. This is our first store in the world that we’ve ever opened. We don’t want to do it in America because there are great stores there. We want to introduce people to the hobby. We have the long-term exclusive rights to the Premier League, to the Champions League, Formula 1. We have so many incredible properties — we want all the people who come to London every day to be able to connect with this hobby. We thought no better way than to put something in the heart of the city.

Are you trying to create a culture, or do you think that culture already exists?

MR: We have to create it. And I love that. You’ve got to get out there and show people how cool this is. This is really about just telling the story to the tens of millions of people who walk past the store every year.

Bricks-and-mortar retailers are having a rough time, while collecting has a big online community. Why did you decide to open a physical store?

MR: Stores are not a pivotal part of our strategy. This is marketing for us. We love the hobby shop. Retail is the entrepreneurs. They’re the people we want to get behind. But there is nothing in Europe and certainly not in London that represented the hobby the way we want to represent it. We said, okay, let’s build it here. We want to use this to show other entrepreneurs how to open hobby shops so we can then support them.

So this isn’t the first of a big rollout of retail stores.

MR: No, it’s definitely not. You know, could we have 5, 10, 20 long term? Sure. But this is all about showing people what the store should look like, how it should work, for us to be able to introduce the hobby to new collectors.

How big is collectibles for you as a business already?

MR: It’s big. It’ll be over $2bn this year, approaching $3bn next year. And I feel like we’re just getting going in revenue.

How big do you think collectibles could be for you?

MR: Look, I don’t know the answer. Here’s what I do know. In America, only a small single-digit percentage of people collect cards. It’s way less than 1 per cent outside of America. We have to keep making great products, innovating the product, and keep marketing, this hobby which has never been marketed before. I think there’s a lot of growth ahead.

Highlights

• Adidas said profits were stronger than expected in the first quarter, highlighting a divergence in fortunes among leading sportswear brands amid heightened global trade tensions. However, the company is being sued by a former US employee, who claims she was unlawfully fired after complaining about racist and sexist comments made by senior directors.

• Everton Football Club and its new American owners want to accelerate development around the Liverpool-based team’s new waterfront stadium, in a call to politicians and investors to help revive a neglected stretch of the city.

Final Whistle

Even at almost 7ft 4in, French hoops superstar Victor Wembanyama doesn’t look out of place on the basketball court. But the same can’t be said when it comes to the football pitch.

The San Antonio Spurs centre had his season cut short by injury, which partly explains why he appeared in Costa Rica this week having a kick about with some local kids. Hats off to the boy in the blue T-shirt who went up for a header.