Outlook: Liverpool FC

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The Independent Online
WAY BACK when, Charles Allen, now chief executive of Granada, drew up a business plan for investing in up to ten of Britain's leading football clubs. It was at a time when even shares in Manchester United could have been picked up for next to nothing, but it was not to be. The board turned him down and can look back only longingly now at such lost opportunity.

Belatedly, Granada finally took the plunge yesterday with the acquisition of a 9.9 per cent interest in Liverpool Football Club for pounds 22m.

The findings of the recent Monopolies and Mergers Commission report on Sky's bid for Manchester United probably bar Granada from outright ownership of Liverpool FC. Furthermore, Granada would presumably have to stand aside from any decision making at the club on the sale of TV rights, since as an ITV franchise holder and through ONdigital a pay TV operator, Granada is highly likely to have an interest in the outcome. What, then, is the point of making this investment?

Unlike earlier football investments by media groups, which were either defensive (BSkyB/Manchester United) or strategic (NTL-Newcastle United), Granada's deal is calibrated to earn a double digit return in the first year. Should the regulatory landscape change to allow media ownership of football clubs, then Granada is also well placed to have a say in the future of one of England's top six clubs.

However, the main point of the investment is a more down to earth one. Granada's range of leisure services neatly dovetail with Liverpool FC's hospitality, publishing, merchandising and electronic media needs.

No Little Chef is planned for Anfield, but Granada does get the contract to run catering and hospitality services. It will also take over and extend merchandising and product licensing for the club. Further down the line, the prospect of setting up a Liverpool FC dedicated TV channel also looms. The purchase therefore seems to work on two levels - both as a bet on the future of TV rights and as a leisure investment. It is surely only a matter of time before Michael Green, chairman of Carlton, revives his talks with Arsenal.