The world's deepest pocket is heading to Anfield: Why is Bezos buying Liverpool?

Amazon founder and one of the wealthiest people in history, Jeff Bezos, is expected to become one of the owners of Liverpool after reaching an agreement to acquire 30% of the club through an investor consortium. The group is led by British-Indian businessman Amit Bhatia, the son-in-law of steel tycoon Lakshmi Mittal. Bhatia is the only member of the group with experience running a soccer team, as one of the owners of Queens Park Rangers, and his consortium includes Bezos and Facebook co-founder Eduardo Saverin.

Last month, Fenway Sports Group (FSG), which has held controlling ownership of Liverpool since 2010, confirmed that the consortium expressed interest in acquiring a strategic minority stake. The American company's controlling interest will remain intact even if negotiations conclude successfully.

The club's market valuation for the transaction is estimated at roughly £4.4 billion (about $6 billion), meaning a purchase of 30% to 33% would total around $1 billion. Sources estimate that an official announcement could be released soon. At age 62, the billionaire is ranked as the world's fourth-richest person, with a net worth estimated by Forbes magazine at $256 billion. Since stepping down as CEO of the e-commerce giant in 2021, he has focused on other ventures, including The Washington Post newspaper and space exploration company Blue Origin.

Meanwhile, the Spirit of Shankly (SoS) supporters' trust sent a letter to management requesting a meeting to obtain further details on corporate governance, the potential for board representation, and the operational impact of the new investors. "We have repeatedly emphasized that given the events leading up to the acquisition of the club by the current owners, the identity of the buyers and the manner of management - while putting the interests of Liverpool and its fans at the top of the priority list - are fundamental issues for us," the organization stated. "The report on the sale of 30% and the new consortium is significant. Ownership and safeguarding the club are of paramount importance. We have witnessed similar deals at other clubs that led to marked operational changes and resulted in decisions many would not want to see at Anfield."

Over the years, the American parent company has remained open to outside investment, particularly after seeing the value of its asset surge from 300 million pounds in 2010 to about 4.5 billion today. In 2023, the investment fund Dynasty Equity purchased a stake of about 3% for roughly 120 million pounds. Speaking with The Athletic last month, CEO Billy Hogan confirmed: "John Henry [the principal owner] has been very open about the fact that if an opportunity arises that would help the team, we would give it serious consideration."

As noted, the fan group is now demanding full transparency regarding the extent of the newcomers' influence on day-to-day operations, both on and off the pitch.

The entirely justified suspicion of SoS toward the entrance of billionaires is completely understandable. When examining why a businessman like Bezos would invest in a top Premier League club, financial and tax experts will not point to his love for the game. He has never spoken about soccer, even though he profits financially from sports content on Amazon Prime. They will talk about his economic, strategic, and accounting motives. And there are quite a few of them. In fact, these motives - and those of the billionaire tier, which has never been more influential than it is today - often run counter to the interests of the rest of humanity.

So why join as a partner at Anfield? First, the issue of value growth among top-tier teams can be critical, even for someone who has enough money to buy the entire league. Over the past two decades, elite European clubs have generated returns that outperformed traditional market indices. Liverpool is a classic example of this. This is largely due to having one of the largest fan bases in the world, which generates diverse revenue streams through global sponsorships, retail, digital media, and preseason match tours. These provide consistent returns and growing international exposure.

Beyond that, this investment could, shall we say, improve the billionaire's efficiency in tax avoidance. And he is a particularly efficient individual in this arena: Over the past decade, there were several years in which he paid zero dollars in US federal income tax, and even received a $4,000 child tax credit refund, a fact revealed in a ProPublica investigation.

Under the US tax code, individuals in his position receive massive write-offs for acquiring sports teams. Additionally, wealthy investors routinely use high-value assets as collateral for low-interest lines of credit. By taking out a loan against equity instead of liquidating shares, they secure liquidity without triggering immediate capital gains tax events. Unfortunately for him, he was recently forced to pay a 3.8% tax on sales of Amazon shares that he executed.

It must also be said that European soccer clubs operate under specific accounting frameworks (IFRS and UK GAAP). Player registration fees, for example, are treated as intangible assets and amortized equally over the length of the contract. Combined with depreciation on stadium infrastructure, such as the expansion work at Anfield, clubs can generate accounting losses to offset tax liabilities while their underlying value continues to grow. Furthermore, wealth accumulated through value growth is taxed as capital gains only upon sale, which carries significantly lower tax rates in most Western countries than income or corporate tax.

The bottom line is that purchasing the Mighty Reds provides the investor with another prestigious asset to execute financial tricks with, bypassing taxes in ways ordinary workers cannot. That alone is worth a vast amount of money, and that is before discussing the massive tax benefits granted by US law to owners.

Beyond this, it is important to remember that there are very few super-clubs in the world today. These clubs represent a rare asset and are seldom offered for sale. Buying a significant percentage of a club of this magnitude grants access to networks of personal and political connections that are unavailable even to corporate owners running businesses ten times larger than the team.

Finally, live sports content must be taken into account as one of the few remaining areas immune to cord-cutting from traditional television. Amazon Prime already holds broadcasting rights for Premier League and Champions League matches in selected markets. Although a personal minority stake does not directly merge these two giant entities, involvement in the equity of Europe's most popular sport provides valuable strategic insights into broadcasting rights, global monetization, and streaming trends.

This acquisition could upgrade Bezos's business even further. The only question that remains open is how he plans to upgrade Liverpool, and to that, there is still no answer. Therefore, the concern of the fans, who see how their beloved team could be exploited by the financial elite, is completely understandable.