The Legacy of Jürgen Klopp: Transforming Liverpool FC

Klopp’s Legacy

Before Jürgen Klopp joined Liverpool FC as manager, the club was worth 1.2 billion euros. By the time he leaves the club, it will be valued at 3.9 billion euros. Few managers are as polarizing as Jürgen Klopp, hated and loved at the same time. With his era at Liverpool coming to an end, we looked into the management skills of Jürgen Klopp.

The CEO Test

When it came to money, Jürgen Klopp said goodbye and went for a walk in the nearby Central Park. Meanwhile, in the office of a law firm on New York’s Lexington Avenue, his agent negotiated his new contract. On that 1st October in 2015, Klopp became the head of one of the most famous football clubs in the world.

His annual salary at that time was around eleven million euros. Klopp had passed the CEO test.

Michael Gordon, President of the Fenway Sports Group, US owner of Liverpool FC, had screened the candidate according to all rules of investment arithmetic: How many points per game does he manage? How many goals do his teams score on average? How do his results on the pitch relate to the financial possibilities of his employer? The figures spoke for Klopp.

When he saw him in person that day, Gordon, who has earned a fortune in three decades as a hedge fund manager, was thrilled: “It was clear that Jürgen as a football coach was on the same level as a company boss, like a man you would like to trust your company to.”

Klopp proved him right in 2019. He and his team defeated Tottenham Hotspur in the final of the UEFA Champions League and won the biggest title in club football. For this achievement, he has been honored as “World Coach of the Year 2019” – and thus as the most valuable manager football’s billion-euro business has to offer. Since then, Klopp has kept Liverpool near the top of English and European football.

Since professional football has become a global business in which the ratings of top clubs reach several billion euros, it has given birth to a new class of top coaches. They plan new stadiums, steal transfers, charm sponsors and investors, think about nutrition, regeneration and youth work, and experiment with new digital tools. Top coaches are now top managers.

To increase the value of their clubs, they need all the qualities of a good CEO. Indeed, managers can learn a lot from someone like Klopp: how to motivate people, how to withstand pressure, and – increasingly important – how to know when it’s time to say goodbye.

Transforming Teams

Sure, Klopp is a successful coach. The small FSV Mainz, where he took over the coaching job overnight in 2001 after eleven years as a player in the 2nd division, led Klopp into the Bundesliga. With Borussia Dortmund, he became champion twice and won the DFB Cup once. In 2013, he even led the club to the final of the Champions League.

For his investor, however, the focus is not on goals and victories as a coach, but on how he increases the value of his club as a manager. The value of Liverpool doubled in Klopp’s first few years as manager. As he leaves, the club is now worth almost 4 billion, making Liverpool one of the most valuable sports clubs on the planet.

Klopp’s former boss, John Henry, also demands something countable. Mathematical models, with which he bet on the prices of soybeans and other raw materials, have brought the US American a fortune of 5 billion dollars. His love belongs to baseball. Henry, who is the main shareholder of FSG, has been buying into baseball teams for more than 30 years.

He owns the famous Boston Red Sox. In Liverpool, Klopp was to repeat what FSG succeeded in doing with the Red Sox: to restructure a traditional but run-down sports company. Since its purchase in 2002, the Red Sox club has won the World Series four times.

The entry price in Liverpool was probably right. When FSG bought into the club in 2010, the club threatened to choke on its debts. FSG only paid 350 million euros. Liverpool is one of the most emotional brands in world football. The city has kept up with the big clubs from Manchester, Madrid, or Munich for decades. The “Reds” have won 19 English championship cups and now six Champions League trophies.

Modern Leadership

Marc Kosicke became Klopp’s agent in 2007. When the man from Bremen was still working for the sportswear manufacturer Nike, that coach from Mainz suddenly appeared in his office because he wanted to be equipped by the US brand. Kosicke found it difficult because, as he said, with coaches, they don’t sell sneakers. “But it was immediately clear to him that this guy is a modern leader, with an uncanny energy and eloquence.”

Klopp got some equipment, but Kosicke also had him give leadership lectures internally at Nike, which was a huge success. Shortly afterwards, he founded his agency Projekt B to exclusively advise coaches. Kosicke could sell his most important asset as a speaker to a different global corporation every week. Google, Apple, BMW – they all want Klopp. The club often attracted sponsors by giving their top people access to the manager.

Klopp’s job title is “Manager.” Sounds simple, but it means he’s in charge of almost everything. Klopp has kept the club focused on himself and at the same time made sure that he doesn’t get stuck with details. In Dortmund, he shared the work with a CEO and a Sports Director.

He soon made it clear to his US bosses that he would like to see a similar distribution of roles in Liverpool. They first promoted Michael Edwards to Sports Director for Transfers in 2016. Shortly afterwards, they brought in Peter Moore, ex-top manager of Microsoft and Electronic Arts, to relieve Klopp in business matters. Both actually left Liverpool before Klopp. Perhaps this loss encouraged Klopp to move on.

In fact, when it was announced that Michael Edwards was returning to Liverpool next season, Klopp reportedly considered reversing his decision to quit.

The Holistic Approach

When he started in Melwood, Klopp was quickly disturbed by the great distance between the players and the service staff. To address this, he memorized the names of all 80 employees who take care of the players. He then invited them and the players into the dining room and introduced them to his team one by one, emphasizing that all of them had the duty to help each other to achieve the best for the club.

Klopp put world stars, who earn up to 230,000 euros a week and have a market value of 150 million euros, on a par with cooks and masseurs. On a wall in the executive suite, Klopp had written: “Together strong.”

Klopp once described his philosophy: “I want the people around me to be happy.” As a manager, that also means having confidence in employees. He stated, “I believe the greatest strength of strong personalities is to surround yourself with people who are stronger than you in certain areas.”

Klopp delegates a lot. Back in Mainz, he had co-trainer Peter Krawietz show self-selected videos during the half-time breaks to make players aware of mistakes. Since then, the tactical genius, nicknamed “The Eye,” has been at his side.

In 2016, he brought fitness guru Andreas Kornmayer to Liverpool as well as nutrition specialist Mona Nemmer. Coincidence or not, he poached both of them from FC Bayern, who had bought away Dortmund stars Mario Götze and Robert Lewandowski.

Additions such as Kornmayer and Nemmer are as important to Klopp as million-dollar transfers; he even described Nemmer’s signing as his “only world-class transfer.” Klopp believes football is more complex than just having the best players. He relies not only on the best feet but also on the best minds.

As a “drill sergeant,” Kornmayer prepares the professionals for the brutal style of play that Klopp demands. Everyone gets their own training plan, depending on what their fitness data reveal. Nemmer makes sure that the stars also eat the best possible food. When Klopp arrived in Melwood, they still had the traditional English breakfast with sausages. Now, Nemmer regularly studies the blood values of each player via app and adjusts the diet accordingly.

The team means everything to Klopp, which is why he also selects players based on their character. As he once said, “To have a complete idiot with you just because he can kick a little better is totally annoying.”

Football and Entertainment

Klopp once told a German newspaper that when he wanted to sign midfielder Georginio Wijnaldum, he invited him to his home to get to know him first. The Dutchman was flabbergasted when the future boss wanted to chat about his last holiday instead of football.

A dozen nationalities play together at Liverpool: Egyptians, Brazilians, Germans, Spaniards. Such heterogeneous teams are also becoming increasingly common at international companies. They can only be led through a shared goal with a high level of intercultural competence, a strong sense of community, and a high level of professional authority.

Klopp leads his teams with vision and innovation. He delegates responsibility to those who can perform better than he can in certain areas, and he understands his role in the football business: coaches are also entertainers. Klopp believes that only if the show on the pitch captivates the audience time and again, football will remain one of the best-paid entertainment industries globally. “Football is theatre,” says Klopp. “If we don’t play a great play, there’ll only be two people left sitting around at the end.”

Klopp strategically employs his showmanship. He used his first press conference in Liverpool as a kind of government statement with the memorable quote, “I’m the normal one,” which was a deliberate contrast to star coach José Mourinho, who had famously branded himself “The Special One.”

A Revenue Game Changer

As an advertising figure, Klopp is among the most sought-after German celebrities, having endorsed products ranging from rusk and razors to wallpaper paste, cars, and beer.

Reportedly earning nearly $9 million annually from advertising alone, Klopp’s down-to-earth attitude not only enhances his credibility among fans but also softens the commercial aspect of football business. While Liverpool secures contracts for items as diverse as jeans, coffee, and prams, having an emotive figure like Klopp at the helm mitigates the commercialism associated with such deals.

Klopp has consistently surpassed the targets set by his employers, Fenway Sports Group (FSG). Initially tasked with securing regular Champions League qualification to stabilize revenues, Klopp has not only achieved this but also doubled income from both television rights and sponsorships during his tenure.

Such achievements might even see Klopp honored with a bronze statue at Liverpool’s stadium, echoing the recognition bestowed upon club icon Bill Shankly, who coached the Reds for 15 years and garnered six titles. Shankly’s statue is engraved with the tribute “He made the people happy,” a sentiment that could equally apply to Klopp, with the addition of “And the investors, too.”

While many would have preferred Klopp to stay longer, his decision to depart was deliberate, offering another instructive business lesson.

Leave at the right time

To explain his decision to leave, Klopp likened himself to a sports car that can still go very fast but has also realized that the gas needle is reaching the bottom. He emphasized that stepping down from his role at Liverpool is not to pave the way for someone like Xabi Alonso, nor is it an admission of losing his touch.

Coaching Liverpool is comparable to managing a large corporation, which is arguably one of the most stressful jobs in football. Despite delegating responsibilities, Klopp remained the symbolic leader of a revitalized Liverpool, often serving as its spokesperson. His successes and setbacks were regularly featured with his image and quotes in the newspapers.

Critics from rival teams may argue that Klopp quit due to pressure, but it would be more accurate to say he decided to leave because he recognized he could no longer operate at peak performance. The outcome of his last season with Liverpool, where the team seemed to lack energy towards the end and missed a crucial final title, further validated Klopp’s assessment.

Some observers might consider one Champions League and one Premier League title over nearly a decade as modest, but context is crucial. Klopp achieved these against formidable competition, including clubs with significant financial advantages and legendary coaches.

During the seasons Liverpool finished second with 97 and 92 points respectively, those totals would have been sufficient to clinch the title in most historical Premier League campaigns. Klopp’s current need for a break echoes his earlier decision to take a year-long hiatus before joining Liverpool, a move also undertaken by other top coaches like Pep Guardiola and Xabi Alonso after their stints in football. This period of recuperation allows even the best coaches to recharge and continue excelling in their field.