Fri. Nov 18th, 2022

Looking at it from a business perspective, Liverpool have outdone the competition.
A Champions League triumph and a Premier League title to their name in the last two years under Jurgen Klopp saw the Reds usher in a new era at Anfield, one where they had become the dominant force in English football once more.
They’ve made the Champions League in each of the last four years to enable them to grow financially as a club, their appearance in the top five of the Deloitte Money League for the first time since the 2001/2002 season evidence of that fact.
Their transfer strategy has been praised by many.
There can be no doubting the remarkable work of sporting director Michael Edwards at Liverpool, a man who has been able to deliver a masterclass time and time again in finding players yet to reach their ceiling who fit into Klopp’s system, their values increasing enormously over time.
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It has been rinse and repeat and been hugely effective. Edwards is a master at what he does.
Philippe Coutinho’s move from Liverpool to Barcelona helped pave the way for two key cogs in the Liverpool machine in Alisson and Virgil van Dijk, moves that addressed the frailties that saw were hampering the Reds in getting over the line when it came to the title race.
Mohamed Salah, Sadio Mane and Roberto Firmino all fall into the same bracket of deals that have been of huge benefits to Liverpool, the players in question having repaid their price tags through performance and value growth since arriving at Anfield.
Buying at a lower price and seeing the value in players for a system that others may have missed is something that Liverpool owners Fenway Sports Group have been well versed in, something that they have used to achieve success in baseball with the Boston Red Sox. Before they arrived at Fenway Park the Red Sox were seen as a team that would spend big but fail to deliver, going some 86 years without a World Series before that run was snapped in 2004, two years after FSG arrived.
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That attention to data analytics has been transferred to Liverpool and there is plenty of homework done before a player is signed. When you look back at the list of FSG signings the good outweighs the bad, most definitely.
But while they have spent money when they have needed to, they have also recouped cash in the form of outgoings to offset their spend significantly. Now, from a business perspective that makes absolute sense when you are looking at achieving success while spending less than others. It is part of the reason that they have been able to grow financially as a club and be more robust in dealing with the impact of the pandemic.
But net spend draws either praise or criticism. One one hand it shows that competing with the best of the rest is achievable can be done by spending less, on the other hand it could be viewed as a lack of real investment in sustained success, the level of spend far lower than those with who they wish to compete year in, year out.
The spending issue came to the fore again in January when Liverpool waited to the final hours of the transfer window before addressing the glaring need for defensive reinforcements, reinforcements that should really have arrived sooner.
Two defenders arrived in the shape of Ozan Kabak and Ben Davies, but with one a 20-year-old who had been playing with the Bundesliga’s bottom side and the other a 25-year-old who had yet to be tested in the Premier League, it seemed to point to a longer term fix rather than the immediate impact that Liverpool needed to avoid the title, and possibly the top four, slipping from their grasp.
Kabak’s fee could rise to £18m if Liverpool decide to make it a permanent marriage in the summer, meaning that they spent less than £3m on two players in the window, a window that could end up making or breaking their season.
The two deals could well turn out to be a shrewd piece of business for the Reds in the longer term, that is certainly the hope, but at a time when the situation called for bit of speculate to accumulate thinking the latest net spend figures hardly do much take away the criticism that has been laid at FSG’s door – they don’t invest enough in the team.
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According to data from the CIES Football Observatory, each Premier League club has a negative net spend over the past five years.
On a sliding scale, Southampton’s stands at minus £43.9m, the other end of the spectrum being Manchester City at minus £553m.
The top six clubs in terms of the largest net spend consist of City, Manchester United (-£514.5m), Everton (-£303.8), Aston Villa (-£297.6), Chelsea -£270.4m) and Arsenal (-£262.5m).
Of those with the smallest net spend, just six sit below Liverpool. Southampton, West Brom, Newcastle United, Burnley, Crystal Palace and Leeds United. Liverpool’s net spend since 2016 has been £113.2m, according to CIES. That figure puts them behind the likes of Sheffield United, Fulham and Brighton & Hove Albion.
In three of the last five seasons Liverpool recouped more in transfer funds than they spent. In 2016/17 they spent £78.1m and recouped £91.3m, in 2017/18, when they sold Coutinho for £140m, they spent £166.8 and raked in £188.7m. In 2018/19 the net spend was down heavily at £127.3m, the signings of Naby Keita, Alisson and Fabinho helping to make up a £185.2m spend compared to a figure of £58m recouped, including add-ons.
The 2019/20 season saw minimal spend with the signings of Takumi Minamino, Harvey Elliott and Sepp van den Berg, with the outlay being £12.3m compared to a £27.2m figured brought in through player sales. The figure spent that season will move up when the tribunal fee for Elliott is set this week.
Last summer, ahead of the current 2020/21 season the additions of the likes of Thiago Alcantara and Diogo Jota saw Liverpool spend around £86.9m, clawing back £50.9m through a number of departures to leave a negative net spend of £36m. It is only the second negative net spend of the last five seasons for Liverpool.
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Compare that to Manchester City and Manchester United and the difference is stark, neither club making a net spend gain over the past five seasons, City breaking even in 2018/19 with a neutral spend.
In a pandemic, with all the financial implications that have been brought about by it, it seems foolish to suggest FSG go out and simply start spending huge amounts of cash when financial forecasting is so difficult right now as clubs try and predict what the future of the game will look like as it emerges, eyes blinking, from such a cataclysmic event.
For Manchester United the method has obviously not worked and they have been guilty of throwing good money after bad and lacking any real structure and forward planning, certainly when it comes to recruitment. Their best players, aside from Bruno Fernandes, heavily feature ones that have emerged through their youth system.
For City it has always been spend, spend, spend. That’s how they managed to shake things up in the Premier League. Their levels of investment under City Football Group mean that winning is demanded each season, their failure to do so in the Champions League yet a major black mark against them, especially when Liverpool have done so by spending far less.
But the last two years at Liverpool raised the bar and expectation and must be viewed as the norm, not the exception. Whether or not FSG decide to have a summer akin to 2018/19 in 2021 remains to be seen, but there is little doubt that a couple of big additions will be needed to make sure that they are able to fend off the relentless spending of those around them who they seek to compete with.