The record-breaking sums Liverpool are spending this summer has raised questions among rival fans as the Premier League champions prepare to submit their next big-money offer.
After months of quiet speculation, Tuesday brought chatter over the Reds interest in Newcastle’s Alexander Isak to the light in spectacular fashion, with reports indicting that the Anfield club are preparing a £120million bid.
Ignoring for a moment the Magpies’ refusal to entertain a sale, a move of that size would see the Reds break the British transfer record for a second time this summer – having paid £116m to bring Florian Wirtz to Merseyside.
In addition to the German, Liverpool have spent a further £65m on the acquisitions of Jeremie Frimpong, Milos Kerkez and Giorgi Mamardashvili. It’s a level of spending that is unprecedented for a club that, perhaps wrongly, is regarded as one of the most frugal at the elite level.
This perception, contrasted with the comparatively ordinary market behavior of their rivals in England and Europe, has raised questions over the club’s financial position, particularly with respect to the Premier League’s Profit and Sustainability Rules.
But there is little reason to resort to conspiracy. The answer is rather straightforward: Liverpool are one of the highest revenue-generating clubs in world football, coming off a very successful season in which they spent barely anything.
Liverpool are prepared to break the British transfer record for a second time this summer to sign Alexander Isak, according to reports
The restraint shown by the Reds in the first summer with sporting director Richard Hughes (left) and head coach Arne Slot (right) has been rewarded this term
The Premier League champions spent big to sign German superstar Florian Wirtz for £116m
The club is forecasted to make a profit for the 2024-25 campaign, a season in which they signed only Federico Chiesa from Juventus. The Italian arrived for a guaranteed fee of £10m, spread over his four-year contract, resulting in an amortisation cost of £2.5m.
Liverpool also returned to the Champions League during this period and pocketed more than £85m, with an impressive League Phase offsetting earnings missed out on by their early last-16 exit.
Then comes the league campaign which is estimated to have earned the club around £185m, thanks to their fees from domestic and international markets, equal share payments and prize money.
The Reds have also continued to be impressive sellers. Already this summer, academy graduates Jarell Quansah and Caoimhin Kelleher have been sold for £30m and £18m respectively. These sales, in addition to the fees expected for the likes of Harvey Elliot and Tyler Morton, who have also been linked with moves, represent pure profit.
Liverpool also have a couple of high value assets in their squad, namely Darwin Nunez and Luis Diaz. While the Reds have been adamant that the Colombian is not for sale and have rebuffed several approaches from clubs such as Barcelona and Bayern Munich, Nunez is clearly available.
The Anfield club could not agree on a fee with Napoli for the striker but reported interest from Saudi Arabia increases the likelihood that they will recoup a sizeable portion of the £85m spent to sign him in 2022.
Liverpool need to secure a £31.8m fee before it can record profits, as the 26-year-old signed a six-year contract prior to the Premier League and UEFA capping amortisation at five years.
Premier League clubs are permitted to incur losses of up to £105m over a three-year period, with deductions allowed for investments in infrastructure, the academy, women’s team and community initiatives.
Liverpool’s title-winning domestic season is estimated to have pocketed them £185million
The club have a number of high-value assets that have attracted interest from clubs, including Darwin Nunez (pictured)
Liverpool have also sold a couple of academy products, including Jarell Quansah (pictured), which represents pure profit for the side
From 2021-22 to 2023-24, after allowable deductions referenced by football finance expert Swiss Ramble, the Reds had a positive PSR position of £48m, which when added to the permitted amount, gave Slot’s side headroom of £153m.
Given that revenue for the 2024-25 season is likely to exceed £700m, and some estimates claim that the Reds could post profits as high as £50m, the club could theoretically spend another £200m in the window and still be PSR compliant.
If Isak was to sign for £120m his amortised transfer fee would be £24m per year and take the total amortised costs to around £62m.
Wages have continued to rise at the club as star players have aged while continuing to perform at high level. But this too raises little concern, even with the figure projected to top £400m, given their strong financial situation.
