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Liverpool not spending? Oh yes they are, and there’s a good reason for it.

By Walter Broeckx

One of the weapons the Wenget Out Brigade mob has used this season is the fact that Liverpool seemed to be able to get close to winning the PL this season.  A team without the financial resources of Manchester United (through their years of world wide marketing), Chelsea (oil) or Man City (a whole country).   If Liverpool can do it then why not Arsenal?

So for the AAAAA it was almost a dream come true for Liverpool to win the league. A club with an older and smaller ground than the Emirates. If they could win the league surely it was evidence that they way Wenger has been working and the way our board has been working were completely wrong.

“Yanks out of Arsenal” I heard part of them scream at the last home game of the season.  Well, actually, Liverpool is also owned by a “Yank” if I might mention that, but let us not put the facts in the way of a knee jerk reaction.

But Liverpool winning the league would have been great ammunition for those who are unhappy. (Actually they will probably never be happy but that is more of a psychological issue for Dr Billy the Dog perhaps).

But what those who present Liverpool as a poor club with a chance of winning the league forget is…the facts. Let us have a look at the facts.

If we take the numbers from the last 5 seasons of the clubs that have been in the top 4 and take the ins and outs of the transfers that has been paid we get the following numbers.

When we have a negative number (-) this indicates that a team has spent more on transfers than they have received in transfer fees. When you see a positive number  (+) it means that they have received more than they have spent.

Club Money spend in total
Man City  – £395.000.000
Chelsea – £305.000.000
Man United – £100.000.000
Liverpool – £100.000.000
Everton + £36.000.000
Arsenal +      £850.000

 

So what we can see is that Man City has spent most over the last 5 years in total. Of course they have spent more than this but in this table we deducted the incoming money from the outgoing. So what we have here is the net spend.

Chelsea are in second place and they both are well ahead of the rest. As could be exptected.

But what is interesting to see is that Liverpool and their resurrection is mostly down to spending a lot of money. They are together with Manchester United the highest spenders on transfer sums over the last five years.  We must say however that for United in these numbers we have to take in account the selling of Ronaldo to Real Madrid and that might have given them third place with a big advantage over Liverpool.

So it is complete bullshit to compare Liverpool to Arsenal. They have spent and spent big.  And by doing so have brought themselves to the edge of things over these last five years.

As you can see Arsenal has over that 5 year period spent as much money as they received.

What it does show is that spending money is still the way forward for clubs that want to climb up the league as fast as possible. The way by building slowly on a team and working within your budget.

Because let us not forget that Liverpool has raked up a big deficit over  the last years.  A deficit that might bring them some trouble when they have to comply with the FFP rules when Uefa will look at their accounts next time. A problem they didn’t have now as they didn’t play in Europe this season.

We’ll come back to where Liverpool stand in terms of FFP in the next article, but for now it is worth noting one wider issue before we move on.  Liverpool have been buying up land and houses around their ground for years as a way to expand their stadium.

Now this expanded and rebuilt New Anfield stadium is desperately needed if the club is to compete with the top four over time, but it also has to be filled and it has to be paid for.  For that the club urgently needs European football because as Arsenal found, the stadium costs, costs and costs again, and at first it actually reduces spending power, because of the repayment of the debts incurred.  And only the Champions League income can pay for it.

Thus for this reason (if no other – and as we have intimated in the article on Everton, there is a very good “other” reason lurking out there) Liverpool need the Champions League now at any price.

As I say, we’ll come back to this in terms of the risk Liverpool is taking over FFP in the next piece, but first, let us take a closer look at the numbers from Arsenal on a season per season outcome.

Club Money spend in total Season
Arsenal + £31.500.000 2009-2010
Arsenal – £12.000.000 2010-2011
Arsenal + £12.000.000 2011-2012
Arsenal +  £3.500.000 2012-2013
Arsenal – £34.000.000 2013-2014
Arsenal TOTAL +      £850.000

Now when we look at this table we see that over time we mostly find more income than outgoing money. We all can remember how this came about with the exit of players like Fabregas, Nasri, Van Persie.

But we can also see that we did invest most of the money back into the team in terms of new players.  Indeed the difference between outgoing and incoming money was rather small.

However last summer might indicate that things have changed at Arsenal. For last transfer window in the summer we spent money in an unseen way for Arsenal in the last years.  I’m not expecting this to happen each transfer window from now on but it is clear to see that now the initial finance deals over the stadium (which gave us money to pay for the building up front) have come to an end and new deals are coming in, we do have some money and might have a bit of money now that we didn’t really have in the past.

These new sponsor deals will add to our spending power in the next seasons. But we still will have to fight the oil money, although as the article on Manchester City showed that might be a lesser problem if Uefa stick to their FFP punishments for club overspending.

But if you want to use the stick that suggests Rodgers is a better manager than Wenger as they haven’t spent any money and have built a runners-up team it is better to look for another stick if you really want to beat Wenger with something.

And it is worth considering exactly how Liverpool will deal with FFP, and the cost of the new stadium, and indeed the question of ownership.   But that is for the next article, later today.

The books

34 comments to Liverpool not spending? Oh yes they are, and there’s a good reason for it.

  • byron

    I don’t think Rodgers spent that much. I believe Dalglish spent most of that and a lot of it very badly.

    I will reserve judgment on Liverpool until the end of next season, lets see how those extra games affect them in the league.

    Our current squad is pretty good and I believe Wenger has done fantastically to assemble it at a nett profit but we do need to win the league soon or fans will eventually demand the back of Wenger regardless of the great work he has done. Like it or not fans want results on the pitch and most don’t concern themselves with the limitations we as a club have.

  • Persian gunner

    Nice article
    There is very thin line at the margins of two separated debates comparing Arsenal and Liverpool
    This article is denying the claim of some people giving medals to Liverpool for fighting for the title without spending, they didn’t!
    We are not talking about who is a better manager

  • Shard

    Yeah it’s kind of weird that the Liverpool spending, losses, and the way their debt has been managed has been ignored and the message being given out is that they are so ‘plucky’ to fight against the oilers.

    Shouldn’t be surprised I suppose. The narrative of being a ‘plucky’ club went to Spurs the last few years. Arsenal are of course neither plucky, nor ambitious (read: making it rain money). So of course, anyone who’s afraid of standing apart from the crowd will say Arsenal are wrong in doing what they’ve done.

    Oh well, we’ve played this outa thousand times, but hopefully things like that are at an end because Arsenal are through the worst of the financial hardships. It doesn’t suddenly make us able to overhaul oil money, but with improved finances, and Wenger, we have a chance, and at the least we have a club infrastructure that is poised to make us a true European giant.

  • Sav from Australia

    Timely article and well put. I much preferred a City win after arsenal could not win it. For several reasons not least that it was one less rock to throw our way.

  • finsbury

    byron at 8:19 am wrote:

    “I don’t think Rodgers spent that much. I believe Dalglish spent most of that and a lot of it very badly.”

    Fabio Borini – £10.5M – 2012. That’s Podolski territory (100 caps for Germany, one in two goals! The much maligned Arsenal team shaved off a chunk of Plodders’ fee with the friendlies, but still, that’s undeniably good value, for Arsenal.)

    Joe Allen – £15M – 2012

    Daniel Sturridge – £12M – 2013

    Philippe Coutinho- £8.6M – 2013

    Luis Alberto – £6.8M – 2013. No idea who this player is but he’s on the books!

    Tiago Ilori – £7,000,000 – 2013

    Iago Aspas – £7.7M – 2013

    Mamadou Sakho – £15M – 2013

    And the list goes on. All of the above information was easily available:
    http://liverpoolfc.wikia.com/wiki/Brendan_Rodgers/Transfers

    Of course Rodgers deserves credit for convincing his board to cut their losses by shunting three of King Kenny’s retirement signings out of the door as quickly as possible for a return of about £25M. Making a loss over £25M on those players. Losses every Arsenal fan knows that the The Arsenal could not afford in recent seasons.

  • finsbury

    corr. Carroll, downing and Adams werer signed for approx. £80,000,000

    Holy crap. That’s makes up an approximate loss of, what, £55,000,000 on those three signings? Nice work if you can get it! Easy money.

  • WalterBroeckx

    Finsbury,
    If Arsenal would have done such a thing we would be in big trouble and it would have thrown us back many years.

  • finsbury

    corr No.2
    *coughs*
    Ok. Try again.
    Signings to a total of approx. £60,000,000
    Loss made on those players when Rodgers had to move them on:
    £35,000,000.

    Whether it was a loss of £20M or £50M, doesn’t really matter. That is the kind of crazy loss making that most football clubs cannot afford.

  • finsbury

    Walter I think my original my sums were out by the odd twenty million, not that it makes any difference! 🙂

    Comparing the fees Liverpool paid for a player they were happy to send on loan with the fee for Podolski, made at the same time, makes me appreciate the efforts of the much maligned Arsenal transfer negotiators.

    In case there was ever any doubt the contrast is further evidence that should indicate to any close observer that The Arsenal have been operating in what Jamie Redknapp might describe as quite literally a different market.

  • para

    Arsenal Arsenal, have now built an economic foundation that is solid.
    We can only look forward now, have our own money to spend when needed, and what ever happens concerning AW(still think he will sign as we will win FA), we can now attract players who see the way Arsenal has managed their economy and want to be at a stable club. The others who are just after money and want to move on after 3 yrs we really do not need them.

    Looks like Fab and Song are going to leave Barca. Wonder how many of us would want them back?
    I am hoping Diaby comes good and can put his major injuries behind him, then we would not need Song.
    With Carzola, and Zelalem in youth, Cesc may be also not needed.

    Hope Sagna does not go to PL, he should know that by now, and if he just wants a good pay packet for his last years, then i hope he goes abroad, but i am beginning to think he may well go to Manc.(Clichy, Nasri, as fleas in his ears) Hope he is keeping up on the news of Uefa v Manc, he would be silly not to.
    Manc is becoming an Ex-Arsenal player club.

  • insideright

    Good stuff Walter – made all the more pertinent on the day that Randy Lerner waves the white flag at Villa and ‘puts it on the market’.
    His overall spending (i.e. money that he has put into the club for any reason) is third only behind Chelsea and City – and he has got nothing back other than heartache and, probably, an overall loss on the sale.
    It’s been demonstrated over and over again that the transfer market is a very inefficient way of building a squad – especially when there are others in the market that are willing and able to blow you out of the water in that market. Villa retreated from it, put their faith in youth and saw that fail as well. The walking out by Dan Crowley to join Arsenal at the beginning of this season made that point as much as any.
    While the really big spenders exist in the market there is only one sensible position to take – keep out unless you wish to only re-invest what the market gives you anyway. In other words run a break even policy which is exacly what Walters numbers demonstrate that Arsenal have done.
    As far as Liverpool is concerned they spent big and relatively inefficiently but got away with it because they lied about the clause in the Suarez contract and only needed to play about 42 games across the season. Their owners also took on their debt and it is now, as far as I know, interest free.
    What faces them now is the paying off of that debt, the taking on of more debt to redevelop the stadium and the significant strengthening of their squad in order to compete across more fronts next season. All at the same time and all within the boundaries set by FFP which they are publicly great advocates of. The same applies at Spurs and Everton.
    It’s not just about money it’s how you spend it and the timing of when you spend it – neither a subject that most short-termist, knee-jerk reacting fans understand.

  • nicky

    Walter,
    You say that notwithstanding Arsenal’s improved finances, you would not expect a repeat of last Summer’s spending spree.
    With the stadium paid for and new kit deals etc, it would appear that the Club’s largesse is rolling in.
    Surely an investment in top class players would be the prudent way of using the money, rather than depositing it in a Bank or under Arsene’s mattress? 🙂

  • Shard wrote:

    “and at the least we have a club infrastructure that is poised to make us a true European giant.”

    And that is why the cries of no trophy in X years don’t bother me one tiny bit. We are now comfortably a top5 European team despite winning nothing in almost a decade. How the hell did that happen?

    Well, it’s that fucking edifice at Ashburton grove. It is a big fucking deal and worth much more than all of Chelsea’s trophies in the last decade. That is the opinion of this ‘deluded’ Gooner.

  • Jax

    nicky
    ………..and if we don’t spend it we’ll get taxed on it, so “spend, spend, spend”

  • insideright,

    Please permit me to condense your great comment into:

    SPENDING THE FUCKING MONEY DOESN’T GUARANTEE SHIT, ESPECIALLY AGAINST OILERS WHO CAN EVEN SPEND MUCH MORE FUCKING MONEY!

  • Oliver

    Interesting stuff.

    Liverpool’s revenue would have been bolstered if they had had Champions league, but yes the spending goes rather unnoticed.

    They will need a bigger squad size next season, interesting to see how they play this. We don’t really know how much the owners are prepare to burn after previous losses.

  • Shard

    Bootoomee

    According to some, being in the top 5 clubs in Europe is actually reason to protest (spend the money) What can you do when they don’t want to understand nor care about anything else except trophies?

    However, that is changing now. Now a potential trophy isn’t enough. It’s just papering over the cracks. Will only be an ok season.. etc etc.

  • nicky

    @Bootoomee,
    Your 11.31 sums up, I believe, the thinking of all right-minded supporters of our great Club.
    Those who yearn for the fleeting success of silverware completely overlook the global scene in which Arsenal FC will always play a major part.

  • Hi Berry

    I think this article is being a little disengenuous towards Online Gooner – I think you will find the main frustration of contributors to that site is that Arsenal have the money to invest in world class players but are so tentative to do so.

    Their main frustration is the fact that last summer Arsenal had the money to splash on a sorely needed world-class striker, but either chose not to or mismanaged the bids for the two or three players that were on the radar – and that is perceived to be dithering by Wenger….all the more frustrating when correct investment of readily available funds would have closed the seven point gap between City and ourselves and in all probability delivered the title.

    The majority of contributors to OG may well have what Untold Arsenal see as an unwarranted pessimistic view of where the club is at present, but the common gripe is that Arsenal is now a superbly run business at the expense of ambition on the field.

  • Gord

    Leicester have announced that they are going to buy their way to a top-5 position in the EPL over 3 years. They think 180 million Pounds Stirling will do the job.

    http://www.bbc.co.uk/sport/0/football/27387616

    Does AV get sold to another money group?

    Oh, Spuds sacked Sherwood.

  • Ray from Norfolk, Virginia

    I think all the mugsmashers can afford is to bring back all the players loaned out:
    Oussama Assaidi
    Pepe Reina
    Tiago Ilori
    Fabio Borini
    Suso
    Jordan Ibe
    etc…
    They cannot sign too many top money players, particularly if they believe that they will have to be in the CL or at least EL for years to come. Eventually, and sooner rather than later, there will be the sale of Suarez to fund the arrivals of three or four players.

  • bjtgooner

    @Brickfields @ 1.49 pm.

    Nice one!

  • Mick

    @Shard
    ‘However, that is changing now. Now a potential trophy isn’t enough. It’s just papering over the cracks. Will only be an ok season.. etc etc.’
    And all these past few years they have been saying ‘all we want is to be competitive’ and lo and behold now we are proving beyond doubt we are competitive the goal posts have been moved!! And as for Talkshit, according to them an FA cup isn’t a good enough trophy, only Prem L and Champions L are acceptable.

  • as

    I think your article supports the view that Arsenal should buy a few world class players this Summer. We now have the money to do so, and it appears that spending money does indeed lead to success.

  • Mandy Dodd

    we do need to spend some money this summer, but in a considered way, these days, on top players who can improve us …and maybe squad players and or youngsters, but we have a manager averse to spending for the sake of it, and thats as it should be.
    From reports I have read,….if such things are to be believed, Liverpool will spend pretty big….Lallana keeps getting mentioned along with the Ukrainian wideman …wont even try and spell his name. But will they have to sell first? The conundrum is how long they can keep Suarez, and what happens if Real come in with a big offer…does his new contract stop them telling lies over escape clauses?
    As ourselves, and the Spuds know, you cannot easily replace these special players like Suarez.
    Will be very interested to see how Rogers does next year, not writing them off,but teams may have plans to deal with their attack,their skipper will be another year older…and what effect will this season have on him? Will refs and the media continue their part in the Suarez love in if he stays? Will they still take 6 points of next years Utd? Will we be as naive next year at Anfield?

  • Mandy Dodd

    Para@ 11.42, would possibly add Alexis Sanchez and Pedro to your list of players Barca may consider offers for….either could fit right into our team if available, if we do buy, we should be looking at that sort of level now
    With Barca players, guess it all depends on their new manager

  • Notoverthehill

    Walter, sorry I cannot agree!

    Arsenal Holdings plc – Statement of Accounts and Annual Report 2012/13

    Note 27 – Notes to the Consolidated Cash Flow Statement:

    Player registrations

    Payments for purchase of players = (£65,041,000)
    Receipts from sale of players = £39,126,000

    for Financial Year 2011/12

    Payments for purchase of players = (£57,406,000)
    Receipts from sales of players = £55,621,000

    Walter, you are a tad out! Never, ever use the Transfermarkt, Transferleague or Soccerbase – except for ins and outs and possible transfer fees..

    ALWAYS, ALWAYS, ALWAYS use the audited accounts. I will always emphasize that the only facts that can be accepted are the audited accounts.

  • omgarsenal

    Hi Berry (neat name by the way);
    a)¨the main frustration of contributors to that site is that Arsenal have the money to invest in world class players but are so tentative to do so.¨ I don’t think you actually can prove that AFc have the money but If you can please do…

    2) ¨Arsenal… mismanaged the bids for the two or three players that were on the radar and that is perceived to be dithering by Wenger¨ Again, please tell us HOW Wenger ¨mismanaged¨ the transfer bids. Wenger stated that there weren’t any strikers available he felt could help the club more than Giroud, Ramsey and Podolski….we will never know for sure but see point 3 below.

    3)¨Correct investment of readily available funds would have closed the seven point gap between City and ourselves and in all probability delivered the title.¨ If we take Spuds as an example of ¨correct¨ investment…you are dead wrong. Regardless, there was no indication that funds were ¨readily available¨ and that bringing in another striker would necessarily have changed anything, certainly NOT guaranteed a title.

    4) ¨the common gripe is that Arsenal is now a superbly run business at the expense of ambition on the field.¨ I agree that AFc is superbly run and is a business but ambition on the field, while NOT your ambition, has brought us into the CL for the 17th consecutive year AND to the FA Cup final, as well as an 18th season above the Spuds, whose ambitions were worth 100 Million quid and 2 managers in one season for a .

  • omgarsenal

    Opps…..forgot the last line: in one season for a 6th place finish!

  • BigV

    I love this blog. Read it every day. Won’t comment often. But really enjoy it. Thanks

  • Jax

    Come on BigV, let’s be a bit more adventurous than that. At 3.15 am you could really make mischief.

  • Hi Berry

    OMGarsenal – thanks for the compliment, but whereas I can see how you have constructed the points you have raised in response to my post I rather feel you have taken a contrary stance in the face of overwhelming evidence that supports my view.

    a) No, I cannot tell you exactly the sum available to purchase players, but with widely reported and audited £100m+ in cash reserves and new revenue streams from sponsorship and kit deals negotiated; with Gazidas clearly stating money is available; with a £40m bid for Suarez on the table and a £42m purchase of Ozil, I think one would have to accept Arsenal,the fourth richest club in the world (correct me if I’m wrong) don’t have to shop in the bargain basement.

    2)Of the three players you mention only Giroud is an accepted striker – Podolski could be with his lethal finishing but is always played in his un-preferred position out wide. In effect we started the transfer window last summer with Giroud and Bendtner as recognised strikers. It was widely reported that a deal was virtually sealed for Higuain when the prospect of Suarez raised its head and the famous £40m+1 bid was made. Regardless of the legality of the release clause, Liverpool refused to sell the jewel in their crown and by the time that fiasco was played out Higuain’s price had gone up and he was on his may to Napoli.
    For Wenger to state strikers weren’t available that would improve on Giroud, Ramsey and Podolski (see above) is quite plainly untrue. Suarez, Higuain and even Loic Remy were available and a proper bid for Suarez at £50m or even £60m would have been good business for the rewards that would have been reaped. You may not want to call that mis-management, but similar scenarios have been played out year after year and I can’t think of another way to describe it. May I also remind you we started against Bayern Munich at home with Sanogo!!!

    3)To suggest not bringing in a quality striker would have made no difference to our season just flies in the face of all reason. Giroud had periods in the season when he struggled with the workload and hit a wall on the goal-scoring front. The difference in winning the league and coming fourth was seven points which one can equate to beating City and Everton at home and a couple of draws from games we lost. Closer, but still no cigar. To compare Arsenal with the circus down the road is like comparing a Rolls Royce with a Reliant Robin. Why not compare Arsenal with Liverpool who spent wisely and reaped the rewards. By the way I did not say ‘Guarantee the title’ but the addition of a world-class striker would in all probability have made it a much more likely outcome.

    4)CL qualification year in year out is a commendable achievement but is that the extent of Arsenal’s ambition these days? It’s a bit like my home town club, St Albans City (bless them), entering the FA Cup or the FA Trophy every year…it might bring in a few games of extra gate receipts but they know they have no chance of winning it. And yes, we have a chance to get that monkey off our back in a few day’s time by winning at Wembley, but one piece of silverware, in nine years (and that in a competition Wenger has shown scant respect for in previous seasons) is a poor return for a club which generates such vast revenues.
    To suggest winning silverware is my main criteria for supporting Arsenal decries the forty five years I have spent watching, at times, pretty turgid stuff through the seventies and eighties when the Brasso never saw the light of day for years on end. Of course in those days one felt as though you were supporting a football club and took whatever success came your way as a bonus.
    The board have raised the expectations of the fans with the infamous ‘compete with the best in Europe’ quote, but unfortunately it would appear as if the ‘competing’ in that quote merely means being in the same competition as them.

    As a one-time student of ‘The British Constitution’ in my youth I well remember the importance of the division of power in all institutions whether it be the Government’s relationship to the Monarchy and Judiciary or the running of a company. I think the wildly held view of most OG contributors is that Wenger and the Board are indivisible and the ability for the club to make that quantum leap to the next level that is well within their capability is being held back by a desire to maintain the status quo of Wenger being paid £8m a year in return for ensuring £25m/30m CL revenue. A top four finish seems to be the height of Arsenal’s ambition and historically you could well argue that consistency on this level is unparalled except maybe during the thirties, but it IS frustrating for a lot of us (new and old supporters alike) to see our club walking around in shackles when with a little verve and dynamic leadership we could be reaching for the stars.

  • Micheal Ram

    Hi Berry,

    What Berry?!

    Bye Berry