Liverpool FC - It's Time to Spend

Liverpool FC - It's Time to Spend

A popular and insightful article in the Financial Times revealed that English teams struggle in the Champions League due to the competitive nature of the Premier League. Teams such as Real Madrid, Barcelona and Bayern Munich all spend on average, 25pc or more of time during a game leading by two goals or more; almost 10pc more than Manchester City, the side deemed the most ‘dominant’ during Premier League games. This particular article drew two main conclusions, one being that money does not equate to Champions League dominance when competitors also possess similar amounts, but also how important it is to recognise the competition within the Premier League. So, in this particular piece, I would like to propose a solution of sorts for Liverpool FC, to compete in both the Premier League and the Champions League competitively and consistently, in both the present and the future.

Liverpool and its Premier League rivals, Arsenal, Spurs, but specifically Chelsea, Manchester City and Manchester United all have immense financial power. The issue with this is that right now no one team is definitively financially head and shoulders above its competitors, in the way Bayern Munich is for instance, whilst also guaranteeing success domestically, and a fair shot at European success to prospective players. Obviously, Chelsea, and both Manchester clubs have exceptional financial power, and so there is a margin for those clubs to spend more and meet the asking prices of the top bracket of players compared to Liverpool, but the point still generally stands. In which case we must ask what can Liverpool do to succeed in Europe and how can it compete with such financial clout?

According to Deloitte, Liverpool are 9th in the ‘Money League’, behind Manchester United, City, Chelsea and Arsenal. However, this season, Liverpool just about pipped Arsenal to fourth spot, despite not having to deal with the pressures and physical demands of European football. Whilst Liverpool need to improve their starting XI for the coming season, a few high-profile players will simply not be enough. As it stands, only Manchester City have truly grasped what it takes to meet the demands of the Premier League and Champions League, buying players that are quite frankly surplus to the starting XI to create a competitive, numerous and talented squad. In terms of attacking players that we would expect to start in all other Premier League teams, Manchester City have: Agüero, Gabriel Jesus, David Silva, Bernardo Silva, De Bruyne, Sterling and Sané. The squad depth in terms of forwards alone is phenomenal, the same way that Real Madrid, for example, have Morata, Asensio, Kovacic and James Rodriguez as substitute or reserve players. Whilst money in terms of wages per player may not directly correlate to a better Champions League performance, building a squad which can cope with the demands of both the Champions League and Premier League will likely correlate to better performances, and a larger wage bill is probably a cost of that.

The competitive nature of the Champions League requires a large and talented squad, let alone without considering the demands of the Premier League alongside it. A squad as small as Liverpool’s will undoubtedly struggle next season, as it did in 2014/15 when struck by a few injuries, and with Champions League, and then Europa League duties weighing heavy on the players and the team’s performances. We need only look at Liverpool’s toothless displays when without Mané in January this season, and then without Coutinho playing well over the following two months.

The wage and transfer structure around the club has done much to stagnate Liverpool’s potential progression too. Liverpool’s anticipated £200m spend is expected to be partially funded by outgoing transfers, thus the squad is not likely to increase in both quality and size, rather one or the other. The wage structure is allegedly hindering Liverpool’s deal for Southampton centre-back Van Dijk, and has also been a stumbling block in recent years when it came to players such as Konoplyanka, Salah, Alli and so on.

This wage system needs to go, and Liverpool should not be considering its spending plans compared to competitors, if they are low, because most of its competitors are already in a stronger position in terms of their squad quality and depth.

Naturally, Liverpool cannot simply go out and sustainably spend more than Manchester City, so the club must manage its finances and revenue streams in a different manner; kit and sponsorship deals alongside the new Main Stand are moves in the right direction, but as it stands are not enough for now. Deloitte predicts that Liverpool’s revenues, which will be announced next season, will increase due to the new Main Stand, but even then the increase in revenue will not be enough to overtake Arsenal or Chelsea, who are in the process of starting to redevelop their stadium to have a greater capacity. In fairness, Liverpool are set to receive a sizeable sum through television rights, as the most frequently live-broadcasted Premier League club, but a one-season variable boost is not enough. For the ability to sustain a challenge for the Premier League over the coming years, the club, board and owners must commit to improving Anfield’s capacity, strengthening commercial links, increasing revenue streams and removing the outdated barriers to attracting and signing players that will definitively improve the team and squad.

So it appears as if £200million will not be enough to restructure both the team and the squad to the degree to which it can compete both domestically and in Europe, and Liverpool lack the exceptional purchasing power of Manchester City, and the infrastructure in terms of the stadium, and the commercial links of Manchester United. How then do I propose Liverpool FC puts itself in a position to compete in the immediate future?

Personally, I would advocate Liverpool spending more than the £200million figure touted, within the clubs’ means, or rather radically, essentially adopting a deficit spending policy: borrowing money levied on assets in the short-term, as Manchester United and Real Madrid have done for years to secure competitiveness at the highest level and entrench Liverpool FC in the elite club grouping in the short-term. Through doing this, Liverpool FC would have a period in which it would enjoy greater success, allowing for better commercial deals to be struck, revenue streams increased, and infrastructure improvements, such as the stadium to be redeveloped. If Liverpool were to do this, in the long-term, the capacity of the club to grow sustainably would be increased, and the club would be in a far better position to compete with clubs that currently have far better levels of funding. To get to near where Manchester United are now in terms of their financial strength, a large degree of money must be spent in the short-term, so long-term benefits can be made.

This increased spending, funded by borrowing or not, would also feed into the image of the club, something which is imperative for success. For instance, Bayern Munich’s highest earners are Lewandowski, Robben and Ribery, all of whom earn €160k p/w. The wages do not matter as much to them, because as players they have a better chance to realise and achieve their ambitions, of winning the league, and potentially the Champions League with Bayern Munich, than compared to Liverpool for instance, who may pay higher wages. Fostering a sense of purpose, and anticipation around a club is crucial to attracting top players. Manchester City managed to do it when signing players such as Agüero, Silva and Toure, and so too did Manchester United when José Mourinho was announced as manager, with Zlatan Ibrahimović and Paul Pogba both joining, believing the project under Mourinho was one in which they could meet their goals, if not within one season, then definitely within three.

Essential to building an image of a club on the rise is successive Champions League qualifications and title challenges, but to do this, the club must engage in high spending in the short-term, in order to reap the long-term benefits. Stability is also key to this, and it seems oxymoronic that I would be advocating increased spending, or even debt-funded transfers whilst preaching about stability, but Liverpool must hold onto Jürgen Klopp and afford him time to get the best out of his team. The role of the board in the short-term should be to provide Klopp with the best possible tools to re-establish the club as a world-class side, then to use that success to develop revenue streams through commercial deals, increasing Anfield’s capacity etc., and then using those extra resources to pay off the debt accumulated in the short-term, and laying the foundations for long-term continued success.

Whilst this approach may not put Liverpool ahead of all of its competitors such as Manchester City or United, who can sustain such a high level of spending, what it would do is equalise the difference between the clubs in the long-term, and put Liverpool ahead of teams that are not considered competitors, in the same way Bayern, Real Madrid, Barcelona and PSG are in relation to the majority of their prospective leagues. Such a difference in quality between fellow title competitors and non-competitors would allow the club and team to save its best for the Champions League, in the way the aforementioned continental European sides do.

In summary, for Liverpool to definitely compete in both the short and long-term in the Premier League and Champions League, the board and owners must break the bank over this transfer window, and a few more, to increase the size and quality of the squad, whilst also increasing the financial stature and foundations of the club.

Other approaches may well work, but following the route of Manchester City and United – whose approaches have paid dividends – seems an approach with successful results. It may not be the typical Liverpool way, and there may well be approaches which could produce similar results, but with teams such as Manchester City looking as if they will pull away, the board and owners must make sure the long-term competitiveness and future of Liverpool FC is secure. A short period of high spending will likely not be too detrimental to the club’s finances, especially if matched with success and revenues rise, or even if it is sustainable – as we do not actually know the full depth of the Liverpool coffers, as the club may well have more than what is currently available to Klopp.

However, the 20th century aspects of the club, such as the wage structure and approach to transfers, as well as the capacity of the stadium, and limited commercial power of Liverpool FC need to be reformed. Through this, Liverpool FC can become one of the true giants of football once again. This is not at all to say the current approach is disastrous for Liverpool FC and the club, rather that there is a great deal of scope for improvement, and now is the perfect moment to start thinking big.

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Comments

4 responses to “Liverpool FC – It’s Time to Spend”

  1. jonathan says:

    A very good write up

  2. Red Panther says:

    Oh and to be perfectly honest we had the chance at Van Dyke for pennies with believe it or not Rodgers but our transfer board said no imagine that !!!!!! NOT VTHE FIRST TIME OUR TRANSFER POLICIES HAVE SCREWED UP DEALS AND COST US PLAYER AND MONEY BBBBBBBIIIIIIIGGGGGG MONEY JUST 2 OR 3 YEARS LATER!!!!!!!!!

  3. jose says:

    Last year, due to clearing out deadwood and Bournemouth throwing money at us, we had more funds available but the manager chose to only bring in 6 players. 6 players. Therefore, 6 players seems to be the limit the manager is willing to work into his squad. Klopp pays close attention to his methods and squad workings. This gave us a top prem squad with maybe two on the bench, say Can/Wini and Sturridge. He will probably bring in 6 more this season. Giving us a decent CL squad on top of our prem squad assuming some rotation. What the club needs is consecutive seasons in the CL. This maintains income levels, status as a big club, and ability to retain top players already at the club. Fast forward, and we should only be in the market for about 3 players the following year, allowing our wage offers to go up.

  4. Evan says:

    I foresee the Mainz->BVB way aka the Klopp way albeit with a tweak as Liverpool has more money to spend. With Klopp preferring to keep youngsters in the club instead of loaning out players, it reminds me of Ferguson. A core of players mainly from within the academy and marquee signings to feel in the gaps. Having played in the academy together for many years will help build chemistry among players. Marquee signings will then be used to help fill in the positions that the academy are not able to produce. In this way Liverpool can keep their book balanced unlike Chelsea with a 1 billion debt to Abramovich. In Klopp I trust! Klopp!!! Klopp!!! Klopp!!!

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Published by Anfield Index
Updated: 2017-06-05 08:03:32
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