FSG and the Wage Bill Woe

FSG and the Wage Bill Woe

The feeling on social media around Liverpool is a little eerie as of late. The club have made some impressive signings in Loris Karius and Sadio Mane and look set to practically recoup what they spent on Christian Benteke yet the supporters online aren’t how you’d imagine them to be after such news. They’re discontent. Unhappy with the owners’ apparent lack of spending. The club seemingly being left behind as rival clubs flex their financial muscle.

FSG and the wage bill woe

The Liverpool Echo ran a piece on this very topic. While it’s difficult to disagree, the timing of the piece is bizarre – a week after spending £30 million on Sadio Mane and a few days after reports that Liverpool were willing to spend £25 million on Gladbach’s Mahmoud Dahoud surfaced.

Of course, there are fans who are indebted to the owners for saving us from administration. They cite how they’ve always reinvested money and although this is hard to argue with, the net spend debate is something entirely different. People seem to fixate on transfer fees. The hate is misdirected. The problem all along with FSG has been the wages at the club.

When FSG bought the club the wage bill was recklessly out of control. Average players on not just Champions League wages, but long contracts too. They’ve been reducing the annual wage bill at the club year upon year and once again look set to decrease the outgoings this summer with high earners on the move.

Liverpool currently have the 5th highest wage bill in the league spending £152 million per season. Arsenal are in 4th (what a surprise) with £179 million, Manchester City in 3rd with £193 million, Manchester United 2nd with £205 million and Chelsea lead the way with a staggering £215 million. If rumours are to be believed first teamers such as Christian Benteke, Lazar Markovic, Kolo Toure, Jordon Ibe and Martin Skrtel all look to be on their way. That’s £435,000 per week off the way bill if TotalSportek are accurate with their figures. Combine that with the £75,000 Jose Enrique was reportedly earning and Liverpool are already £510,000 better off per week. That’s without taking into account the wages for the likes of Mario Balotelli, Adam Bogdan, Jerome Sinclair and Sergi Canos. That’s potentially another £100,000 right there.

Just to reiterate these figures come from TotalSportek.

New signings will arrive but it’s unlikely their wage demands will be as high as those leaving due to the fact they’re probably going to be playing in a financially poorer league so their existing wages won’t be as much.

It’s also important to remember that FSG have often spoken about incentive-based deals meaning if the club is successful the players earn more money. It’s seen as a way to have everybody working for the same goals. In an ideal world it’s a flawless plan. However, agents aren’t ones to structure deals that don’t pay-off for them immediately.

Liverpool are rumoured to have missed out on signing players because of this strategy. Graeme Kelly recently spoke on an AnfieldIndex Podcast about how Liverpool have worked on a deal giving off the impression they’ll pay X amount up front but when the agent is going through the deal they effectively find out that figure is dependent on other factors. It’s not guaranteed money.

It’s a questionable strategy because not only are the individuals expected to perform to a high level throughout they’re also reliant on teammates. A player could score 25 goals in the league, play out of his skin but his teammates don’t chip in, the team finishes 5th and the player doesn’t earn what he could have earned had they qualified for the Champions League. Just because we aren’t in the Champions League shouldn’t mean we expect players to accept anything less than the going rate.

These deals may be beneficial to youngsters and those with a lot of potential they aren’t going to be the best way to appeal to the better players. The game changers.

Manchester City signed Kevin De Bruyne for £54 million and put him on wages of £170,000 per week. They also signed Raheem Sterling for £49 million and he was put on a £180,000 per week deal.  Two players for £103 million on £250,000 per week.

Manchester City are in another league to Liverpool financially but their willingness to pay higher wages means they can attract such talents. People say the club can’t compete with the City’s and the Chelsea’s but that’s not entirely true.

Liverpool could if they really wanted to gamble. After all they paid a combined £43 million for Lallana and Lovren but their wages per week equate to £130,000 between them. Then there is Christian Benteke and Lazar Markovic. Signed for a combined £52 million, they get paid a rumoured £175,000 per week.  Four players for £97 million on £205,000 per week.

Instead of spending £45 million on a player and offering them £160,000 per week, FSG try to get two players out of that. It’s possible but it’s not going to help the club progress. Money doesn’t always lead to success but there’s a strong correlation if the style fits the player. Mesut Ozil cost £42 million and he’s on £190,000 per week. Eden Hazard cost £35 million and he’s on £220,000 per week. Sergio Aguero cost £33 million and was originally on £140,000 per week. The same summer he signed for City, Liverpool spent £36 million and £160,000 per week on Jordan Henderson and Stewart Downing. Players of that ilk, your Aguero’s and De Bruyne’s, aren’t unattainable if you have the right financial package on offer. With the new TV deal that shouldn’t be a problem for a juggernaut like Liverpool.

The club try to spread the risk. Investing a lot of money into one player for them to fail is a disaster. Investing that same money into 1-3 players means there’s more chance of ‘success’.

The club seems to have a problem paying players what they’re worth. Philippe Coutinho only renewed his deal last summer but he’s on £100,000 less than Kevin De Bruyne. That’s up to his agent to negotiate a better deal but it’s also on the club to try to help make their star players feel valued.

Until FSG start paying the going rate to recruit and keep players Liverpool are always going to be trailing behind. We’ll never compete with the likes of Chelsea, United and City but the odd star player here and there could bring the club closer to Arsenal. It shouldn’t be out of the question given the platform already at the club. People need to acknowledge that it’s possible it’s just the owners have a different strategy compared to the other big clubs.

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*Insert picture of Gerrard kissing the camera at Old Trafford here*

Comments

13 responses to “FSG and the Wage Bill Woe”

  1. RedWill says:

    The problem is with Man Utd, Man City and Chelsea is that they will buy a number of players for large transfer fees and large wages. They have the same strategy as us of buying a few players but they buy a few ready made stars so if one doesn’t work out they are not overly exposed by putting ‘all their eggs in one basket’.

    Arsenal would be the one club you could argue we need to replicate as they tend to only sign one big name player a season rather than a number of players.However i believe that they have got to that point as they have had the same manager for some 20 years so he has complied the squad himself and not inherited a squad so will feel he just needs to tinker rather than rebuild.

    The hope is after a few transfer windows of change at Liverpool for Mr Klopp to build his own squad he will be in a position where he does just need that one player of quality to add to the squad to improve each year.

    • Truth says:

      FSG will never let us keep a player like a Suarez,they buy potential so they can then sell for a huge profit and tell the manager that’s your budget for this season.There pond scum who only bought the club due too it being cheap,they’ll be off once Anfield is complete and they make there BILLION POUNDS !!! FOOK OFF henry & FSG OUT !!!

    • FrankC says:

      S’truth!

    • RedWill says:

      I do not think FSG or anybody else at Liverpool had a choice when it came to Suarez to be honest. No matter who owned the club at the time, Suarez wanted the move and forced it through.

      Who else have they bought to sell on for a profit? Yes they don’t want to buy players in the 28/29 year and over range for alot of money as when their contract is up the value is gone and that is not sustainable unless you are being bank rolled or have a massive income stream like Man Utd.

    • FSG out? They may have a buy low sell high philosophy, but how mucn $$$ have they sunk into transfers in the two seasons prior to Klopp? Hundreds of millions! FSG are stable investors and are at least making an impact. Signing Klopp was a huge friggin deal and now he’s making huge changes with our backroom. I’d say they’re doing well. A stadium expansion to boot and they do listen to fans.

      Who else would you have at this moment? A chinese investor? If you don’t know anything about the financial world let me educate you on something: that’s not stable money. FSG is stable money.

    • Jose says:

      So we should’ve paid lallana $125000?
      Klopp builds great players, he doesn’t buy them. When a difference maker becomes available TO US, they’ll spend. Of course look how Chelsea did this year. Let’s follow them. For such a local, hard working, regular man fanbase, We sure seem to want to be plastic.

  2. TOM says:

    Mane is not an impressive signing in the slightest

    • FrankC says:

      He wanted to come here, he fits right into Klopp’s plan, works hard and scores goals. I’m impressed so far.
      At least let’s give him a chance before we get on his back eh?

  3. rafapologist says:

    d Kevin De Bruyne for £54 million and put him on wages of £170,000 per week. They also signed Raheem Sterling for £49 million and he was put on a £180,000 per week deal.  Two players for £103 million on £250,000 per week.

    Err no. 170k + 180k is 350k

    £43 million for Lallana and Lovren but their wages per week equate to £130,000 between them. Then there is Christian Benteke and Lazar Markovic. Signed for a combined £52 million, they get paid a rumoured £175,000 per week.  Four players for £97 million on £205,000 per week.

    Mmmmm again doesn’t 130k +175k make 305k?

    The article might have a point but when there are such glaring errors it’s hard to take an accountancy based exploration like this seriously.

    • Passing Stranger says:

      I totally agree. Writers using figures should really make sure their sums add up.

  4. Quagi says:

    Ozil is on 140k

  5. Passing Stranger says:

    It’s not always necessary to buy loads of players at 40m+ to build a title winning team, ask Claudio Ranieri. The main aim is to build a scouting team capable of finding the stars just before they hit their peak. If we get a good enough first team we should be able to buy cheap/young and slot them into the squad when ready.

  6. Jay Wright says:

    A players wage demands will depend on the wages on offer to other players at the club already, not necessarily his own quality. Man City HAVE to offer their big new signings stupid, because the players demand parity with their teammates and won’t accept the same wages they’d accept if they were going somewhere else, e.g. Liverpool. In much the same way that players joining Liverpool are going to demand much bigger wages than if they were going somewhere lower down the pecking order (financially), e.g. a Napoli or Swansea. The quality of the player hasn’t changed, just his demands.

    Liverpool/FSG’s wage structure isn’t holding Liverpool back as far as I’m concerned. And remember that Liverpool have not been performing either – either we had been, all of those wages (and bonuses) would have been going up even further in relation to the teams success

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Published by Anfield Index
Updated: 2016-07-11 08:09:07
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