Liverpool and The Magical Myth of Net Spend

Liverpool and The Magical Myth of Net Spend

As the transfer window has finally wound down to a close and settled into an international break, Liverpool supporters have begun to reflect upon our window. As you could probably expect, the general fan opinion on our window is “mixed” at best. Certain supporters like myself are happy with where we have improved and bolstered the squad, but there are others who wish we hadn’t stopped where we did in the market. Namely people were hoping for a first team left back and a quality defensive midfielder. Deadline day came and went, and while we improved on the wing, midfield, center back, and goalkeeper, there was no sign of a Jonas Hector, Paredes, Dahoud, or Ricardo Rodriguez to fill those two gaps in the squad. As it so often does when things don’t go our way in the transfer market, and helped on by talks of a rich Chinese takeover, attention and scrutiny was turned towards FSG and of course our net spend. For a while now, we’ve gauged FSG’s commitment to winning by net spend, but our concept of net spend and it’s affect on the club/squad is very different from the club’s, and for our fans the importance of it is often overstated.

First off, window by window, the club will look at net spend very differently than we do. Fans will use, understandably, a simple addition and subtraction of all the incomings minus the outgoings. It’s simple, makes sense, and gives you one number that tells you how much money was invested into transfers from outside of our received transfer fees. But for clubs that’s not actually how it’s looked at. Let’s take brand new marquee signing Sadio Mane as an example. There’s been a small amount of debate surrounding his fee due to add ons and such, but the most widely reported fee for Sadio Mane was 34 million pounds. So as fans we look at that as a flat 34 million. The club doesn’t. When Mane signed his contract until 2021, they looked at the fact that we have him for 5 years, and they look at the transfer as an investment of 34 million over those 5 years. And because of this, they divide the fee by the number of years, and look instead at the transfer fee per year. So for Mane the club would be viewing the cost as 7 million a year over 5 years, rather than 35 million as one big splash, regardless of whether or not we are actually paying for the player in installments. Because of this perspective, net spend gets awfully confusing awfully quickly, and as fans it becomes pretty tough to keep up with net spend. Personally I haven’t. But the reason I haven’t is more out of disinterest rather than complexity. Net spend doesn’t matter to me. There’s a variety of factors that could affect why the club does or doesn’t spend more or less on transfer fees, and as supporters that are on the outside looking in, we just don’t know them. I could go on about potential factors that affect our net spend, but I really have no interest in speculating needlessly. All I’ll say about it is that Klopp has said that HE doesn’t want the players, and HE doesn’t want to spend the money. Some people may call me naive for believing him when we were lied to so much by Rodgers, but the point is that there’s no evidence otherwise, so I’m going to stick to believing Klopp since I’ve been given no reason to think otherwise.

I will however explain why I don’t care about net spend, and it’s simple. It’s because money doesn’t win games, players, tactics, and managers do. Obviously money buys those things, and I’m not ignorant enough to think that money has no effect in the modern game, but believe it or not, there’s actually no correlation between transfer spending, or net spend, and league position. There is actually a strong correlation between wage spending and league position, but not transfer fees. And honestly it should be kind of obvious to us that transfer spending is irrelevant, but sometimes we find it hard to think critically about. In this instance let’s look at Paul Pogba, 89 million pound signing for United. That’s an insanely expensive transfer, and there’s been endless discussion over people think he’s worth it. But regardless of whether United had paid 89 million, 20 million, or 300 million, they’re getting the exact same player. The change in transfer fee doesn’t magically make Pogba a better or worse player. Transfer fees are merely the “market price” for a player. It’s just economics. It’s about how valuable to the selling club the player is. United has spent an insane amount this summer. Now imagine Pogba flops, Ibra’s goals dry up, and Mkhitaryan doesn’t come good. Nobody in the world will be saying “United didn’t spend enough”. That’s because the players and the manager determine the results. Obviously money gets you the best players and the best managers, but players are human, and flawed. Some players flop, some players overacheive. Spend and net spend don’t account for that. Imagine we’d signed N’golo Kante last summer. We would’ve moaned about “moneyball” and owners who don’t want to spend at the time, when he ended up being one of the players of the season last year. We look at that now as one of the best pieces of business over the last few years. In the transfer market, you just don’t know. Especially fans. I’m not going to feel badly about our transfer window just because some couch manager is pointing out that we have a negative net spend. I want to see the players and how they impact the team. If come January or 6 months from now there are still gaping holes in the squad, then sure I’m all for spending money. But I’m not all for panicking over meaningless numbers.

I know some of us aren’t, but I am incredibly excited for this season. I think we’ve done great business, and we’re yet to even see the best available squad with Karius still out. I think top 4 is 100% a possibility, and nothing you can say is going to change my mind about that. I’m here to enjoy football, and I’m going to do that as best I can. I strongly encourage anyone who’s feeling negative about our window to try and forget about the numbers and focus on the positive effects our players have already had on the team just a couple months in. Just sit back and enjoy the season, because literally anything can happen with Klopp at the helm.

by

23 year old, American, analytics enthusiast, goalkeeper.

Comments

5 responses to “Liverpool and The Magical Myth of Net Spend”

  1. RED PHIL says:

    The teams who finished a long, long way ahead of us last year have spent a hundred million-plus on new players whereas we have made a PROFIT by getting more back in outgoing transfers than we spent and we didn’t even bother looking at the glaring weaknesses at LB and DM . . . and some people think we are going to overtake United and City, Arsenal and Chelsea and Spurs?
    We’ve got a right-winger playing LB, we are considering putting the disaster that is Sakho at LB and if we don’t use the wholly average Henderson as DM rumour has it we might bring Lucas back despite him not being good enough for the last nine years, or whatever it is? We’ve got a midfielder playing as a striker, with an injury-prone striker coming on and running down the right wing more often than not Are we being serious here?
    Hector could have been bought for about £15m, to give us the security we haven’t had in years in that area and then, with a top-notch DM we could give our defence the protection it so obviously needs.
    Sadly, the club decided to not bother addressing KNOWN weaknesses so we have wasted an entire transfer window at a time when the club is awash with cash. Will the small profit we’ve made on our transfer dealings counter the possible lack of European football next year?
    If we go down the route of playing the oft-failed Lucas and Sakho we are making a mockery of our pretentions to win the league. They aren’t good enough and should have been shipped out.

  2. Vinnyr says:

    This article is great. What many do not realise is that money spent in previous years has already been allocated to this year.
    A transfer fee paid this year will be equally allocated over the period of the contract. Therefore the cost of the whole squad that has been bought counts towards the money spent this year. Liverpool have had a massively bloated squad of average players and therefore the money just has not been available yet.
    This years clearout along with more money coming in from TV deals and larger gate receipts will help in the future.

  3. Ronan says:

    This article is an interesting read. I can understand points from both sides, it isn’t as simple as net spend but then again there must be money there with the new TV deals etc. I wholeheartedly agree for now that I’m willing to trust Jurgen and see where it takes us. However you point out that there is a strong correlation between league position and wages yet no correlation between transfer fees and league position, I may be wrong but I’m struggling to believe that, I’m guessing but there must be a strong correlation between transfer fees and wages within the premier league so I would have presumed therefore that fees and league position would have been linked. Did you read this somewhere else?

  4. JBrad says:

    There are deficiencies, of course there are, but I literally don’t care about net spend. If anything, I’m happy for there to be responsibility by those in charge instead of some owner acting like a bull in a China shop buying all the over-priced tat on their holiday.

    We have a new stadium in familiar surroundings, we have got rid of ALOT of deadweight in the squad, and we have one of the most sought-after managers in the world. Not only that, but he seems to adore our club as much as we do.

  5. CHansen says:

    It goes beyond what you’ve stated too… it’s not just about prices, but the players you get in. If Klopp didn’t want the left-backs that were available, then I’m ok not spending on the wrong person. We’ve done that before (see Balotelli), and it was a massive waste of money and really hard to get rid of him in the end. There’s no point in buying the wrong player just for the sake of buying a player. If the available left-backs were no better than Moreno and Milner/whoever else slots in there, buying someone doesn’t fix anything.

    We could easily change the direction of the net spend. Why don’t we just throw 20 million to Schalke for Matip, and add another 5-10 for Karius? Will that make people feel better?

    I agree that a new left-back is needed, and another holding midfielder. But I don’t want to bring in the wrong players for the sake of having someone, and then not be able to get rid of them when we finally get the right player. If Hector didn’t want to leave home, then don’t bring him over. The last thing you need is another homesick player that doesn’t perform well because their head isn’t in the game (see the latter end of Torres’ time).

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Published by Anfield Index
Updated: 2016-09-06 22:21:49
3,739 Views