Liverpool related transfer speculation

[bluebell]

Timing is the issue.
Let me give a more simple example.
Let’s say we signed a player for £50m, 3 years ago. We’re now going to sell him for £50m and replace him with a new guy for £50m, 5 year deals all round. Ignore wages to keep it simple.
The old guy is on the books at £20m. We make a profit of £30m on sale. We save £10m amortisation in years 1 and 2.
So profit in year 1 of £40m, profit in year 2 of £10m. No impact in years 3-5 as his contract would have expired and he’d be fully written off at the end of year 2.
The new guy adds costs of £10m a year for five years.

So our profit / loss profile is:
+ 30m
Neutral
- 10m
- 10m
- 10m

With the FFP 3 year count-back, that comes to:
+ 30m - no problem
+ 30m - no problem
+ 20m - no problem
- 10m - problem
- 20m - problem

Now imagine the new guy costs £120m and is on £250k a week, and has some mates…

I think we have replaced Salah with Isak. I think in 2 years we get a winger who will contribute 20+ GAs. I think at the end of this season our turnover is likely to be close to £800m and in a further 2 years £860-870m.
I think Madrid will come in big for Mac, so he could have his head turned. If he goes we are looking at £120m.
Not doubting you @Beamrider but these lot would not spend what they have done unless they knew it wasn't going to come back and bite them in the bum

 

[bluebell]

View: https://x.com/LFCTransferRoom/status/1949737201908011319

 

[bluebell]

Hopefully its true. Signing Isak, Guehi and the renewal of Konate will make it the best transfer window in PL history. Slot can then work on cohesion and tactics. Wirtz and Salah already looks like its happening. Slot needs to make sure we don't get rivalry and jealousy too within the camp

View: https://x.com/RobJFleming/status/1949768809952256283

 

[Judge Jules]

Just as an aside, why does the window have to "slam" shut every ******* time?

 

[StevieM]

In the first three years the losses are offset by the (much higher than normal) profit on sale of players this summer. Once that drops out in year 4 then we are exposed to the full extent of the costs.
Same happened with Villa. They were fine running losses while they had the Grealish profit to offset them. Once that dropped out they were in trouble.

So - does that mean we have to sell some players in 3 years time?

I’d look at Gakpo & Macca as being good players hitting 30 and highly sellable or if players like Danns, Nyoni or even Rio aren’t up to world class scratch in 3 years but are still like Elliot level and need selling?

I’m trying to think of ways to mitigate - and, I may be wrong, but your figures would seem to take in players we could sell now with benefit over 3 years versus players we bought spread over 5 years.

The thing you can’t have factored in is future player sales - or is the question, “How much revenue would we need to bring in from sales to offset”?

Sorry if this is me being dense - it seems like a calculated risk that we’ll be able to bank sales in a few years.

 

[MomoWASright]

We will be selling Ali next year, probably Mo too. Virgil will go the season after on a free and maybe Gakpo and Mac will leave too.

 

[Frogfish]

That’s kind of my point - we don’t require him to dry often - ideally not at all outside of early domestic cup ties or when the league is already won.

 

[Buddha]

View: https://x.com/LFCTransferRoom/status/1949737201908011319

This has Italian side loan written all over it…

 

[Beamrider]

I'm probably being thick but I can't backwards engineer your figures. Just ignoring wages for now, I'm getting an annual increase in amort of £79m (395m spent by 5) less an annual saving of £23m on Nunez, Diaz, Chiesa, and Tsimikas. So hit to the accounts each year of £56m as compared with existing costs.

So I've got the following:
SALES
Proceeds:
Kev 12.5
Q 30
Diogo 25
Trent 8
Diaz 60
Nunez 40
Chiesa 11.5
Harvey 40
Kostas 8
Morton 8
Doak 25

Total 268

NBV
Kev 0.3
Q Bobbins
Diogo 13.1
Trent 0
Diaz 18.1
Nunez 26.8
Chiesa 11.3
Harvey 2
Kostas 3.3
Morton .1
Doak .3

Total 75.3

Profit on sale 192.7

Amortisation saved is same as the NBV, spread over 2-3 years by player:

2025-26 total 33.8
2026-27 total 33.6
2027-28 total 5.6
2028-29 total 2.9
2029-30 total 0.2

Total £76.1m - there's a difference of £0.8m just due to a bit of rounding in my calcs.

Amortisation added based on fees over 5 years. Assumed fees (plus club share of agent):

Frim 33.5
Wirtz 112
Ekitike 75
Kerkez 44
Guehi 45
Isak 128

Total = 437.5m

Amortisation is 88m per annum, reduced to 79.4m in 2025-26 as they weren't all here throughout the period (I've assumed Guehi and Isak done by 31/7).

Then it comes down to wage differences - all the figures below are increases in cost. First numbers are the new players:

2025-26 65.7 - 48.0 = 17.7m
2026-27 85.0 - 52.6 = 32.5m
2027-28 85.0 - 50.7 = 34.3m
2028-29 69.3- 49.1 = 20.3m
2029-30 55.4- 49.1 = 6.3m

The higher numbers in the early years are due to agent fees paid on behalf of the players and then bonuses to enable them to pay the tax on the benefit in kind. There are still some agent payments for Chiesa and a tax payment bonus for Nunez in the base figures.

 

[Beamrider]

So - does that mean we have to sell some players in 3 years time?

I’d look at Gakpo & Macca as being good players hitting 30 and highly sellable or if players like Danns, Nyoni or even Rio aren’t up to world class scratch in 3 years but are still like Elliot level and need selling?

I’m trying to think of ways to mitigate - and, I may be wrong, but your figures would seem to take in players we could sell now with benefit over 3 years versus players we bought spread over 5 years.

The thing you can’t have factored in is future player sales - or is the question, “How much revenue would we need to bring in from sales to offset”?

Sorry if this is me being dense - it seems like a calculated risk that we’ll be able to bank sales in a few years.

The bit in bold is the essence of the problem.
When the huge profit on sale from this season drops off, we're in the shit and need to replace it, most likely by selling other players (no later than the Summer 2028 window as UEFA accounts run to 31 December so sales in January 2029 wouldn't help).
Broadly correct re future player sales, the kicker being we'd need to replace whoever we sell, and we'd need to assume our highly desirable players don't get tapped up and leave on a free a la Trent (i.e. that we can sell, for example, Gakpo and Macca in 3 years time for solid fees, which means extending their contracts in the meantime). Bearing in mind the likely routes out of Liverpool are Madrid (love a Bosman) Barca (skint), Bayern (tight), PSG (they look sorted for 5-6 years already). Anywhere else, e.g. Saudi, is a step down (and I'd argue PSG is a step down domestically too). I don't see our top players going to Saudi.

 

[Frogfish]

We will be selling Ali next year, probably Mo too. Virgil will go the season after on a free and maybe Gakpo and Mac will leave too.

We wont be selling Ali next year. Mo for sure. VvD will go on forever.

 

[Frogfish]

Timing is the issue.
Let me give a more simple example.
Let’s say we signed a player for £50m, 3 years ago. We’re now going to sell him for £50m and replace him with a new guy for £50m, 5 year deals all round. Ignore wages to keep it simple.
The old guy is on the books at £20m. We make a profit of £30m on sale. We save £10m amortisation in years 1 and 2.
So profit in year 1 of £40m, profit in year 2 of £10m. No impact in years 3-5 as his contract would have expired and he’d be fully written off at the end of year 2.
The new guy adds costs of £10m a year for five years.

So our profit / loss profile is:
+ 30m
Neutral
- 10m
- 10m
- 10m

With the FFP 3 year count-back, that comes to:
+ 30m - no problem
+ 30m - no problem
+ 20m - no problem
- 10m - problem
- 20m - problem

Now imagine the new guy costs £120m and is on £250k a week, and has some mates…

Everything you've said makes sense. What doesn't is that FSG would go down this road, based on their historical parsimony, without having the strategy in place to offset it (and that doesn't mean selling our best players after 3 years).

 

[StevieM]

So I've got the following:
SALES
Proceeds:
Kev 12.5
Q 30
Diogo 25
Trent 8
Diaz 60
Nunez 40
Chiesa 11.5
Harvey 40
Kostas 8
Morton 8
Doak 25

Total 268

NBV
Kev 0.3
Q Bobbins
Diogo 13.1
Trent 0
Diaz 18.1
Nunez 26.8
Chiesa 11.3
Harvey 2
Kostas 3.3
Morton .1
Doak .3

Total 75.3

Profit on sale 192.7

Amortisation saved is same as the NBV, spread over 2-3 years by player:

2025-26 total 33.8
2026-27 total 33.6
2027-28 total 5.6
2028-29 total 2.9
2029-30 total 0.2

Total £76.1m - there's a difference of £0.8m just due to a bit of rounding in my calcs.

Amortisation added based on fees over 5 years. Assumed fees (plus club share of agent):

Frim 33.5
Wirtz 112
Ekitike 75
Kerkez 44
Guehi 45
Isak 128

Total = 437.5m

Amortisation is 88m per annum, reduced to 79.4m in 2025-26 as they weren't all here throughout the period (I've assumed Guehi and Isak done by 31/7).

Then it comes down to wage differences - all the figures below are increases in cost. First numbers are the new players:

2025-26 65.7 - 48.0 = 17.7m
2026-27 85.0 - 52.6 = 32.5m
2027-28 85.0 - 50.7 = 34.3m
2028-29 69.3- 49.1 = 20.3m
2029-30 55.4- 49.1 = 6.3m

The higher numbers in the early years are due to agent fees paid on behalf of the players and then bonuses to enable them to pay the tax on the benefit in kind. There are still some agent payments for Chiesa and a tax payment bonus for Nunez in the base figures.

Again, maybe I’m misunderstanding all this but that looks like all we need to do is sell some players over the next few years and reduce some wages from high earners.

So it 3 years time we’re replacing 30 year old Gakpo and Macca with 21yo Nyoni & 20yo Rio, while offsetting wage increases for Wirtz and Ekitike by releasing Mo & Virgil.

Again, I would be the last to doubt your expertise, but it does look like you’re not factoring in future sales to your numbers - I mean you can’t, in the same way you can’t factor future transfers in and their cost - but I’d be pretty confident we’re not going to splurge like this again and the next few years will be spent dealing with the crazies trying to cope with non-transfer windows.

Although. I do get it - it’s risky… very risky, in an almost Leeds sort of way.

 

[Frogfish]

Just as an aside, why does the window have to "slam" shut every ******* time?

The wind from the blow hard media outlets.

 

[MomoWASright]

We wont be selling Ali next year. Mo for sure. VvD will go on forever.

Oh we will. That’s why we spunked £30 million on a keeper last season.

 

[peterhague]

So I've got the following:
SALES
Proceeds:
Kev 12.5
Q 30
Diogo 25
Trent 8
Diaz 60
Nunez 40
Chiesa 11.5
Harvey 40
Kostas 8
Morton 8
Doak 25

Total 268

NBV
Kev 0.3
Q Bobbins
Diogo 13.1
Trent 0
Diaz 18.1
Nunez 26.8
Chiesa 11.3
Harvey 2
Kostas 3.3
Morton .1
Doak .3

Total 75.3

Profit on sale 192.7

Amortisation saved is same as the NBV, spread over 2-3 years by player:

2025-26 total 33.8
2026-27 total 33.6
2027-28 total 5.6
2028-29 total 2.9
2029-30 total 0.2

Total £76.1m - there's a difference of £0.8m just due to a bit of rounding in my calcs.

Amortisation added based on fees over 5 years. Assumed fees (plus club share of agent):

Frim 33.5
Wirtz 112
Ekitike 75
Kerkez 44
Guehi 45
Isak 128

Total = 437.5m

Amortisation is 88m per annum, reduced to 79.4m in 2025-26 as they weren't all here throughout the period (I've assumed Guehi and Isak done by 31/7).

Then it comes down to wage differences - all the figures below are increases in cost. First numbers are the new players:

2025-26 65.7 - 48.0 = 17.7m
2026-27 85.0 - 52.6 = 32.5m
2027-28 85.0 - 50.7 = 34.3m
2028-29 69.3- 49.1 = 20.3m
2029-30 55.4- 49.1 = 6.3m

The higher numbers in the early years are due to agent fees paid on behalf of the players and then bonuses to enable them to pay the tax on the benefit in kind. There are still some agent payments for Chiesa and a tax payment bonus for Nunez in the base figures.

I might be wrong but I think you might be sort of undercounting the saved amortisation. If I'm reading the above right the figure in last year's accounts for the guys who'll be sold this summer is ~£33m. By my logic that figure should be stripped out every year *so long as we're comparing what will be expensed to what WAS expensed LAST YEAR*.

So if we're going to project a profit in 2030 based on adjustments to this year's figures, we won't be paying £33m regardless of the fact that we wouldn't have been expensing that anyway. So if that's right you can reduce the losses by 3 x £33m.

 

[bluebell]

If I look in the mirror and close my eyes, and I always imagine I have hair and a body like that

 

[Beamrider]

I might be wrong but I think you might be sort of undercounting the saved amortisation. If I'm reading the above right the figure in last year's accounts for the guys who'll be sold this summer is ~£33m. By my logic that figure should be stripped out every year *so long as we're comparing what will be expensed to what WAS expensed LAST YEAR*.

So if we're going to project a profit in 2030 based on adjustments to this year's figures, we won't be paying £33m regardless of the fact that we wouldn't have been expensing that anyway. So if that's right you can reduce the losses by 3 x £33m.

Re the bit in bold, that's not what I'm doing, for amortisation anyway. It's inconsistent with what I've done on salaries, and I get that, but we fundamentally won't be charging that amortisation. Theoretically, if we renewed all the existing players when their contracts expire on the same wage terms then we'd get to my numbers - that's my effective assumption. You can feel free to impute some additional amortisation if you like, it's just not how I've chosen to do it. Your method would knock £100m off the theoretical year 4 and 5 numbers, but we'd still be looking at additional net costs of £207m instead of £307m for year 4 (and £216m instead of £316m for year 5). That's still a huge problem because the target is €5m.

 

[Hansern]

View: https://x.com/anfieldedition/status/1949803541280784784?s=46

 

[peterhague]

Re the bit in bold, that's not what I'm doing, for amortisation anyway. It's inconsistent with what I've done on salaries, and I get that, but we fundamentally won't be charging that amortisation. Theoretically, if we renewed all the existing players when their contracts expire on the same wage terms then we'd get to my numbers - that's my effective assumption. You can feel free to impute some additional amortisation if you like, it's just not how I've chosen to do it. Your method would knock £100m off the theoretical year 4 and 5 numbers, but we'd still be looking at additional net costs of £207m instead of £307m for year 4 (and £216m instead of £316m for year 5). That's still a huge problem because the target is €5m.

I'm just trying to get to a reasonable estimate like we all are, and if the approach is to adjust from existing figures (seems reasonable) then it seems obvious to me you'd eliminate costs we won't suffer as well as adding costs we will suffer... not really sure how anything else can be more accurate tbh.

But yeah, as you said, it still leaves a big gap to fill anyway.

 

[Buddha]

Joking aside, what’s the likely future correction to sides selling their women’s team to ostensibly themselves?

 

[tombrown]

Does the maths change if the PL moves from it's current PSR rules to ones aligned with the UEFA one? If so, maybe that is what FSG are banking on ...

 

[Frogfish]

Joking aside, what’s the likely future correction to sides selling their women’s team to ostensibly themselves?

Didn't the PL block that loophole?

 

[Hansern]

The PL can’t even apply sun block

 

[Beamrider]

Joking aside, what’s the likely future correction to sides selling their women’s team to ostensibly themselves?

For PL PSR, very high correlation as the PL appear to have bottled it on that score.
For UEFA FFP, zero correlation as they aren't having it.

 

[FreshRed]

So it 3 years time we’re replacing 30 year old Gakpo and Macca with 21yo Nyoni & 20yo Rio, while offsetting wage increases for Wirtz and Ekitike by releasing Mo & Virgil.

I think Stevie makes a good point that at least some of the young talent that we are developing/buying should break through and cost us much less than those they are replacing. If none of the younger talent breaks through - or does not provide a bunch of 30-40M checks then I see trouble.

 

[Frogfish]

I think Stevie makes a good point that at least some of the young talent that we are developing/buying should break through and cost us much less than those they are replacing. If none of the younger talent breaks through - or does not provide a bunch of 30-40M checks then I see trouble.

Again though. I simply can't see FSG going down this road. They will surely have wrung the calculations through the wringer and have it covered.

 

[Buddha]

For PL PSR, very high correlation as the PL appear to have bottled it on that score.
For UEFA FFP, zero correlation as they aren't having it.

…so it’s kind of relevant as a consideration in our spending?

 

[Al_Gatto]

Again though. I simply can't see FSG going down this road. They will surely have wrung the calculations through the wringer and have it covered.

I think they may have been building up the headroom to do this for the last couple of years. Maybe the extra ticket income from expanded Anfield helps with that?

Aren't allowed losses higher if covered by owners equity? Maybe FSG plan to plough in £50m a year instead of spending it on transfers?

 

[Gerry_A_Trick]

We're going to be selling players in the next few years though, we're better than most at getting value from our youth players. I also suspect we will end up selling at least one of the players we buy now within three years. I don't think it's something to be worried about now.