Time to dig deep at Liverpool?

Fenway Sports’ Group (FSG) rode into Merseyside like the fairytale prince, bolstered by the trusty steed of financial security back in October 2010, vanquishing the evil duo of George Gillett and Tom Hicks in the process. The club was saved at the eleventh hour, they were just a day away from financial ruin and administration and for that, the club’s fans will always be eternally grateful. However, after a difficult year in the league last season and a disappointing end to the campaign in terms of not only results but performances, it’s time to analyse where it all went wrong – one point worth exploring, though, is the investment that FSG have made since taking over the club, is it enough for the club to deliver on its undoubted potential?

In the period between October 2011 and 1st July 2012, Liverpool endured a huge turnover of players. Under FSG’s ownership, from the January window of 2011 to the present day, they have so far spent £114.4m on 11 players and recouped £77.8m from the sale of 10 players, not including loan deals and free transfers that have left the club in that time. That leaves a net spend of £36.6m when you take out the deals Roy Hodgson conducted under the previous Hicks and Gillett administration.

Net spend became a watchword of the Rafa Benitez reign, with his supporters passionately defending the image of a club that spent money freely with little regard when compared to their competitors. It doesn’t appeal to everyone, the topic that is, but it’s a fair barometer when tracking the overall feel of a club’s transfer activity.

For instance, between 2007-8 to 2011-12, Liverpool came third with regards to net spend in the entire top flight, spending a total of £99.25m. Manchester United spent £47.25m, Tottenham £49.4m, Manchester City £430.77m and Chelsea £159.7m. Arsenal ran an especially tight ship bringing in £31.3m more than they spent over that time to reinforce the feeling that they are a selling club, while Newcastle did the same, recouping £30.25m more than they spent with the Carroll transfer again pivotal in that figure.

However, net spend-wise, Liverpool have spent just £36.6m in two seasons and four transfer windows which comes in at an average of just £9.15m. It’s hardly small potatoes and a lot of clubs, local rivals Everton especially, would kill for the opportunity for that sort of money to spend per transfer window, but it’s far from the perception of extravangance often linked to the FSG regime. Rafa Benitez spent £63m net spend during his six-year tenure, which comes in at £7.875m per transfer window, after the transfer window was first introduced in 2008 during the middle of his reign. Not a massive difference in expenditure it has to be said, but crucially, the perception is completely different.

Christian Purslow, the former managing director at the club and the man responsible for brokering the deal that saw John Henry and New England Sports Ventures (NESV) purchase the club, made this astonishingly terrifying statement back in May: “People have short memories, it’s only 15-16 months ago we were a day away from being in administration. We are now stable financially. It’s year one of what they (Fenway) said when they bought the club would be a long journey.”

NESV bought the club for £300m, clearing the club’s £200m debts that were run up by Hicks and Gillett in the process and reducing the club’s debt servicing obligations from £25m-£30m a year to £2m-£3m. So behind the scenes, initially at least, the investment was on an absolutely huge scale, but there’s been little to back that up in the transfer market since, as the aforementioned figures show.

Brendan Rodgers arrived this summer after negotiating a £7m compensation deal with Swansea, while Kenny Dalglish respectfully waived any severance pay from his dismissal such is his regard for the club, but it will be interesting to see what sort of operating budget Rodgers is given this summer, I can’t see it being over £20m personally, if we are to follow the fiscally conservative example set by FSG so far.

The club is clearly on a much more secure financial footing than before, so criticism of the club’s transfer expenditure, to an extent, may seem a bit like sour grapes and a touch ungrateful, biting the hand that feeds you so to speak. However, where FSG do deserve scrutiny is the way that they have consistently dithered over the issue of a new stadium for the club, and they’ve shown a lack of leadership since taking control of the club about the matter.

John Henry stated last month a preference to redevelop Anfield which would make sense considering how they redeveloped Fenway Park for the The Boston Red Sox (who they also own) stating: “A long-term myth has existed about the financial impact of a new stadium for Liverpool.”A belief has grown that Liverpool FC must have a new stadium to compete with (Manchester) United, Arsenal and others. No-one has ever addressed whether or not a new stadium is rational. New stadiums that are publicly-financed make sense for clubs – I’ve never heard of a club turning down a publicly-financed stadium. Building new or refurbishing Anfield is going to lead to an increase from £40million of match-day revenue to perhaps £60-70m if you don’t factor in debt service” before acknowledging that the club may have to sell the naming rights should a move to Stanley Park or a new site ever take place.

While the reasoning is certainly understandable, the sheer amount of time it’s taken them to come to such a conclusion is troubling and the supporters patience is wearing thin. Purslow (hardly revered by many sections of the Anfield faithful now) had this to say on the stadium topic: “If I am disappointed about one thing under this new ownership is that they’ve got nowhere on the new stadium. It’s critical. If you look at Chelsea’s news in the last few days, Arsenal have already stolen a march on us. If Chelsea get that stadium up and running then it’s another team that’s ahead of us in the queue.”

FSG, formerly NESV, have done Liverpool a great service so far and that should not be forgotten, but the time has come for significant investment on the pitch, particularly in light of the clear lack of direction over the stadium issue. The club is caught in a stagnant position, neither willing to spend on or off the pitch at the moment.

This is not a call for silly money to be spent, far from it, caution is always a positive when discussing transfers, but when caution gives way to indecisiveness, that’s when clubs begin to stand still. Under a new managerial regime, it’s time for FSG to put their money where their mouth is, good intentions so far have gleaned a degree of goodwill from the terraces, now it’s time to capitalise or risk the club going backwards.

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