Liverpool fans will no doubt be losing sleep following yesterday’s announcement of the club’s rather dire financial situation. The Anfield club has released figures reporting that their debt has increased to £87million, and is now amid a painful hangover from their cavalier spending spree whilst former bosses Roy Hodgson and Kenny Dalglish were at the helm.
It’s certainly been coming; you can’t expect to fork out £35million for Andy Carroll without it biting you in the rump somewhere along the line. Of course, the club has learnt its lesson regarding overzealous transfer bids, but Liverpool are now in a situation that could prove difficult to get out of, and has every chance of becoming a downward spiral unless it is addressed quickly.
It is not only the Andy Carroll deal that has crippled the club; a number of their recent investments are yet to pay off, and arguably never will. Stewart Downing may be back to his best or at least back to being slightly better, but was his best ever worth £20million? His record of nine goals and ten assists in 63 Premier League appearances whilst donning an Aston Villa jersey is hardly what you’d call inspiring form.
Similarly, Jordan Henderson had a couple of successful seasons at Sunderland, but in no way has he justified his £16million move to Anfield either before or after the transfer. Perhaps it is wrong to judge a club on its past failings, but this season, the £15million investment in Joe Allen and the £11million transfer of Fabio Borini also appear to have backfired.
Now the situation has become rather more difficult however, as Liverpool have a number of players of their books who simply aren’t good enough, with in some cases such as Andy Carroll’s, absolutely no resale value, and furthermore a serious lack of finance to turn the club’s fortunes around as they squander in mid table, some distance away from the top four.
Furthermore, the wage structure is arguably the most concerning issue. 70% of Liverpool’s total income is spent on players’ and staff wages, which has lead to Managing Director Ian Ayre stating that the club will now “bring in talented players on sensible contracts”, and deals such as Joe Cole’s 100k per week for being a lackluster bench warmer are to become a thing of the past.
But the fact Carroll is on a 80k per week contract is truly worrying considering he’s unwanted by Brendan Rodgers, and although West Ham are currently covering their loanee’s salary, unless the striker’s future is settled in the summer, it will be yet another financial burden placed upon the Anfield club next season.
The British revolution at Liverpool clearly hasn’t worked. Although it is an admirable ideal to build a roster based around home-grown talent, the nature of the market has made their transfer fees unreasonable, and if there’s one lesson to be taken from the England national team’s recent failings of the golden generation, it’s that the general spread of talent regarding English players is simply not comparable to the likes of Italy, Spain and Germany, who have far much more quality in depth in their national sides.
Ian Ayre has also announced a new dawn in regards to the club’s transfer policy, but it needs to be a rather shrewd and quick revelation to turn around Liverpool’s domestic form. The club are set for another year of Europa League football next season, and unless Brendan Rodgers can get the absolute best out of his current roster, Liverpool will continue in the years to come to miss out on the riches that the Champions League provides.
Of course, the elephant in the room and the simple solution is to sell Luis Suarez. He’s one of the club’s top earners, and furthermore his reported £50million price tag would alone cover half of the £87million debt. But that resolution comes with its own set of headaches. The Uruguay international is the sole reason Brendan Rodgers’ inaugural season hasn’t become a rather embarrassing affair, and his 21 Premier League goals have been invaluable whilst the Reds have spent much of their current campaign without a proper strike force.
So perhaps selling the side’s best asset isn’t the answer, but even selling some of their lesser assets also appears to be rather unrealistic. As previously mentioned, the likes of Stewart Downing, Jordan Henderson and Andy Carroll simply aren’t fit for purpose, but their inflated transfer fees make selling them on an incredibly difficult challenge, and similarly, with such a young squad where the majority of back-up players are under the age of 23, as are many of the first team, the club are in no position to start selling their senior personnel.
Sometimes it is impossible to go forward without taking a step backwards, but it seems that Liverpool are running out of time, and too many more backward steps will seriously endanger the club’s future. Leeds United, one of English football’s biggest institutions, have fallen by the wayside as their performances on the pitch failed to equate to the financial backing off the pitch, and similarly, Portsmouth are now in freefall after suffering the backlash from their lavish spending and irresponsible contractual arrangements which they are still paying for.
Perhaps the comparison is a little over the top, the financial situation at Anfield is worrying, but there is no reason to believe the club are on the brink of destruction. However the dangers need to be highlighted of what will happen if the monetary issues aren’t properly addressed. Similarly, the longer the club remain out of the Champions League the more real the danger becomes.
I do not pretend to know all the answers, and I’m rather glad that I’m not in a position where it’s required to find them. Liverpool have made some steps in the right direction, with Brendan Rodgers making some decent January acquisitions in Daniel Sturridge and Phillipe Coutinho, who have added to the squad without breaking the bank, but there are still some harsh realities upon the horizon that the club have to deal with.
In the summer, Pepe Reina will be on his way to Barcelona, whilst spiritual leader Jamie Carragher is hanging up his boots. Similarly, hanging on to Luis Suarez may be a difficult task, and the first team cannot continue to be reliant upon Steven Gerrard in the middle of the park, as the England man enters his twilight years.
Finally, a rather pressing issue is the financial fair play laws set to come into effect next season. As it currently stands, Liverpool are well in breach of the new rules, which limits net losses to £35million per year. Getting in sync in time and avoiding subsequent punishment will be the club’s most important challenge to address.