Brendan Rodgers

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.

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  • Bill Ward
    1 year ago

    Why don’t you go and worry about manures finances for a change. They are leveraged to death.

    Reply
  • michael carter
    1 year ago

    Oh dear what do they say? paper never refuses ink, equally the internet has an infinite amount of space to fill.

    Liverpool already have a transfer policy – see Sturridge and Coutinho as recent proof.

    Andy Carroll has a resale value not big sure but he has one. Jordan Henderson is not going anywhere this summer, Jonjo Shelvey on the other hand almost certainly is. Tom Ince will probably be coming in (see Shelvey money) and Stefan De Vrij looks likely for Carra. Get DM cover and LB cover and Liverpool will be fine.

    The the best of the current kids will be ready in two seasons (Sterling, Smith, Ibe, Ward, Suso, Texieria, Yesil, McLaughlin, Dunn, Coady) at which point buying in ready made first team talent should almost a thing of the past.

    Reply
  • Tyrone Maggoo
    1 year ago

    It seems the internet is a forum for fools and genius alike. a place where even the most uninformed and ignorant can ran rant to a vast audience. In this case the author of this piece is doing a cracking job of proving this point to be correct. Lets look at the facts

    These are the figures posted to May 2012 and not covering our current financial position. Most recently we have offloaded the majority of the large salary earners and senior playing who contributed to the large wage bills of the period reported. Players such as Joe Cole, Maxi Rodrigues, Dirk Kuyt, Alberto Aquliani to mention but a few have been taken off the wage bill. In the current trading period Liverpool have also managed to secure more sponsorship deals with Warrior (one of the largest in the Premiership) as well as Chevrolet to mention but a few. Also contributing to the loss reported was the severance package paid to King Kenny (one off payment)

    What does this mean we have dramatically reduced our wage bill, we have also vastly increased our commercial revenue with at least one sponsorship deal alone being worth approx 25million per year.

    In the past what kept us back was the philosophy of paying too high transfer fees for mediocre talent and rewarding that talent with high wages. This no doubt has changed since Roger’s appointment as even though Alleen and Borini have been signed at what some would considered inflated prices their salaries will be no where near the likes of those who have left.

    The notion that we are running out of time is the farthest thing from the truth, in fact we’ve witnessed that with the passage of time since Roger’s has taken over we seem to only get better and better, he is bringing out the best from players only 6 months thought to be flops as well as a player who in his first year at the club looks a vastly improved player this year, Suarez. Truth is slowly we are finding the right pieces of the puzzle as we move forward we are no longer relying on Stevie G to save us. Others are beginning to emerge. the truth is we are a much more balanced team than we were 12 months ago.

    Comparing Liverpool to Portsmouth….. That simply proves the author of this piece as no knowledge of the fact and like so many supporters make assumptions with out knowing the facts. Please, please, please do us all a favor and do some research before you decide to show those with some knowledge just how empty your the gap between your ears really is.

    Reply
  • Tamir Feroz
    1 year ago

    Another piece of lazy journalism. Many “top” clubs are in debt, as far as I know Liverpool debt is due to the owners at no interest not the banks. This article said a lot without saying much at all. It was a re-hash of many different articles over the past month. In regard to resale values Liverpool do not have to sell top players to bring money in. Assaidi – 2mil, Coates – 5mil, Downing – 6mil, D.Wilson – 1mil, Spearing – 2mil, Pacheco – 2mil, Carroll – 12mil, Skrtel – 10mil, these sales would raise around 40mil for the club which is nearly half the debt.

    Reply
  • Tyrone Maggoo
    1 year ago

    Well what to say about this article. Everything seems to be correct except the facts.
    Lets look at the facts
    These are the figures posted up to May 2012 and not covering our current financial position. What has happened since?
    Firstly, very recently the club have managed to offload a large chunk of their higher earners and senior playing staff who contributed to the large wage bills of the period reported. Players such as Joe Cole, Maxi Rodrigues, Dirk Kuyt, Alberto Aquilani, Charlie Adam, Craig Bellamy to mention but a few have been taken off the wage bill.
    Secondly, in the current trading period Liverpool have also managed to secure more sponsorship deals with Warrior (one of the largest in the Premiership) as well as Chevrolet to mention but a few.
    Thirdly, contributing to the loss reported was the severance package paid to King Kenny (one off payment)
    What does this mean we have dramatically reduced our wage bill on the likes of Sterling, Suso, Shelvey, we have also vastly increased our commercial revenue with at least one sponsorship deal alone being worth approximately £25million per year. In short decreased expenses increased income.
    Selling the idea that the club is being run under the same model over this financial period as it was over the period reported is simply WRONG. In the past what kept us back was the philosophy of paying too high transfer fees for mediocre talent and rewarding that talent with high wages. This no doubt has changed since Roger’s appointment as even though Allen and Borini have been signed at what some would considered inflated prices their salaries will be no where near the likes of those who have left.
    The notion that we are running out of time is the farthest thing from the truth, in fact we’ve witnessed that with the passage of time since Roger’s has taken over we seem to only get better and better, he is bringing out the best from players only 6 months thought to be flops as well as a player who in his first year at the club looks a vastly improved player this year, Suarez. Truth is slowly we are finding the right pieces of the puzzle as we move forward we are no longer relying on Stevie G to save us. Others are beginning to emerge. The truth is we are a much more balanced team than we were 12 months ago.
    Comparing Liverpool to Portsmouth… This simply proves great journalism is about reporting on the facts and doing research to ensure what is being reported is accurate. In this case both research and accuracy seem to be lacking.

    Reply