Sometimes you’ll read a sentence so bad that, even when trying to take it easy for a while after a testing winter (as I am), you end up writing a piece to counter it.
This, courtesy of the Manchester Evening News, may as well have been written in Abu Dhabi:
“Liverpool won the title for the first time in 30 years after recording the biggest transfer spend in a calendar year in English football history, in 2018.“
Now, I hate net-spend arguments, as I’ve noted many times, including in this recent piece.
But gross-spend arguments – as this is – are the worst.
Net-spending arguments can be twisted by arbitrarily (or sneakily) moving a cut-off point; for instance, only start counting the day after Man City spent £100m on Jack Grealish, and suddenly they didn’t spend any money on Jack Grealish. He was just magically there all along. Everton have massively outspent Man City in 2022, so Everton should be better, right?
Indeed, net spend in the calendar year, sees Man City having made a profit of £43m, on Ferran Torres. You wouldn’t say City’s chances are now nosediving in 2022 as they’re -£43m on outlay in the year 2022.
Gross-spending arguments take the same flawed approach and make it even worse, by ignoring what money came in. It ignores the sell-to-buy that all clubs, unless financially doped, have to live by.
Both net and gross calculations also ignore inflation, which means that a massive historical but still relevant spend – say five years earlier – could be trumped, but the original cost far more in “real” terms due to the fact that transfer prices generally rise.
So, in 2016/17, the average price of a Premier League player was 18x what it was in 1992, when we began our index (not that football began then, but we had to start somewhere). But this season, the average price has risen to 30x what it was (having actually fallen to 27x in 2020/21). So an £18m player in 2017 effectively cost £30m in the current market.
Both net and gross spend arguments ignore the state of a club before the arbitrary cut-off point: did they need to spend money, or had they spent the past few years shelling out tons to perfect their squad?
The key fact to all this is that in 2018, Liverpool sold Philippe Coutinho to Barcelona for £142m; as well as Danny Ward £12.5m and Ragnar Klavan £2m, and losing Emre Can (who needed replacing) on a free transfer. (All fees listed in this piece are the maximum amount payable.)
That’s £156.5m brought in during 2018.
The money was reinvested in Virgil van Dijk, £75m, in January 2018; and in the summer, Naby Keïta (£52.7m), Fabinho (£43m), Xherdan Shaqiri (£13.5m) and Alisson, (£64.4m). That’s £248.6m, which is clearly huge; but less than £100m net.
One of the reasons for creating the Transfer Price Index with Graeme Riley in 2010 was to look at how much teams cost (the team that plays, and the overall squad), based on transfer spending, adjusted for inflation. (Andrew Beasley is now helping me to track the data, and Daniel Rhodes is creating some Tableau vizzes to help present the information.)
Wages are obviously another big factor, and City obviously top the wage-bill chart, too.
But on transfer fees, the sale of Coutinho was seen by a lot of Liverpool fans as a sign of impending doom. Less than three years earlier Liverpool had lost Raheem Sterling to Man City (at what works out now at well over £100m), having had Luis Suarez pilfered in 2014; and now they were losing another key player.
That’s where Liverpool were between 2010 and 2018 (and indeed, a process that began before 2010, under the shambolic ownership of George Gillett and Tom Hicks): unable to retain their elite talent, as they didn’t have the financial power to pay mega-wages, but instead had to manage the wage bill in a way that maintained unity. In order to buy, some selling was usually required.
When Raheem Sterling moved to City – essentially taken against Liverpool’s will – the average price of a Premier League player was £7.4m; now it’s £18.1m. Sterling therefore cost almost £120m with inflation. Kevin de Bruyne works out at £133m, while the recently retired Sergio Aguero was £177m – albeit the only City player to rank in the top 20 in the Premier League era, which is comprised almost entirely of Chelsea and Man United players from 2001-2016.
What City have, with so few homegrown and free players, is a squad packed with expensive players, many of whom cost big money a few years ago, but that big money, as an illusion, seems smaller now unless inflation-adjusted.
For instance, it would be crazy now to say that Stewart Downing was a cheap signing for Liverpool, because a decade ago, £20m was a lot of money. With inflation it now equates to £93m; someone who cost c.£30m in the 2000s – as a few players did for Chelsea and Manchester United* – is now the equivalent of around £200m (which is where the ‘actual’ European transfer record maxed out just a few years ago, before the biggest signings abated.)
* Andriy Shevchenko, Wayne Rooney, Rio Ferdinand, Michael Essien, Didier Drogba and Fernando Torres.
Perhaps what has changed is a greater number of expensive signings, and fewer super-expensive signings; certainly in the Premier League, with excesses curbed by FFP. When we devised TPI in 2010, FFP had yet to take hold. Now it would seem unthinkable to spend £200m on a single player and stay within the allotted budget; but that’s essentially what was happening in the 2000s.
The most recent signing in the TPI top 20 is Aguero, at 7th, while Man United’s procurement of Paul Pogba and Anthony Martial both make the top 20. Otherwise, even £100m this summer is not as outlandish, relatively speaking (and the whole point of adjusting for football inflation is to make things relative), as the deals taking place prior to FFP.
Football – amongst the sensible clubs – has also become less about superstar individuals, and in fairness to Man City, they are a prime example of a system of interchangeable players, who almost all cost a lot of money, rather than marquee players.
Even now, the few players who might cost £200m are retained by the big clubs that own them, or are about to be available in the summer on free transfers or reduced buyout clauses. Indeed, holding onto such players – as PSG have done with Kylian Mbappe – is almost the same as paying £200m, as they did for Neymar, as they are essentially writing off £200m; only an oil state could afford to do that.
(Note: our inflation model only focuses on Premier League signings to calculate present-day money.)
City have 17 players who cost at least £33m in the TPI model; they have 15 players who cost £46m or more; 13 players who cost £56m or more; 11 players who cost £62m or more; six who cost £80m or more; and three who cost £100m or more. That’s the crux.
City’s 17th most expensive player (İlkay Gündoğan) cost £33m, roughly the same as the Reds’ 11th most expensive; Liverpool’s 15th most-expensive (Andy Robertson) cost £11m, whereas City’s cost £46m.
Apex Predator
For all City’s mega-spending since 2008, how many of their best players have been whisked away from them at their peak? None. (Leroy Sané might qualify, but he was going to be sold the previous summer anyway.)
Imagine losing Kevin de Bruyne to Real Madrid, or Ederson to Barcelona, two or three years ago, and having to replace them, with the 50-50 chance that the replacement won’t be a success. Imagine that, a few years before that, David Silva and Vincent Kompany were bought by rivals when at their peak. City have never had that issue.
City managed to get Sterling out of Liverpool, to weaken a rival, and plundered Arsenal repeatedly, until Arsenal were threadbare. (Emmanuel Adebayor, Kolo Toure, Samir Nasri, Bacary Sagna and Gael Clichy, in just a few years.) They also took Kyle Walker from Spurs when Spurs were strong, and Riyad Mahrez from Leicester soon after they won the title; so the idea that they didn’t raid rivals is a lie.
Yes, City will give their players the chance to always play in (if not win) the Champions League, and will challenge for the title. But an unseen sign of their power is how they can resist all predators. They are the top of the food chain, and how they do it – indeed, how they got their money to start with – isn’t always palatable.
City are a super-smart operation with a world-class manager, albeit one who left Germany having bored the Bayern Munich hierarchy. City don’t have to entertain neutrals, but there is something sterile about them, as noted by Ken Early in the article that got the blue half of Manchester so riled.
Pep Guardiola won more in Germany than Jürgen Klopp, but Dortmund were literally bankrupt when Klopp arrived, and what he achieved – against all odds – will be remembered for longer, as Bayern Munich are a monster of a machine, who were chugging before Guardiola arrived and chug exactly the same after (except with a Champions League to boot).
Klopp has also taken Liverpool far further, from a starting point of mediocrity, than Guardiola (who has improved City), whose players had mostly already won the Premier League. That said, Guardiola, domestically at least, can’t take City any further than he has, as he’s already broken all kinds of records (albeit Liverpool’s 97- and 99-point seasons remain more incredible based on the budget and the starting point).
It’s hard to say that Liverpool can win hearts and minds, given the enmity that exists in football fandom, but I think a neutral (or if the labels were removed from both clubs like unmarked cans in a taste test) would put Liverpool’s European and Premier League ride of 2018-2020 above any period of Man City’s dominance given the more thrilling an unexpected nature of it; just as Leicester’s league title trumps anything else in terms of expectations; just as the nature of Istanbul in 2005 tops anything anyone can do.
Alas, Liverpool could not ride out Covid in the way that City or Chelsea, with their petrodollar doping, could. That’s a fact of life. Liverpool have turned many cheap and mid-priced players into world-beaters (this is the model), but to pay them all the going rate in wages would cripple the club.
The wage bill already has little room for leeway, but even to give Mo Salah £400,000 a week would mean he’s on virtually double what everyone else gets, and would see £100,000 added to the demands of all players to follow.
Salah is clearly worth £400,000 a week, but it’s not awarded in a vacuum.
Is he worth the extra £100,000 a week that Sadio Mané and his agents will then ask for, and the extra £100,000 a week Roberto Firmino will ask for, and when it comes their turn, the extra £100,000 a week Trent Alexander-Arnold will ask for, and the extra £100,000 a week Jota will ask for? And how will Virgil van Dijk, Alisson and others feel about signing new deals when the top earner last summer was £200,000 a week (Salah) and now that guy is on £400,000 a week? This is how wage bills evolve, and why they must be controlled.
(Look at the chaos caused by Lionel Messi’s at Barca. When Barca ended up £1.3bn in debt, it was admitted that as much as Messi deserved his money, the fact that all the others players then asked for more money is what wrecked them. Increase the ceiling, and everyone lower down wants to move closer to the new limit.)
Again, doubling Salah’s wages is affordable, in a vacuum; dealing with the potential £100m-a-season rise in the wage bill if everyone else ups their demands, in line with the new ceiling (even if still below that ceiling) would cause chaos. Everyone in the squad surely accepts that Salah should be the top earner, but if he’s on twice what the next-best paid player is, there’s a chasm, a disparity. As well as Barca, the wage structure madness at Man United and Everton in recent years helps to explain why hard-working mid-tier players get pissed off when someone else comes in on two, three, four or five times the money.
Liverpool also cannot find themselves with souped-up sponsorship deals that make them the biggest earners in the world. (Which two clubs voted against nepotistic deals? Man City and Newcastle.)
City, for all their intricate brilliance, continue to do it with all the money, and in that sense, you can’t blame them. (You can blame them for any financial chicanery, mind, that has been exposed several times.)
As I always said about Jose Mourinho: let’s see how he does without the money. It’s like the fastest person in a bike race – while the rest may take EPO and cycle away as hard as their legs will pump, they’re competing with the guy on the rocket-boosted Kawasaki Ninja.
Even with a big budget at Manchester United, some money at Spurs and a fair chunk at Roma, Mourinho is diminished by both time and the lack of having twice as much money as everyone else. His Chelsea squad still remain by far and away the costliest in English football, when adjusted for inflation. City can take comfort from the fact that they didn’t distort the market in quite the same way as the arrival of Roman Abramovich. Chelsea blew the bloody doors off (and Man United followed suit, to keep up, at a time when all the other clubs were cut adrift financially).
But in time, FFP slowed Chelsea (until Covid meant a loosening of the laws), and Man City’s attitude to FFP? Well …
(Google suggests: “Manchester City owner Sheikh Mansour bin Zayed al-Nahyan would allegedly ‘rather spend £30m on the 50 best lawyers’ and sue Uefa ‘for the next ten years’ than accept their punishment.”)
My main concern in terms of football writing is the weaselly way of finding one financial figure that, out of context, can distort the picture. No model is perfect, but TPI removes such sleights of hand.
To pretend that one big gross spend, that wasn’t a particularly big net spend, that in turn was still leaving only the 4th-most expensive team, and suggest that it was the same as buying success, is cheap and tacky.
Another example. Uninflated, Tanguy Ndombele (£65m) cost Spurs more – ignoring inflation – than any fee Man City had paid for a single player up to that time; yet to claim that therefore Spurs are a super-rich club on a par with City would be madness. Yet if you take inflation into account, City have spent that type of money or more many, many times. And they still benefit from several of those players; indeed, 11 at £62m or over when adjusted for inflation.
Squad Costs Shows The Loaded Dice
While I discussed the latest £XI figures in my last article (Substack newsletter version can be found here), it’s also worth looking at the current inflation-adjusted squad costs, to show the depth that the richest clubs have. (Graphic was from a couple of games ago, and Chelsea’s £XI will increase with the more regular inclusion of Romelu Lukaku, and any games Kepa plays.) A reminder: the £XI is the average price of all starting lineups, adjusted for inflation.
Again, Man City and Chelsea have spent big on transfer fees in the Covid era, whereas Liverpool haven’t. That’s the reality of being a sustainable club, not a petrodollar plaything.
While Liverpool have the 3rd-highest £XI, and have a wage bill around that level when applying the greater reliance on bonuses (in order to only pay big bucks when big bucks are earned), the overall cost of the squad remains below the richer clubs.
But let’s look at squad costs.
Now, you can half-ignore the horizontal axis, in that points are harder to come by the higher up the table you go: you could put together a team of decent free transfers and youth team graduates and still expect to win some Premier League points. (No team, no matter how cheap, has won zero points.)
What the horizontal axis does show, of course, is the different performances from the three clubs with the £1billion+ squads. You can’t argue that Man City have not spent their money better than Man United.
(Indeed, United and Everton have been shocking examples of how not to spend money in recent years – yet it doesn’t alter the fact that if a richer club gets it right, they are hard to compete with. Also, Chelsea have £200m+ of players out on loan, which is fairly incredible. They’re included in this chart, as they own the players, but they are not part of their 2021/22 squad, unless suddenly recalled – as has just been the case with Kenedy.)
But the vertical axis shows the squad costs. The comparison with the £XI shows that Liverpool’s spending has gone into the XI: Virgil van Dijk, Alisson, Fabinho and others players who were never going to be part of a rotation policy.
Liverpool then rely, with one or two exceptions, on cheaper backups (and youth team graduates); albeit in the case of Naby Keita, that’s through a failure to stay fit and establish himself in the team.
And while Liverpool’s front four were not super-expensive, and have all been exceptional value for money, they are not cheap either – in 2022 money, at almost £220m combined. (Or £55m per player.) Again, that’s not their current value, but the fee that was paid for them adjusted to present day prices. And again, Aguero alone was £177m adjusted for inflation. Sterling, de Bruyne, Grealish and Riyad Mahrez cost twice as much, at £437m.
Again, van Dijk and Alisson were largely funded by the sale of a player fans thought it crazy to sell, but who is now at Aston Villa, after flopping at Barcelona. With FSG improving the club’s infrastructure and general operating methods, the money goes back into the team, via wages (especially in 2021/22, with 11 new deals already handed out, most of which are to important players) and transfer fees. Nothing leaves the club, but nothing is artificially injected. (It’s the best the club has been run since the days of Peter Robinson, who sadly died today, aged 86.)
The fact that Man City are a great side cannot be ignored; that they’ve achieved what they have on a much bigger budget than Liverpool should not be able to be distorted or smoke-screened by cherry-picking misleading stats.
By all means sing City’s praises if you work for them or a media outlet close to them – or even if a neutral who enjoys their football; but don’t distort the truth about Liverpool’s financial clout, which is considerable in many terms, but dwarfed by those with sportswashing cash dripping with oil.
