Transfer spending last 5 years

[Devil's Advocate]

Bravo. Net spend is an utterly meaningless metric, plus the only truly reliable figures are in the accounts. As you say, wages is another key metric and the actual cost of the squad should be looked at as wages plus amortisation. Net spend doesn't take into account any wages or amortisation that goes off the books, via sales, for one thing. So if you buy a player for £50m and pay him £100k a week, that's £15m on your annual player costs. If you also lose 3 players on a free transfer who were on £100k a week, you've saved £15m in wages a year, which effectively covers the new player's cost. But the net spend wankers would see that as a £50m net spend when in reality it's had no impact on the bottom line at all.

So after that spending spree of over £200m in the summer of 2017, with net spend supposedly around £120m, our wages and amortisation only increased by £7m when all that was taken into account. And half of that was offset by a small increase in the profit on sale of players. That's just one illustration of how net spend is a meaningless metric.

Another is that clubs, particularly successful ones like us and Liverpool, and even united, generate significant amounts of cash even after paying wages and other expenses. Typically we'd generate around £120m of spare cash each year, before player sales, which will be available to spend on new players (and other things, such as infrastructure, debt repayment, etc). The real question should be, how much does each club generate and reinvest into its squad? We reinvest 100% while Liverpool only reinvest around 80%.

Net spend isn't utterly meaningless. It is an indicator and one that Swiss Ramble has used more frequently in his posts because it is the language understood more widely by football fans. Like you, he also explains (and always has) that it is more nuanced - wages + amortisation, transfer profits etc etc.

For example, in Swiss Ramble's great post today he draws everyone in with gross/net spend and then goes on to explain again about wages + amortisation.

As an aside, let's not forget the terminology "net expenditure" is included as a note to our accounts each year.As an example, from 2021 accounts below. Of course you are already aware of this be because you read them but it wouldn't be there would it if utterly meaningless?

25. EVENTS AFTER THE REPORTING DATE
Since the year end the Club has entered into agreements to acquire the football
registrations of Jack Grealish (from Aston Villa), Kayky Da Silva Chagas (from Fluminense),
and Scott Carson (from Derby County). The football registrations of Jack Harrison (to Leeds
United), Ivan Ilic (to Hellas Verona), and Lukas Nmecha (to VfL Wolfsburg) have been sold.
The net expenditure on these transactions was approximately £79.8m.


As for Liverpool only reinvesting 80%, I saw your commentary on this a while back but cba at the time checking/reconciling your figures. It does feel right though and it would be great if you could summarise this again in a way that is digestable.

 

[Brightwell Bros.]

We are a well run football club. Possibly one of the best run football clubs in the world. We've obviously spent a lot of money to get here, but if our owners sold up tomorrow they'd leave with a tidy profit and we'd be left with a well-run football club. Pep is a genius and we will never see this level of domestic domination again, because if we are honest there are 4 or 5 clubs who can and do match us, give or take, on spending but don't get near us on the pitch.

 

[domalino]

Liverpool fans discovering the transfer fees the Liverpool Echo tells them aren't true...

 

[Brightwell Bros.]

Liverpool fans discovering the transfer fees the Liverpool Echo tells them aren't true...

I've said for a while that there's plenty to criticize our owners for, but 99% of stuff lobbed by opposing fans demonstrates the geopolitical and business understanding of, well, let's be blunt here, your average football fan. I really think most Liverpool fans think we are funded by Bond villains who have set up 1000s of fake companies in order to launder their reputation, and that Liverpool are Bond trying to stop that.

 

[Manchester33]

Net spend isn't utterly meaningless.

In a business sense, it is.

Financially, you can have both a horrific net spend on transfers, and be profitably run.

Their ownership model is hilarious, but United proves that. They will be able to spend insane amounts indefinitely, and they don't give a shit about net spend because the company generates so much money.

 

[domalino]

In a business sense, it is.

Financially, you can have both a horrific net spend on transfers, and be profitably run.

Their ownership model is hilarious, but United proves that. They will be able to spend insane amounts indefinitely, and they don't give a shit about net spend because the company generates so much money.

Net spend has it's uses. It's not perfect, there's no perfect, easily digestible, easily available metric for total expenditure on a squad.

One of the problems is that football fans have been conditioned to think that a net spend of 0 is good, when actually if a football club is not investing any of the 100s of millions they get from TV money and sponsorships into transfers then they're either paying way too high wages, or they're underinvesting in the football side of the club.

 

[The blue phantom]

When Martin Samuel mentioned this Simon Jordan ridiculed it and said it was bollocks. Put his figures over and the Scousers had a net spend £200 Million less than us. Wasn't even challenged by that **** White and it was taken as Gospel.

 

[domalino]

I think this is a graph that fairly represents the financials of both teams.

But it has to be weighed against the fact that City were competing for titles and in the CL for every single year of those 12 years and Liverpool were not.

 

[Semper aggressus]

In a business sense, it is.

Financially, you can have both a horrific net spend on transfers, and be profitably run.

Their ownership model is hilarious, but United proves that. They will be able to spend insane amounts indefinitely, and they don't give a shit about net spend because the company generates so much money.

Chelsea seem to be the same. Though I’m not sure how as we generate more than the chavs don’t we?

I hope we can overtake those rag shits in terms of income so we can sign whoever we want. Those making the decisions at City tend to get most of the signings right so with almost unlimited funds like the rag scum we’d win everything every season.

 

[Manchester33]

Chelsea seem to be the same. Though I’m not sure how as we generate more than the chavs don’t we?

I hope we can overtake those rag shits in terms of income so we can sign whoever we want. Those making the decisions at City tend to get most of the signings right so with almost unlimited funds like the rag scum we’d win everything every season.

The beautiful thing is that as long as the Glaziers own United, we don't need to overtake their income.