It is a sign of intent from Arsenal and a reflection of where the women’s game is heading.
“It’s a privilege and an honour to sign for Arsenal,” said Smith.
“It’s my dream to compete for the biggest titles here in England and in Europe and I’m excited to get started and contribute to doing that here with Arsenal.”
Head coach Renee Slegers added: “Olivia is an exciting young player and we believe she can make a big contribution here at Arsenal. We’ve been impressed by her mentality and character, excelling in two European leagues at such a young age. I know she has a level of ambition that matches our own and we’re looking forward to working with her as she continues to grow at the club.”
Olivia Smith signs on for Arsenal
There is an arms race between two developing superpowers − the European champions Arsenal and Chelsea. The Women’s Super League champions previously held the record for a fee paid for a women’s player when they signed Naomi Girma for £890,000 ($1m).
Chelsea are also understood to have held an interest in Smith, the 20-year-old Canadian forward who enjoyed a superb first season in England. But Arsenal were the only club prepared to pay Liverpool the unprecedented fee.
Arsenal wanted to strengthen their squad to ensure they do not stand still after beating Barcelona in last season’s Champions League final.
There is a desire to develop and evolve the team in what will be their first full season under head coach Slegers. More broadly, the club want to bring down the age profile of the squad.
Smith ticks all of those boxes. Arsenal are paying for potential. If Smith can reach the levels Arsenal and those who have previously worked with her believe she can, she could be worth double in a few years’ time.
Arsenal have plenty of options in the forward area and Smith, who usually plays on the right-hand side of the attack, will not be a guaranteed starter. Her biggest competition on the right will be Chloe Kelly and Beth Mead. Stina Blackstenius can also play out wide while Caitlin Foord tends to play on the left.
There is a definite sense of succession planning with Smith’s arrival. Mead and Foord, both 30, have one year left on their contracts and could move on at the end of next season.
Liverpool broke their transfer record when they signed Smith from Sporting Lisbon for £200,000. In her first season in England she scored seven goals in the WSL, a third of Liverpool’s tally.
Her former Sporting coach Mariana Cabral said earlier this year that she believed Smith was ready for bigger things. Liverpool were reluctant to sell her but could not turn down Arsenal’s offer.
The forward has long been on the radar of the biggest clubs. She made her international debut aged 15 years and 94 days, making her the youngest ever player to represent Canada.
Smith spent one year at college in the United States before deciding she did not “fit in” with the style of play. From there, she joined Sporting and her 16 goals and 10 assists in her first season attracted the attention of Liverpool.
A player with physical and technical qualities, Smith is powerful and skilful. It is not a surprise she became a target for opposition teams, with many resorting to stopping her by force. Her former Liverpool manager, Matt Beard, said she needed greater protection from officials or could end up getting seriously hurt.
It is clear why Arsenal wanted Smith and why they broke the bank to get her.
Chelsea, who went unbeaten domestically, recently secured investment from Alexis Ohanian, the husband of former tennis champion Serena Williams.
The WSL champions are showing no signs of slowing down when it comes to strengthening their squad and, if Arsenal want to keep up, they know they have to be willing to invest.
Chelsea beat them to the signing of Girma and Keira Walsh in January, two players Arsenal wanted to recruit.
There was a determination from Arsenal to ensure they did not also lose out on Smith to the same rival club.
Arsenal are desperate to end Chelsea’s dominance at domestic level. They have won six straight WSL titles and also won the FA Cup and League Cup last season.
That is something that does not sit well with Arsenal. The club have acted fast in this transfer window already, with Chloe Kelly and Taylor Hinds having signed on free transfers.
Smith is the eye-catching addition and it will be a relief that they have won the race to secure her services.
Trevor Francis became the first £1m player in men’s football in 1979 and the women’s game is finally getting its moment 46 years later. It is a sign of the unprecedented level of growth there has been since the WSL formed in 2011, when players moved between clubs on free transfers or for nominal fees.
Arsenal matching Chelsea’s willingness to spend big should ensure a more competitive title race, but it is clear the WSL is becoming more and more a league of the haves and have-nots.
There are a limited number of clubs who can afford to pay fees as big as the ones Arsenal and Chelsea are committing to.
Even Manchester City and Manchester United, who are always competing for Champions League qualification, have not gone beyond the £300,000 mark.
For the clubs further down the division, it is an even greater task to try to keep up.