It could be a busy summer for Liverpool and head coach Arne Slot.
It could be a busy summer for Liverpool and head coach Arne Slot.
With Arne Slot suffering nearly as many defeats in a week as he had done in his opening eight months in charge of Liverpool, the spotlight has been cast over improving the squad. The knee-jerk reactions from disappointment against Paris Saint-Germain and Newcastle United echoed loudly - during a season where the Reds were headed into the unknown.
Though Liverpool sit 12 points clear at the top of the Premier League, something they have won once in 30 years, there have been some signs that the current crop needed reinforcements. During the summer, Martin Zubimendi rejected a move to Anfield, before the Reds uncovered a viable alternative in Ryan Gravenberch.
But as the importance began to be heaped on the Dutchman, there was a feeling that cover was needed in January - which didn't come to fruition.
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Now in light of two defeats in a week, Liverpool and their attacking threat have come under the microscope. Mohamed Salah has been in fine form this season, topping the Premier League goal and assists chart, but as evidenced against PSG and the Magpies, when he doesn't perform, the struggles are clear to see.
Slot and the Liverpool hierarchy face key decisions over the contract of Trent Alexander-Arnold, Virgil van Dijk and Salah, who are all out of contract in the summer. The prospect of replacing the trio would likely cost on average, or in excess of, £60million.
"The idea of ‘next summer’ is something that has rankled with some elements of the Reds fan base when it comes to their transfer activity," Reach PLC's Business of Football writer Dave Powell explains. "The 2023 summer midfield rebuild saw the likes of Dominik Szoboszlai, Alexis Mac Allister, Ryan Gravenberch and Wataru Endo all arrive, but the price tags that came with those deals were dwarfed by what some of their rivals spent.
"But transfer spend does not equal success, and for some of their rivals who spent so heavily during a period when the Reds were more reserved, and on players who have not been able to deliver, the issues around remaining within the confines of the Premier League’s profit and sustainability rule (PSR) have amplified due to bad business, and clubs like Manchester United and Chelsea are having to be far more mindful when it comes to what they can do in the market this summer if they don’t achieve UEFA Champions League qualification.
"Things for Liverpool are different, and they have been for quite some time under the ownership of Fenway Sports Group, whose approach remains divisive among Reds fans. FSG’s more measured approach to achieving value in the market through greater focus on underlying data has seen them more comfortable with walking away from big money deals, feeling they have a greater grasp of what players should be worth against the contribution to the team they would be expected to make.
"For the 2023/24 financial year, Liverpool made a £57million pre-tax loss, following on from a £9million pre-tax loss the year before. In 2021/22 they made a £7million profit.
"For assessment purposes up to the end of the 2024 financial year, with PSR allowing £105million of losses over a three-year period, with allowable deductions for investment into infrastructure, the academy, the women’s team and community initiatives, which for Liverpool has stood at around £107million for the three-year period, the club had significant PSR headroom to the tune of some £153million."
A summer spending spree has been reported, but there always remains the threat of breaching the Premier League's Profit and Sustainability Regulations after falling below the red line.
However, their return to the Champions League and success Group Phase, which saw them top the group with seven wins out of eight, will have boosted the balance sheet at Anfield.
Powell added: "For the current financial year, which for the Reds runs until the end of May 2025, the £7million profit will drop off, but a season back in the Champions League and the near £100m in attributed revenue that the club have gleaned from that, will likely see them swing back towards the black once more, meaning that the PSR headroom for this summer will be almost certainly be a higher figure when it comes to what they are allowed to spend.
"But spending wisely will still be the name of the game, and it is hard to envisage that the club will be looking to engage in reckless spending when it is something they have no history in doing. But they can spend if they need to. They have some big contract renewals to sort, yes, but with transfer fees amortised over the length of a contract, capped at five years, a £300million spend, as has been reported, would work out at some £60million per year in terms of additional amortisation costs on the balance sheet.
"That £300million seems fanciful, but a spend in excess of £100million this summer seems more appropriate, but that may have to be higher if they are faced with having to replace the output of Mohamed Salah, Virgil van Dijk or Trent Alexander-Arnold, and shopping in the Premier League market for the likes of Milos Kerkez will come with a premium attached, likely above £50million.
"Liverpool can spend, and spend big, but what they will actually spend will be determined by who stays and who goes."