When it comes to transfer spend, Liverpool and Tottenham Hotspur are more closely entwined with each other than they are with the rest of the so-called ‘big six’.
The ownership of both clubs has sought to build infrastructure to deliver value and support investment into the team and, ultimately, the chances of succeeding on the pitch.
Where the spending of their rivals on transfer fees has considerably outpaced their own, a change of approach has not been enforced despite some pressure from fans keen to ensure that their clubs don’t get left behind and taken out of the trophy equation.
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For Liverpool under Fenway Sports Group it is a model that has had success, although the hiring of Jurgen Klopp as manager in 2016 was a pivotal moment in its progression. The fact that FSG have not had to deal with the tumult that comes with the chopping and changing of managers due to Klopp’s stellar work in rebuilding the club has meant that, until this season at least, the model was seen to still be functioning as intended.
Where FSG invested in a redeveloping Anfield into a world class venue, Spurs’ ownership of ENIC and Daniel Levy put their future hopes in the delivery of the state of the art £1bn Tottenham Hotspur Stadium, a development that they feel will provide the revenue opportunity for the club to continue to grow and invest into on-pitch success.
Liverpool and Spurs are the most obvious examples of clubs being run with a business-minded approach to underpin success, which is ultimately what the clubs exist to strive to achieve. But achieving that has become harder and harder in recent years with both clubs outspent heavily in the transfer market by the likes of Manchester City, Manchester United and Chelsea.
Chelsea, having been taken over by Todd Boehly and Clearlake Capital last year, have taken things to a new level in recent times, with over £500m spent across two transfer windows and the club handing out seven, eight and nine years deals to players in a bid to drive down amortisation costs on the balance sheet (the accounting of transfers through transfer fee divided by length of contract).
With Manchester City having been landed with over 100 charges of alleged breaches of profit and sustainability rules by the Premier League, and UEFA keeping a watchful eye on Chelsea, changing their own rules from this summer to cap contract lengths at five years, there is a push to try and tackle the spending of major European football, predominantly in the Premier League.
Liverpool and Spurs are no paupers, the Reds spent the second highest sum on wages in 2021/22 (£366m) due to bonus payments coming into play, but when it comes to how willing the owners are to accept heavy losses to fund transfer spend, their approach differs from some other ownership groups.
Spurs chairman Levy and FSG principal John W. Henry will undoubtedly be pleased with the change in regulations that will arrive this summer from UEFA, where a newly introduced cost control rule will restrict spending on player and coach wages, transfers, and agent fees to 70 per cent of club revenues. Rules will permit 90 per cent in the first year, the figure reaching 70 per cent by year three.
Levy believes that the new regulations will be impactful when it comes to the spending in the Premier League, regardless of who is the owner of the football club.
Addressing questions during an appearance at the Cambridge Union, Levy said: “There are new rules coming into effect this season, UEFA rules where sustainability is going to become much more paramount in people’s minds.
“You will be limited to the amount that you can spend on wages and transfer fees, effectively the amortisation element, as a percentage of your total turnover. It is starting off at 90 per cent and after three years it is going down to 70 per cent.
“The impact of that is effectively some form of wage control. So I think that even though clubs have been spending very heavily, and you talk about someone like Chelsea, now the new rules come into effect this summer I think you’ll find that regardless of who is the owner it is going to have quite an impact on the financing of football.”
Liverpool principal owner Henry has long been an advocate of running the club in a sustainable manner, something that has had a knock on effect with regards to transfer spend that has been viewed less than favourably by some Reds fans, particularly during a season of struggle for Liverpool such as they are enduring this campaign.
During an exclusive interview with the ECHO last month, Henry said: “We continue building at Liverpool Football Club in a responsible manner.
“We’ve seen many football clubs go down unsustainable paths. We have and will continue to focus our attention on investing wisely in the transfer market and we remain incredibly proud of our squad.
“At the same time we continue investing in our training facilities, our main stand and currently the Anfield Road stand. These are all physical reflections of our resolve and how very seriously Fenway Sports Group takes its responsibilities for this great club.”
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