Even Pep Guardiola must know real Liverpool transfer truth as Man City have ’12 -point ‘advantage

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Liverpool are not a poor football club by any means. The problem they have is the context in which their wealth must be viewed.

According to the most recent Deloitte Money League, the Reds have a turnover of € 550.4m, the seventh most in world football. If they rarely came into contact with the six clubs above them then it wouldn’t be so bad, but the teams which pipped them to the Premier League and Champions League respectively this season are first and second in the standings.

Manchester City and Real Madrid earn between £ 90-95m more than Liverpool, with Bayern Munich, Barcelona, ​​Manchester United and Paris Saint-Germain also ahead of the Reds in the Money League. But in terms of competing for the major prizes, what does this actually mean? What’s a reasonable expectation for Liverpool in light of their financial standing within the game?

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Sporting intelligence agency Twenty First Group have tried to calculate a statistical answer to this question, and their findings were recently published in The Times. Using the most recently available accounts for the 20 teams in the Premier League, they figured out how much each club spent on wages and amortization.

The latter is an accounting practice which spreads a transfer fee over the duration of the contract which the new player signs. As an example, if a forward is signed for £ 50m on a five-season deal, then. 10m will be applied to the books for each year of their contract. This system enabled Liverpool to sell Sadio Mané to Bayern Munich for an initial fee of less than he cost, yet in accounting terms they made a profit.

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The Reds’ wages and amortization figure was £ 419m, which put them fourth in the standings behind the usual suspects: City (£ 519m), Chelsea (£ 496m) and United (£ 443m). As much as it was disappointing to miss out on the title by a point, the Reds overachieved against their finances to finish second, which is to their credit.

While these figures set a fair level of expectation on each club, they still lack context. For instance, the Premier League runners-up for the last two seasons got 92 and 74 points respectively, so while they both finished second, there was a clear gulf in performance level between the two. Yet if they had enjoyed the second largest budget then both teams would’ve met expectation.

Twenty First Group addressed this by implementing a points calculation. Using a baseline of 23 points as the minimum a team should achieve – though eight Premier League teams since 1995 have failed to – they then added 1.2 points for every £ 10m a club spent on wages and amortization.

By this measure, Liverpool should have been good for 74 points in 2021/22. Their actual total of 92 gave them the largest overperformance in the division, with a resurgent Tottenham Hotspur (+14 points) in second. With Brentford top in terms of proportional improvement and Brighton in the top five too (as are the Reds and Spurs), clubs which favor an analytical approach have shown others how to overachieve their financial standing.

More interestingly, the model suggests that City should have got 86 points this season. While they too earned more than expected, in financial terms they hold a 12-point advantage over the Reds before a ball is kicked, which goes against the narrative that Pep Guardiola tried to spin last month (“For the people, it’s just money. OK, if you want to think about that, think about that,” said the Man City boss in May, while bemoaning Liverpool’s previous spending power. “I know exactly what I’m working for here and I say ‘okay, don’t give me credit, don’t give us credit but let us give ourselves credit’. “).

Of course, Liverpool could theoretically double the wages of every member of their squad, leading the statistical model to believe they had a much better chance of winning the league. In this perverse example the reality might actually be the opposite, with previously hungry players less driven thanks to their stunning new salaries.

A more productive (and realistic) boost will be provided by Darwin Núñez, whose potentially club-record transfer fee will have a high amortization value, and if the relatively low-cost pair of Fábio Carvalho and Calvin Ramsay make significant contributions in 2022/23 , all the better. Liverpool can now quantify their predicted points gap to City, though, and there’s no escaping the fact it will be hard to overcome.

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