“Bottoms in the investment world don’t end with four-year lows, they end with 10 or 15-year lows.”
- Jim Rogers
Albeit Jim Rodger’s statement is more applicable to financial stock markets, investments, returns and sustenance, his underlying philosophy remains unquestioned. Bottom-line results do matter. I’m not being myopic – it’s not about Liverpool being out of the Champions’ League for 4 years but about the fact that Liverpool have not won the elusive English Premier league for 23 years.
If you look around, this summer has seen a sea of changes in the upper half of the Premier League – Sir Alex retiring, Mourinho back at Chelsea, Pellegrini at City, Wenger spending(!), and Spurs possibly losing Bale for a ridiculous fee. Among these, Liverpool fans perhaps have been through the most emotional toil they have endured in recent years. With over 700 appearances under his belt (or cleats), this summer saw Jamie Carragher hanging up his boots – a Liverpool legend and one of finest example of a one club man in world football. Pepe Reina also ended his 7 year association with the club. Liverpool fans & Reina himself would have liked it if the departure was much more amicable.
If that wasn’t enough, Luis Suarez’s ongoing ramblings have tested Liverpool fan’s steadfast support and patience past a tolerable limit. Subsequently, it has done wonders for his image in the eyes of Arsenal fans – He is no longer a racist, egoistic man who has no character and shame. The same set who previously claimed that Suarez should no longer play football as it’s completely unacceptable and out of character for anyone to behave like this. How could he!
Suddenly, Luis is Arsenal’s best hope of being title contenders and he is no longer a child only a mother could love. I could go on with this but that would miss the point of this article. The Luis Suarez saga however, is a key note in the entire plot. Liverpool’s stance on Luis – particularly the way Rodgers has handled the situation is commendable and deserves appreciation.
Liverpool in the transfer market
In November last year, Liverpool formed a transfer committee – not something that we hear everyday or at every club. The committee encompasses Dave Fallows (Head of recruitment), Barry Hunter (Chief scout), Michael Edwards (Head of Performance & Analysis), Ian Ayre (Managing Director) and finally first team manager Brendan Rodgers.
I had hinted back in May that I could see Pepe Reina leaving the club which people refused to believe. It wasn’t an ITKish hit-and-a-miss. The conclusion was drawn from how Liverpool operated in the previous window and some simple analytics. Although I would have liked it if Pepe would have continued at the club, the move is a sign of a wave of changes to come.
Here is a quick look at Liverpool’s goalkeeper’s department and their wage structure:
|Player||Weekly Wages||Yearly Wages|
The obvious opinion surfaces – you don’t keep a £110k/week keeper on the bench. However, it was always in Liverpool’s interest to have Simon Mignolet as a replacement, not as competition to Reina. Here are some Mignolet statistics.
Image Credit: Bass Tuned to Red @BassTunedtoRed
The Belgian shot stopper has made more saves than Pepe in the last 2 consecutive years, has a higher save percentage than him and played for Sunderland, who give him a weaker defensive cover than Reina gets at Liverpool. Take that into perspective besides the fact that getting Reina off the wage bill saves Liverpool £5.7m annually. Even after inculcating Mignolet into the wage bill, Liverpool save £2.4m annually.
Side note: On a detailed Reina vs Mignolet comparison, I recommend you read @BassTunedToRed’s piece here
Moving ahead, when you take a quick look at the defender wage structure, things start getting interesting.
A key point which is missing here is Jamie Carragher. Carra retired in the summer and along with him, wages of £120k/week. That is approximately £6.25m per year – not a small amount! Also, here is why I feel Martin Skrtel is about to be offloaded – he’s on £70k/week wages for the season and has made only 23 starts last season. You also can’t help but feel that Brendan doesn’t think Skrtel fits into his system by the bit-part role that he played last season. I’m not questioning his quality – I’m sure Martin deserves every bit of the £70k/week wages he earns. However, as per his performance evaluation, he also deserves more game time. Skrtel won’t be of concern unless Liverpool are looking to replace him with *cough*Papa*cough*
I’m sure you must have noticed by now – you’ve guessed it right. If you apply the same principles, I can’t see Glen Johnson staying at Liverpool beyond this transfer window. I may be wrong of course but his wages of £100k/week principally are not proportional to the value he provides to the team at right-back.
Here are how our midfielders earn:
Captain Fantastic, Stevie G miscues the entire graph like an outlier. Since he is indispensable to the club, it is best to remove him for the purpose of simplicity in analysis.
Here is how the new chart reflects data. *ducks from sight*
There you have it! You’re not having an illusion. Stewart Downing is our highest earning midfielder, only second to Gerrard. Although I have said in the past that I appreciate the way Downing has turned around his campaign magnificently after getting a kick up the backside from Brendan (and he did!); and that he deserves another shot. I still maintain he is good enough to be a squad player but he simply can’t be squad at that £80k! Bushwa! (Thanks Hodgson! edit* -> omg Kenny!)
Oh, and look Jay Spearing is on an absurd contract!
Jury: I can’t see him in a red jersey come September.
For those who feel that at a stretch, it can be argued that Jordan Henderson is a bit on the higher side of the curve considering his young age – his contribution to the team is something that can’t be disregarded. Here is a neutral comparison of Wilshere, Cleverley & Henderson. I’m not suggesting in any way that he is as good as those two, but his contribution as a team player is immense and his value to the team should not be undermined.
Finally, Luis Suarez.
Liverpool currently hold a strong stance with respect to Luis Suarez. Arsenal’s attempt of £40m+£1 was rejected. Suarez does not have a release clause embedded in his contract and in most likelihood, Liverpool will reject a £42.5m bid too. Brendan has maintained that Suarez belongs to the “top bracket of players”, “Liverpool do not have to sell him”, “looking to build rather than break” and “a fee in the region £55m and we’ll consider”.
As a Liverpool fan, and a football fan, I would like to see Brendan Rodgers keep hold of him and get another season out of Suarez. Contrary to what most say, Liverpool needs Luis Suarez this season. Suarez is one of the best there is out there at the moment and without Champions’ League football to lure excellent players, Liverpool have very little chance to attract players of the same calibre (also with the new strategic spending in place). If Liverpool must sell Suarez, they should not negotiate anything below £55m, especially if they are selling to a direct rival for 4th place. I’ll voice a common opinion among Liverpool fans – I’d rather see Suarez leave for Madrid for £40m than to Arsenal for £55m. If Arsenal do put in an offer in that region, I believe Liverpool should sell him even if it is Arsenal – under the obvious condition that we smartly reinvest in 2-3 quality players. However, I do not think Wenger will put in such an offer. (Their record signing is Andrei Arshavin, £15m. They DO have the money to spend this season – however, Wenger will never overpay for a player if he feels the value isn’t proporional to returns)
New players – Finding Hidden Gems
Luis Alberto was bought in for £7m, Iago Aspas for £7m, Simon Mignolet for £9m and Kolo Touré for free. Liverpool have also done a splendid job of getting Andy Carroll off the wage bill plus selling him for £17.8m. We can’t comment anything with respect to how Liverpool’s summer signings will perform but they all mirror a strategic thought process. Also keep an eye on the wages the new players are earning – if they don’t perform, they are offloaded. If they do, apart from the obvious that their transfer value rises – a new contract (after a couple of years) which is still in the meager £60-£70k range. It’s a win-win situation!
|Player||Yearly Wages||Weekly Wages|
Liverpool’s two signings which have been the new Transfer Committee’s work – Phillepe Coutinho (£8m) and Daniel Sturridge (£12m) have been phenomenal to say the least. Their success in the January window was a pilot test for a template they could implement in the summer. These two have been exemplary and fit well into Brendan’s philosophy of playing. Liverpool are looking for value in the transfer market rather than just getting the best out there.
Fans are resistant to change which is quite natural considering their thorough knowledge and the longevity of their association with the game. They have seen a lot things gone wrong in the past and their apprehension towards a new direction is understandable. Liverpool are however competing in a league which boasts of Man City, Chelsea and Man United – their strength in spending, in addition to their presence in the European Cup gives them an edge over any prime target Liverpool set an eye on.
There have been many fans berating FSG on public forums claiming how Liverpool are not being ambitious. Most of the fans have been calling for Marquee signings and claiming FSG are simply asset stripping. I can assure you they are not. If you want quick returns, a football club is the worst investment you could ever make. Liverpool also don’t have a bottomless pit to spend from and if Liverpool play the game according to their rivals, they are bound to lose. Considering the financial wealth of other clubs, Liverpool will only fail if they work in the traditional way. Let me put it this way, the probability of Liverpool succeeding is much higher if they are prudent in their transfer dealings rather than spending a bomb on a few players and hoping they would fare well. This is Liverpool’s best chance to break into the top four after which Liverpool can spend heavily,
The method of spending to win the league with exponentially increasing wage budgets would be the work of Dinosaurs as John Henry would attest. However, if this strategic spending does work, it won’t be long before John Henry with Liverpool, successfully replicates a feat similar to ending the curse of the Bambino.