The past five years have seen Liverpool return to the summit of European football.
While the slow start to this season and perceived lack of transfer spend in the summer window has dominated in the early weeks of the current campaign, the Reds came into the season having gone agonisingly close to making history last time around.
FA Cup and Carabao Cup winners, Champions League finalists and 15 minutes away from winning the Premier League, Jurgen Klopp's men were operating at the peak of their powers. For the squad that almost achieved footballing immortality, they have been a driving force in raising the economic success of the club, with Liverpool having grown into one of the most valuable teams in global sport.
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But while Darwin Nunez arrived from Benfica for a fee that could rise to as high as £85m, the departures of the talismanic Sadio Mane, Neco Williams, Takumi Minamino and Marko Grujic all helped offset that cost, meaning the Reds had a net spend of around £8.6m in the window. With the backdrop of Chelsea and Manchester United spending lavishly without the same kind of player-trading profits, the questions understandably arose around why Liverpool weren't doing the same.
Under the ownership of Fenway Sports Group, Liverpool have operated a more sustainable model than many elite clubs across Europe, placing much emphasis on investment in infrastructure and finding undervalued talent. That approach has seen them secure plenty of wins on the transfer front as well as helping them deliver a healthier balance sheet when compared to many of their rivals.
Liverpool had the ability to spend heavily this summer, although paying inflated transfer fees and breaking wage structures, so soon after they had to bend to accommodate a new deal for Mohamed Salah, never seemed a likely route for FSG.
But how do they compare in terms of how they have invested over the past five years when compared to their rivals? Transfer fee outlay and net spend can offer a guide to how clubs have approached the market, but a look at wage growth and amortisation against revenue growth gives some idea about how clubs have been managing their affairs.
Looking at figures, presented by football finance expert Swiss Ramble, which assessed the audited financial accounts of the 'big six' from 2016/17 to 2020/21 highlighted clear growth for Liverpool but also an increase in costs related to the playing side.
In the last five years Liverpool's wage bill has grown from £208m per season to £314m per season, an increase of 51 per cent. The payroll costs from the 2020/21 period fell from the 2019/20 due to the payment of bonuses from winning the Champions League in 2019. But the 51 per cent rise was still the joint-biggest jump in wages over a five-year period among the big six, with Chelsea also on 51 per cent over the same period (£220m to £333m).
Tottenham Hotspur saw the biggest surge in wages over the five-year period, with payroll rising 61 per cent from £127m to £205m. Manchester City's rise from £264m to £355m was an increase of 34.5 per cent, while Manchester United's increase from £264m to £323m was an increase of 22.3 per cent. Arsenal had the smallest increase among the big six, with their rise from £199m to £238m an increase of 19.6 per cent.
Wages at Liverpool have been rising around 18 per cent faster than revenues, which grew 33.4 per cent over the same period. But that has been the case across the rest of the big six, with Liverpool having recorded the highest revenue growth over the period.
Manchester City's revenue growth stood at 20.5 per cent, the same as Chelsea, while Spurs was 16 per cent. Both Manchester United and Arsenal saw revenue declines over the five years, the impact of a poor European performance in recent seasons compared to the other four. United have seen a 15 per cent decline, while Arsenal's stood at 22.5 per cent for the same period.
Liverpool have invested into a bigger payroll, but there are other transfer related factors to consider over the same period, such as the annual amortisation costs as they appear on the balance sheet.
Amortisation is how transfers are accounted for; it is the guaranteed fee spread over the life of a contract, so the amortised cost of Nunez to the Reds will be £64m divided by six years, meaning £10.7m on the balance sheet. These aren't costs that are to be paid, in some instances the fees have been paid in full or have remaining instalments, what they are is the costing of these transfers for accounting purposes.
Over the last five years Liverpool's amortisation costs have risen from £68m to £108m, a rise of 86.2 per cent. That is the largest increase among the whole big six.
Chelsea's annual amortisation grew from £88m to £162m (84 per cent), Spurs' £43m to £74m (72.1 per cent), Arsenal's £77m to £117m (52 per cent) and Manchester City's from £122m to £146m (19.7 per cent). Manchester United saw a decrease in their annual amortisation over the five years, dropping from £124m to £120m, a drop of 3.2 per cent.
The five-year picture shows that Liverpool have plenty of room to spend in comparison to their rivals, and that they have invested in the on-field product at a more accelerated degree than their rivals.
With record revenues of more than £600m predicted for the next set of accounts, according to forecasts presented by analysts at sports business website Off The Pitch, it will need to be a trend that may need to accelerate if the Reds are to make sure they are fighting on all fronts.
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