Barcelona’s £ 1billion warning proves Liverpool’s transfer approach is right
It has been a month since many questions have been asked of Fenway Sports Group and their approach to Liverpool.
These questions stem from the inability, so far, to resolve what has been a glaring problem at Liverpool for some time, with their lack of depth at center-back a point of contention week after week.
Now, with Joel Matip the final center-back set for a sideline spell, joining longtime absent Virgil van Dijk and Joe Gomez, the need for the FSG to back Jurgen Klopp in the market before the transfer window closed was bigger than ever and the Reds have decided to bring in Ozan Kabak from Schalke and Ben Davies from Preston in a bid to retain their Premier League crown, or at least secure Champions League football next season, which is by no means inevitable.
FSG has been right to question their lack of action so far, and if their dogged approach does not pay off in the long term, they are playing a very dangerous game by risking their relationship with the supporters.
However, it is important to put things in context.
Liverpool are not in debt, enjoyed a fantastic set of financial results in 2018/19 and are expected to feel less heat than some in the face of the coronavirus pandemic.
They are also continuing the Anfield redevelopment and have this season moved to a new multi-million pound training ground and laid the groundwork for future success.
Their planned expansion from the end of Anfield Road will not only increase capacity, but it will create more business avenues, as will their bid to apply for a license to host more non-football events during the offseason in a future that will hopefully come to some sort. from normal in the months and years to come.
FSG also tabled plans this week to move forward with a major redevelopment around Fenway Park, the home of their Boston Red Sox baseball franchise, in a show of commitment to the organization’s future growth. .
It at least gives a glimpse into the future, with a lot of potential for Liverpool and FSG.
One glance across Europe and you see the fires burning.
Barcelona, arguably the biggest football club on the planet, are facing a period of austerity unlike anything they have seen before. A club where excesses are not only expected but encouraged, but Barça is now in debt of a billion pounds sterling.
Their latest accounts showed a loss of £ 85.9million in the past fiscal year, with the club largely blaming the effects of the pandemic.
And yes, although the pandemic is hitting them hard, that’s not the only issue that has pushed the La Liga giants to the brink of collapse, at the risk of defaulting on huge loans from major US banks and banks. be forced to impose massive salary cuts on their players. and the staff.
Liverpool’s transfer policy has long been one that relies on details, on ensuring value for money, ensuring that the right level of due diligence has been done to ensure that the new addition is as perfectly suited as possible, or at least. reduce the risk of them being a failure. It’s hard to say it hasn’t been a huge success.
Philippe Coutinho signed for the Reds for £ 8million but was sold to Barcelona for £ 142million. A phenomenal increase.
Barcelona still owe Coutinho money, around £ 35.5million, but as the Reds sold their debt to a third-party finance company, which paid the money to Liverpool, the Reds actually received the sum even if the Spanish side has not yet paid it. .
Money owed to Coutinho is the tip of the iceberg as a plethora of talent remains unpaid in full, £ 111.5million still overdue and Barca spend 74% of the money coming into the business only on wages. And when you factor in that Barcelona have even budgeted 25% of fans at the stadiums, you can see the huge area of concern.
Major deals with Nike are contributing to their bottom line, but they’ve already seen their major shirt sponsorship with Rakuten decline in both length and value.
Another determining factor is their plans to develop Espai Barça around Camp Nou, which would have improved the stadium and created new sources of income around the world-famous stadium. Barcelona took out a large loan from Goldman Sachs for the project, although a Spanish economist, Marc Ciria, claims the financial situation has been so dire that Barca used the loan to pay players’ salaries instead of the use to speed up Espai Barça.
Such is the financial concern that Barca, according to various reports, have approached financial institutions from which they have taken loans to ask for more time to make repayments.
Get all the latest Liverpool news, squad news, transfer rumors, injury updates and analysis of what’s to come for the Reds.
You will also receive the latest transfer discussions and analysis direct to your inbox every day with our free email newsletter.
Linking them to huge names in the transfer window can go on, but it looks like nothing more than the storefront when the store is being engulfed in flames.
“If I were a big European club I would wait until the deadline for Barcelona accounts and then make a ridiculously small offer for their players; they would hardly have a choice and could bite.” This is what an agent told ESPN.
Real Madrid themselves are in a major financial situation, burdened with debt and in need of funding for a redevelopment while trying to keep themselves on top of the tree.
And although the financial crisis is enveloping them, their enormous capacity to generate income remains enough to see them both occupy the head of the Deloitte Money League, although the hidden truth about their debt problems skews the picture somewhat.
Liverpool struggled to resolve their defensive issues and make sure they stayed on track.
For Barcelona, they appear to have to sell some of their precious assets and face a period far from the success that has seen them become one of the most iconic clubs in football history.
Liverpool have a clear path to follow. The grim days of George Gillett and Tom Hicks and the mammoth cast a distant memory. Barcelona could only wish for this at the moment.