Despite the need for reinforcements, Liverpool’s salary expenditure is expected to decline.
Payroll is by far the biggest financial burden that football clubs must deal with.
While the transfer market’s highest spenders receive a lot of attention, success is frequently more directly correlated with a club’s wage cost. There are outliers, with Manchester United spending the most on salaries last season at £384 million and Liverpool coming in second at £366 million. However, Cristiano Ronaldo was a significant factor in the £59 million increase in United’s wage bill year over year, while Liverpool’s own $52 million increase was due to bonus payments and contract extensions. Manchester City’s £354 million, which is $1 million less than the prior year, would have been the highest in a more typical year.
Due to Liverpool’s lack of competitive success for the 2022–2023 accounting year, its payroll bill will decrease the following year, therefore the bonus payments made the year before won’t be a problem this time around.
However, there would be the Mohamed Salah contract extension to take into account. Despite his big salary, this wouldn’t drastically impact the Reds’ wage structure, especially given the lack of bonuses and the significant number of other contract extensions made the year before.
The departures that have been observed and are anticipated to continue this summer won’t be shown in the accounts until the 2023/24 financial year is published, which is most likely in early 2025. Liverpool’s fiscal year runs through the end of May.
However, there are some estimates that can be made about how the Reds will be able to reduce their wage bill and how much financial leeway they would have to bring in new hires, often on less money than those who have left Anfield or who may be about to leave were on.
When their contracts expired this summer, Roberto Firmino, Alex Oxlade-Chamberlain, James Milner, and Naby Keita all left the Reds. Using the earnings previously recorded for each of the four players who have left, the Reds’ wage expenditure has been reduced by about £480,000 per week, or little under £25 million annually. If Jordan Henderson leaves to join Al-Ettifaq in Saudi Arabia and Fabinho follows him to Al-Ittihad in the Middle East, the payroll would be reduced by a combined £370,000 per week, or £19.2 million annually, based on reported wage statistics. With the prior data added, that comes out to £850,000 per week or £44.2 million annually.
Naturally, Liverpool must now replace any outgoing players. Despite the fact that Alexis Mac Allister and Dominik Szoboszlai’s addition has already eaten into cost savings and that neither player is at the top of their pay scale, according to reported earnings, both players are making about £250,000 per week together, or about £13 million annually. That is the salary impact of Keita and Oxlade-Chamberlain’s exits.
Even though Liverpool will need more reinforcements this year, especially if Henderson and Fabinho leave, it seems more likely that the club will look for younger players with greater earning potential down the road. Players like Romeo Lavia and Cheick Doucoure have been linked to this.
The Reds are undergoing significant transformation, and the planned partial renovation is beginning to take on a much larger scope. However, the Reds will see a pay cut, and their wages to turnover ratio is comfortably below UEFA’s recommended range of 70%, giving them freedom to manoeuvre and continue with fairly significant midfield surgery without incurring a significant financial strain.
