Have Liverpool suffered from a lack of investment?

Some Liverpool fans are understandably unhappy with their team’s performances this season, identifying a lack of investment as one of the factors, particularly compared to Manchester City. The authoritative Swiss Ramble considers whether this is indeed the case.

Liverpool have a net spend of £60m in the last two years, as gross spend of £164m has been partly offset by £104m sales.

Manchester City actually had £4m net sales in the last two years, as high player purchases of £266m were compensated by £270m sales.

Livepool’s gross and net transfer spend have been steadily falling since 2019, from £223m and £163m respectively, which is partly due to the adverse impact of the COVID pandemic. Zero net spend in 2020 is quite striking, though did not prevent them winning the Premier League that year.

Manchester City net spend has also been declining from the £250m peak in 2018 with the club actually making £54m net sales in 2022/23. Gross spend has held up pretty well, though the club has generated more from player sales, including good money from academy products.

Liverpool had higher net transfer spend than City this season and for the last two years, three years and even five years, which might come as a surprise to some. However, City were building from a stronger base, spending much more than Liverpool over a longer 10-year period: £941m vs. £564m.

It’s a different story for gross spend with City consistently outspending Liverpool. For example, in the last 3 years City’s £460m is 53% more than Liverpool’s £300m. Over the last 10 years it’s also around 50% more: £1.6bln compared to £1.1bln.

Another driver for a club’s success, arguably more important than transfer spend, is wages, where Liverpool are much closer to City. For example, their £950m total wages in the three years up to 2021 were only 7% lower than City’s £1.0bln, though the difference was 11% in 2021 itself.

One area where Liverpool are unequivocally behind City is owner funding (share capital + owner loans). Liverpool actually partly repaid loans in last five years, but the real difference came much earlier with City’s £684m in last 10 years being significantly more than Liverpool’s £110m.

The Swiss Ramble sits on the fence concluding that you can use the available statistics to construct your own narrative: ‘As always, when comparing finances of football clubs it is best to look at more than one metric, then consider the impact over different time periods. This thread has shown that people can use a single statistic to “prove their point”, but the full story is often more nuanced.’