It’s not even been three years since then-Liverpool manager Jurgen Klopp drew his line in the sand of the modern, multi-billion-pound transfer market.
The Reds were one of several have-nots having to co-exist with a very small number of haves.
“Nobody can compete with City,” Klopp told a press conference ahead of Manchester City’s October 2022 visit to Anfield. “You have the best team in the world and you put in the best striker on the market. No matter what it costs, you just do it. City won’t like it, nobody will like it, but you know the answer. What does Liverpool do? We cannot act like them. It’s not possible, not possible.”
Klopp implied that City, along with Newcastle United and Paris Saint-Germain as clubs with state-linked ownerships, were operating in a different field. Turning towards the other Premier League club in the trio, he added: “It’s just clear: there are three clubs in world football who can do what they want financially. It’s legal, everything is fine, but they can do whatever they want. Competing with them? It’s not possible to deal with that. I heard the Newcastle [sporting director] say there’s no ceiling for this club — he’s absolutely right. There’s no ceiling for Newcastle. Congratulations. Some clubs have ceilings.”
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Now, in their second summer transfer window under Klopp’s successor Arne Slot, Liverpool are Premier League champions. They have broken the British transfer record to bring in Florian Wirtz for £116 million ($154.2m), signed full-backs Jeremie Frimpong and Milos Kerkez for a combined £70m ($93m) and agreed a further £79m ($105m) outlay for Eintracht Frankfurt forward Hugo Ekitike.
Despite this, multiple reports suggest Liverpool are now ready to swoop in for Alexander Isak. Newcastle must wish there was some sort of ceiling in place to stop this from happening.
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Can Liverpool really sign Alexander Isak?
Despite the huge numbers at play, Liverpool do have the financial capacity to make a deal for Isak happen.
The Sweden forward has three years left on his contract at St James’ Park and Newcastle are not in the sort of unfavourable position in relation to the Premier League’s profit and sustainability rules (PSR) as they were this time last year, when promising youngsters Elliot Anderson and Yankuba Minteh were sold to Nottingham Forest and Brighton and Hove Albion respectively.
As such, there is no need for Newcastle to sell and the widely reported £150m ($199.4m) asking price is one Liverpool will have to hit.
How can Liverpool afford to sign Isak after spending so much?
A combination of 2024’s lack of spending, their successful season, and a handful of key sales is why Liverpool have been able to invest the money they have in this market.
They have also been linked with a move for Crystal Palace’s England centre-back Marc Guehi. If both he and Isak were to be secured, Liverpool’s gross spending would move towards £500m ($665m).
However, Luis Diaz’s move to Bayern Munich for £65.5m ($87.1m) does plenty to explain why such an outlay is possible. The Colombia winger’s switch to the Bundesliga giants ticked Liverpool’s net spend for the transfer window below that of Arsenal, who have furnished their squad with Viktor Gyokores, Martin Zubimendi, Noni Madueke, Cristhian Mosquera, Christian Norgaard and Kepa Arrizabalaga.
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That situation obviously won’t remain if the Isak deal gets done, but there are further obvious sales to make that can keep Liverpool on an even keel.
Interest in Isak even after Ekitike’s arrival suggests Darwin Nunez’s race is run on Merseyside, while Harvey Elliott will not be short of suitors after his starring role for England Under-21s in their European Championship success.
Federico Chiesa and Wataru Endo are also expected to leave, albeit for lower sums, and they have already recouped around £50m ($66.5m) through the departures of Trent Alexander-Arnold, Caoimhin Kelleher and Jarell Quansah. The fact all three count as ‘home grown’ players is also a big plus when it comes to PSR calculations.
How does amortisation work in football?
The amortisation of transfer fees is another means for Liverpool and other clubs to spread the cost of substantial investments.
Selling the likes of Nunez and Elliott will not leave Liverpool with balanced books in the traditional sense. Barring an unexpected turn of events, the Reds will finish the transfer window with a net spend somewhere between huge and a Premier League record.
However, the way that transfers are recorded in club accounts means basic net spend is not a relevant calculation.
Each player has an amortised value, meaning that the cost of any new signing is spread over the years of their contract.
For example, if Isak were to join Liverpool for £150m ($199.4m) on a five-year contract, this would not go down as £150m on the 2025/26 accounts, but £30m ($39.9m) for each of the next five years, plus the annual cost of his wages.
The same does not apply when a player is sold, with the fee received counted in full on that year’s accounts. This is set against the amortised value of a player, which decreases each year of their contract.
Diaz signed a five-and-a-half-year contract when he joined Liverpool in a deal worth £49m ($65m) in January 2022. He had two years of this left to run. As an estimate using the figures we have available and to explain how this process works, his book value at the point of his sale will have been £17.8m ($23.7m), plus wages. This means Liverpool will have been able to record a profit of £47.7m ($63.4m) — the difference between the fee Bayern paid and Diaz’s amortised value. That probably covers the hole Isak would likely blow in the Anfield accounts.
The wage bill will still have to be carefully managed before we even get on to the pros and cons of Slot integrating several mega-money signings into such a well-drilled team. But debates about the wisdom and sustainability of Liverpool’s aggressive summer 2025 approach are different conversations that will run and run. As of now, the champions definitely have the means to put the ball firmly in Isak and Newcastle’s court. They have a very high ceiling.
