Liverpool: How did the champion spend €450M and the financial secret?

Liverpool: How did the ‘Reds’ become the team to beat in the transfer market?

Liverpool’s fans made their message clear. After the 3-2 victory over Newcastle United at St James’s Park, the visiting supporters clamored to “give” their target to him. The “him” in question was Newcastle striker Alexander Isak. A week after that victory, Liverpool fans saw their wish fulfilled when Isak sealed a British record transfer of £125 million ($169 million) on the last day of the market. It was an astonishing sum of money in a summer in which the Premier League champions have shown their financial muscle more than any club in the world. Midfielder Florian Wirtz, who arrived from Bayer Leverkusen in a £100 million deal that could rise to £116 million with add-ons, has barely played and has already been dethroned as the club’s record signing, while Liverpool’s total spending this summer is around £450 million, including add-ons. In a landscape where clubs live and die by adherence to financial rules, both nationally (Profit and Sustainability Rules, or PSR) and in Europe (Financial Fair Play), there will be understandable confusion in some quarters about Liverpool’s ability to spend so freely this summer.

Only Chelsea has spent more in a single transfer window (almost £600 million in 2022-23), and yet, Liverpool is not in danger of breaching Premier League or UEFA financial rules. So, how have they done it?

• Liverpool and Arsenal win the transfer window; Newcastle, the biggest losers.
• Worst transfers of the summer of 2025: from Cunha to Isak, moves that could fail.
• Liverpool gets a B- for the record signing of Isak for £125 million.

The first sign that this would not be just any summer for Liverpool came in April. After signing a two-year contract extension at Anfield, striker Mohamed Salah was asked by the club’s media if he felt his team was ready to continue competing for major honors.

If I didn’t believe that, I wouldn’t have signed.

Mohamed Salah

The following week, captain Virgil van Dijk sent a message to the owners of Fenway Sports Group (FSG) before signing his own contract extension.

I think Liverpool should be able to fight for titles in the coming years. Whatever happens in terms of players leaving, players coming in, I think it should be a great summer. I think (FSG) plans for it to be a great summer, so we all have to trust the board, as a Liverpool-connected fan, to do the right job.

Virgil van Dijk

While Salah and Van Dijk surely wouldn’t have imagined that their trust in the club’s hierarchy would be so handsomely rewarded, it’s logical that both players, who are still at the peak of their careers, committed their futures to Liverpool because they had received assurances that their loyalty would be rewarded with a significant show of ambition in the transfer market. Externally, it might seem that Liverpool has deviated from its traditional policy of cautious spending; however, years of smart financial planning have allowed the club to really take the handbrake off this summer. According to Dave Powell, chief football business writer at Reach PLC, the explanation for Liverpool being able to spend so much on Alexander Isak, and in the transfer market in general this summer, is quite simple. Not only have they built up to a point where revenue is among the largest in world football, but they have also reached a summer where they can trade players effectively. Did you know that they could enter this summer after a solid 2024-25, when they earned nearly £90 million from the Champions League by including matchday revenue, and obtained additional funds for winning the Premier League. It will be a record year for the Reds and one in which they will likely make a profit again. Revenue is expected to exceed £700 million for the first time.

With record revenues that have expanded the parameters of Liverpool’s financial capabilities, the club’s impressive track record of recouping significant fees for departing players has also provided them with more leeway in terms of the Premier League’s Profit and Sustainability Rules (PSR). The star departures from the first team such as Luis Díaz, Darwin Núñez and Jarell Quansah helped generate around £260 million this summer, including add-ons. In contrast, title rivals Arsenal, despite spending less than Liverpool this summer, end the window with a higher net spend, as they failed to secure significant fees for any of their outgoing players. While teams like Arsenal, Manchester City, and Chelsea have been active in the last two transfer windows, Liverpool’s only addition last summer was forward Federico Chiesa for an initial fee of £10 million. In each of the previous two summers, Liverpool chose not to pursue expensive alternatives after missing out on their primary targets in midfield (Moisés Caicedo in 2023; Martín Zubimendi in 2024). That patience, it seems, has now been rewarded. Powell explains that Premier League clubs can lose £105 million over a three-year period, with deductions allowed for investment in infrastructure, the academy, the women’s team, and community initiatives. The period from 2021-22 to 2023-24 saw the Reds record a profit of £7 million, a loss of £9 million, and a loss of £57 million over the last three years. In terms of permitted deductions during that period, the club had £33 million, £35 million, and £39 million, meaning the club had a positive PSR position of £48 million, which, added to the £105 million allowed, means it had a margin of maneuver of £153 million. They had absolutely no concern. Since we are now in the 2025-26 cycle for PSR, the Reds could lose over £200m and still comply. They won’t, and that doesn’t factor in player departures they’ve made this summer, many of whom have been home-grown, meaning guaranteed sums are pure profit, as there is no book value in the accounts to be written off before accounting profits are made.

Is there a spending limit for Liverpool? Liverpool critics will point to the fact that this summer’s spending is at odds with comments made by former Liverpool manager Jurgen Klopp, when, before his team’s clash with Manchester City in October 2022, he conceded that his team could not compete with the financial power of their rivals, who are majority-owned by the United Arab Emirates’ Vice President, Sheikh Mansour.

Nobody can compete with City. You have the best team in the world and you put the best striker on the market. Whatever 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 can’t act like them. It’s not possible. It’s not possible.

Jurgen Klopp

Klopp also attacked Newcastle after its acquisition by Saudi Arabia’s Public Investment Fund (PIF), stating that there was no “ceiling” for the club’s spending. But, almost three years later, those with an inclination for Newcastle would be justified in feeling that it is Liverpool, along with the other six traditional teams, whose ceiling is much higher due to their historical commercial success. For Liverpool, however, there is a sense that this summer has offered the opportunity to lay the foundations for a dynasty. While still adhering to the rules, the Premier League champions have assembled a squad with the quality to compete for the game’s most important prizes not only this season, but for the foreseeable future.

For the first time, Liverpool has “won” the transfer window. With the exception of Crystal Palace defender Marc Guéhi, whose £35 million transfer fell through when Palace pulled out of the deal at the last moment, they secured all their main targets, all of whom still have their best years ahead of them. (Isak is 25, Wirtz 22, Hugo Ekitiké 23, Jeremie Frimpong 24, and Milos Kerkez is only 21. Defender Giovanni Leoni, a long-term prospect, turned 18 in December). Of course, market success doesn’t always translate into success on the field. Chelsea has spent over £2 billion in recent years under Todd Boehly’s ownership, but sometimes that has posed more problems than solutions. Even with all the additions, this Liverpool team is not infallible. Despite winning their first three games of the season, Slot’s team has looked unconvincing at times, particularly in defense, and the team will take time to gel after a summer of so much change. Even so, Slot has never really subscribed to the idea of Liverpool being the underdog and will not be under any illusions about the expectation that his team will perform this term.

We are Liverpool, the pressure is always there. Even if we bring in 10 players, or no players, there is always pressure when you wear a Liverpool shirt.

Slot

For Liverpool’s owners, FSG, who have previously been criticized by some fans for their perceived lack of investment, this summer reaffirms their commitment to the club they briefly considered selling in 2022. However, such investment is not without risk. Powell says that the money coming back in the door means Liverpool could well make a profit despite their heavy spending, but the flip side is that there is a risk. The club needs to be part of the Champions League elite and do well in the competition to keep the money flowing to support spending, and it needs to remain a dominant player in the Premier League to keep the big brands that want to align themselves with the Reds. That expense is not without an element of risk, but in a game of such high stakes as elite European football, Liverpool will feel that this summer’s investment is about solidifying and strengthening their position on the field so that they can do more important things off it. It goes hand in hand with FSG. By breaking records to sign Isak this summer, Liverpool has further reinforced its status as the team to beat in the Premier League this season. But, after having spent so much, the champions will hope that this gives them immediate rewards.