September 2 – A question that many in football are asking in the wake of Liverpool’s incredible spend over the summer, which has now reached over £450 million, is ‘how can the club afford this without breaking Financial Fair Play (FFP) rules?’
The answer lies in how football finances are accounted for, rather than the raw transfer fees you see in the headlines. The first word you’ll hear from the bean counters is amortisation.
When a club buys a player, the transfer fee isn’t accounted for all at once. Instead, it’s spread over the length of the contract. For example, with record signing Alexander Isak costing £125m, his seven-year deal actually shows up as an annual cost of around £18m on Liverpool’s books (give or take agents fees). Multiply that across several players, and the actual yearly impact is far lower than the eye-watering totals reported on deadline day.
Liverpool have also generated significant money through player sales this window including moving Luis Diaz to Bayern Munich for £60m, Darwin Nunez to Al-Hilal for £46m, and Jarell Quanash to Bayer Leverkusen for £30m.
When a player is sold, the profit is booked immediately in the club’s accounts, offsetting any spending straight away. Even £100m in outgoing transfers can dramatically lower the net spend figure that really matters.
Liverpool’s commercial revenues are also among the highest in world football, with money pouring in from broadcasting, sponsorships, and an expanded Anfield that now seats over 60,000. Deloitte ranked them close to £700m in annual revenue, giving them plenty of headroom compared to FFP limits.
In addition, the Premier League’s Profit and Sustainability Rules allow clubs to lose up to £105m over three years if owners cover it, while UEFA focuses on a wage-to-revenue ratio. Liverpool’s wage bill has been carefully managed, with older high earners leaving to make room for new arrivals.
Finally, most deals are paid in instalments, further reducing short-term impact. Put all of this together, and Liverpool’s £450m spree looks far less dramatic in the spreadsheets.
So, while the summer spending spree may appear staggering, Liverpool’s combination of amortisation, sales, and revenues means they can spend big and still stay within the rules.