Liverpool have seen wages grew to record highs, according to reports. But how did it happen that they dwarf even Manchester United?
Liverpool just released their financial reports for the year ending May 31st 2020. They paint an interesting picture, to say the least.
The Reds posted a pre-tax loss of around £46m, per the Athletic. A decline of total revenue contributed to that – Liverpool brought in £43m less than the previous year.
What’s particularly worrying is that this report doesn’t factor in the losses during the pandemic outside of the first three months. The overall hit to Liverpool after over a season without fans is far worse.
Per the Athletic’s report, the club has lost around £120m.
But there is another reason for the big loss – wages. Liverpool have seen a big increase in wages over the last three years and it’s having an effect.
Back in 2017/18, Liverpool paid around £263m. Now they pay £325m after seeing wages jump £15m for last season.
It means only Manchester City pay more in the Premier League (£351m).
Given Liverpool didn’t sign anyone for last season, how on earth did it happen? And how do they now dwarf Manchester United for the first time in decades?
We try to explain.
Liverpool and the problem with wages
United have had a larger wage bill than Liverpool since the 90s. For good reason, too – they were a lot better.
They signed bigger players, played in the Champions League every year and no one matched them for revenue. Liverpool couldn’t really compete.
In fact, United still sign big-name players. They’ve got Paul Pogba, they just brought in Edinson Cavani and it wasn’t long ago that they had Zlatan Ibrahimovic. Those players don’t exactly play for free.
Yet without signing ready-made superstars, Liverpool have overtaken them. And there’s a very good reason for it – success.
Liverpool sign players by committing them to cheaper contracts with big bonuses for delivering success. And there was a major success in 2019.
The Champions League win saw everyone get a big pay-rise on the back of it. So much so, in fact, that Liverpool’s wages appear to have soared.
After all, it’s one thing when you sign one player on big wages. It’s another when virtually everyone in the squad gets a pay-rise at once.
The result is that, per The Times’ Martyn Ziegler, Liverpool pay almost £40m more per year than United.
But wait, there’s more.
This is only up to May last year. Liverpool, of course, delivered more success last season as they won the Premier League. This report doesn’t factor it in but the players likely received another rise.
Nor does it account for Thiago joining the club in September. Per Spotrac, the Spaniard is on around £200k a week.
So while these reports suggest Liverpool have an inflated wage bill, the reality is that it’s almost certainly even higher than this.
And as it turns out, this is literally the price of success.