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With just under five weeks left of the summer transfer window, Liverpool is expected to be active until the deadline on September 1. The Reds have already welcomed seven new faces this summer, and there's potential for more arrivals in the coming weeks.
Liverpool has wrapped up its pre-season tour of Asia, concluding with a 3-1 victory over Yakohama FM on Wednesday. The squad will now head back to Merseyside to gear up for a double-header at Anfield against Athletic Bilbao next week.
As the transfer window remains open, speculation continues to swirl around potential new signings. One name that's been making waves is Alexander Isak, with the Newcastle United striker reportedly on the Reds' radar.
On the departure front, Liverpool announced on Wednesday that Luis Diaz has sealed a permanent switch to Bayern Munich. An $87 million agreement was reached with the Bundesliga champions, marking the end of the Colombian international's stint at Anfield.
There could also be additional departures this summer, with Darwin Nunez's name cropping up as a potential leaver. Napoli, Atletico Madrid and clubs in the Saudi Pro League are rumored to be interested in snapping up Nunez this summer for around $66 million, a sale that would undoubtedly boost Liverpool.
Reach PLC's Business of Football writer Dave Powell has shed light on how Nunez's departure could bolster Liverpool's compliance with the Premier League's Profit and Sustainability Rules.
"While the sums may appear eye-watering in terms of incomings, Liverpool have no concerns when it comes to PSR," he asserts.
"The signings of Jeremie Frimpong, Milos Kerkez, Florian Wirtz and Hugo Ekitike come in at around £269M ($357M), including add-ons, although it is only the guaranteed fees that are accounted for through amortisation, with add-ons payable via exceptional items as and when they are triggered.
"But a little over £108M ($143M) has come back into the club in terms of player sales following the exit of Luis Diaz to Bayern Munich on Wednesday. That means that the net spend is actually around £161M ($214M). The key point to remember is that the transfer outlay is spread over five years, with the guaranteed fee divided by the length of a player's contract. The Premier League and UEFA last year capped amortisation at five years, regardless of contract length, in response to Chelsea's tactic of seven, eight and nine-year deals.
"But profit on player sales can be booked in its entirety when a deal is done, even if the cash is to be received via instalments, which for big deals is almost always the case. That means the amortisation costs added to the balance sheet for Liverpool are actually dwarfed by the profit made on players.
"The remaining book value of players is also removed from the balance sheet. Diaz had around £12.9M ($17M) remaining book value before his sale, and he was sold at a £65.5M ($87M) guaranteed sum, representing a £52.6M ($70M) profit. That reduction in book value lessens the impact of additional transfer spend for the club this summer when it comes to monitoring amortisation costs, which for Liverpool stood at £114.5M ($151.9M) in 2023/24, some £90M ($119M) less than Chelsea's.
"Liverpool have saleable assets remaining. Darwin Nunez has around £32M ($42M) in remaining book value, and a sale at £50M ($66M), the reported figure the Reds seek, would not only hand them an £18M ($24M) profit, but also clear the £32M from the balance sheet. Add that to the removal of Diaz's remaining book value, and the total additional amortisation costs for the four new signings so far are accounted for in 2025/26. It's effectively cost-neutral, although cash flowing the deals can be a headache, requiring capital inflow through sales to ease the burden. Liverpool do have a £300M ($398M) credit facility they can rely on, though.
"They could move on someone like Harvey Elliott, Ben Doak or Tyler Morton, but the impact there would be purely from a profit standpoint as none of those players hold book value at the club due to being products of the youth system or being acquired for very small fees that have since been fully amortised.
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"The wage bill will be the key thing that Liverpool really need to control. With Premier League title success came bonuses for players, and add to that contract extensions for big players like Mohamed Salah and Virgil van Dijk, and the wage bill will push past £400M ($530M) for the first time for the 2024/25 accounting period, which came to an end on May 31.
"Managing those costs will likely be key to whether or not they go big on Alexander Isak and another central defender, and whether they need to move on one or two more players. In terms of wages, Nunez would command the most from the remaining saleable assets, while Trent Alexander-Arnold's exit to Real Madrid provided some flexibility. It seems likely that a Nunez exit would be a preference over others because of the impact it would have on removing amortisation costs and wage costs.
"But there is no requirement for the club to sell to meet PSR obligations. If anything, even with their heavy outlay, they could well post a profit for the 2025/26 financial year if they have a successful run in the Champions League to the knockout stages."
* An AI tool was used to add an extra layer to the editing process for this story. You can read the original story in the Liverpool ECHO by clicking here.
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