Liverpool’s spending over the summer dominated the agenda when it came to the transfer market.

With around £450m including add-ons committed in terms of transfer outlay, with the club breaking the British transfer record twice to land Florian Wirtz and then Alexander Isak, it was the kind of open chequebook policy in the market that hadn’t really been seen under Fenway Sports Group to such an extent before.

Wirtz’s £116m arrival from Bayer Leverkusen, the £125m spent on bringing in Alexander Isak from Newcastle United, £79m on Huge Ekitike from Eintracht Frankfurt, £40m on Milos Kerkez from AFC Bournemouth, a deal worth over £30m for Giovanni Leoni from Parma, and a £29.5m acquisition of Jeremie Frimpong from Leverkusen made for a summer of significant churn at Anfield. The club were also stymied in their attempts to bring in Crystal Palace defender Marc Guehi on the final day of the window after Palace boss Oliver Glasner made a firm stance that he wasn’t to be sold due to a lack of a replacement being found at such short notice.

The spending came on the back of being crowned Premier League champions in Arne Slot’s first season in charge last term, and gave rise to many a pundit to claim that the 2025/26 title was as good as wrapped up and heading for the red half of Merseyside once again, although the start to the campaign has punctured that confidence considerably.

Given that the issue of clubs remaining compliant with the Premier League’s profit and sustainability rules (PSR) has become more prominent in recent years, with the £105m in losses over a three-year period having caused some clubs to engage in accounting gymnastics in order to remain under the threshold and avoid the kind of punishment that landed at the doors of Everton and Nottingham Forest, both of whom were handed points deductions for PSR breaches, twice in the case of Liverpool’s Merseyside rivals.

The pressure was understandable coming into this season. After all, when you spend more than any club has spent in a single window in the history of English football then success isn’t just hoped for, it is expected.

But the summer spending spree was one done with the longer term in mind, and on the back of a 2024 summer when they spent little more than £10m, with Federico Chiesa’s arrival from Juventus the only senior signing to fall within that accounting period.

The club also pulled in considerable money from player sales this past summer, with the exits of Luis Diaz to Bayern Munich, Darwin Nunez’s switch to Al-Hilal, Jarell Quansah’s move to Bayer Leverkusen, Tyler Morton departing for Olympique Lyonnais, Caiomhin Kelleher leaving for Brentford, and Ben Doak making the move south to join Bournemouth bringing in a combined £216m.

In terms of net spend, that meant that Liverpool actually had a net spend that was some £33m less than that of Arsenal this past summer, which from an accounting perspective should be instructive as to what the Reds, who have been linked with a return for Guehi in January, as well as a £65m swoop for Bournemouth’s Antoine Semenyo, could actually do while remaining compliant with PSR.

Liverpool Not At Risk Of PSR Issues

“I think all of the focus is the fact that they broke the transfer record on a couple of occasions,” Kieran Maguire, author of the Price of Football and lecturer at the University of Liverpool told GIVEMESPORT.

“But people aren’t focusing on the overall investment in the squad.

“I think the other thing very noticeable about Liverpool is they pay incredibly competitive wages.

“That will increase, certainly as far as 2025/26 is concerned, because you’ve got the recruitment of new players, plus the bonuses being paid to staff for qualifying for the Champions League.

“So whilst it’s glib, revenue is vanity, profit is sanity. But I don’t see that as being an issue. And whilst I’d expect the club potentially to have lost money, I don’t think that that’s going to be an issue.

“If you look at the losses that they made in 2023/24, which was £62m, I think those losses will reduce for 2024/25 because revenue will have increased faster than costs.

“There’s a couple of disposals that they would have taken into consideration, which will help to balance the books. So they’re under no PSR pressure. FSG run a tight budgetary ship. There’s no cash flow issues at that club. They’re far too well run for that type of danger.”

That points to Liverpool having more than enough leeway in terms of financial capability to go out and spend more in January without being unduly concerned about any kind of PSR pressure bearing down on them.

In terms of PSR, Liverpool do have very little to be concerned about, even if they were to go back into the market in January to add talent, with defensive reinforcements likely to be high on the agenda with Leoni out injured for the remainder of the season and the sale of Quansah and inability to get a deal over the line for Guehi leaving them short-handed.

Clubs are allowed to lose £105m over three years under PSR, with allowable deductions for losses incurred through depreciation, investment in infrastructure, the women’s team, the academy and community initiatives.

PSR estimate

For Liverpool, using the allowable deductions from 2023/24 of £48m, a year when the club lost £57m, we can make some estimates as to what the PSR position would be for 2024/25, and look ahead to what can be done for 2025/26, the current financial year.

In 2022/23, Liverpool made a loss of £9m. That loss will drop off when including the 2025/26 financial year, meaning that the £57m, whatever the result may be for 2024/25, which is likely to be significantly reduced from the previous year, and the result from the current season, one where the club has high wage and transfer spend but has also managed to bring in considerable profit against player book value, will be assessed.

For the 2024/25 financial year, based on the same allowable deductions, Liverpool would likely be able to post a loss of more than £170m and remain compliant. In reality, it is likely to be a minimal loss for the club in 2024/25, if at all, given the return of Champions League football and the lack of transfer activity last summer.

For 2025/26, Champions League revenue will be factored in once more, which could be worth more than £110m with a deep run in the competition and associated additional matchday revenue. The added amortisation costs for the summer business will come to around £85m, that is against the backdrop of total amortisation costs from the previous year, which stood at £114.5m. But that doesn’t tell even half the story.

Amortisation is how transfers are accounted for. It is the guaranteed sum of a deal divided by the length of a contract. So, for example, a £50m signing over five years is £10m per year in amortisation costs. That reduces by £10m each year the contract winds down, that is the player’s book value.

Liverpool’s summer sales have brought in a guaranteed £236m, with a further £232m possible through add-ons. Nunez’s £46.2m switch to Al-Hilal wiped his remaining £32m book value and delivered a £14.2m accounting profit. Diaz, whose annual amortisation cost was just under £6.5m, saw his book value fall by £22.6m over three-and-a-half years. His £65.5m move to Bayern Munich generated a £52.6m profit for the 2025/26 accounts.

The increase in amortisation costs for 2023/24 stands at £38.5m, but the accounting profit from guaranteed sales alone hits £152.6m. That figure excludes any add-ons, meaning the club’s financial gain could climb even higher.

With only Nunez and Diaz carrying notable book value, their exits were timed perfectly to maximise return.

From an accounting perspective, Liverpool’s profit from player sales comfortably outweighs the rise in amortisation and the expected hike in wages. It’s a clear sign of strategic planning, with the club leveraging depreciated assets to deliver a significant boost to the books, allowing them to pursue big targets during the summer and retaining enough dry powder to head back into the market in January without fear of creating any issues when it comes to PSR. Whether they will or not is up for debate, what shouldn’t be is their ability to do so.