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How Liverpool can afford to spend more than £100m on Jude Bellingham and still sign more players

There is the financial freedom for Liverpool to make major additions next summer

While Borussia Dortmund were on the receiving end of Manchester City’s latest late show in the Champions League on Wednesday night there was one player who shone enough to take many of the headlines.

 

Jude Bellingham. The 19-year-old midfield prodigy netted in a 2-1 defeat to City at the Etihad Stadium as goals from John Stones and Erling Haaland in the final 10 minutes helped deliver a group stage three points for Pep Guardiola’s men.

 

But it was the overall performance of Bellingham, a player linked so heavily with a move to Liverpool over the past year, that dominated the post match agenda, the former Birmingham City player showing he more than belonged at the elite level.

 

So good was his display that Guardiola was waxing lyrical, telling reporters after the game: “I was impressed when he was 17, imagine now that he’s 19, he grew up so [much].

 

Defensively he’s able to follow [Ilkay] Gundogan or Kevin [De Bruyne] in the pockets and win the duels. The transition is fast, have the sense for the second position right to the box for the goal he scored.

 

“So he’s an exceptional player, I think everyone knows it. Not because the manager of Manchester City is going to tell you. Everybody knows it.”

 

Guardiola’s praise of Bellingham has only served to heighten the speculation that Manchester City may join the race to acquire the England international, who is expected to depart Dortmund next summer with a line of potential suitors likely to be in waiting.

 

Liverpool’s midfield problems have been a key issue, something that wasn’t addressed in the summer window to the extent that supporters would have liked to have seen. It has been suggested that next summer will be when Liverpool will make a play to address their midfield problem, but it is a window that is likely to see owners Fenway Sports Group have to stray somewhat from their desired low net spend, with significant outlay required and little in the way of major saleable assets that could be moved on to bear the brunt of the cost.

Player values usually fall in line with the length of the contract. Last summer Bellingham was deemed to be worth around £75m with three years remaining, but given how he has taken his game to another level and is still only a teenager has seen his market value, according to analysts at the Swiss-based CIES Football Observatory, pegged at between £130m to £175m.

 

CIES methodology takes into account a number of factors; age, contract, performance, international status, career progression, sporting level, economic level and inflation. All these create a transfer market value that CIES use to rank the top players in European football.

Bellingham is valued at around the same level, according to CIES, as the likes of Haaland, Phil Foden and Kylian Mbappe, and if Liverpool wanted to acquire him next summer it would be an expensive exercise.

 

His route so far has been developmental, his next move will likely see him get parity with the biggest earners, meaning wages of £200,000 a week won’t be too much of a stretch.

 

Transfer fees appear in the financial statements of clubs as amortised costs, the guaranteed fees minus any add-ons spread over the life of the players’ contract. However the payment of the fee is structured, the amortisation will be how the fee appears for accounting purposes.

 

Using the lowest estimate of CIES’s valuation of Bellingham, £130m, based over a six-year deal, as was the signing of Darwin Nunez, and the amortisation would appear as £21.7m per year. Add wages at an example of £200,000 per week and that would be £10.4m per year, an annual accounting cost of £35.7m per year. With potentially higher wages, add-ons and agents fees it could creep up significantly higher.

There is, however, room to manoeuvre for a big move should FSG sanction it. Over the last five years Liverpool’s amortisation costs have risen from £68m to £108m, a rise of 86.2 per cent. That is the largest increase among the whole big six, but their annual amortisation has been considerably lower than Chelsea, Manchester City, Manchester United and Arsenal.

 

Chelsea’s annual amortisation grew from £88m to £162m (84 per cent), Spurs’ £43m to £74m (72.1 per cent), Arsenal’s £77m to £117m (52 per cent) and Manchester City’s from £122m to £146m (19.7 per cent). Manchester United saw a decrease in their annual amortisation over the five years, dropping from £124m to £120m, a drop of 3.2 per cent.

 

With no concerns over the potential Financial Fair Play breaches, something that Manchester City would have to be mindful of having remained on UEFA’s radar, Liverpool will be able to have more flexibility for negotiation, especially given that they are forecast to post record revenues in excess of £600m for the 2021/22 financial year, according to forecasts by analysts at sports business website Off The Pitch.

 

There is undoubtedly the ability for Liverpool to spend next summer on Bellingham and still have room to add to other areas as well. Whether that happens remains to be seen.

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