In all reality if ANY of that money DOES come to LFC (not guaranteed even if it can) it would probably just be what is required to keep us stable after lost revenues.
One thing we need to do (and I regularly find myself guilty of it too) is avoid slipping into the net spend mistake. Its not how it works.
There’s two separate matters. First profit & loss, second cashflow.
Cashflow is affected by how the deals are structured. So to take Alisson in 2018 as an example the fee was £56m plus £9m in extras. The £56m was probably split over 2/3 seasons so either £28m a year that’s paid now or around £19m a year with final payment this summer. The £9m will have been due when triggered and almost certainly paid by now. On cashflow we’ve done very little incoming business since 2018 so most or all of previous deals should be finished with the rest this summer clearing many over heads. The business this summer was loaded to largely skip the first year or so to take the pandemic into account and wasn’t really heavy spending either.
Outgoing actually works the same way so yet again I’d expect mostly resolved by now.
On profit and loss outgoing sales are actually very good. First a purchase is spread through life of the contract, so Alisson (again) signed for 6 years so it’s roughly on the books at £11m per year with 3 years expired so £33m cleared and around same left to go. If he extends his deal by signing another 6 year deal it spreads that out to around £5.5m per year halving the yearly cost (the rumours of wanting to extend his and VvD deals therefore makes a lot of sense).
When players are sold though 100% of that incoming money goes onto the books there and then. So in that example if we then sold Alisson this summer (a ridiculous example) for what we paid then the “cost” of the player still on the books is around £32.5m so that gets “paid” then the remaining £32.5m is “profit”.
Now I feel like I’ll get a lot of heat for this prediction but thinking it through there are two high profile outgoings that could be really beneficial from the business side. Mane and Firmino.
Mane signed for about £35m on maybe a 4 year deal so around £9m a year, two years in he extended on a 5 year deal so about £3.2m a year with only about £6.5m left. Anything past that is profit on the books. On cashflow it’s all good as we’ve almost certainly fully paid up on him.
Firmino yet again is almost certainly fully paid for in cash terms and signed for around £30m in 2015 on a 5 year deal so £6m a year, 3 years in (£18m cleared) he extends in 2018 on another 5 year deal so now around £2.5m a year with £5m to go.
Both have been in spotty form but have top class reputations that might attract top clubs still and have two years left on their deals so could fetch OK prices. Say £50-60m for Firmino maybe around £70-80m for Mane (including extras). That’s actually a hell of a lot of profit coming into the club and a hell of a lot of cash coming in on the cashflow side of things. Best part of £120m to balance the club profit and loss books for this year coming and cashflow to pay the day to day running costs.
With future revenue streams more predictable after the pandemic and the last few existing payments cleared or being cleared this summer there could actually then be significant room to add on to the annual outgoing cash payments and the annual profit and loss costs.
A few things need to really happen now, some hard decisions on guys like Ox and Keita need making, they don’t earn their current wages but wouldn’t like extend deals on worse terms so we either match/improve the current earnings they aren’t earning to extend their deals or sell them to recover what we can and get their costs off the books.
Guys like Alisson and VvD need locking in a room and not allowed to leave till they sign extensions to spread their “costs” out further on the books.
Then if interested clubs are sniffing around Mane and/or Firmino and the players are open I can see moves happening. Especially if this big deal goes through so FSG have cash to make available to meet payments before revenues later come in if that makes any sense. I would actually predict that leading to some major moves in the market from us, on a par with the VvD and Alisson ones and potentially even club record fee style moves.
My understanding of all this is pretty damn basic and I may have got things wrong/explained it poorly. But to my limited understanding that’s what I could see happening.
