How did Liverpool do it when spending 450 million pounds to buy people in the summer window but there were no financial violations?

The message from Liverpool fans is clear.

On August 25, the team defeated Newcastle United 3-2 at St James Park Stadium. After the game was settled, away fans shouted that the opponent would "hand over him." Obviously, the “he” mentioned here refers to the striker Alexander Isaac, whom Newcastle United wants to leave the team.

A week after that dramatic victory, Liverpool fans got what they wanted, and "he" finally set a British record for transfer fees of £125 million on the day the transfer window closed.

This summer, the transfer fee is staggering, and Premier League defending champion Liverpool has better financial resources than any club in the world. Midfielder Florian Werz transferred from Leverkusen for £100 million in June, and if additional terms were added, the transfer fee could rise to £116 million. He was almost broken in the club's transfer fee record before he even kicked. This summer, including additional terms, Liverpool's total spending is about £450 million.

In an environment where the club's life and death depend on compliance with the UK's domestic profit and sustainability rules (i.e., PSR) and the European Financial Fair Play financial rules, it is understandable that some people are confused about Liverpool being able to spend money so freely this summer.

Only Chelsea once spent more in a single transfer window than Liverpool (nearly £600 million in 2022-23), but Liverpool has no risk of violating Premier League or UEFA financial regulations. So, how did they do it?

Liverpool's savvy financial planning laid the foundation

In April this year, Liverpool showed signs that this summer will be extraordinary. Salah signed a two-year contract extension with the club, and the media asked him if he thinks his team is ready to continue challenging important honors.

"I wouldn't have signed up if I didn't believe this," Salah said. The following week, captain Van Dijk sent a sharp message to the team's investor, Fenway Sports Group, before signing the contract renewal.

"I think Liverpool should be able to challenge the championship in the next few years," Van Dijk said. "I think this summer will be a big time regardless of the player's departure and joining. I think (Fenway Group) plans to make this summer a big time, so as a Liverpool fan, we must trust the board to do a good job."

Although Salah and Van Dijk certainly didn't expect the club's top leaders to repay their trust so firmly, it makes sense for the two players who are still at their peak to decide to devote their future to Liverpool because they are assured that their loyalty will be rewarded in the transfer market.

On the surface, Liverpool seems to have deviated from their traditional strategy of spending money with caution. However, years of savvy financial planning has allowed the club to really let go of the game this summer.

"Liverpool's ability to sign Alexander Isaac with such a big deal and his move in the transfer market this summer is simple," said Dave Powell, chief football business columnist at Reach PLC. "They have already ranked among the highest-paid clubs in the world, ushering in a summer where players can trade effectively."

They know that with their strong performance in the 2024-25 season, they can "make up" and return to their peak this summer. They earned nearly £90 million from the Champions League last season, and the Premier League champions also brought them additional income. It was a bumper year for the Reds, and they are likely to return to profit, with revenue expected to exceed £700 million for the first time.

Record revenues broaden Liverpool's financial capabilities, and the club's outstanding record in charging huge transfer fees for players leaving the team also provides further room for their growth in the Premier League's profits and sustainability rules. The departure of first-team stars such as Louis Diaz, Darwin Nunes and Jarrell Quanza has brought about £260 million in revenue this summer, including additional transfer fees. By contrast, champion rival Arsenal ended the transfer window with higher net spending despite spending less than Liverpool this summer as they failed to earn a considerable transfer fee from any player leaving the team.

Although teams such as Arsenal, Manchester City and Chelsea have been active in the past two transfer windows, Liverpool's only player brought in last summer was forward Federico Chiesa, with an initial transfer fee of £10 million. In the previous two summers, Liverpool gave up introducing other high-priced players after missing their top midfield goals (Moises Kessetdo in 2023 and Martin Subimedi in 2024). Now, this patience seems to be rewarded.

"According to regulations, Premier League clubs can lose £105 million in three years, but investments in infrastructure, youth training academy, women's football and community projects can be deducted," Powell explained. "In the three seasons of 2021-2024, Liverpool's fiscal situation was a profit of £7 million, a loss of £9 million, and a loss of £57 million. In these three seasons, Liverpool's PSR loss quota was respectively It is £33 million, £35 million and £39 million; in the past three years, they have saved a loss of £48 million, plus the £105 million allowed in the new cycle, which means they have a loss of £153 million, so there is no need to worry at all. "

Given that PSR is currently in the 2025-26 season cycle, the Reds still meet the regulations even if the losses exceed £200 million. But they won't lose so much, and that doesn't take into account the players they've transferred out this summer, many of them local youth training players, which means their transfer fees will be counted as pure profit.

Is there a ceiling for Liverpool's spending?

Critics will point out that this summer’s crazy spending contradicts the remarks of former Liverpool coach Jurgen Klopp, who admitted his team could not compete with the opponent’s financial resources ahead of Liverpool’s match against Manchester City in October 2022, with a majority of the equity in Manchester City owned by UAE Vice President Sheikh Mansour.

"No one can compete with Manchester City," Klopp said. "They already have the best lineup in the world, or they have won the best striker in the market. No matter how much they spend, they have to do it. How does Liverpool do it? We can't be like them, it's impossible, absolutely impossible."

After Newcastle United was acquired by Saudi Arabian Public Investment Fund, Klopp also pointed the finger at them, claiming that the club's spending "has no ceiling". But nearly three years have passed, and Newcastle United fans have reason to believe that Liverpool — and other traditional "BIG 6" teams — has a much higher ceiling with its historical commercial success.

However, for Liverpool, this summer seems to provide the foundation for building a dynasty. While following the rules, they formed a strong team that is enough to challenge the highest honor of football not only this season, but also for the foreseeable future.

The pressure increased after the "big win" in the transfer window

Perhaps this is the first time in Liverpool's history that "big win" in the transfer window. Except for Crystal Palace defender Mark Gey, they signed all the target players, and these players are in their peak or rising periods. Isaac is 25, Werz is 22, Ekitic is 23, Flynnon is 24, Kolkz is 21, and defender Giovanni Leoni turns 18 in December last year.

Of course, success in the transfer market does not necessarily mean success on the court. As we all know, Chelsea has spent more than £2 billion in recent years under Todd Burley's leadership, but sometimes this brings more problems than solutions.

Even if many new players are introduced, this Liverpool team is not foolproof. Despite winning all three games in the first three seasons, Slott's team still performed poorly, especially on the defensive end. After a summer of staff changes, the team needs time to get started. Despite this, Slott never really agreed with Liverpool's view as a underdog and had great expectations for his team to achieve good results this season.

"We are Liverpool, and the pressure is always there," he said earlier this month. "Whether we have brought in 10 players or one player has not been brought in, as long as you are in the Liverpool jersey, the pressure is always there."

For Liverpool investor Fenway Group, they have been criticized by some fans for their insufficient investment. This summer, they once again fulfilled their commitment to the club they had once considered for sale in 2022. However, such investments are not without risks.

"The funds recovered mean that Liverpool can make profits even if they spend huge amounts of money, but there are risks on the other hand," Powell said. "The club needs to be a Champions League giant and achieve good results in the game to attract huge amounts of funds to support the team's spending; they also need to continue to dominate the Premier League to attract big brands to cooperate."

"This investment is not without risks, but in high-risk events like top European football, Liverpool will feel that this summer's investment is to consolidate and strengthen their position on the court so that they can achieve greater off-court results. This is crucial for Fenway Group."

Liverpool broke the record and signed Isaac this summer, further strengthening their position as the most difficult team to defeat in the Premier League this season. But with so much spending, the defending champion certainly hopes to pay off right away.