The summer transfer window for Liverpool which started with a clear indication that there was no money to spend, was nonetheless saturated with rumours of Thiago Alcantara joining the Reds. This move eventually came to pass after the start of the season. But the acquisition of Diogo Jota flew under the radar and came as a surprise to the pundits and fooled everybody.
Liverpool FC was clear that they did not have the money for a hefty fee required for a player like Jota, and there were no rumblings of a raid on Wolves. Other potential targets to compete for a position in the front three were flying, with names like Messi and Sarr being thrown around, but the acquisition of Jota was not a surprise to those who watch Liverpool closely. Liverpool’s raid of the Wolverhampton Wanderers goes all the way back to April, when management at Liverpool identified the next team to be exploited.
Liverpool had Money to Spend All Along
Coming into the summer, Liverpool looked and sounded like a team without a lot to spend in the acquisition market. As the season ended manager Jurgen Klopp said “COVID has of course influenced both sides with ins and outs, that is completely normal. It’s just not likely that it will be the most busy summer in the world.”
Additionally, an analysis of the financial statements and salaries showed that there was indeed no money, and even a loss in the fiscal year, which would indicate there would be no transfers. And it would be easy to say that the analysis was wrong, but looking deeper, it’s clear that this transfer window shows the creativity and ingenuity of the Liverpool management team.
Liverpool agreed to large transfer fees, but they have initial payments. Not to say that the agreement is all add-ons, just that the set transfer fee will be paid later, giving Liverpool more time to balance the books. For example, Liverpool is paying the £20 million over time for Thiago, with only £5 million up front. Similarly with Diogo Jota, Liverpool is rumoured to only be paying £4 million up front.
The Obvious Acquisition – A Smoke Screen
Thiago joining Liverpool was an open secret before the end of the season, and the only surprise was how long the actual transfer took. In retrospect there should be no surprise to this at all, as Liverpool was limited in funds for transfers this summer, so there needed to be significant negotiations and gamesmanship to drive down the price. In the end the transfer cost slightly less than expected, and very tellingly, required very little money up front.
Thiago is undoubtedly a star who joins the team with the expectation that he will displace a starter and play an essential role in the how well Liverpool does this year. He brings an elite ability and vision to add new dimensions to the Reds and is a finished product, a known quantity for today, not for the future.
The Typical Acquisition – Undetected but Obvious
Similar to 2018 summer window when the whole world knew that Loris Karius’ time as the first choice keeper was over and that Liverpool were investing in an established netminder, there was no talk of another major acquisition. However Liverpool stepped up and bought Fabinho for a hefty fee; a transfer that while surprising as there were no indications it was coming, made all the sense in the world. The exact same situation played out for Jota.
Recently the Reds have been savvy in the transfer business, looking for teams that need to sell (for a variety of reasons) and thereby allowing Liverpool to be in the driver’s seat in negotiations. And thus the story of acquisition of Jota goes back to quite more than two years,
When Wolves were in the Championship they were accused of breaking Financial Fair Play rules (FFP) by other teams in the league. Unlike Man City who breaks FFP with impunity (“allegedly”), Wolves took the extraordinary step of admitting they risked FFP violation in their financial statements from 2018. And while the FFP case wound it’s way through the usual processes, Wolves earned not only promotion to the EPL but also a place in Europa League with a team of players that made other teams envious. And all along the Reds watched.
Fast forward to this summer, and in news at the beginning of August that made very few waves and had no real impact to most football fans, Wolves were found guilty of FFP violation and agreed to their punishment (again, teams not named Man City actually admit wrongdoing). The punishment was almost laughably insignificant on the surface, as even the BBC article on the punishment actually missed the €200,000 fine.
But buried in the last sentence of the article is the magic words that perked up Liverpool management ears, “Wolves have agreed to report “a maximum break-even deficit of €30m (£27.1m) in the financial year ending in 2020”. The translation for Reds fans is that Wolves needed to make a sale in the summer transfer window, plain and simple.
The next piece to the puzzle came when Wolves sold Matt Doherty to the Spurs and set bells ringing at Liverpool head office. The fee for Doherty was simply not enough and now Wolves needed a replacement at right back (the right back cupboard is so empty for Wolverhampton that they needed to put Adama Traore in that position). The right back position at Liverpool of course is occupied by the still young Trent Alexander-Arnold, and behind him is the younger Neco Williams who is already part of the first team having recently surpassed Ki-Jana Hoever on the depth chart.
So the facts for Liverpool were:
- Wolves need to make a sale
- Wolves need a right back
- Hoever, a player with a low salary compared to Doherty, no longer has a viable option to first team but is still a player with significant value and potential
So the indirect offer of Hoever and cash for a Wolves player is is exactly what the Wanderers needed, and Liverpool knew it. Now it was simply a matter of finding who on Wolverhampton Liverpool wanted and making the play. While Traore is a great player, the case against him is clear, with the acquisition of Thiago it is clear Liverpool should be adding a young front-line player with potential: namely Diogo Jota.
Jota can play across the front 3, at only 23 years old has the better part of a decade ahead of him and already has experience not only in the EPL but also in Europe through playing in Europa last year. The hunt was over, the shot was taken and Liverpool got their man.
Daniel is a professionally designated accountant who has spent 20 years in the finance and data analytics field which has skewed his view of the sporting world. Instead of seeing simply an athletic competition, he sees a financial exercise waiting to be unlocked by data analysis. He enjoys reading professional publications such as the annual deloitte football report and team financials as well as spending hours putting together and analyzing football data, which saves his readers from having to do it themselves.