I update this article each season when Liverpool face Manchester City, as it really emphasises the spending gulf between the two clubs. For the latest figures, scroll to the bottom of the article.
A common stick to beat Kenny Dalglish with was the fact that he spent somewhere north of £100m on players, yet finished a massive thirty-seven points behind the champions, Manchester City.
When comparing the net-spend of the two clubs since Manchester City were first bought by Thaksin Shinawatra in the summer of 2006/07, it is pretty clear why there has been a gulf between the two teams recently. It also makes for an interesting comparison as the 2007/08 season was the first full season where the Reds were under the ownership of Tom Hicks and George Gillett.
Bear in mind, the below was compiled simply using Transferleague‘s transfer figures, and does not include wages. This piece in The Guardian shows that Manchester City spent £21m more on wages in 2010/11 than they earned, before transfer spending and other expenditure is accounted for; a truly mind-boggling set of financial results.
It is also fair to say that at the start of the time period looked at, Liverpool were roughly as far ahead of Manchester City as they are behind them now; twenty-six points better in 2006/07, with a Champions League final appearance that season, and three straight years at Europe’s top table behind them, so it was understandable that City had to spend large sums in order simply to catch up.
Neither is this an attempt to assess how well the two clubs have spent their money or managed their teams; I have defended Dalglish and his signings on this site in the past, and may well continue to do so, but it is fair to say that they underperformed in the league this season. Indeed, they finished behind clubs that have spent less than them last season, irrespective of the huge sums that City have invested.
The below table purely shows the cumulative net spend that Liverpool and Manchester City have made since the summer of 2007; what it proves or disproves is up to you!
After 2007/08, when both clubs’ new owners made a similar statement of intent (Liverpool outspent City by £730,000 net), the difference rocketed in favour of the Sky Blues, as Shinawatra made way for Sheikh Mansour, and City have been making ground (and obviously going past the Reds) ever since.
As I said, this is not a defence of Liverpool’s transfer spend; rather it is a very simplistic way of demonstrating the realities of the two clubs’ spending over the last few years; far greater football finance analysis can be found at the excellent Swiss Ramble blog for instance.
I just wanted a simple illustration of the financial gulf that exists between the two clubs, and I’m pretty sure the above graph demonstrates it perfectly. It certainly appears that John W Henry and FSG will have to invest very heavily before Liverpool can compete at the top end of the table.
Update 1st February 2013: The two club’s transfer spend since this article was written shows that Liverpool have narrowed the gap slightly, but clearly not by very much in reality.
The Reds have spent a net total of £40.8m compared to City’s £14m since the summer 2012 transfer window opened, meaning the total net spend by the two clubs since 2007/08 is as follows:
Manchester City: £435,270,000
Hardly seems fair, does it?! Here’s the updated graph:
Credit to FSG for giving the red line a boost in the last two years, but clearly it’s still a ‘no-contest’ competition, and that’s likely to remain the case for a long time yet.
Update December 2013
Well, so much for narrowing the gap! Manchester City went on a gargantuan shopping spree in the summer of 2013:
It’s hard to put these figures into context, but here goes: FSG have made a net total transfer spend of £93.65m since they bought Liverpool in 2010. In the last summer alone, Manchester City had a net spend of £86.8m.
Of course, there are lots of clubs who have spent far less than the Reds have in this period, but I also find it intersting to compare these two transfer spend lines whenever the two clubs meet. For Liverpool to be above City in the table at Christmas is impressive; let’s hope that remains the case on December 27th.