I would like to counter the ridiculous statistics offered in this article. http://www.dailystar.co.uk/posts/view/214493/Liverpool-lead-the-way-splashin-the-cash- Introduction These statistics are the single most utterly pointless I have seen! PERIOD Man city sit on a team with a myriad of huge signings and so do Chelsea.... yet Liverpool are singled out.... this is actually hilarious. NOBODY CAN DISPUTE THE ACTUAL NET SPEND WE HAVE LAID OUT I.E. 4O MILLION SINCE JANUARY. That's a fairly simple equation.... net spend based on fees in the public domain and estimates made by pundits on undisclosed fees. You see this is what's known as actual data. Actual data is not what the author of these ridiculous stats wants to highlight though In this case an absolute ass makes up a stat that suits himself. He compares John Henry who is barely 12 months into his reign (and only uses fees paid too boot) to sides like Everton who are at the bottom of the pile as their owners is in the role for many years! In short the points per pound spent is a completely stupid statistic made up to compare apples with oranges deliberately. The only ONLY fair way to compare clubs is on the basis of their net spend per year. If you simply plot that on a chart then you'll see that YES Liverpool are indeed after spending a lot of money, that's not a problem with me but the only way to highlight a CHANGE in policy is to plot at least 8-10 data points (and better if there's more) on a chart and show where the signals change. The specific case: If you plot utd's net spend you will clearly see the ronaldo factor in the chart.... similarly you will see at Chelsea thier spend and the same for city under both recent owners..... At Liverpool you would see the following; unfortunately http://www.transferleague.co.uk/league-tables/2003-2011.html tried to lump things together..... again this distorts the picture this page is better http://www.transferleague.co.uk/premiership-transfers/liverpool-transfers.html Let me do exactly what I've said and show the point. please log in to view this image data From the website was: season spend sold net 2002/03 13.7 5.75 7.95 2003/04 8.5 6.25 2.25 2004/05 39.8 14.5 25.3 2005/06 35.14 9.5 25.64 2006/07 28.04 12.38 15.66 2007/08 69.75 29.9 39.85 2008/09 39 32.75 6.25 2009/10 36 44.65 -8.65 2010/11 80.45 85.6 -5.15 2011/12 56.3 20.25 36.05 Analysis Lets first set a few salient points out. 1. I didn't make the data up but have provided a link to it. 2. I will point out that as it is done over a season by season basis the work done by us in january is counted in 2010/11 this does skew the data concerning henry a little but it both helps and hinders equally seeing January was a minor 2 mil net spend! 3. whether or not you agree with this websites figures is not the point. I don't agree with all the fees. the POINT is every rival fans uses this to point to liverpool's spending. Next lets actually analyse the net sped per year. 1. Interesting correlations; First the biggest net spend done by us is 40million in 2007/08 which co-incidentally matches up to when Gillett and hicks took over. what did that get Liverpool in actual results? not much to be frank and this could be construed as a giant waste of money given we managed only a 2 second place finish. If you align the 2007 champions league final with this spend you'll see its not actually outrageous spending. 2. negative net spends. some reds fans will make a connection between the big spend in point on and the negative net spends in the next seasons and 2009/10 and 2010/11 The most salient point I want to make is not that, it is the simple fact that we took in more money than spent. There are some facts that need to be put out there though, 30million for alonso, 18million for mascherano and 50mil for torres. all in all no matter what way you cut it good players went out and results got worse and worse. 3. Injection of cash. It is very interesting however to note that following Mr Henry buying out the club with RBS' blessing is that his net spend is not that massive, again I've stated that the torres deal slants that 4. Average net spend. This is a VERY dangerous figure to use simply as it has clear unsustainable, short term out of control points built into it. Nobody who does statistical process control when setting up a run chart would allow these data points to be included. For instance I've said that on the one off basis we've seen 40mil being spend and conversely with the club out of control it's taken in more than it spent. If I merely average the figures i get 14.5million as an average net spend, and strangely given our revenues this is not out of order either. even more interesting is that if i average the years 02-07 i get 15.3mil net! not very far off the overall average and shows what Moores invested. Conclusions If you've waded through this article thus far then you've done well. here are my conclusions. 1. David moores put our club on the road to ruin by running up a rather miserly 70million in debt and had an average net spend of about 15million. We all should realise a lot of this money was wasted by houllier later in his reign on the likes of diouf etc. However in this period a league cup and champions league and an FA cup were won, plus another CL final. 2. Gillett and hicks made a one year splash then pulled their head sin managing to put 300million of debt on the club in the process. the average net spend on their tenure is too dangerous a figure to use but nobody can argue that even the majority of Benitez signings under G&H were not poor. the highlights were obvious in maschernao, torres and the like but the awfulness of keane and aquilani cost him his job. In this period Liverpool managed one 2nd place but by the end were in 7th. The negative net spend in a league like the premier league shows why this occurred. 3. Under Mr Henry then. People should return the website link given to see the total signings as Mr henry has a season and a half of spending to look at. However the 40million net spend in not more than 12 months is self evident. How this can be construed as anything other than a rectification of bad spending policy in previous regimes is beyond me. Nobody can know the future but patterns in both the spending I've shown and in the spending of other clubs like utd and chelsea would indicate that owners invest at the start then move to a more mature sustaining model. I don't see much to conclude we will be anything different. further without anything but stadium development debt to finance our revenues WITHOUT European football can sustain a net spend of 15million. 4. other net spends Manchester city net spend has been (from same website) 57mil ,126.5mil, 99mil, 117.9mil, 39.12 mil in the past 5 years.... Chelsea net spend over 5 years has been 47.2mil, 87.3mil, 17.5mil, -10.8mil, 7.5mil. (interesting outgoings but you can see how a side that matured spent less but now realises it needs to refresh?) Utd net spend over 5 years has been 43.4mil, 13.55mil, -64.5mil, 33.75mil, 26.55mil (again interesting single outlying signal point caused by one transfer, their net spend is quite high each year then isn't it but their revenues are there to pay for it) Arsenal net spend over 5 years = -17.95mil, 6.8mil, -31mil,-3.55mil, 13.4mil (if there was ever any reason to question why they are in trouble it is this.) The clear conclusion to be drawn here is you absolutely need to spend to stay in the top 4. In fact spending only 15mil net each year as our average has been is in fact too low to really compete. 5. Finally. i hope this shows why statistics that don't compare like with like or WORSE deliberately skew data like applying time when in fact one club has had 12months and another 5 years are just plain wrong. Objective data and objective analysis are required. The net spend can't lie, it shows where and when Liverpool have wasted money and where the basis for later success is laid, further considering revenue and ABILITY to spend on a sustainable basis is vital.
Great analysis MITO, it's probably well over the heads of those who want to bash us about it, but there you go.
Too be fair eveyone knows the article is ****. Some of the factors they include they shouldn't and visa versa. Still other fans will have a pop as it's in the paper ( and as we know the papers don't lie ). PS MITO - I'm sure it's a good article but I couldn't be arsed to read it all
All this stats stuff is boring (previous article) I just want to watch the reds every week and let the powers that be do all the math.
Good article MITO and carefully considered conclusions with justifications (an element that most conclusions do not contain). Statistics themselves do not lie. It is the purpose to which they are put that is the problem.
I'm an engineer so do SPC for processes as well as production line design and project management.... or in other words i sit here all day on 606 or not 606.. cos its awful boring. and yes the chart is right out of excel for good reason. i can't do a control chart from only 8-9 data points especially when at least 3 of those points have special causes attributable to them. i just graphed it in excel to show the trend and in fairness the drop in spending is clear to see. King Eric... i don't blame you, I only intended to spend 5 mins on it and it sort of got out of control so now I've got to work over lunch. i did find it interesting to see that despite the fact I don't think the website transferleague.co.uk is accurate in many fees that the overall totals show interesting picutes of how cycles of spending at the top 4 clubs coincide with dips in their performances and recovery from them.
I prefer my own in-depth analysis of the original article- that it's a bag of ****e. Seriously though, thanks mito for taking the time and trouble to put together your deconstruction of it.
I agree. Secondly. What are we supposed to do...stand still? If investing money in the squad is way of getting success then so be it. Why is nobody having a go at Manchester City for spending vast amounts on mediocre players ie £24 million on Lescott, £26 million on Milner and paying Yaya Toure more in a week than Barack Obama earns in a year? Why is it Liverpool are getting attacked?
City do deserve analysis for spending huge amounts. However while Milner and Lescott are questionable, Toure is a good player though his wages are crazy.
Toure is a good player and so is Tevez and they earn similar amounts. Its Citys fault that its now accepted that players earn £200k a week. Its my opinion that they are the reason why Man United were forced to pay Rooney £200k a week. I don't care who the player plays for, or who he is, nobody should be paid that much for kicking a bag of wind around a piece of grass. The people who do worthwhile things like saving lives aren't paid that much.
my answer on man city is two fold. 1. they under erikkson and hughes spent a woeful amount of cash on bad buys. lescott was a bad buy from a manager under pressure. 2. however they have reached the CL and won an FA cup. now that's not a great return for all that money BUT..... that's not their ambition and their spend is to get to the top of Europe. The utd spend is kind of interesting, the've spent consistently so it kind of debunked the theory their debt is stopping investment. also Chelsea, if you look back past 5 years you see their first really heavy spend in 2002-2004 and after that they come back into line thanks to sales like robben and such but clearly they've reacted to city and utd and have gone at the spends again. On wage; i agree that the fees paid are too much and the reason why is because clubs cannot recoup the money form revenue steams. 200k to toure, tevez, and whomever simply put cannot be made back in shirt and scarf sales (simplistic i know) Utd can make it back off rooney and real can make it back off ronaldo just like la galaxy could make it back off beckham....... but if everyone is paid that much the whole house of cards comes tumbling down.
With United it's not a spend v revenue problem and never has been. Their income streams are strong and sustainable - unless the global economy goes tits up - which it may well do. Their only income problem is how close to the maximum are they? If you can truly answer that question then you'd be one of the foremost business analysts in the world! United's fiancial weakness lies in the structural debt and the strategic weakness to the club itself in not being in control of its destiny. City have the same strategic problem but also have the problem of relatively poor income streams. Exactly where Liverpool are now is debatable. If NSV continue to develop the club - sqaud and ground - and succes on the pitch comes as a result of that; then they could well have made the purchase of the decade. The omens are good so far but like all clubs the global financial situation could put us all in jeapordy.
I think Utd by floating an English company in Singapore will not have any money issues any more... maybe some unforeseen tax issues but not with that debt. The glaziers seem to have moved to a profit taking mode or at least that's what this flotation seems to me to be. Their debt has been acquisitions debt and of course they've the revenue to support large fees. The whole city debate has to be seen in terms of Uefa fair play rules and honestly i don't think the arabs care about those. neither does abramovich. Where are we? Well to be honest i would like our club to go back to the days not so long ago when annual reports were freely published for us all to see. If i could see those then i could answer where we are at. In short 15million net spend per year in addition to all the ages and fees with agents etc is sustainable for us i feel but every progression into Europe adds 10mil (europa = 10mil, cl = 20mil) so success breeds success. and its pretty clear to me why arsenal have been very poor in spending their money to keep their status. Especially seeing as they've watched Chelsea blow by them, now city and they had to see our problems and our solution too... to not spend the vast reported profits they made was grossly negligent of their long term future. if they finish 6th they'll have to spend more than 50million to get back into the CL when in fact spending 15mil net each year (my analysis shows they have not done so in 5 years and actually are taking in far more than have spent) If I were an arsenal fan I would simply be aghast at how their greatest manager of the modern era has allowed the invincible team they had to fall apart over a long period of time.... there's not even anyone like G&H to blame for it, cos their stadium has paid for itself. Wenger will be out of a job by seasons end.
The Singapore floatation is problematic. The shares to be issued have no voting rights. This has already been roundly rejectected by the major fiancial investors in the far east who were originally the prime targets for the floatation. The whole global economic mess is crawling closer to some kind of collapse and the floatation has already been postponed. Would you buy a large chunk of shares in United without having any say whatsoever? Now, we can speculate about the true reasons behind the Gliazers move - but that is what it would be speculation.
