Money Makes The World Go Round: Wages in The Premier League

Liverpool owners Fenway Sport Group are criticised for not spending enough on transfers. But Premier League salary data shows that is not the full story.

Photo by Alexander Grey on Unsplash

The football world would be a better place if signings were reported with their total expenditure figure. Darwin Núñez cost €25m more in transfer fees than Erling Haaland, per Transfermarkt; according to FBRef, the Norwegian earns around €14.5m extra every year.

This basic analysis doesn’t take account of agents fees, renegotiated contracts and anything else which pushes the financial commitment up. But this Substack is not the peerless Swiss Ramble, either. We can just take an overview, leaving accountancy to the experts. The salary data is also partially estimated by Capology, so should not be taken as gospel.

The point about players costing more than their initial transfer fee comes to mind during every transfer window. Liverpool owners Fenway Sports Group are disliked by a sizeable section of the Reds’ fanbase for the club’s reticence in the market. Transfermarkt’s five-season analysis shows that Liverpool’s net spend since the summer of 2020 is €30m below what West Ham have invested, a similar margin above Nottingham Forest’s net transfer outlay.

Paul Tomkins proved the flaw in looking at such figures long ago. By purchasing Alisson Becker, Mohamed Salah and Virgil van Dijk in 2017 or 2018, for instance, there was no need for huge outlay in their positions in the last six years. Even so, isn’t it reasonable to expect a Champions League regular to spend significantly more than the smaller clubs, especially those that were not even in the Premier League for the entirety of the last half decade? Most Liverpool supporters believe so.

Like Tomkins, Liverpool’s former director of research Ian Graham believes around half of transfers fail. “In a game where the average success rate is 50%, refusing to play unless you have a good reason to can be a good strategy for success,” he wrote in arguably the defining line from his excellent book. Graham also noted: “in football, 65% of revenue is spent on wages, and 25% on transfer fees. We’ve seen that a huge fraction of that money is wasted.”

With so much income passing from club to players, criticising the former for its net spend is largely pointless unless you account for its salary outlay. How do the Reds compare to their peers in this regard?

Across the previous five seasons (including the current one), Liverpool have spent €830.3M on wages, compared to €298.4M net on transfers. This means that 73.6 per cent of the combined outlay has gone on salaries, above the 66.4 per cent average for the 13 clubs that have consistently remained in the Premier League since 2020.

Among the big six, only Manchester City has devoted a higher proportion of this outlay towards wages (86.4 per cent). This is how Liverpool succeeds. By signing players relatively cheaply, it has funds available to ensure they can be well renumerated. That enables them to retain their top talent; per FBRef, Salah is the joint-eighth best paid player in the big leagues. That leaves very few clubs at the elite level for whom he can realistically play.

If mid-October feels an odd time for this analysis, with the first week of September harvesting hate clicks galore, a review of starting XIs in the 2024/25 Premier League made salary data worth investigating as we all pause for the international break.

Per FBRef, Liverpool’s wage bill is the fifth highest in the division this season. Despite this, it is the ninth largest across Europe’s big five leagues, neatly illustrating that football in England is fought along very different financial parameters compared with most countries.

Yet the Reds’ salary outlay was higher to varying extents in each of the last four years. FSG Outers, you may now start your engines.

However, a player’s best ability is availability, or so the old saying goes. Thiago Alcântara would be the Reds’ third highest paid squad member if he were still at the club this season. In 2023/24, he earned £10.4m for playing five minutes of first team football. Nice work if you can get it.

While not as extreme, both Fabinho and Roberto Firmino left ahead of last season after each being paid £9.4m in 2022/23 to contribute less than they did at their lofty peaks. A lower wage bill does not automatically equate to a side having less quality on the pitch.

With salary data for each player, we can establish the average wage of the starting XIs which each club has deployed in the Premier League this season. It makes for sobering reading if you’ve never considered the numbers before. The average team only deploys 52 per cent of its total salary outlay into the players who start their matches.

For Liverpool in 2024/25, this figure has been 69 per cent, the highest in the division. Last term, they were less than one per cent above the average whereas now they are markedly above the line of best fit. The leagues fifth highest wage bill has so far produced the third highest salary in terms of starting XIs.

Liverpool’s top three paid players, a notoriously soon-to-be-out-of-contract trio, have started all seven matches so far. The same is true of the midfield pairing of Ryan Gravenberch and Alexis Mac Allister, the Reds’ joint-fifth highest earners.

With Alisson and Andy Robertson starting six games apiece - though the former will now miss important matches due to injury - Federico Chiesa is the only one of the club’s top eight best paid players who hasn’t yet featured much. If nothing else, the Italian international has already contributed more minutes than Thiago did last season, for less money.

Arne Slot will not be selecting his team based on their payslips. Doing so is no guarantee of success either; the only club other than Liverpool to hand seven starts to all three of its top earners is Everton, and, well, you know.

But look at that final graph, or read Soccernomics, or think about the reality of the ever changing world in which we’re living. Money determines success far more often than not. Liverpool’s slightly shrinking wage bill still dwarfs their transfer fee expenditure, and if they can keep their upper echelon salary earners on the field as often as possible, good things will follow.