Liverpool knows real truth as Eddie Howe bemoans same $538m transfer problem as Man United

Liverpool will be playing the world’s smallest violin as Eddie Howe warns that Newcastle could be affected by the same transfer issue as Manchester United.

Liverpool will have some sympathy for Newcastle United in certain ways. When the season began, Eddie Howe was given an appalling schedule while everyone was still well. Since then, he has suffered an unbearable amount of injuries.

Few people are more qualified to comprehend this situation than Jürgen Klopp, who has led Liverpool through several comparable crises over the years. Newcastle has considerably more money currently, but even with state support, players’ health and fitness cannot be guaranteed.

However, that finance is undoubtedly the biggest issue. Although Klopp can lament the unfortunate injury status of a fellow management expert, nobody at Liverpool will be especially touched by Newcastle’s general predicament.

Specifically, Howe’s remarks in January regarding Financial Fair Play (FFP) limitations hit the wrong note. According to remarks published by Newcastle World, he was concerned that he would not have permission to spend money.

He responded, “No, we haven’t received those assurances.” As we often say in January, it’s a challenging month. I apologize if it seems like I’m repeating myself, but it’s been a really tough month to get good guys. We will continue to consider financial fair play when making decisions, but for now, we’ll wait and watch.

Newcastle is thought to have spent sparingly ever since the takeover. It has undoubtedly used its funds quite sensibly; there hasn’t been a “Robinho” moment, and, in comparison to the Manchester City buyout (which took place in a world before FFP), it has received better media coverage.

This isn’t wholly absurd. Newcastle should be given some minimal recognition, if nothing more, for their astute hiring choices, which finally enabled them to run ahead of schedule by beating Liverpool to a Champions League berth the previous season.

However, the idea that the funds have not been used is entirely inaccurate. Howe may raise concerns about FFP as if they were just another inevitable annoyance, similar to the injury situation, but the club is in danger of missing out since it has been spending big money over an extended period of time.

Although the state-backed ownership has significantly changed the situation, Newcastle has lost money on transfers each of the previous five years. The Magpies spent more than they took in during the (rightfully) despised Mike Ashley era, outspending Liverpool by a large margin between 2019–20 and 2020–21.

Then, such transfer losses increased dramatically (all data from Transfermarkt). Newcastle lost $145 million (£114 million/€131 million) in 2021/22, even though the Saudis didn’t arrive until October, following losses on transfers of $41 million (£32 million/€37 million) and then $43 million (£34 million/€39 million) in Ashley’s final two full seasons. That was fueled by a January hiring frenzy that brought in Dan Burn, Chris Wood, Bruno Guimarães, and Kieran Trippier.

In 2022–2023, the figures increased once more, with Newcastle suffering a staggering $189 million (£149 million/€171 million) loss. Transfer losses this season were $121 million (£95 million/€109 million) as of January 1.

The laws governing profit and sustainability are currently shifting toward a more lenient framework that limits spending to a portion of revenue. However, the original intent of FFP was to counteract such persistent loss-making in transfers, and Newcastle is nothing more than a victim of its own indulgence.

Over the course of the previous five years, Newcastle has lost $538 million (£422 million/€486 million) on transfers. Therefore, if things are starting to grow a bit tight, it cannot possibly have any complaints at all. In contrast, Liverpool has lost $288 million (£226 million/€260 million), or just more than half as much, even though its non-transfer revenue streams are far bigger.

Howe and Manchester United are dealing with the similar issue in this regard. While there was little sympathy for Erik ten Hag when he had to settle for Wout Weghorst on loan last January, the spending figures at Old Trafford are even more absurd.

In those five years, Manchester United has lost an almost unfathomable $772 million (£605 million/€697 million). That obviously cannot continue, even as a revenue engine, and there will be no compassion when the FFP constraints bite the dust.

Liverpool is aware of the fact that Manchester United and Newcastle will continue to spend heavily, and FSG has long since accepted the fact that they will have to compete with that. However, when the comparatively few limitations that are in place do eventually bite, any complaints at all ring massively hollow.