Could Liverpool pay for Kylian Mbappe? Transfer rate, salaries and detailed financial analysis of an impressive rumor



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No transfer window would be complete without the strange and exaggerated but fascinating rumor.

In fact, Liverpool fans have been here before. Whether it's Marco Reus or Gareth Bale in recent times or the likes of Rivaldo and Zinedine Zidane in the past.

Suffice it to say that these movements never occurred.

Going forward to 2019 and is the World Cup striker, Kylian Mbappe, who could be set to exchange Paris for Anfield.

The 20-year-old said a month ago that when he received the Ligue 1 Best Player of the Year award, he wanted to take on more responsibilities, either with his current employees or "somewhere else, for a new project."

Of course, the owners of PSG were quick to undo any remote chance of Mbappe climbing the board, making a move just one year after spending € 180m in French.

But the rumor has grown again in recent days.

Gross comments made by Fabinho, former Mbappe teammate in Monaco, resurfaced at the same time as the photos were shared by the young Frenchman with Liverpool minority shareholder LeBron James.

Play for Times reporter Paul Joyce by retweeting a video that Mbappe shared on Twitter and it's easy to understand why Reds fans got involved in a tizz.

But they say Liverpool shocked the world of football by confirming the hiring of Mbappe: how would the transfer affect Liverpool's finances?

And could they even pay for it?

Given that PSG spent 200 million pounds with Neymar, six years older than Mbappe, the transfer fee Liverpool would have to disburse would certainly be to the north, especially with many years remaining in its current contract.

Say, by the argument, it was £ 250m, with a weekly salary of £ 400,000 per week agreed in a five-year agreement.

When players are signed, their transfer fees are distributed over the duration of their contracts, a process called amortization.

That's because for a business like Liverpool, the contract – the part that Liverpool is paying for what is "useful" – is useful for many years, not just at the time of purchase.

Kylian Mbappe celebrates his third goal during the French match between Paris Saint-Germain (PSG) and AS Monaco (ASM) at Parc des Princes Stadium on April 21, 2019
Kylian Mbappe celebrates his third goal during the French match between Paris Saint-Germain (PSG) and AS Monaco (ASM) at Parc des Princes Stadium on April 21, 2019

Thus, Liverpool would not have an immediate cost of £ 250 million – instead they would recognize a non-monetary expenditure of £ 50 million per year over the next five years.

Or Mbappe would leave for free at the end of his contract when his value on the Liverpool books fell to zero, or he would sign a new contract and his transfer fee would begin to be repaid again from that point onwards.

Another alternative, of course, is that he would go out to a new club for a transfer fee. Liverpool would have to bear the unamortized amount of its transfer fee, and could then declare a profit on its sale – or a loss.

So if he left in two years for 300 million pounds (a truly ridiculous number, but here we are), when his value on Liverpool books dropped to about 150 million pounds, Liverpool would make a profit of 150 million pounds. pounds.

The 150 million pounds of unamortized value were canceled, with 150 million pounds to declare as a profit for Liverpool.

These are all rough estimates, obviously, and do not include fees and other fees.

Liverpool's Georginio Wijnaldum takes the ball under pressure from Kylian Mbappe, Paris St-Germain
Liverpool's Georginio Wijnaldum takes the ball under pressure from Kylian Mbappe, Paris St-Germain

Here you see how new hires increase the club's amortization rate while player sales decrease.

Back to Mbappe – his signature of £ 250 million pushes Liverpool's amortization rate to £ 50 million by 2019/20.

In 2017/18, Liverpool's total amortization cost was just £ 77.1 million – about 17% of total revenues, compared with 16% in 2016/17.

He will have raised considerably last season, with the club spending a lot with Naby Keita, Fabinho, Alisson Becker and Xherdan Shaqiri.

That is at least a 40 million pound increase in the amortization rate, according to my estimates, although Liverpool has transferred a number of players as well, which will have the adverse effect as revenue grows.

Unlike the amortization, Mbappe's wages would have to be fully recognized in the year.

At £ 400,000 a week, Liverpool would see an increase of £ 21 million in annual turnover.

Thus, Liverpool would look at an annual increase of £ 71m per year for the costs of securing Mbappe's services, based on those figures – a staggering sum, even with Liverpool's revenues at around £ 500m by 2018 / 19.

The club's salary bill last summer was £ 264 million – or about 58% of turnover.

In 2016/17, wages were 57% of turnover.

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The increase of one percentage point in both amortization and salaries as a proportion of year-over-year revenue shows Liverpool's experienced business model and ability to remain within budget.

In terms of money, PSG was happy to accept a transfer fee spread, as with most clubs, Liverpool is very likely to pay the Frenchman with 250 million pounds of the Premier League and Champions League in 2018/19 and lucrative sponsorships.

But it is very unlikely that they would blow up their financial structure of water by throwing money at Mbappe's signature – which would a rise of 71 million pounds to costs would make, and then some.

Even if Mbappe was the only summer hiring – by itself a strange move – it is incredibly unlikely that Liverpool would cut its costs in such a way.

While outputs from Sturridge, Moreno and Ings were expected to release a few hundred thousand pounds per week on the payroll, Liverpool would have to transfer one, if not several of its most valuable assets, to offset the increased costs on the eyes. .

Given that these players have secured Liverpool a sixth UEFA Champions League trophy, why would Klopp risk it?

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