Liverpool's 'summer of madness' is delighting its fans in equal proportion to upsetting rival supporters. Once the Ekitike deal is concluded, transfer fee outlay will hit £260m- with further expensive incomings expected. This thread explains how the club is financing it.

No, not Ozzy. 😢.

RT @RobGutmann: What occurs about this summer’s LFC work is that punching your weight, and being seen to punch said weight, brings transfer….

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Appearing live on the @AnfieldIndex YouTube channel around 3pm (UK time) with @eddiegibbs to discuss my thread from yesterday and delve into the club's wider financial strategy.

Whilst still adhering to the broad principles of FSG's self-sustaining model, Edwards appears to have developed a new approach that is intent on ensuring success is not fleeting. This is about building a dynasty. Delightful for Reds, depressing for the rest.

Liverpool's bold, ambitious and fearless approach to player trading is in stark contrast to the timid, hesitant and procrastinating ways of transfer windows past. I suspect Michael Edwards used his time away from the club to learn from the club's mistakes of previous years.

All this business does not mean we should expect frequent player trading every summer- the plan appears to be focused on making positive changes in one fell swoop with only incremental adaptions then required over the coming years.

Given the club will have ended last season in a position of making a healthy profit (its player trading in summer 2024 was £41m in itself, as revealed in the last accounts)- the club will have gone into this window knowing it was and is in a comfortable PSR position.

Due to this, many of the outgoings' proceeds will show as pretty much pure profit, whereas with Nunez and Diaz well into their contracts, their sales will also show as large profits (Diaz's book value right now will be around £14m, so a sale for £69m would show as a £55m profit).

This is because an outlay of £485m on transfer fees plus agents' fees of £60m (totalling £545m) would be amortised over five years- so £109m in the 2025/26 accounts. However, the same does not happen for player sales- these proceeds are recognised once and not spread out.

I make mention of amortisation because this causes all sorts of headaches for rival clubs in respect of PSR. For Liverpool, this summer's player trading should actually show as profit if all incomings and outgoings displayed earlier do materialise.

Amortisation, that I mentioned earlier, is used to deal with accounting for player acquisitions. As a simple example, Milos Kerkez (assuming his base transfer fee is £35m) will see his value amortise over the duration of his contract- his book value would be £28m in July 2026.

This will leave net cash after operating activities at £160m- which should be ample to cover the £135m needed to facilitate the remaining deals and anticipated fees the club is working on. The credit facility can cashflow this if cash isn't immediately available.

This remaining amount would need to be funded from net cash after operating activities. For 2025/26, I estimate the club should generate revenue of £750m. I estimate that the wage bill will hit £430m this season whilst other operating expenses will total £160m.

Payments due this summer - for summer 2025 sales as well as departures from previous seasons - could therefore amount to approximately £125m. This means the net outlay for player trading should be around £135m.

In addition to benefiting from proceeds from sales of players this summer, the club will also receive instalment payments for players sold over the last couple of years- these payments could amount to £30m.

All figures - like the earlier graphic - exclude add-ons.

Clearly, a very significant commitment. However, Liverpool is all set to smash its record for player sales this summer. The following graphic shows sales that have already completed as well as other sales that are expected to conclude by the 1 September transfer window deadline:.

That is broken down as:.Summer 2025 deals' instalments £149m.Previous arrivals' instalments £20m.Agents' fees £60m.Reducing credit facility liability (for Mac and Szobo) £31m.

Assuming all the deals on my earlier graphic materialise and payments need to be made towards previous deals, this summer's deals plus reducing the borrowing for the Mac and Szobo signings, the outlay this summer could be in the region of £260m.