Rafa Benitez and the Net/Gross spend argument

I read an interview with Rafa Benitez last weekend where he insisted that any criticism of his transfer market performance as Liverpool manager is not fair, as he was not given enough money to succeed at Liverpool. He said “We had the confidence we could win the league but you have to wheel and deal, You cannot bring in two or three top-class players if you don't have the money. You have to sell”
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In another interview earlier this season Benitez said:

“Sometimes, maybe one player is a good player and after he doesn’t settle down, but if you see, we have a net spending of between 10, 12 million. >>

“So I think that this, for a top side ... it’s not big money”>>

In fairness it’s not reasonable to suggest that Benitez would turn around and say “Yeah, I wasted a ton of money on mediocre players, sorry about that”. He is, as is his right, defending himself. A lot of his supporters have been commenting on this story this week.

Now the real point of this is article is that once again the net spend/gross spend argument has been brought up and I want to put my opinion on this topic forward. This issue seemed to arise in the latter seasons of Benitez’s Liverpool reign when his devotees decided to defend their hero by finding a way to present the transfer figures that made him seem like a transfer genius having to find ways to buy players despite being given no money to spend. This was a response to when fans were asking questions of Benitez’s transfer dealings and he was getting criticised for his big-money failures and not much silverware to show for a lot of expenditure. Also, with the protests against Hicks and Gillett ongoing, this further served as a way to make it look like the Americans had given him no money and could be used another piece of ammunition against them.

The reality is that the opposite was true. Benitez in his Liverpool career spent £289m on transfer fees. That’s the figure that you get from looking at the club accounts, so can be taken as accurate. That’s also enough money to build a winning team. He also sold players for a total of £225.5m, making his total net spend £63.5m. Even under the so-called austere years of Hicks and Gillett, Benitez still got £188m to spend on players.
As Benitez was manager for 6 years, simple division gives us his average net spend figure of roughly £10.5m per season, which is what Benitez himself said (I’m going to guess that the figure he mentioned was per season rather than in total, as it is accurate that way).

Benitez’s supporters have latched onto this figure as ‘proof’ that he was handcuffed in the transfer market. I don’t believe this is the case at all. There were two seasons where Benitez spent close to £70m in transfers. Yes, players were sold, but what’s weird about that? If they weren’t we’d have ended up with a ridiculously large squad like Barry Fry had at Birmingham (he had something like 50 first-team players at one point). Also, in most years, the money raised from transfers was spent again, hence the positive net spend.
I’ve never really got how people can see net spending as a true reflection of a manager’s ability to spend in the transfer market. Surely the amount of money that was actually spent (i.e. the gross spend), is a far better indication of this?

The logic that most of the pro-net spend advocates seem to have is that a higher net spend equates to more money spent on transfers. That’s just not true. For example Gerard Houllier had an average net spend of £13.3m per season, higher than Benitez’s. So that should mean he spent more money right? Well, no. Houllier’s gross spend was £147m. So unless 147 is now greater than 289 this argument’s totally invalid.

Also, just because you make/don’t lose money on a player doesn’t mean they were a good signing in the first place. For example who seriously thinks Andriy Voronin was a good signing? Yet, the fact that we made money on him would lead some of the net-spend advocates to conclude he was.

There is also an argument that a higher net spend means that you spend more on transfers, so get better players and therefore more success. Well, look at the Premier League. Chelsea, and in the past four seasons, Manchester City have spent millions on transfers, with little coming back into the club giving them humungous net spends.

Until last season, Chelsea were beaten to the title by Manchester United three years running, a team with a much lower net spend. Liverpool beat them into 2nd place in that time too. Manchester City have not yet managed a top 4 finish (until this season ends anyway), despite all of their superior spending. So, in my opinion, that argument doesn’t hold water either.

Benitez also said “We sold Xabi Alonso and bought Glen Johnson, Alberto Aquilani and Sotirios Kyrgiakos. We [should have] had money but I couldn't use it because we had to meet the interest payments”>>

Simple maths tells us that statement isn’t true. Alonso was sold for £24m (it was 30m EUROS, not pounds as was widely reported), Johnson, Aquilani and Kyrgiakos cost £37.4m combined. So he certainly did use the Alonso money, and more on top. Also it was repeatedly stated by the Liverpool hierarchy that money recouped from transfers didn’t go on any debt/interest payments. There isn’t anything in the club accounts to show that was the case either, so I don’t buy that argument.

What has to be the most important considerations when looking back at how Benitez spent money on transfers is to ask, did those players make the team/squad better in terms of results? Was the money spent on players that were actually needed at the time (I’d argue Glen Johnson was not needed at the time of purchase)?

Net spend doesn’t apply to either argument. Gross spend is by far the more important figure when looking at how much money a manager had to work within the transfer market. Benitez didn’t get the vast amounts of money that Roman Abramovich has provided for Chelsea or what Sheik Mansour has provided for Manchester City, but he still got £289m over the seasons, and didn’t use it as wisely as he could have.

Benitez had some great successes in the transfer market but he also had a string of expensive failures (and a plethora of failures in the £3-6m range) and had that money been invested wisely, Liverpool would have been a stronger team and Benitez would have left Hodgson and Dalglish a stronger squad to work with, instead of one that needs a major overhaul. Money wasn’t the issue; bad transfer decisions were the problem, there were reports that the board had lost faith in his transfer judgement, and this ultimately led to Benitez’s departure.

P.S. If you want to check out Liverpool's accounts for yourself, you can download them from the companies house website, www.companieshouse.gov.uk

Search for 'Liverpool Football Club and Athletic Grounds Ltd', each statement costs £1 to download.