£105m cut-off no issue for Liverpool and Arsenal as FSG and KSE set budgets ahead of deadline day

As a market, the Premier League is a basket case. Despite spending a combined total of over £850m on their squads in the last financial year, Liverpool and Arsenal are among the only clubs acting sanely.

In financial terms Stan Kroenke and Fenway Sports Group (FSG) are getting good ROI from that figure, which is derived from the amortisation and player w⛎age sections of their official accounts.

Yes, Arsenal and Liverpool have a grand total of one Premier League title between them in the last 2🍌0 years. However, their respecti🔜ve enterprise values have exploded in the same period.

FSG paid £300m to buy Liverpool in 2010 and almost immediately wrote off around £200m worth of debt inherited from Tom Hicks and ൩George Gillett, meani𒈔ng their enterprise value stood at around £500m.

Kroenke Sports & Entertainment (KSE) meanwhile paid ITV £65m for an initial 9.9 per cent stage in 200ꦦ8, giving the Gunners an enterprise value of about £650m.

These are imperfect calculations, of course, and a club’s value is inherently tied to the market, but even the most conservat꧒ive of estimates shows an astonishing level of caꦚpital growth.

Speaking to TBR Football last year, Liverpool University football finance lecturer and industry insider Kieran Maguire called FSG’s takeover the “bargain of the century.”

Forbes estimate that the Boston-headquartered owners’ investm💜ent🎉 at Anfield is currently worth approximately £4.3bn in today’s market while Arsenal are appraised at £2.5bn.

Clearly, b🐠ot🌳h owners feel there is far more upside to be achieved.

That is why FSG opted to sell onl൲y a minority stake to th🦩e private equity firm Dynasty Equity last year, as opposed to a full sale which was at one point on the cards.

In doing ꦫso, they are believed to have recouped around £150m for just 3-4 per cent of the business, while re𝄹linquishing almost no operational control.

On the pitch, Arne Slot is proving an inspired hire. Former sporting director Michael Edwards’ return as CEO and a raft of other baꦑck-of-house changes have also made smoothed the post-Klopp transition.

Arsenal were a fading force at the start of the Kroenke era but have invested heavily in recent years and, although the coveted Premier League title still alludes Mikel Arteta’s side, their bar has risen significantly.

That investment – which has seen Declan Rice and Nicolas Pepe become the two most expensive players in Arsenal history, with mixed results – has ღeaten into their profits. They have lost £311m since 2019.

When TBR speaks to industry sources, the mood music is that, now the Gunners are Champions League regulars agai🦋n, KSE will likely taper their spending and return to profitability.

This article has been rosy reading for Liverpool and Arsenal fans so far, but the business models of Stan and Josh Kroenke, Tom Werner and John Henry don’t placate suppꦚorters pining for blockbuster signings.

When there is a market opportunity, they will strike. But their emphasis on the laser-focus on sust𝓰ainability means that Galactico signings aren’t de rigueur.

In recent years, a convenient excuse has fallen into FSG and KSE’s laps. But there is j🌃ust one problem…

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The PSR myth about Liverpool and Arsenal circulating this January

January transfer windows have become much quieter 💦affairs in recent years.

Last January, Premier League clubs collectively spent less than £90m. T🐼his timꦫe around, spending is around the £250m mark, but Man City are accountable for around half of that.

In seasons gone by, English clubs hღad flirted with the £1bn mark.

The drop-off over the last two winters has been attributed to Profit and Sustainability Rules (PSR) reigning in clubs’ spending. 🌼That is true – although, only to an exꩵtent.

Several rece🎐nt op-eds and transfer reports have suggested that clubs like Arsenal and Liverpool are unable or unwilling to sign readymade superstars like Alexander Isak because of PSR.

Whether that information is com🦂ing in media briefings from the clubs or ham-fisted attempts to read the accounts, it isn’✤t true.

TBR Football is aware that certain Premier League clubs without PSR issues are actively parroting this narrative, presumab♏ly to quell fan ex✤pectations that mega-money signings are inbound.

Liverpool have more PSR headroom than almost any other team in Europe under 🥂both the Premier League’s £105m loss limit and UEFA’s squad cost control rul🅷es.

Arsenal have slightly less flexibi♛lity but are still more than comfortable because of various PSR-allowable add-backs, as are all of the ✨so-called Big Six with the exception of Man United.

But even in United’s case, there are a dozen levers that they could theoretica๊lly pull to create more breathing space and it is highly unlikely they will actually breach PSR.

Cash flow, business strategy and a l▨ack of market opportunities are different matters altogether.

But the reason the bigger clubs aren’t pushing the boat out while simultaneously hiking ticket prices and removing concessionary discounts for bedrock fans has virtually nothing to do with PSR.

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New FFP system next season: How will Liverpool and Arsenal fare?

As of the start of 2025, UEFA have finished phasing in their squad cost control rule which limits clubs competing in Europe to s﷽pending 70 per cent of revenue on wages, transfers and a൲gent fees.

That limit, which includes p🐽rofit on player sales as well as clubs’ headline turnover figures’, is expected to be replicated in the Premier League from next season, albeit at a more lenient 85 per cent༒ cap.

As regulars in European competition, Arsenal and Liverpool are already well-versed in navigating UEFA’s system, which𝓡 has been being phased in for the last two calendar years.

As the loss limits and the squad cost cap in Europe are righter, the new Premier League system should not be an issue for either Arsenal or Liverpool 🅰based on their present levels of expenditure.