S Poddar
Liverpool’s interest in Real Sociedad and Spain’s Martin Zubimendi could mark the beginning of a new era under Arne Slot, but the pursuit of the talented midfielder is far from straightforward. Zubimendi, 25, has been monitored following some exceptional displays in La Liga, which add to a fine reputation forged during an impressive showing in the Euro 2024 final. Liverpool, looking to fill into the No. 6 role, finds in Zubimendi the perfect player, though it will take much to bring him on board.
Zubimendi has surfaced on the radars of top clubs in Europe. Now, it is Liverpool making a move. The owners, Fenway Sports Group, are known to act cautiously in the transfer market. They prefer to identify talent they believe to be undervalued in the market, develop the player so that they probably increases in value while at the club, and sell them off at a premium. As successful as this approach has been in the past, it also means that Liverpool tends towards the risk-averse end of the spending spectrum, meaning deals like Zubimendi’s are always difficult to close.
The real issue is the fact that Zubimendi carries a release clause of €60 million (£51.7 million). It won’t be an excessive fee for any player of his age and caliber; it might actually be a tad on the troublesome side if the clause really is as set out. They want all the money paid up front. That, of course, is a big ask in the transfer market these days. This makes the likes of Liverpool, or any other lavishly paying suitor, liable to pick up on most of the payment almost immediately.
By usual convention, the payment for a transfer is spread along the period of the player’s contract, then taken into account by amortization. As such, for instance, in a £51.7 million agreement, that would work out as a five-year period where the annualised figure equates to £10.3 million. This strategy, therefore, helps the championship clubs maintain sound cash flow and reduce the massive fees related to transfer in their banks. But the Zubimendi case, in which he demands an instant payment, leaves Liverpool requiring a quick and vast amount, hence this may adversely affect the cash flow and overall financial planning of the club.
The club’s financial history over the past few years reveals that this kind of huge, one-off outflow will really stretch its resources. The outflow from investing activities of Liverpool during the accounting period 2022/23 amounted to £132.9 million, out of which about £122 million was toward player payments. While the Reds definitely have the financial muscle to pull off big transactions, in the case of Zubimendi, the upfront nature of the release clause further complicates matters.
Of course, that is a strategy that has been largely to do with coming in low on transfer fees compared with release clauses; it is what Liverpool did in signing Luis Diaz from Porto in January. The Reds made an offer of £37m, well below what was required to get Diaz out immediately and pay off some huge, very urgent financial obligations. That form of leverage is something that won’t be available to them in any deal for Zubimendi. Real Sociedad is not in any precarious position to sell, and they realize very well the rising stock of Zubimendi. With this in mind, the Basque institution could even want to stick to the release clause, leaving in them the idea that planting Zubimendi might bring more value to the club.
From Liverpool, it means working out a way to convince Sociedad that a staged payment as opposed to an upfront fee will work best for all. They could offer a bigger total but with staged payments over a few years as a compromise that might be advantageous to both. But then again, that would be a delicate negotiation to handle, and one is not quite sure whether Sociedad would compromise on their word.
Liverpool’s financial strategy and tough bargaining capabilities in trying to reinforce the squad under Arne Slot are to receive a test in the pursuit of Martin Zubimendi. Even though the player fits the profile of what Liverpool wants, his release clause further complicates things, so getting his signature would be far from easy. As the transfer window now clocks down, the Reds have to race against time in order to find a solution that satisfies both their financial constraints and on-field ambitions.
