From bid to conclusion, Liverpool didn’t mess around when it came to getting Luis Diaz signed.
A few short days ago it was widely anticipated that Liverpool wouldn’t be making any moves in the market before the January transfer window closed, and certainly there weren’t too many that would have called them landing their number one summer transfer target.
But Luis Diaz is a Liverpool player. A player who the club believe can follow the same kind of trajectory as Mohamed Salah and become a world class performer for years to come, the Colombian arrives at what looks like a snip in the current climate, with a deal of £37.5m concluded, one that will rise as high as £49m should a number of add-ons kick in.
Liverpool stole a march on Tottenham Hotspur, who had sparked the bidding process in the first place with their own move for Diaz. Not willing to let a target move to a rival, the Reds entered the race and had the ability to offer Porto more security than Spurs over a number of things, not least the value in the add-ons for such things as making Champions League football and the amount of goals scored, with both things more achievable with the Reds.
But why, with a release clause of €80m (£67m) did Porto agree to let their prized asset go for £18m less than the clause they put in place to ensure they were compensated as they felt they should be in the event of him being the object of desire from Europe’s biggest clubs?
Porto needed the money, and they needed it fast. Liverpool and owners Fenway Sports Group had a great bargaining position.
Many clubs have been hit hard by the pandemic, but Porto have been one of the clubs to really feel the bite. The year-on-year financial decline shown in their 2019/20 financial accounts that took in the onset of the pandemic. The 2019/20 season also saw them miss out on qualification for the group stages of the Champions League after they were beaten in the play-off round. That meant a huge whole in income for the 2020/21 accounting period.
Porto were hit with a €300,000 fine by UEFA for overdue payables, a violation of Financial Fair Play (FFP) regulations. At the start of December they were also threatened with exclusion from European competition for a season if they did not meet their debt obligations within two months, and with that deadline looming large and European football vital to Porto given the comparatively tiny amount of media revenues they rely on when held up against the Premier League, the need to find cash quickly was vital.
And Liverpool, sensing the weak bargaining position that Porto had, paid €8m to the Portuguese giants almost immediately so that they could meet their debts and improve cash flow. It was a deal that Porto had to make happen, one that they couldn’t put off until the summer.
Journalist and Portuguese football expert Aaron Barton, who runs the Proxima Jornada football website, told the ECHO: “Porto had to send proof of payment for €300,000 to UEFA by January 31.
“The one thing that gave Liverpool a massive edge over Tottenham was this up front payment of €8m. That basically arrived at Porto by the time that he’s had his medical finished. Any payments that were needed to UEFA or former clubs the owed money, they would use this up-front payment to pay it.
“Liverpool and Porto have built up a nice connection over the past couple of years. They’ve got some similar staff, the assistant at Liverpool now, Pep Lijnders, used to be at Porto, and Vitor Matos, who coaches at Liverpool in that gap between the academy and the first team, he used to coach at Porto. Then there’s the Marko Grujic deal.
“Porto do very well from player sales. They operate very close to the wind, there’s a player every year that goes. Last season they made £76m from player sales, the season before that it was £88m, the season before that was £72m, the season before that it was £70m. It is usually around the £70m to £80m mark, but this season after the Luis Diaz deal they are now at £70m. Without that money they are well short.
“They didn’t have too many other saleable assets. Players like Vitinha in a couple of years will be going for £40m but they only had young players right now.
“It came at a good time for Liverpool.
“Apparently Tottenham’s objectives were a lot more difficult to reach than Liverpool’s. So the €15m add-ons for Liverpool are pretty much guaranteed in terms of what these add-ons are for, they are relatively easy to meet.”
While the money that will be arriving into Porto’s accounts will enable them to meet some looming financial deadlines, a large chunk of the fee has already been earmarked to head out of the club.
According to respected Portuguese football news website A Bola, 20 per cent of the fee will head to Atletico Junior Barranquilla, Diaz’s former Colombian club who sold him to Porto for €8.9m back in 2019.
Player trading is core to Porto’s strategy and underpins their financial health, as does their need to be competing in the Champions League year in, year out.
And Porto boss Sergio Conceicao’s displeasure at the sale of Diaz was clear when he addressed the media following his side’s victory against Maritimo at the weekend.
He said: “It’s not worth repeating myself. I’m aware of the club I represent, the demand this club has for its professionals and the one I have.
“That identification and this way of being doesn’t change, but obviously we are talking about four players, three of them. Corona two years ago was the best player in the league, Sergio (Oliveira) was last year, curiously, and this year it was Luis Diaz.
“It’s part of my job to find solutions, in a situation very difficult where clearly the financial aspect was much stronger than the possible sporting success.”
And the pressure to find those solutions weighs heavy, especially with the Porto fans also up in arms at the sale of their star player in the middle of a season where they are chasing the title having lost out to Sporting CP last season.
“I’ve never know in the last 20 years Porto sell a player, the best player in the league, in January,” Pascoal Sousa, a journalist at A Bola, told the ECHO. “That is something that we thought was impossible to happen.
“It wasn’t a very good deal. In January they lost four players. They then had to accept this offer from Liverpool, and if it wasn’t Liverpool it would have been Tottenham, because of financial problems.
“They have a lot of debts. In the past five years this coach (Conceicao) has worked miracles and always worked with financial problems. But he has won them a lot of money in the Champions League so we can’t understand why Porto can’t establish a financial plan. They had to sell the best player, by far, in the Portuguese league. The coach was furious.
“They needed the money in January. Diaz didn’t really want Tottenham, but Porto needed to sell as they needed the money immediately. They had debts to pay and they needed to pay them today. They didn’t want to sell him but they had to sell him, and with Jorge Mendes in the business it was inevitable to sell him now.”