The reason why Liverpool have no PSR concerns after making Isak approach

They’re considering a £120 million move for the Swedish superstar 

They’ve already splashed out close to £200 million on a host of exciting first team stars, including more than £110 million on German attacking midfielder Florian Wirtz and another £40 million on Bournemouth’s Milos Kerkez in defence. 

Considering their free-spending approach, most fans were surprised to learn of their interest in Newcastle United’s Alexander Isak. 

Long gone are the days where a team with money can simply buy up the best players in the league without consequences  — as Manchester City did when Sheikh Mansour bought the club in 2008  — because there are now strict spending rules in place. 

According to the league’s Profit and Sustainability Rules (PSR), Premier League sides are only allowed to make an overall loss of £105 million at the very most over a three year period, so they need to have brought in at least more than that to stay in the clear. 

PSR regulations are nothing to be trifled with, after all Everton received a 10-point deduction for breaching spending rules last season. 

With Alexander Isak valued around £120 million, The Reds' spending would rise to nearly £350 million, seemingly putting them in trouble. 

Even with Darwin Nunez linked to move away from Anfield to Napoli, the champions don’t seem anywhere close to bringing in the kind of total that would clear the way for further heavy spending. 

So how are they able to spend so freely? 

The answer is simple, they’ve been financially healthy for all of the last three years. 

According to football finance expert Swiss Ramble, the past three seasons actually pace the Reds in a PSR positive position. They’re up by £48 million overall, which rises to £153 when combined with the  £105 million headroom they’re allowed. 

This is before we consider this year’s profit, which is expected to be at least another £50 million. 

That places Liverpool’s PSR buffer at more than £200 million, keeping them well in the clear for the signings they’ve already made. 

We haven’t even taken into account the sales they’re likely to make, there’s £18 million on Kelleher then there’s £30 million of pure profit from the sale of Jarell Quansah. 

When we break down the financial gains brought about by sales we need to separate them between amortisation and pure profit. 

When clubs usually make a sale, the transfer gains are separated over the length of the player’s contract. 

For example a £60 million deal over a six-year contract would bring in £10 million every year. 

This is called amortisation.

However when clubs sell a home-grown academy talent they can bank all of that transfer fee immediately. 

So the Quansah deal adds £30 million to Liverpool’s PSR buffer. 

When combined with the sales from other players and the expected money for Nunez, Liverpool have more than enough breathing space to bring in Isak. 

All that’s left is to agree a deal with Newcastle!