Reds: Joe Cole signs for four years

Liverpool have today announced the signing of England international Joe Cole on a free transfer.

The former Chelsea star was out of contract at Stamford Bridge and therefore free to choose his destination from any offers in front of him, with Tottenham or Arsenal having looked his most likely destination before the World Cup.

Joe Cole joins LiverpoolUltimately though it was Liverpool who said the right things and made the right offer, the player signing on a four-year deal – although he does still need to undergo a medical.

Cole is the club’s third new arrival of the summer, joining Jonjo Shelvey and Milan Jovanovic – both of whom signed before the previous manager left but will play their debut season under the new first team coach Roy Hodgson.

28-year-old Cole was a product of the West Ham youth academy, before moving onto Chelsea where he won the league three times along with two FA Cups. He was recently on duty in South Africa with his England and now Liverpool team-mates Jamie Carragher and Steven Gerrard, and also his former Chelsea team-mate Glen Johnson.

Of the four players signed by Liverpool in 2010, Cole is the third one to be signed on a free transfer. There will undoubtedly be a hefty signing-on fee to pay, not to mention a contract that is more lucrative than it might have been had he been signed for a fee from his former club, but in terms of straightforward transfer fees Liverpool’s transfer fund is heavily in profit since the turn of the year.

Of the four players signed this year – Argentine international Maxi Rodriguez, Shelvey, Javanovic and Cole – only Shelvey cost the club a transfer fee, which was £1.7m.

Players sold and released since January 1st include Dossena (£4.7m), Voronin (£1.8m), Mihaylov (£1.5m), San José (£2.6m), Aurélio (Free) and Benayoun (£6m). A deal that sees Emiliano Insua move to Fiorentina for around £5m is expected to be finalised in the next 48 hours, which would see Liverpool’s income from transfers in 2010 reach £21.6m

Overall that leaves Liverpool with a profit on transfer fees of just under £20m in the seven months of the year so far.

The club chose to start talking about transfer spending as being inclusive of signing-on fees, agent fees and player pay-rises (also known as contract renewals) last summer, something fans had not seen done before and something done without making any adjustments to figures for previous years. No doubt they’ll make the same claims this summer without being too specific about the true level of spending.

Although the club insist that transfer fees don’t get spent on paying down debt, it does seems more and more likely that wages are now being paid by the income from player sales. Income from other sources, traditionally used to boost the transfer kitty after other costs had been taken into consideration, now seems to be heading directly to RBS, the bank to which Liverpool (and its parent company) are in a considerable amount of debt.

A report in yesterday’s Sunday Times suggested the transfer budget before sales would be a paltry £3m this summer. But despite the embarrassment of that figure so soon after co-owner Tom Hicks predicted a “big” transfer window there should still be a lot to spend this summer. That £20m transfer-fee profit so far in 2010 should be added to the money recouped for Javier Mascherano who looks almost certain to move for a fee of at least £25m, which added to the generous £3m (presumably the amount left after paying off the old manager and the club of the new manager) should leave a remaining budget of £48m.

Few fans actually expect to see the club spending anywhere near that £48m this summer.

In many ways Liverpool are fortunate that Joe Cole became a free agent this summer, it may well have bene the only way a quality player could be in reach of Liverpool’s RBS-trimmed transfer budget. That kind of quality will by and large be out of Liverpool’s reach until Tom Hicks and George Gillett finally sell their stake in a club they admitted they can’t take any further.

It remains to be seen how Cole will be deployed, but he can certainly play in any of the positions former Red Yossi Benayoun was deployed in before his move to Chelsea last week, a move that netted Liverpool in the region of £6m. Cole certainly represents an improvement on the Israeli international, and with the Premier League’s new quota rules coming into play from this season his “home grown” status is a further bonus. He’s expected to be handed the number seven shirt.

With the imminent departure of Emiliano Insua, in a deal that was put in motion before the appointment of Roy Hodgson, Liverpool now need to look at finding some left-backs. Daniel Agger covered the role towards the end of last season with Insua and Aurelio both injured. Youngster Martin Kelly can play left-back but would be far more suited as cover for right-back Glen Johnson.

What still isn’t clear is how much say in the buying and selling of players the new manager Roy Hodgson actually has. No doubt someone at the club will strive to clarify the way transfers work under the new set-up before too long.

9 thoughts on “Reds: Joe Cole signs for four years”

  1. Welcome Joe. Good piece of business if we can keep him fit.

    Joe Cole and 5 million for Benayoun, Liverpool are definitely the winners in that scenario.

    We need more than Joe Cole though. I would like to see us take a risk on Micah Richards if we could get him for a reasonable price, he needs a change of scenery. After that a new left back and a striker and things are hopefully on the up.

  2. Mr. Cole’s signature is a great bit of news. If he can stay fit I think he’ll make a wonderful addition to the squad.

    Welcome to Liverpool Joe.

  3. Didn’t one of the ‘owners’ or one of their puppets state that things like wages etc would have to come out of any transfer budget from now on (well from a year ago)? So although Joe was free his wages would come off of the money available to Roy! Hope not though, and maybe they can see that there needs to be some investment, particularly if the club is proving hard to sell in its current (non-Champions League) position and they need to rectify that to sell!!!

  4. Hi Jim

    Firstly I would like to say I’m very pleased about the signing of Cole, I think at his best for Chelsea he was one of the Prem’s top players and if fit he will be a great addition to the Liverpool first team.

    In 40 years of supporting Liverpool i’ve never been interested in how players were signed, just as long as they were good enough for the Reds. Besides most deals were kept out of the press until they were concluded. However in our current scenario there seems to be a heated examination of the process, from speculation to negotiations, decision mechanisms and over all transfer control to exactly how much has been spent and what’s in the kitty.

    So far 4 major transactions have been concluded in this window: the exits of Benayoun and Insua (yet to be finalised but pretty certain) and the arrivals of Jovanovic and Cole.

    All of these decisions appear to have been conducted without direct contribution of the manager. In a number of interviews now, Hodgson has reiterated that Purslow (as CEO no less) is in charge of all negotiations and that he has had little or no input and that his role is to “coach the team”. Jovanovic was a free contract agreed under Rafa, Benayoun was a close to completion before Hodgson was apppointed and it would appear that negotiations for the sale of Insua were also too far down the line for Hodgson to feel able to intervene. On the latter what we don’t know is if Hodgson wanted to intervene, having said he liked Insua (as a player and a man) and if he did want to whether he had the power to. It would also appear that he had very little input into the Cole signing “I haven’t had any discussions with him, but I had a brief chat a while back.”

    Your last few posts have been putting the actions of Purslow under increasing scrutiny as it would seem that he has an inordinate amount of influence for one with such little expertise in football. He has come under criticism for selling both Benayoun and Insua, but does he now deserve credit for signing Cole?

    It is of great concern to me that CP is taking control of player acquisition strategy and leaving the manager to the role of head coach. It is not a situation I favour as CEO’s can be a meddlesome influence, Ashley’s role at Newcastle and Perez’s at Madrid spring to mind, but often in those clubs with a CEO election process, player acquisition strategy can be a very public and destabilizing sideshow. Clubs with CEO’s who decide player acquisition invariably have a high turnover of head coaches. This is not to confuse this with the Director of Football/Head Coach structure that some clubs have as their approach. Where the former is usually an ex-player or technical expert who sits between the coach and board. There is no evidence that we have this structure at Liverpool and I’m not aware of any job vacancies for that position. But I can’t just criticise CP for the transactions I don’t like and ignore the ones that I do without being a hypocrite.

    So do you know what CP and Liverpool’s medium term plans are for this situation? It seems to me that CP was disingenuous why he said that no player transactions would be made before a new managerial appointment, whilst knowing full well that at least 2 were initiated and in progress to such an extent that the manager would have no say. However I can see a case for his involvement on a temporary basis whilst there was a vacancy in the hotseat (although if this is the case he should have just said so). I can see a scenario were CP felt the need to act on or continue progress on some decisions or targets identified under Rafa’s regime as the club could not down tools just because the manager had gone. But what can we glean from this regarding a future structure? Is CP talking to Macia and then deciding what’s what? Is Dalglish offering CP any technical insight? Will Hodgson now have a greater say in player identification and then leave negotiations to CP? Hodgson has repeatedly said that CP is in charge however he also seems to have blocked or slowed down the negotiations regarding Loic Remy until he’s had a chance to review it. He has also said that he wants a new left back as a priority. I guess its probably too early to decide.

    All of this is incidental to the player pot that CP has talked about. Whilst CP and Broughton have both been adamant that no player sales will be used to pay down debt they haven’t excluded player sales to pay debt interest. In the SoS minutes CP said that interest was paid for by club profits and any club profits left would decide the initial size of the player pot, to be then supplemented by sale income and salary reductions from player sales. If however profits are reduced or are insufficient to pay off interest then surely we would have to sell to balance the books. It seems to me that CP has again been disingenuous, at least less than transparent about how the player pot works. He did say that incremental costs associated with agents fees and renegotiated contracts would come out of the player pot, which seems fair enough as they have to be paid somehow. Except he also said the the 2009 summer transfer window saw LFC spend the usual 20mil net on top of player sale revenue, which seems to be a complete lie to me. I suspect that he takes the incremental cost of new contracts as one hit on the expenditure instead of amortising it across the life of the contract as majority of the players’ salary would be. If this is true, does he also take the salary savings of player sales at one hit? But with a total lack of transparency its just conjecture.

    So its good to see that you are keeping an eye on the net spend following player trading. But I think you’ll need the help of a forensic accountant to get to the bottom of it. Good luck with that one!

  5. Hi Jim

    Further to my last comment regarding you needing a forensic accountant to wade through all of the figures regarding transfer budgets, today has seen Broughton enter the arena of spin and misinformation. Please see the link below to his interview in the Director magazine in which he says:

    “Remember, over the past five years, LFC is second only to Chelsea in terms of gross and net player spend. The question is whether the money has been spent wisely.”

    This particular exaggeration is all the more brazen as in the same article he berates the media for “misreporting” and “fabrication”.

    So over the last few months Hicks, Purslow and Broughton seem to be seeking to create a myth regarding the transfer budget. I can understand why Hicks would want to (in his incessant state of self-importance and grand delusion) but what is the advantage of P&B maintaining this if the club is so close to a sale? The accounts show we’re in debt, make an operating loss and pay 40+ millions a year in interest so they have nothing to lose by admitting that we don’t have a pot to piss in. Its hardly as if a prospective buyer won’t see through the crap and bid what the think the club is truly worth.

    I know that Rafa spent huge sums of money, some of it was well and truly wasted. There has been a massive turnover of players and some spectacular mistakes. But Rafa has often had to sell to trade up in the market. And relative to he rest of the big clubs in the prem league his player transactions do not stand out as being particularly wasteful or excessive. And this is the key.

    I know that Paul Tomkins has done some in depth analysis using TPI and his analysis suggests that Chelsea, City, Spurs and even Sunderland and Birmingham are outspending LFC. Can you provide an accurate source of true transfer figures and accurate gross and net spend relative to other clubs in the last 5 years that Broughton is referring to?


  6. Hi all, I’m new to this site but I have to say look’s like Editor has a very anti club agenda here. I thinks it’s very clear to everyone what has been going on at the club for the last couple of years & who was to blame yet editor is saying that he knows this or that. Thankfully Rafa has moved on and now we can get back to being run like a proper football club again. Chritian & the board are doing a fabulous job, let’s all give them our support now. Great news about Joe & Stevie, now lets bring on some more good signings, things are looking up.YNWA

  7. As a Liverpool fan, I’m desperate for Cole to regain his best form at Anfield. He had so much potential for a youngster, but through injuries, being out of favor with managers, being underused or misused, he never achieved his potential. Liverpool fans will hope this is a resurrection for Cole – still the most naturally gifted English player of his generation.

  8. Once again I have reason to love stevie G. thank you so much for signing again…please stay fernando….and welcome joe cole. looks like this could be the real deal with the scottish young player of the year..a quality serbian striker and now joe cole. hopefully it’ll be a great year!

    Matty K from Oregon, USA

  9. Welcome Joe, i just hope you play better for us than you did in the world cup!

    Todd, do you happen to work for Hicks, Gillete, Purslow, or Broughton? Sure sounds like you do!

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