Dr Ian Graham on why he left Liverpool, Michael Edwards return and truth about FSG spending

Liverpool owners Fenway Sports Group are once again being criticised by certain sections of the club’s fanbase for their approach in the transfer market. The Reds remain the only side in the Premier League yet to sign a player this summer.

In truth, Liverpool’s recruitment has been limited in recent years as the club made minor additions to improve their playing squad.

But with such a stance in contrast to their big-spending rivals, there is a frustration in a fanbase that has often seen their side fall narrowly short in their quest for major honours - even if they have won every prize on offer to them since 2019.

Admittedly, that frustration has grown this summer after being rejected by Martin Zubimendi, and seeing a number of targets move elsewhere in recent years.

But how have Liverpool’s own recruitment team felt about the level of investment on offer to them as they look to strengthen the playing squad? Dr. Ian Graham, the Reds’ former Director of Research, has no complaints.

“Fenway have always invested in the club, but they want to spend their money wisely, which is something that I don't disagree with,” he insisted in an exclusive interview with the ECHO ahead of the release of his new book, 'How to Win the Premier League: The Inside Story of Football’s Data Revolution’.

“There’s a very unfair caricature of FSG. They're always very happy to invest in the team, but the team's got to be self-sufficient to a certain degree. I think they've shown with their capital infrastructure projects, like two stadium expansions, new training ground, they're very happy to invest in the team if they can see the money's being wisely spent.

“I can't speak for Fenway but I can give my view. And I think I think in a similar way to Fenway. There are two ways you spend your money as a football club - In the transfer market and on player wages. And the transfer market is a very inefficient way to spend money.

“In the book, I've got a chapter on the transfer market and how terribly inefficient it is. I think even before I joined Liverpool, Fenway had probably come to the same conclusion that it's a bad way of spending money.

“Now, the other way you spend money is through player wages. And that's where the bulk of the money goes. You don't read too much about it but 65% on average in the Premier League on wages, 25% on transfers.

“And some of that transfer money is made back through sales as well. And what Fenway did demonstrate is that they're very happy to spend on wages.

“So as Liverpool progressed from Champions League contenders in 2016/17 to champions in 2019/20 and regular later stages of the Champions League participants, they demonstrated that they were willing to fund that in terms of wages.

“So our star players earned star player money because that's what it takes to keep them at Liverpool. And from a statistical and a financial point of view, that is a way of spending money that is more correlated with success than transfer fees. A pound is a pound, it doesn't matter how it gets spent.

“You should just look at the total amount of money that gets spent. If you add wages onto transfer fees, Fenway spends more than most fans think they spend.

“We still spend less than the Manchester clubs. competing against Manchester City was an incredibly difficult task. And everything needed to go right.

“In order to help do that, we had to be perfect in everything we did. We couldn't make mistakes.

“And how data helps with that is it gives you more intelligence, more insight, a wider view of the transfer market, hopefully a more rational view of the transfer market to, first of all, stop making mistakes.

“Stop wasting money on players that aren't right for your team or players that might arrive for a large transfer fee and leave for nothing a couple of years later.

“So using data was an edge. But we had a super scouting department. We obviously had a super manager. We had super owners who invested in the stadium, improving that as well. So yeah, a very, very hard job to win the Premier League when Pep Guardiola's around.

“Fenway are unfairly maligned but I was happy to stick with the financial program for 11 years, which hopefully said something.”

Liverpool are well-documented to be data-led under FSG, with Graham a crucial cog in such an operation during his 11-year stint as Director of Research. But beyond helping identify transfer targets, what did his role actually involve?

“We were trying to develop new models, new ways of understanding football,” he said. “The idea was every piece of data that impacted the football insides of the club.

“So we didn't really look at, you know, commercial performance of the club. But, financial data, so how much prize money you get for Champions League and Premier League performance, what transfer fees are, how much players are paid, performance data on the pitch.

“So event by event, what players are doing on the pitch, how that impacts their team's chance of success. When tracking data arrived, rather than pass by pass, we can see 25 frames per second, what 22 players on the ball are doing. How can that extra level of data improve our predictions of which players are going to be impactful?

“So any data that was to do with the football performance, that was my department's job to analyse that, generate insights and recommendations from it.

“And the first thing that leaps out at you from that sort of analysis is most of the many at every professional football club is spent on the playing squads. So on average in the Premier League, 65% of revenue goes on player wages and 25% goes on transfer fees.

“Some of that 25% is made back through transfer sales. But the gross outgoings, 25% of revenue.

“And that immediately tells you, if you want to make a difference or if you want to get a equivalent level of performance to Manchester City but spend a bit less money, all of the money spent in the playing squad and so optimising that playing squad, getting the best performance out of the players, identifying targets in the transfer window that might arrive for a lower fee than other options who would provides a similar level of performance.

“That's the critical thing to do. And it's a direct result of analysing the financial data. Also, the performance data, really. The quality of the players is the biggest factor in determining if your team is going to be successful or not.”

However, while Liverpool are data-led, it would be simplistic to think that it is the only influence on their recruitment plan when it comes to identifying possible transfer targets.

“There's been a bit of a caricature of Liverpool and data and so on,” he said. “‘The data drives everything.’ The data doesn't drive everything.

“It's one important input into that process that involves every department at the training ground.

“Mario Balotelli is a good case study of data. If all you care about is a player's data, then Balotelli is the player to sign.

“But you sign a person, you don't just sign a set of statistics that will appear on the league table at the end of the season. And even though Mario didn't really do anything wrong at Liverpool, he came with a certain reputation that made it quite easy to put him to one side.

“So in terms of identifying players, what we put in place at Liverpool was a process. Names of players can come from anywhere. So in my team, me and my colleague curated a data list of players. So they popped out in our data as, first of all, playing in a relevant style to Liverpool.

“You know, they don't have to really switch their style to come and play for Liverpool. Young, what's their contract situation? Is their performance good? What do we project their performance to be two years in the future and so on.

“We make an estimate of a player's impact on their team, and we translate that into an estimate of what their impacts might be should they come to our team. But it's always an estimate.

“And there are various reasons why the performance you expect or the performance that you've estimated that would happen doesn't arise. Footballers are human beings, after all. They could have particular family circumstances, they could be homesick, they might not speak the language and so on.

“But there are other difficulties. So adapting to a new league, adapting to a different style of play. So we only ever gave estimates to say yes, of course, we thought Mo Salah was going to be a very, very good player for Liverpool.

“But there's a range of performances that we might have expected from him and he hit the top end of that range performances. Other players who we expected to do as well, through no fault of their own, did not reach that same level of performance.”

He continued: “So there was a set of names that was always generated by data. But similarly the scouting department would generate sets of names based on market knowledge, based on which are the best players playing in different leagues. You obviously have agents ringing you up and recommending their players to you.

“And the manager and the coaching staff watch a lot of football and they’ll get excited about players and raise names as well. The thing we did at Liverpool was to say every name that's generated, it doesn't matter if the name comes from data, it comes from scouting, it comes from the manager.

“Every player goes through the same process, and from a very long list of possible transfers, that allowed us very quickly to narrow it down to a shortlist. And again, data is one way to narrow that large number of players, it could be up to 100 players in some cases for, for one position.

“We can quickly filter that down to 20 or 30 just based on whether they look good in the data. And then the shortlisted players would go through a second step of detailed video scouting.

“So there's always things that the data can't see. And those things, our video scouts would go through in great detail.

“The finances also have to work. There are certain players whose salaries would be above our budget, whose transfer fees would be above our budget. So the salaries also have to be realistic.

“And then finally, the manager's got to be convinced that the player's going to be right for the team, that he's going to make a difference to the team.

“And that's an area which Jurgen was critical in. He was very open-minded about considering players that might not have been on his radar, but were on our radar and trusted the detailed work that Michael (Edwards), the video scouts and my department did on those players as well.

“Then it finally comes to the stage of, do they actually want to come to the club?”

Liverpool found that out the hard way last week when Martin Zubimendi rejected a move to Anfield, with the Reds said to now be unlikely to recruit a new number six before the transfer window closes.

Having left Liverpool in the summer of 2023, Graham is thankful it is no longer his responsibility to identify the Reds’ transfer targets.

One of a number of high-profile exits behind-the-scenes in recent years, there had been suggestions there had been fallings-out with Klopp and disagreements over transfer and contract decisions that prompted such departures. Such a theory was then only fuelled further by a number of returns after the German’s own exit this year.

However, Graham insists that after 11 tiring years at Anfield, he was just wanting a new challenge.

“You know, it was brilliant,” he said. “Who wouldn't want the opportunity to work for Liverpool? To work for John Henry, to work with Jurgen Klopp?

“It was a brilliant 11 years. But 11 years is a big, big chunk of anyone's career. And I needed a new challenge. Plus, the season is a grind.

“World's smallest violin! You have to work for Liverpool! Poor you! But after a certain amount of time, you just need a break from it.

“You saw last season that Jurgen needed a break from it as well. We all reach our breaking point at different times. That was the main reason. Michael also reached his, Michael needed a break before I did. He had a much more stressful job than I did.

“I think only after handing in my notice did I realise how tired I was and how in need of a break I was.”

Graham set up his own sports consultancy agency, Ludonautics, with Michael Edwards following his Anfield exit, only to see the former Liverpool sporting director re-join FSG as CEO of Football earlier this year.

While not interested in a return himself, Graham was initially surprised by Edwards’ decision before realising just how attractive an offer FSG had put on the table. And with talks held in the United States, he inadvertently played a decisive role in his now former colleague’s return.

“I was surprised that Michael was interested in joining the company,” he admitted. “It was great to be working with him again and also in a completely different environment.

“So as a Start-Up, we were the only two people working for the company in its very early days. And even in the very early days, I was kind of surprised that he was doing this full-time.

“He'd spoken to a couple of other clubs, and I kept saying to him, ‘You’re gonna go back, aren’t you? Some club is going to give you an offer you can't refuse.’ And he said he would never go back to being a director of football.

“I think Fenway offered him to go back as a director of football, and I was delighted that he was true to his word and said, ‘no, I don't want to be a director of football again.’ And then they made him an offer he couldn't refuse.

“So I was actually in Boston, speaking at the MIT Sloan Sports Analytics conference. And, Michael had come along with me, representing Ludonautics. He was doorstopped by Fenway and given this amazing offer and, you know, if I was given that offer, I'd find it very difficult to turn down as well.

“The opportunity of, you know, first of all, being given the responsibility, at an even higher level, of making sure Liverpool continues to be successful, but also being given the project of or the opportunity of looking at purchasing a club in Europe, to set the agenda for that from scratch. What a brilliant opportunity.

“So, disappointed as I am, I can see why he went back and the new business is going really well. I think, thankfully, we're prospering even without Michael's expert advice.”

He continued: “At Liverpool, I made the mistake of hiring people that are smarter than I am, so I kind of made myself redundant. I think, you know, when I handed in my notice, I was thinking, I'm not sure what it is I even do at Liverpool anymore because my colleagues were doing most of the technical work by that point.

“So Liverpool certainly don't need my expertise anymore. That department has got some really great talents working in it.

“I think having been inside a club, I'm not tempted to go back. It's quite nice being a third-party consultant.

“We’re asked our opinion, we hopefully improve clubs’ performances, but we don't have that pressure and that spotlight and that ‘Well, you haven't signed anyone yet this window,’ that all clubs go through.

“The highs were very high and the lows were also quite low. Being a fan of the club at the same time as working at the club is a difficult thing.

“So when I worked for the club, people asked if I was a Liverpool fan and I'd reply, I used to be a Liverpool fan because having that fan emotion at the same time as being involved in decision-making, it's just too much. So you have to switch off the fan part of your brain while you work for the club.

“That being said, it did mean more that I was working for Liverpool compared to another club when we had that success. Yeah, it was special.”

Ian Graham's 'How to Win the Premier League: The Inside Story of Football’s Data Revolution, published by Century, Penguin Random House, is on sale now.