Graeme Yorke of the Daily Mail indicates that Reds manager Brendan Rodgers is to speak to the club's owners to inquire about whether Alonso can be brought back for a fee of around £10 million.
While there can be no doubt as to Alonso's enduring quality and the fact that he represented Liverpool so well in the past, it remains doubtful that he is the right fit for Liverpool—this summer in particular.
What Alonso Could Bring
As a Spain international with more than 100 caps, a World Cup and European Championships winner, a Champions League winner and a Spanish league title winner, there is one thing Alonso can certainly bring: winning experience.
Not so long ago, Liverpool had an entire squad filled with such players. Now they are a distant memory and Rodgers does have to try and bring in some faces who have that experience and know-how.
Of course, Alonso is an accomplished passer, a threat from set pieces and has wonderful positional sense and vision. He's very much a central midfielder, operating from deep areas of the pitch—versatility and the pace or drive to quickly find spaces elsewhere on the pitch are not in his repertoire.
The Financial Aspect
At £10 million, Alonso would represent good business—at least on the face of it.
However, Alonso is 31 years old, will be on extremely high wages—likely around or above £100,000 per week—and would offer little to no resale value in two or three years' time. Moreover, he potentially would not be in the side every week on account of his age at that point, yet would still be making large wages.
All in all, even a three-year deal for Alonso would cost Liverpool a minimum of £25 million, with nothing recouped at the end.
With the Reds aiming to build a sounder business model with regards to transfers, and with Champions League income far from assured at this point or in the future, it seems an excessive amount to spend on one veteran central midfielder—possibly the area of the team the Reds are currently most stocked in.
Why Alonso isn't the Right Signing
The finances do not point to a must-do deal, but even given Liverpool's supposed no-over-30s policy and the amounts they would have to spend to bring Alonso in, such a deal is workable if the player would make a significant difference on the field.
While, again, Alonso's quality on the ball should be recognised, his position within a team means he is unsuitable for Liverpool at this time.
At Real Madrid and more often than not for Spain, Alonso plays in the second central midfield role. Beside him is the defensive midfielder, a holding player with energy and physicality, positional awareness and good distribution. Then it's Alonso, the distributor, the creative presence from deep who can also lend his skills to protecting the back line.
This is the same role he played in his original spell at Anfield. Of course, at the time, he had Steven Gerrard in the team ahead of him in the more advanced midfield role as the attacker or second forward.
Nowadays, Gerrard's importance to the team is undiminished, but his role within the starting XI has changed.
Now it is Gerrard who operates that deeper role, and does it well, allowing those with more energy and ability to make penetrating vertical runs—Luis Suarez, Jordan Henderson, etc.—to play in that advanced role.
Liverpool have to improve the midfield area of the pitch just like most of the positions within the team, but that particular area of midfield is stocked.
After Gerrard, Joe Allen and arguably Henderson are vying for game time in the same place, with Spanish youngster Suso also more suited to that position over the longer term.
Alonso remains a great player and Liverpool could do with one or two more of those, but bringing him back to Anfield this summer would not solve any of the Reds' problems and would indeed bring about the question, once again, of where to use Gerrard to get the best of him.
They'd be better off letting Gerrard continue in his deeper role, where he performed well last year, and using the funds which Alonso would take up in bettering the squad elsewhere.