Because Davies was a loan player City will get no cash from the deal - unlike when former player Ben Godfrey joined Everton previous year, which netted York a reported £2.5m.
However, due to their current needs, Liverpool also jumped in this deal and secured Davies' signing.
Centre back Ben Davies, 25, was signed from second-tier Preston North End on Monday, while a loan deal was done for Schalke's 20-year-old Turkey central defender Ozan Kabak. It's a huge opportunity.
Liverpool insiders continue to suggest the club will look to make some statement signings next summer, when a squad shake-up may be inevitable as Gini Wijnaldum is set to leave on a free transfer and several fringe players are expected to leave. Obviously it came as a bit of a surprise when it first came but once you start to get your head around it, the opportunity that is in front of me is incredible. "Just to be in this kind of atmosphere is brilliant".
The former Gunners midfielder has told talkSPORT: "I wouldn't be taking Mustafi, because I've seen him play for Arsenal!"
"Once you get your foot in the door then you're here as well".
He would take Premier League experience with him to Anfield if a shock move was made, but Groves believes there are more suitable additions for Liverpool to pursue.
"So I think naturally there's probably an element of consideration, of taking the time to understand exactly where the market's at, and I would imagine people making the decisions at clubs at the minute are probably struggling to understand what represents true value". Moreover, talks are still ongoing between Liverpool and Preston.
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