The club that sells well

The authoritative Swiss Ramble has used his forensic skills to examine the recently reported financial results of Liverpool. He notes, 'A core part of Liverpool's business model is that they have become a club that sells well. In the last four years, they made a hefty £261m from this activity with only Chelsea £272m ahead of them. For more context, Arsenal, Manchester City and Manchester United only made £158m, £108m and £43m respectively.'

Liverpool have made a profit four times in the last five years, amounting to £204m over that period. The preceding five years (2009-13) saw total losses of £176m, so there has clearly been 'a stable and sustained improvement in the club’s financial position over recent years.'

Recent profitability has also benefited from the absence of exceptional charges in the last two years. These had increased costs by £113m in the decade up to 2016, mainly (unsuccessful) stadium development expenses £61m and compensation for sacked managers £47m.

Revenue has more than doubled since 2013 and is up by 50% in the last two years alone. Most of that (£96m) has been driven by TV, but there has also been impressive growth in commercial £39m and match day £18m. Commercial revenue was up 18% (£13m) to £154m, mainly due to eight new partnerships, including shirt sleeve sponsor Western Union £5m, plus higher merchandising (including record sales of 125th season celebration kit) and catering, plus bonuses for reaching Champions League final.

The board is very focused on commercial opportunities. The Standard Chartered shirt sponsorship has been extended to 2022/23 with an increase from £30m to £40m, while there is talk of improving kit deal from £45m to £75m when New Balance agreement ends in 2020.

Significant revenue growth to £455m means that they now have the third highest revenue in England, having overtaken both Chelsea £443m and Arsenal £388m. They’re within striking distance of Manchester City £500m, but still a long way behind Manchester United £590m.

Average attendance of 53,049 was the 6th highest in the Premier League. The board is considering expanding the Anfield Road End at an estimated cost of £45m for 5,000 additional seats to bring capacity to around 60,000.

As far as the Champions League is concerned, it should be noted that a new UEFA coefficient payment (based on performances over 10 years) will benefit traditional big clubs like Real Madrid and Barcelona at the expense of clubs from countries with large TV pools, i.e. England and Italy.