Does the Swiss Ramble spend every day hunched over a computer? Or does he ever get the chance to enjoy Zurich and Switzerland more generally? In any event the accounts of Liverpool FC for 2018/19 are the latest to be subjected to his forensic and authoritative analysis.
He notes, 'success on the pitch, both domestically and in the Champions League, has driven significant revenue growth and profitability, which has enabled the club to make substantial investments in player recruitment and infrastructure in a bid to create a virtuous cycle.'
Since FSG acquired the club, Liverpool have had £680m available cash: £492m from operations, £144m from owner loans and £44m from bank loans. £396m went on players (net), £203m capital expenditure, £38m stadium loan repayment and £25m interest payments. Commendably, the board invests almost all profits back into the club. [One must always avoid a domestic owners good, foreign owners bad narrative].
The inter-company loan is interest-free, while the bank loan is 1.96%, so the club only paid £1.9m interest, while other clubs have had to pay more substantial sums, e.g. Manchester United [Glazers] £19m, Spurs £14m and [Silent Stan's Arsenal] £11m.
£129m is the 8th highest debt in Premier League, way behind Manchester United £511m, even after all the Glazers’ re-financings, while others have taken on debt for new stadiums, e.g. Tottenham Hotspur £466m, Brighton £280m and Arsenal £209m. Worth noting that Everton debt is up to £337m.
The club made record player purchases of £223m (including Alisson, Naby Keita, Fabinho and Xherdan Shaqiri), though only second highest in the Premier League, behind Chelsea £281m. However, well ahead of Manchester United £103m and Manchester City £87m. Liverpool have spent a chunky £731m in last five years.
The wages to turnover ratio has improved from 69% in 2011 to a healthy 58%. So the £310m wage bill is now the third highest in England, only behind United £332m and City £315m, though some will argue that the latter figure is under-stated, due to City’s innovative [one way of putting it] corporate structure (i.e. the use of City Football Group Ltd).'
Liverpool have had the second highest wages growth of the Big Six in the last 3 years with their £102m only outpaced by Manchester City £118m. Their increase is three times as much as Arsebal £36m, which helps explain the divergent fortunes on the pitch recently. The wage bill climbed £46m (18%) from £264m to £310m, though basically in line with revenue growth, so wages to turnover ratio unchanged at 58%. Included sizeable Champions League bonuses, while 11 player contracts were extended.
In 2019/20 the training kit deal with AXA is reportedly twice £8m BetVictor deal. The following year Nike replace New Balance £45m with a base £30m plus 20% royalty on net merchandising (usually 7.5%) worth an estimated £70m. Standard Chartered shirt sponsorship extended at £40m.
In the last three years, commercial income has grown by an impressive £72m, just behind Spurs £75m, but better then the rest of the Big Six, especially Manchester United and Arsenal, who have only grown by £7m and £4m respectively in this period. Will further grow over next two years [particularly if outstanding success on the pitch continues. I find the United figure particularly interesting as they have a deserved reputation for a sophisticated commercial operation, but sooner or later performance on the pitch has an effect].
Jürgen Klopp beautifully described the Champions League as a “money-throwing competition”, which has earned the club €192m in the last 2 years. This has meant the Reds have received €264m in the last 5 years, only behind Manchester City €337m, despite missing out on Europe one season. Liverpool earned £98m for winning the Champions League final, only behind Barcelona £104m. Restricted by finishing fourth in the 17/18 Premier League, so they only got 10% of first half of the TV pool. Although final was played day after accounts, this was only worth €4m (€19m less €15m).
Premier League TV money was up £6m to £152m, largely due to a higher merit payment (second versus fourth place). Liverpool actually received more than champions City, as were shown live three more times. They will see further growth in 2019/20, as the overseas rights increase is split by league position.
Broadcasting income rose £41m (19%) to £261m, the most of any club in the world from this revenue stream, just ahead of Barcelona and Manchester City.
The club's £533m revenue is the third highest revenue in England, within touching distance of Manchester City £535m. Still a long way behind the Salford club at £627m, but there is a genuine chance of overtaking their rivals, as United forecast £560-580m in 2019/20 after only qualifying for the Europa League.
The £231m revenue growth in the last three years is only surpassed by Spurs £250m (from a much smaller base). The rest of the Big Six has grown at a far slower pace: Manchester City £143m, Chelsea £118m, Manchester United £112m and Arsenal £44m. Revenue has shot up by an amazing 77% (£231m) in the last 3 seasons, mainly due to reaching the Champions League two years in a row. The growth mainly came from broadcasting, up £137m, but there were also notable increases in commercial, up £72m, and match day, up £22m.
Profit from player sales is having an increasing influence on Liverpool [This is true of many clubs across Europe]. Between 2010 and 2014, Liverpool had £51m profit here, but this has shot up to £306m in the 5 years since then. COO Andy Hughes: 'Financial results do fluctuate depending on player trading.'
Liverpool have now made a profit 5 times in the last 6 years, including £207m in the last three years alone. The preceding four years (2010-13) saw total losses of £160m, so there has clearly been “a stable and sustained improvement in the club’s financial position over recent years.”
Once again thanks to the Swiss Ramble for sharing the results of his work.
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