Liverpool's sound finances

Today’s Subbuteo comes complete with accountants and, in the case of Manchester City, first rate lawyers.   Clubs need to be assessed off the pitch as well as on it which I have been doing since the mid-1990s – but now there are better informed minds at work in the form of the Swiss Ramble, Kieran Maguire and the new football business correspondent at The Athletic.

Despite the sizeable flak FSG get for not doing a City and going on a trolley dash each transfer window, it is evident that they've been good custodians of the club.   The club has been run at a profit, nowhere near the PSR limit, they have expanded the historic stadium and undertaken investment into the playing squad at the right time.

Winning the revamped Champions League would have banked Liverpool €52.5million (£44m; $57m) more than they will now receive, not to mention a further €5m had they gone on to win the European Super Cup. They still earned an estimated €100m, underlining just how lucrative UEFA’s premier club contest has become.

This season should still bring record revenue for the club and that was the case last year too, even as Liverpool played in the Europa League. The club booked income of £613.8m in 2023-24, a £20m (three per cent) annual increase, despite broadcast revenue falling by £37.9m (16 per cent) without the Champions League.

That dip was partly offset by improved matchday income, as work on extending the Anfield Road End completed mid-season (Liverpool also received £8.6m in compensation for lost revenue after delays to the works), with the club making over £100m in gate receipts for the first time. They joined Manchester United, Arsenal and Tottenham Hotspur as the only English clubs to break that mark.

More consequential to the top line was Liverpool’s commercial income. The club-record £308.4m was an impressive 13 per cent increase on 2022-23. Commercial revenues have increased 42 per cent in five seasons, and more growth is on the horizon — a kit-manufacturer deal with Adidas, beginning in August 2025, is expected to generate even more than the club’s arrangement with Nike.

That said, last year saw Liverpool book a £57.1m pre-tax loss, the worst financial result in the club’s history, and a stark departure from the £206.6m in profit they booked between 2017 and 2019.

Tom Hicks and George Gillett’s takeover of Liverpool in February 2007 borrowed straight from the playbook used at Old Trafford in 2005, but the ruinous impact on the club they bought arrived with far greater haste. Three years on from Hicks and Gillett rocking up at Anfield, Liverpool were on the hook for £378.4m of debt, £234m of it owed imminently to banks at chunky rates, the rest to a holding company moored in the Cayman Islands, with annual cash interest payments of £29.8m (comprising 16 per cent of the club’s entire total income, no less) having just contributed to a club record £54.9m loss. With the club’s auditors warning about Liverpool’s ability to survive, and fans in revolt, it took a High Court ruling to wrest the club from the grasp of its two American owners.

The resulting buyer, of course, was FSG. The group spent £230.4m on adding a Premier League football club to its portfolio and, though the early going was tricky — Liverpool lost a combined £139.6m during FSG’s first three seasons in charge, and hovered between sixth and eighth in the table — it ultimately transformed an institution on its uppers. Last season brought Liverpool’s worst pre-tax result but the club are close to breaking even during FSG’s tenure.

Over the past decade, Liverpool’s £453.9m profit on player sales is only bettered by Chelsea (£755.4m, 2014-23) and Manchester City (£583.7m, 2015-24). Yet limit looking back to just five years and it’s an altogether different story. Since the beginning of the 2019-20 season, Liverpool’s £150.1m in player-sale profits is bettered by nine other English clubs.

An historic stadium enlarged

Liverpool spent £56m on capital projects last season, principally on completing the extension of the Anfield Road End and buying back their old Melwood training ground, the latter so that it can be used by the women’s first team and academy. That’s the third-highest capital expenditure among Premier League clubs’ most recent financials, only topped by Everton (Bramley-Moore Dock Stadium build) and Manchester City (Etihad Stadium extension and surrounding works).  More notably, it took Liverpool’s total investment in capital works to £368.4m in the past decade. For context, that’s the highest of any English club that wasn’t building a brand new stadium in the same timespan/

Back in the Champions League and with the biggest slice of the Premier League prize pot within their grasp, Liverpool will break another club record for revenue this season. They should top £700m in income in 2024-25, a barrier only previously broken by Manchester City on the domestic front.