Liverpool's financial year came to an end on May 31, and it marked a return to financial success
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Key FSG and Liverpool FC figures including John Henry, Billy Hogan and Arne Slot pose for a photo with the Premier League trophy.
Key FSG and Liverpool FC figures including John Henry, Billy Hogan and Arne Slot pose for a photo with the Premier League trophy.
(Image: Liverpool FC via Getty Images)
The financial picture for Liverpool for 2023/24 was one heavily impacted by the lack of Champions League football. A season that was spent playing football in the Europa League instead of European football’s elite knockout club competition meant that the bottom line at Anfield was significantly impacted.
The Reds posted a £57m pre-tax loss for 2023/24, despite seeing some revenue pillars such as commercial income rise to record levels of £308m. Total revenue for the 12-month period was £614m.
The publishing of club accounts is always a curious one. It gives laser focus on numbers that explain the position of the club at a moment in time, a year prior. It doesn’t give much of an insight into what the current financial situation of a club is.
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For Liverpool, the picture for 2024/25 will be significantly different, and that points to the confidence in spending big this summer on the likes of Florian Wirtz, if that potential £126m deal does indeed get done, and moves for Jeremie Frimpong, a done deal, and possibly Bournemouth’s Milos Kerkez in a £45m move.
The losses for 2023/24 could be pretty easily explained away. No Champions League means less access to prize money, significantly diminished broadcast revenues and potential loss of matchday income through fewer games. For Liverpool, the 2023/24 period alone saw a drop in media revenues of £38m.
The reason for the focus on this right now is that Liverpool’s financial year for 2024/25 came to a close at the end of May. Out of all the 20 Premier League member clubs, only the Reds, Arsenal and Wolverhampton Wanderers have May 31 as their end of financial year. The Reds are now into a new cycle while much of the Premier League still have some weeks to run before they kick over.
The 2024/25 period will be a 12-month stretch that includes a return to the Champions League, where the club had a superb league phase that delivered huge revenues before seeing their interest ended in the last 16 by eventual winners Paris Saint-Germain. It will also, of course, include the Premier League title success, which will bring with it several million more in terms of merit payments from the Premier League.
So what might be expected from the 2024/25 financial year for the Reds, something that won’t be made public until around February time next year.
It will be far brighter, that is for certain, and it seems highly likely that the Reds will return to profit, potentially up to £20m and beyond. Football clubs at the top level, or indeed any level, are largely unprofitable. There is no huge value in the profit and loss column for investors, but what it does point to is the health of the business and its ability to invest sustainably. The value for owners and investors is the accretive growth in the value of the team over time, a strong balance sheet will aid that growth.
To look at the figures from the Premier League in terms of central payments made to member clubs last season, Liverpool earned £171m in total. That figure will likely increase.
The financial success of the Premier League is built largely on the enormous TV deal that they have in place both domestically and internationally, worth £12bn over four years. Much of that sum is is filtered down to clubs through equal share payments from both markets, merit payments from both markets based upon where they finish the season, commercial revenue and facilities fees, which is how many times clubs feature in live TV broadcasts from the three UK broadcasters, which are Sky Sports, TNT Sports and Amazon Prime Video.
Liverpool will have earned around £10m more than they did in 2023/24 based on the same distribution as last year. That is made up of £31.2m from the equal share of domestic rights, £58m from the equal share of the international rights, £55.9m from the combined merit payments from both markets for finishing top of the pile, and £8.7m from commercial rights. There is also a sum of around £26m due to the club after featuring 30 times in live broadcasts, the highest in the Premier League for the season, with each game shown live delivering around £840,000 in revenue for chosen clubs.
All these factors considered mean that the Reds will have additional funds in their arsenal to make moves in the market, with the total money to arrive into the club likely to be around the £181m mark. Add into that the £90m-plus revenue generated from a run to the last 16 of the Champions League, where they were defeated by Paris Saint-Germain after topping the league phase, and that sum, including additional matchday revenues from five extra home games, and the financial situation is rosy at Anfield.
That £90m, taking into account that the Reds earned around £23m from the Europa League in the 2023/24 accounts, plus the additional £10m from the Premier League, allied with an expected rise in commercial revenue, potentially up to around the £335m/£340m mark thanks to new partnerships, means that the club could have booked more than £100m in terms of revenue over and above the previous financial year.
Player trading also needs to be factored in, with the added amortisation costs of Giorgi Mamardashvili and Federico Chiesa last summer, while the sales of Fabio Carvalho (£25m to Brentford), Sepp van den Berg (£20m to Brentford) and Bobby Clark (£10m to Red Bull Salzburg) all representing significant profit, pure profit in the case of Van den Berg and Clark.
It is very likely that Liverpool will tick over into the £700m territory for revenue for 2024/25, potentially £710m or a little more, although there will be some increase in the wage bill through bonus payments for success and contract extensions. The wage bill stood at £376m in 2023/24, which could be pushing closer to the £400m mark for the 2024/25 set of accounts. Wages are rising across football, but Liverpool are managing to ensure that revenue growth outpaces payroll growth, something that not all clubs are managing to succeed with.
The broad view is that 2024/25 will be one of significant growth for Liverpool, and a return to what they would perceive to be more of the norm. The investment this summer speaks to the desire, and requirement, for the club to be part of the Champions League elite each and every year, with the revenue impact of failure stark.
For Fenway Sports Group it is a sign of investment into the longer term, and the club will already be focusing on how they go about raising revenues from now until the end of May 2026.