Liverpool Financial Results 2023/24

The 2023/24 season marked Liverpool's 62nd consecutive year in the top flight and was also the final campaign under manager Jürgen Klopp.

Liverpool's hopes of a Premier League title send-off for Klopp looked promising as they led the league mid-season. However, with only three wins in their last eight matches, they finished nine points behind champions Manchester City, settling for third place. Despite this, they managed to secure silverware, winning the Carabao Cup by defeating Chelsea in the final. Their FA Cup journey ended in the quarter-finals, and after missing out on Champions League qualification the previous season for the first time since 2018/19, they played in the Europa League. They topped their group but were eliminated by Atalanta in the quarter-finals.

Liverpool remains among Europe's financial giants. However, missing out on Champions League qualification did affect their financial results for the 2023/24 season. They are, however, back in the competition this season after their third-place finish.

Overview of Liverpool's Financial Performance

The 2023/24 season saw Liverpool achieve a record turnover of £614 million, a 3% increase from the previous year. This placed them 4th in the Premier League (behind Manchester City, Manchester United, and Arsenal) and 8th in Europe. However, rising costs resulted in a record loss of £57 million.

Season 2023/24 Financial Highlights:

• Record turnover: £614 million, an £18 million increase compared to the previous year.

• Broadcast revenue drop: £38 million decrease, primarily due to playing in UEFA's second-tier competition.

• Matchday revenue: Increased by £22 million following the opening of the Anfield Road stand and three extra home matches.

• Commercial revenue: Grew by £25 million, driven by retail and sponsorship deals.

• Salaries and wages: Totaled £386 million, a 3.5% increase, the second-highest in the league.

• Other operating expenses: Rose by 22%, contributing to the club's £57 million loss—its worst-ever financial loss and the second worst among the eight clubs that have published accounts.

• Squad investment: £194 million spent, with major signings including Dominik Szoboszlai and Alexis Mac Allister.

• Additional funding: £127 million provided by parent company FSG Football Group to cover stadium expansion costs.

• Profit and sustainability: No concerns regarding the profit and sustainability rules, with combined three-year losses before PSR adjustments standing at £59 million.

Liverpool's future looks strong. Under new manager Arne Slot, they currently lead the league by 15 points and finished top of their UEFA group stage. Unfortunately, they were knocked out of the Champions League in the round of 16 by PSG in a penalty shootout. This season, revenues are expected to rise significantly due to a higher league finish, Champions League distributions, increased matchday capacity, and continued commercial growth.

Turnover Seasons 2022/23

Despite not participating in the Champions League, Liverpool managed to achieve modest revenue growth, reaching £614 million. However, they fell behind Arsenal, now ranking fourth in terms of revenue within the Premier League.

While broadcast revenue saw a decline, this was more than compensated by the increase in both matchday and commercial revenue.

Matchday Revenue

Matchday revenue is driven by several factors, including the number of home games, average attendance, ticket prices, and the club's ability to generate income from hospitality events and corporate boxes. The only exception is domestic cup matches, where revenue is shared between the clubs and the FA.

Liverpool’s victory in the Carabao Cup allowed them to host three additional home games (and seven more matches overall) compared to the previous season. The completion of the Anfield Road stand increased the stadium's capacity to 61,276, adding 8,000 extra seats. Although these seats were only available towards the end of the season, the club's average attendance of 55,809 was up by 5% from the prior season. Additionally, Liverpool boosted their revenue per fan per match by 10%. At £66 per fan, this still lags behind the major London clubs (who average around £86 per fan) and Manchester United, though it surpasses Manchester City.

As a result, Liverpool’s total matchday revenue reached £102 million, marking a 27% increase from the previous season. This places them fourth in the Premier League, just behind Tottenham.

Broadcast Revenue

Broadcast revenue mainly comes from central distributions from the Premier League, UEFA payments for participation in European tournaments, and income generated through the club’s media platform.

A substantial portion (67%) of the Premier League's distribution is shared equally among the clubs, while the remainder is allocated based on league position and the number of 'live' televised games. With a third-place finish and 29 live games in the league, Liverpool’s total Premier League broadcast distributions amounted to £171 million, up from £163 million the previous season.

After six consecutive seasons in the Champions League, Liverpool’s failure to qualify for the competition in the 2022/23 season was likely a shock, both on and off the pitch. UEFA operates a similar model to the Premier League for its broadcast and commercial deals, negotiating them centrally and distributing the funds to clubs based on various factors. Approximately 75% of the total distribution goes to the Champions League, 17% to the Europa League, and 8% to the Europa Conference League.

Liverpool earned £72 million from their round of 16 exit in the 2022/23 Champions League. In contrast, the quarter-final exit in the Europa League brought in £29 million, a drop of £43 million. However, their earnings were somewhat offset by their high UEFA club coefficient, which is a key factor in the distribution of funds. For the 2023/24 season, they ranked fifth in the coefficient standings, and this high ranking will also benefit their income for the 2024/25 season.

With total broadcast revenue of £204 million, Liverpool's ranks fourth in the Premier League.

Commercial Revenue

Commercial revenue, which includes sponsorships, retail merchandising, tours, and other business activities, reached £308 million in the 2022/23 season, marking a notable 13% increase compared to the previous year. This has propelled Liverpool to the second-highest commercial revenue in the Premier League, behind Manchester City but now ahead of Manchester United. It's worth noting that just five years ago, Manchester United’s commercial revenue was 50% higher than Liverpool's!

Four new global partners were signed during this period – UPS, Google Pixel, Peloton and Orion Innovation – with Kodansha and Carlsberg extending their existing partnerships. Retail recorded record revenues across its seven global locations, which included a new store opening in Dublin.

A recent UEFA report also highlighted this global appeal, showing they share the highest Premier League revenue from kit and merchandise sales. However, this is lower than the Spanish and Germany giants.

Commercial revenue remains a crucial factor that separates the "Big 6" from the rest of the league. Arsenal, who earn the least of the big 6, earn 2.5 times Newcastle, who are the next highest. The massive global appeal of these six clubs makes it difficult for others to compete at the same level.

The chart below also shows some impressive increases in commercial revenue with Newcastle and Arsenal the standouts. The only club to show a drop in revenue was Everton, although the previous season included an amount for naming rights for the new stadium.

Staff Costs

Liverpool has the second-highest salary and wage bill in the Premier League, only behind Manchester City. At £386 million, this marks a relatively modest 3.5% increase compared to the previous year. Across Europe, this total is the fifth-highest, though still far behind PSG, whose salary bill is a staggering £650 million.

When it comes to amortization — the write-down of player acquisition costs — the story is different. As shown in the chart below, there has been minimal increase in this area over the last five years, with a total of £114 million, which is the lowest among the "Big 6." This is largely due to Liverpool's relatively lower spending on players during this period, ranking only 8th in the league in terms of player investment.

As a result, we expect Liverpool's total staff costs to rank fourth in the Premier League, just ahead of Arsenal. The £501 million figure represents 82% of turnover, which is in line with other "Big 6" clubs (excluding Chelsea).

Profit on Player Sales

It has become increasingly common for clubs to manage their financials (and stay compliant with PSR) by selling players profitably at specific times (e.g., at the end of the season before accounts close) or engaging in player swaps, where the selling club records the profit, and the buying club capitalizes the cost.

However, Liverpool has not relied on these practices, and they don’t need to. Their profit from player sales for the 2023/24 season was £22 million, which ranked 15th in the league, with only Bournemouth, Palace, and the relegated clubs recording lower profits. The most notable sales were Fabinho and Jordan Henderson, both of whom moved to the Saudi Pro League.

Profit and Loss

As previously mentioned, Liverpool recorded their highest-ever loss of £57 million for the 2023/24 season. While this is a significant figure, it is not cause for alarm. It was a season without Champions League participation and with minimal profits from player sales.

Revenue increased by £20 million compared to the previous year, but operating costs rose by £43 million. Liverpool has stated that this increase in costs is due to higher salaries and wages (though, as noted, they only grew by 3.5%) and additional expenses related to hosting extra games and generating extra commercial revenue.

Other factors contributing to the loss include a £3 million increase in depreciation from the new stand, a £12 million drop in profits from player sales, and a £5.5 million increase in interest costs, all of which led to the overall £57 million loss.

So far, nine clubs have released their financial results for the 2023/24 season. As shown below, Liverpool's results are better than Manchester United's but below the rest.

Looking ahead to the 2024/25 season, there are several positive factors to consider. Revenues are expected to rise significantly, amortization is likely to decrease with minimal player acquisitions, and the sales of Van den Berg and Carvalho to Brentford should generate around £25 million in profits.

Player Trading

Liverpool's performance this season clearly demonstrates the strength of their squad, but this success hasn't come from heavy spending in recent years. Over the past five seasons, up until the end of the 2023/24 campaign, they have spent £376 million—less than the other top six clubs and even below the spending of emerging challengers like Newcastle and Aston Villa.

When factoring in player sales, their net spending (acquisitions minus sales) ranks eighth in the league, behind the same group of clubs and around half of Manchester United and Arsenal's net spend and way behind Chelsea.

Looking ahead to this season, with their net player trading close to zero, the contrast in spending becomes even more apparent.

Football Debt

During the season, Liverpool received an additional £127 million from their owners, FSG Football Group, bringing their total loan with them to £199 million. This loan is interest-free and has been used to fund the stadium expansion.

Additionally, they have a revolving credit facility with £116 million outstanding, accruing interest at a rate of 6.35%. This brings their total debt to £314 million, making it the fifth highest in the league.

Liverpool's player trading debt, which represents outstanding payments to other clubs for player acquisitions, remains relatively low at £70 million.

Cash Flow

Like most of the Big 6, Liverpool generates strong operating cash flows (cash before investments and new funding) thanks to their high turnover. These cash flows can fluctuate year to year due to factors like payment terms and the timing of things such as season ticket sales, so it's best to assess them over a three-year period.

Over that time, Liverpool has generated £271 million in operating cash flows, the fourth-highest in the league. Their net cash flows from player trading total £281 million, and they've invested £129 million in assets, primarily for the development of the Anfield Road stand.

This leaves a shortfall of £139 million, which has been covered by new loans from their owners, FSG Football Group, and existing cash reserves.

Liverpool is in a position where their operating cash flows generally cover their player trading activities (one of only about half a dozen clubs that can claim this), allowing any additional funds to be directed toward improving their facilities. Over the last eight years, around £150 million has been invested in the club, which is relatively low by Premier League standards.

Financial Outlook

Liverpool has struck a strong balance between investment and on-field performance. Jenny Beacham, LFC's Chief Financial Officer, commented:

"Operating a financially sustainable club continues to be our priority and, with the continued increase in costs, it’s essential to grow income streams year on year to maintain financial stability. The success of our commercial operations, together with the opening of the new Anfield Road Stand, has increased our revenues during this reporting period, which demonstrates our desire to continue to compete at the highest levels of football in the men’s and women’s games."

Looking ahead, Liverpool's financial future is strong. Their top finish in the league stage of the Champions League has netted them approximately £80 million, while if they win the Premier League that would bring in around £175 million. A full season at the upgraded 61,000-capacity stadium is expected to increase matchday revenue by at least 10%, alongside additional commercial opportunities from Champions League participation. As a result, their overall turnover for the 2024/25 season could rise by £80 to £100 million.

While costs are likely to increase, amortization should decrease due to the limited number of player acquisitions. All in all, the 2024/25 season could prove to be a financially lucrative one for the Reds.

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