finances, revenues, transfers and salaries Liverpool FC

Liverpool have won both English cups, the FA Cup and EFL Cup, in the 2021/22 season but finished runners-up in the two most important competitions. They finished runners-up behind Manchester City in the Premier League and lost to Real Madrid in the Champions League final. Financial results were helped by the fact that this was the first full season since the COVID pandemic.

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annual result

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The club have improved from a pre-tax loss of £5m to a profit of £7m in the 2021/22 season as turnover increased by £107m (22%) from £487m to a club record £ 594 million has increased. However, this was partially offset by an increase in operating costs of £85m (16%) to £612m and a £11m fall in profit on player sales from £39m to £28m.

Profit after tax was £2m, reflecting a tax charge of £5m.

 

The main reason for the increase in Liverpool's revenue was the return of fans to the stadium, which resulted in significant gains in both matchday revenue, which rose from just £4m to £87m, and commercial revenue, increased by £29m (13%) from £218m to £247m. Both were new highs for the club.

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However, despite success on the pitch, TV rights revenue fell by £5m (2%) from £266m to £261m as the previous year included some revenue due to the extension of the 2019/20 season were postponed beyond the end of the association's accounting year.

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Liverpool's significant increase in revenue did not translate directly into higher profits as expenses also increased significantly. Wages increased by £52m (16%) from £314m to £366m, while other expenses increased by £36m (38%) from £96m to £132m, mainly due to the higher cost of staging games in front of spectators.

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On the other hand, player depreciation fell by £5m (5%) from £108m to £103m, while net interest payable fell by a third to £2m.

So far only half of Premier League clubs have released their 2021/22 stats so comparisons to other clubs are somewhat misleading as last year's figures were severely impacted by the pandemic and almost all games were played in front of empty stands .

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Nonetheless, Liverpool's £7m pre-tax profit is the third-best of last season, surpassed only by Manchester City at £42m and West Ham at £12m. This sustained approach is in stark contrast to some other leading clubs, the big Losses included Manchester United at £150m, Tottenham at £61m and Arsenal at £45m (plus Chelsea at £156m in 2020/21).

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In the previous two seasons, Liverpool's revenue was significantly impacted by the COVID-19 pandemic. Liverpool are estimated to have lost a total of £114m, split between £27m in 2019/20 and £87m in 2020/21, mainly due to games without spectators at the stadium.

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To further rank Liverpool's small £2m net profit, some other top European clubs have reported significantly worse results for the 2021/22 season including PSG at -£327m (according to French newspaper L'Equipe), Juventus at -£212m, Roma at -£190m, Barcelona at -£157m, Inter at -£124m and Real Madrid at -£119m

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Liverpool's profit from player transfers fell from £39m to £28m, mainly due to the sale of Harry Wilson to Fulham, Marko Grujic to Porto, Xherdan Shaqiri to Lyon, Taiwo Awoniyi to Union Berlin and Kamil Grabara to FC Copenhagen . Due to the pandemic, the transfer market as a whole has been impacted. Despite this, some clubs have managed to generate good money from player transfers, notably Aston Villa at £97m, Manchester City at £68m and Leicester City at £44m. Despite the decline, Liverpool's £28m result was still one of the better ones .

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Earnings before tax

 

It is the first time Liverpool have turned a profit since 2018/19 after posting a loss of £51m in the previous two years. The pandemic has obviously taken a toll on the Reds' finances as they have previously been consistently profitable. In the previous five years, they were able to generate almost a quarter of a billion in profits, which is remarkable in the highly competitive world of football.

 

That includes a whopping £125m win in 2018, which is the third highest win ever in the Premier League. Liverpool's profits of £42m in 2019 and £40m in 2017 are also among the top 20 financial results.

In recent years Liverpool have also benefited from the absence of exceptional charges which had increased their costs by £113m over the 10 years to 2016, mainly for stadium development (£61m) and sacked managers (£47m).

Since then, however, they have only booked a £4m gain from the sale of their former training ground in Melwood.

Income from player sales

Like many clubs, Liverpool are increasingly reliant on profits from player sales and have generated nearly £400m from it since 2015.

The annual reports note that since the balance sheet date there has been £36million in transfer profits, including Sadio Mané to Bayern Munich, Neco Williams to Nottingham Forest, Takumi Minamino to Monaco and Ben Davies to Rangers. A number of players went on free transfers, including Divock Origi for Milan and Lorius Karius for Newcastle United.

 

A key element of Liverpool's strategy is to be a club that gets big on transfer sales. This can be seen in the profit from player transfers in the five years to 2021, where only Chelsea have made more transfer turnover than the Reds with £413m. At £274m, Liverpool were well ahead of the rest of the Big Six.

Liverpool's operating loss (ie excluding player transfers, exceptional items and interest expense) reduced from £40m to £18m. The club used to be one of the few to make (small) operating profits, but that changed in 2020, largely due to the impact of the pandemic.

 

Most football clubs are making losses at the operational level, as was the case for almost all clubs in the Premier League in the 2020/21 season. Some clubs suffered massive losses, such as Chelsea at £159m and Everton at £118m.

Only West Ham have managed to make money from operations so far in the 2021/22 season, but Liverpool's £18m operating loss is their second-best result in the Premier League so far.

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EBITDA

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Liverpool's EBITDA (earnings before interest, tax, depreciation and amortization) improved to a very healthy £96m from £77m, which is often taken as a measure of operating cash flow as it excludes player transfer profits and exceptional items . However, it is well below its pre-pandemic peak of £124m.

 

Nonetheless, Liverpool's £96m EBITDA is still the third best in the Premier League, behind Manchester City at £131m and Tottenham at £114m. Behind  Liverpool follow Arsenal with £83m and Manchester United with £81m.

Sales volume
Liverpool's £594m turnover is the highest in the club's history and is £61m (11%) above the previous peak of £533m before the pandemic in the 2018/19 season. Interestingly, virtually all of the growth since then has come from commercial activity, with gaming revenue up by just £3m while television broadcast revenue has remained flat.

Despite this, television broadcasting remains the most important revenue stream at 44%, closely followed by commercial at 42%. The revenue from gaming operations accounts for only 15% of total sales.

 

In fact, over the past five years, Liverpool has seen the biggest growth in revenue of any Big Six (from £364m to £594m), a 63% increase. The next highest gains came from Manchester City at £160m, followed by Tottenham at £137m and Chelsea at £120m. Manchester United remained virtually unchanged over this period, while Arsenal's revenue fell by £54m.

 

As a result, Liverpool's turnover of £594m is the second highest in England, behind Manchester City at £613m. United are just behind at £583m, but then there's a huge gap of £100-200m. next clubs: Chelsea £481m, Tottenham £443m and Arsenal £369m

In other words, even within the Big Six, there is a competitive disparity in terms of revenue. Compared to Manchester City, we can see that Liverpool are better in two revenue streams, namely matchdays and broadcast rights, but the significant commercial deficit is enough to put City in the lead overall.

Deloitte Money League

Liverpool were the biggest climbers in the Deloitte Money League, rising four places from 7th to 3rd to overtake Manchester United in the rankings for the first time. The distance to the two leaders (Manchester City and Real Madrid) was small.​

 

In fact, Liverpool recorded the highest annual revenue growth of any club in the Money League Top 20 with an increase of £106m, significantly higher than Manchester United (£89m), Tottenham (£82m) and PSG (£61 million). That's a remarkable achievement for a club that was only recently ranked 12th in the Deloitte rankings in 2013.

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television revenue

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Although Liverpool have played in three finals (and won two of them), television revenues fell by £5m (2%) from £266m to £261m. This is because the previous year included some revenue for games that took place after the conclusion of the  2019/20 season due to COVID postponements.

That drop outweighed the surge in Champions League revenue after Liverpool reached the final last season.

Due to deferred TV money in 2020/21, comparisons to many other clubs are misleading, but in 2021/22 Liverpool's £261m was the highest in England (and Europe), ahead of Manchester City's £249m.

Liverpool have received a total of £152m from Premier League central TV distribution, which is £2m more than last year, largely due to better place (2nd vs. 3rd) which meant a higher premium payment.

Reportedly, Liverpool earned €118 million by reaching the Champions League final, which was €30 million more than the previous season when they only reached the quarter-finals.

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Qualifying for the Champions League is very important to Liverpool's business model, with revenues in the Europa League (£28m on average) and Europa Conference (just €9m in 2021/22) being significantly lower.

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The Champions League is a key driver of Liverpool's revenue growth with an impressive €478m over the last five years, around the same amount as Manchester City but much more than other English clubs.

The contrast to Liverpool's European successes in the previous five years is clear as they earned just €59m over that period despite reaching the Europa League final in 2016 by failing to qualify twice.

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Commercial Revenue

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Liverpool's commercial revenues increased by £29m (13%) from £218m to a club record £247m on strong growth in sponsorship and increased revenue from the reopening of non-match activities such as retail stores and tour and museum center.

A total of eight new partnerships were signed, including Sonos, Kodansha, Vistaprint and Wasabi.

Liverpool's growth in commercial revenue of £131m since 2016 is comparable to Manchester City's revenue, with Tottenham just behind, while their increase has been significantly better than Chelsea, Arsenal and especially Manchester United, whose revenue in this period have actually decreased.

This has resulted in the gap in this area with Manchester United being reduced from £153m to just £11m.

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Despite this, Liverpool's £247m is still well behind Manchester City's £309m in third place in commercial earnings in England.

A driver of Liverpool's commercial growth is its partnership with Nike, whose global distribution strategy has resulted in another record year in shirt sales. This deal replaced New Balance in the 2020/21 season with a lower base amount of £30m but a significantly higher merchandising royalty of 20%, taking annual sales to an estimated £70m.

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match day

 

Since 2013, only Tottenham have generated more matchday revenue than Liverpool, while the rest of the 'Big Six' clubs have seen little growth (or even decline). The Reds have gotten more bang for their buck as the Main Stand expansion cost just £110m while the new Tottenham stadium has cost around £1.2bn.

As a result, Liverpool now have matchday earnings of £87m, surpassed only in England by Manchester United at £111m and Tottenham at £106m, although this has been helped by an unusually high number of home games.

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In recent years, despite the high London prices, Liverpool have overtaken both Arsenal and Chelsea.

Liverpool averaged 53,027 attendances in the 2021/22 season, finishing fifth in the Premier League, well behind Manchester United with 73,150 and also behind London clubs Arsenal with 59,568, West Ham with 58,367 and Tottenham with 56,523.

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The Anfield Road expansion will increase capacity by 7,000 seats to around 61,000 for the start of the 2023/24 season and is expected to cost £80m. The club would reportedly be open to selling naming rights to this stand (but not the entire stadium).

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Liverpool season ticket prices have not been increased for the seventh straight season for the 2022/23 season.

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wage costs

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Liverpool's wage bill rose by £52m (16%) from £314m to £366m, setting a new club record as the workforce increased by 41 to 1,005. The increase was also driven by high bonuses, particularly as contracts are heavily incentivized and 22 player contract renewals were signed.

There were new long-term contracts for Jordan Henderson, Harvey Elliott, Andy Robertson, Alisson Becker, Stefan Bajcetic and Diogo Jota.

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In the last five years, Liverpool's wage bill has risen by £158m (76%), the fastest growing of the 'Big Six'. The next highest increases are at Chelsea and Manchester United at just over £120m.

After that steep rise, Liverpool's wage bill is now the second-highest in the Premier League at £366m, behind only Manchester United at £384m. The Reds have overtaken both Manchester City at £354m and Chelsea at £342m, while there is then a big gap to Arsenal at £212m and Tottenham at £209m.

In fact, Liverpool's wage bills ranked fifth in Europe at £366m, but well below PSG's £615m.

 

Liverpool's payroll costs have fallen relative to revenue, from 65% to 62%, although they are still higher than the 58% pre-pandemic.

Liverpool's wage bill of 62% as a percentage of turnover is firmly on the bottom end of the Premier League, better than Chelsea at 71% and Manchester United at 66%, but higher than Manchester City at 58%, Arsenal at 58% and Tottenham at incredibly low 47%.

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depreciation

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Liverpool's depreciation increased by £2.5m (28%) from £8.9m to £11.4m due to investment in stadium development and the new training ground. These costs were just £3.3m in 2015.

This is the fifth-highest write-down in the Premier League but miles away from Tottenham's £72m following their huge stadium investment. However, it is worth noting that this is a non-cash expense item.

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Liverpool's player payback, the annual charge to carry transfer fees over the life of the player's contract, fell by £5m (5%) from £108m to £103m, partly due to player contract renewals. That cost has now fallen by £9m since it peaked at £112m three years ago.

Although Liverpool's player amortization has doubled since 2017, from £58m to £103m, it is still relatively low compared to the other Big Six clubs (aside from Tottenham), especially compared to Chelsea's £162 million, Manchester United at £149m and Manchester City at £141m.

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Other expenses

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Liverpool's other expenses increased by £36m (38%) from £96m to £132m, mainly due to higher costs for matches with fans. The club said annual running costs for Anfield have increased by almost 40% over the last five years.

This is the second-highest in the Premier League, behind Manchester City at £134m.

 

transfers

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Liverpool have spent big bucks in the transfer market over the past five years, totaling £652m. The bulk of this (£418m) was spent in 2018 and 2019, while just £234m was spent over the past three years.

Overall, this puts Liverpool fifth in the Premier League in terms of gross spending on transfers over the past five years. However, both Manchester City and Chelsea have each spent around £1bn - more than three times as much as Liverpool. Arsenal have also spent more at £676m, while Everton are just behind Liverpool at £647m.

According to Transfermarkt, Liverpool spent £116m on new players in 2022/23. While they are miles away from Chelsea's half a billion pounds in spending, they are also behind the likes of Nottingham Forest, Wolves, Leeds United and Southampton on spending.

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squad costs

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Liverpool squad costs rise from £709m to £729m meaning they have more than doubled since 2017. After that increase, they have the fourth highest squad costs in the Premier League (Manchester City   tops at £1.1bn).

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Debts

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Liverpool have reduced their gross debt by £40m to £159m, with the bank loan reduced to £87m from £127m and the owner's loan (to finance the stadium expansion) unchanged at £71m.

 

Liverpool have managed to reduce their transfer debt from £122m to £94m. In contrast, most other clubs have significantly increased their transfer debts in recent years. For example, Tottenham have debts of £252m, Arsenal £188m and Manchester United £307m.

Liverpool have turned an operating loss of £18m into positive operating cash flow of £113m. This was achieved through £32m in player transfers and £97m in player buybacks. Cash flow before financing was £22m.

However, the repayment of £40m bank loans resulted in a net cash outflow of £18m. As a result, Liverpool's treasury fell from £32m to £14m, which is on the low side for a leading Premier League club.

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£885m has been allocated to Liverpool over the last 10 years. Of this, £718m came from the club's operations, £118m from owner loans and £49m from bank loans. The club has spent £551m on players (net) and £262m on infrastructure (stadium and training ground).

According to Liverpool chief executive Andy Hughes, the club's financial position remains strong and the club remains financially sustainable. Still, it should be noted that despite winning two cups and being close to the Championship and Champions League, Liverpool have only managed a meager profit of £7million.