Liverpool FC reports record revenues but a fall in profits

Newly-filed Liverpool FC accounts for the 12 months to May 31, 2019, reveal big rises in media, commercial and matchday revenues and a total spend on players of £220m. Tony McDonough reports

Liverpool FC
Liverpool FC is to upgrade its Anfield Road stand in a £60m project

 

Liverpool Football Club is reporting record annual revenues of £533m, £78m higher than the previous year, and says it spent £220m on new players.

Newly-filed accounts for the 12 months to May 31, 2019, reveal a sharp fall in pre-tax profits to £42m from £125m in 2018. However, the previous figure was boosted by the sale of Brazilian playmaker Philippe Coutinho to Barcelona. It is better compared to the £39.5m pre-tax profit figure achieved in 2017.

All three of the European champions’ main revenue streams saw healthy rises, with with media revenue increasing by £41m to £261m, commercial revenue increasing by £34m to £188m, and match revenue increasing by £3.5m to £84m.

The increase in turnover is a result of a new UEFA Champions League broadcasting deal which commenced in this period, a second-placed finish in the Premier League and higher partnership and merchandising value.

Later this year, Liverpool intends to start work on the £60m redevelopment of its Anfield Road stand, adding 5,200 general admission seats and 1,800 for hospitality and taking the stadium’s capacity to around 61,000.

When the club rebuilt its main stand it required a £110m loan from its US-based parent company, Fenway Sports Group. However, Liverpool says it can undertake the Anfield Road project funded by its existing credit facility. It expected to submit a detailed planning application to Liverpool City Council in the spring. Liverpool is also scheduled to move in to the new £50m training facility in Kirkby in June, replacing the current Melwood training ground in West Derby.

During the accounting period Liverpool saw goalkeeper Alisson Becker, midfielder Naby Keita Fabinho and attacker Xherdan Shaqiri all join the club. Departures included Danny Ward, Danny Ings, Ragnar Klavan, Dominic Solanke and Lazar Markovic.

The first-team squad, managed by head coach Jurgen Klopp, was further reinforced with 11 players renewing their contracts, including club captain Jordan Henderson, Roberto Firmino, Mohamed Salah, Sadio Mane, Andy Robertson and Trent Alexander-Arnold.

The 12-month period also saw a rise in the club’s annual wage bill to £310m, from £263m a year earlier, representing 58% of total turnover.  Liverpool also reduced its net bank debt from £46m to just £12m. It has also cut its debt to Fenway, for the main stand financing, down to £79m from £100m.

Currently the club is 22 points clear of its main rivals Manchester City at the top of the Premier League table and is just a few games away from clinching its first league title since 1990. Such an outcome would be sure to enhance the club’s financial performance further.

Andy Hughes, Liverpool FC’s chief operating officer, said: “This continued strengthening of the underlying financial sustainability of the club is enabling us to make significant investments both in player recruitment and infrastructure.

“Being able to reinvest over £220m on players during this financial period is a result of a successful business strategy, particularly the significant uplift in commercial revenues. The cost of football, however, does continue to rise in transfers and associated fees but what’s critical for us is the consistency of our financial position, enabling us to live within our means and continue to run a sustainable football club.”

Jurgen Klopp and Jordan Henderson carry the Champions League trophy off the plane at Liverpool Airport

 

Liverpool maintained its seventh position in the Deloitte Football Money League having moved up two places from ninth during the previous financial year. Nine new commercial partners joined the club, including its first official training partnership with AXA. Retail had a record-breaking season in sales with footfall surpassing a million fans into the official LFC stores.

The club’s international expansion plans have also grown with a new retail partner announced in Malaysia, shop-in-shop opened in Thailand and new selling channels on Amazon in USA, Canada and Germany. E-commerce orders were shipped to more than a record 190 countries worldwide.

Digitally, the club’s global social media followers increased by 26 per cent to nearly 70m. LFC’s official YouTube channel reached 2.5m subscribers and is the most-followed club in the Premier League. Twitter also increased by 11 per cent to 13.5m and reached 59m total engagements during the 2018-19 season – 6m more than any other Premier League club.

“These financial results and this sustained period of solid growth is testament to our ownership, Fenway Sport Group, who continue to support the club’s ambitions and continue to reinvest revenues both in strengthening the playing squad and the club’s infrastructure to build for the future,” added Mr Hughes.

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