Liverpool FC has returned to profit after sustaining two years of pre-tax losses but rising costs eats into record revenues. Tony McDonough reports
Liverpool Football Club is reporting record revenues in the year to May 31, 2022, as well as a return to profit after two years of losses.
Overall revenue for the 12-month period was up by £107m to £594m. Pre-tax profits came in at £7.5m. This compares to a loss of £4.8m last year and £4.8m and £41.5m the year before.
Media revenue, which refers to money earned from broadcasters, was £261m, £5m down on the previous year. A big chunk of that total comes from appearances in the UEFA Champions League.
Liverpool, owned by Fenway Sports Group (FSG), is currently having a relatively poor season in the Premier League. If the club fails to get into the top four and gain a Champions League place for next season then the financial hit could be significant.
Administrative costs during the 12-month period rose by £69m to £545m. This is due to the increase in salary costs and matchday overhead costs. In the past five years, annual operating costs for Anfield have increased by nearly 40%, the club says.
During the year Liverpool just over 1,000 permanent staff. It also employed a further 1,930 temporary staff which is mainly matchday stewards.
On the pitch, seven new players were signed, including Ibrahima Konate, Luis Diaz, Fabio Carvalho, Ben Doak and Bobby Clark.
LFC extended 22 current player contracts throughout the period with Jordan Henderson, Harvey Elliott, Andy Robertson, Alisson Becker, Stefan Bajcetic and Diogo Jota all signing long-term deals.
Commercial revenue increased by £29m, with a growth in partnerships and the reopening of non-matchday operations with the global retail stores and stadium tours and museum centre.
A total of eight new partnerships were signed throughout the reporting period, including Sonos, Kodansha, Vistaprint and Wasabi. One partnership was renewed, football simulation game partner EA SPORTS.
In January LBN reported that Liverpool FC had generated the third-highest revenues of any football club in Europe in the 2021/22 season.
The Deloitte Football Money League revealed the top 20 highest revenue generating football clubs for the 2021/22 season. Manchester City was top with £619.1m, Real Madrid second at £604.5m and Liverpool third.
This pushed Liverpool up four places in the league table – its highest-ever position in the 26-year history of the survey. It was a big increase on the club’s revenues for the previous season which came in at £487.4m.
And earlier this month LBN revealed that Liverpool plans to open standalone retail stores in the US selling club merchandise.
In February FSG owner John W Henry insisted the club was not for sale, despite multiple media reports. However, he confirmed he is still seeking fresh investment.
Andy Hughes, LFC managing director, said: “Some of the numbers in these latest accounts look slightly skewed as a result of the previous reporting period being impacted by the global pandemic.
“However, the underlying strength of our financial position remains strong and we continue to operate a sustainable club which is our main objective from a financial perspective.
“The cost of running a football club does continue to rise. But we maintain our position of growing this club with significant investment with new and existing players signing contracts and the construction of the new Anfield Road Stand.
“In the last five years we have invested over £250m in infrastructure and created world-class facilities for our players, staff and supporters.”