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The latest reports show a significant turnaround for the Reds, reflecting the financial benefits of Champions League participation and continued commercial growth.
Financial analyst Wyn Grant, writes The political economy of footballhighlighted the extent of the improvement in the club’s finances.
Grant summarized the findings Swiss Ramble’s analysis from Liverpool’s accounts.
He wrote: “Liverpool returned to profitability last season when they went from a pre-tax loss of £57m to a profit of £15m, a big improvement of £72m on the bottom line.”
This turnaround was accompanied by a large increase in total income.
Grant added: “Turnover shot up by £89 million (14%) from £614 million to a club record £703 million, while profits on player sales more than doubled from £22 million to £53 million.”
The return of the Champions League increased Liverpool’s turnover
One of the main factors behind the financial growth was Liverpool’s participation in the Champions League.
The report explained that broadcast revenues increased significantly thanks to the club participating in Europe’s most lucrative tournament instead of the Europa League.
Grant wrote: “One of the key drivers of Liverpool’s revenue growth was playing in the more lucrative Champions League… which led to a steep increase in broadcast revenue, up £60m (29%) from £204m to £264m.”
Matchday and commercial revenues also increased in the same period.
Matchday revenues rose from £102 million to £116 million, while commercial revenues grew from £308 million to £323 million, with both reaching new club heights.
Swiss Ramble concluded that the overall picture was extremely positive for Liverpool.
The analysis stated: “This is clearly a very good set of figures as Liverpool returned to profitability… while also setting a new club record for turnover, becoming only the second English club to earn more than £700m.”
The new kit deal with Adidas was also previously cited as a huge moneymaker for the club.
Liverpool is heavily funded, but the pressure remains
Despite the encouraging financial results, the analysis also shows that costs have risen sharply.
Operating costs increased significantly over the same period, driven by higher wages and investments in the team.
Swiss Ramble also warned that last summer’s transfer spending will further increase charges on future accounts.
The report explains that higher depreciation and salary obligations will impact the club’s financial prospects in the coming years.
That said, Liverpool’s strong revenue base means the club is well positioned to absorb these costs.
However, maintaining Champions League qualification remains financially important, with experts previously warning that missing out on Europe’s top competition could cost the club significant revenue.
For Liverpool supporters, however, the focus will ultimately remain on results on the pitch, with Arne Slot’s side still battling in both the Champions League and FA Cup as they look to secure a place in the Premier League’s top four.
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