Liverpool’s latest set of accounts for the 2022-23 season saw the club record a pre-tax loss of £9million ($11.4m).
Overall revenue for the year to the end of May 2023 remained unchanged at £594m after a disappointing campaign on the field saw Jurgen Klopp’s side finish fifth in the Premier League, suffer early exits from the domestic cups and only reach the last 16 of the Champions League.
Liverpool’s wage bill continued to rise — up from £366m to £373m — with total administrative costs climbing from £545m to £562m. External net debt went up sharply from £74.6m to £123m.
The Athletic takes a look at the main issues raised in the figures and what it means for the club.
What about the club’s three main revenue streams?
Commercial revenue increased by £25m to £272m to become the club’s biggest source of income — balancing out the drop in media and matchday revenues across the season.
There was strong growth in partnerships and a lucrative pre-season tour to Thailand and Singapore. The club’s retail operations enjoyed a record year with seven new stores opening in Asia. Footfall across all of the club’s global LFC stores hit 2.5million as the kit deal with Nike continued to reap significant rewards.
Since this reporting period — which covers owners Fenway Sports Group’s search for new investment, and saw them consider selling Liverpool before deciding they would instead seek minority investment — the club have brought in four blue-chip partners in Peloton, UPS, Orion Innovation and Google Pixel.
Media revenue fell by £19milion to £242m, largely due to Liverpool’s early exit from the Champions League in the last 16 at the hands of Real Madrid. The previous season, they had reached the final in Paris.
Matchday revenue dropped by £7million to £80m due to fewer matches being played at Anfield over the course of the 2022-23 season – 25 compared to 30 in all competitions in 2021-22.
Matchday revenue will be higher in the next set of accounts following the delayed opening of the redeveloped Anfield Road Stand which has lifted capacity to around 60,000. It has been forecast that the new stand could be worth as much as an extra £1million a game now it is fully operational.
From a digital perspective, Liverpool became the first club in the Premier League to reach 8million YouTube subscribers and surpassed 40m followers on both Instagram and Facebook. The LFC Foundation achieved a 47 per cent increase in the number of people they supported across Merseyside – up from 83,000 to 122,000.
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What about the wage bill?
Despite not having to pay out hefty performance-related bonuses in a season without silverware or Champions League qualification, the wage bill still went up by around two per cent to £373million.
This was mainly due to contract renewals, with Mohamed Salah becoming the highest-paid player in the club’s history at around £350,000 per week. Joe Gomez, Harvey Elliott, Curtis Jones, Jarell Quansah, Stefan Bajcetic and Ben Doak were also among those to pen new deals.
During this accounting period, Liverpool signed Darwin Nunez, Cody Gakpo and Calvin Ramsay.
Darwin Nunez was signed in the summer of 2022 (Justin Setterfield/Getty Images)
Since this accounting period ended, Liverpool have sold or released several high-earning players such as Jordan Henderson, Roberto Firmino, Fabinho, Naby Keita, Alex Oxlade-Chamberlain and James Milner.
However, new players have come in to replace them and there is a high chance of greater performance-related bonuses being paid at the end of the 2023-24 season, so it is too early to say whether the wage bill will be reduced next year.
What about the club’s debts?
FSG loaned the club £110million to cover the cost of Anfield’s new Main Stand which opened its doors in 2016.
It has been gradually paid off since, but there wasn’t a repayment made to FSG during this accounting period. The balance still stands at £71.4milion.
The club’s external net debt went up from £74.6million to £123m – with that sharp 65 per cent rise largely down to the cost of the £80m Anfield Road Stand project which is being spread across several accounting periods. FSG opted to use Liverpool’s existing banking facilities for the redevelopment rather than taking out a loan.
The new Anfield Road Stand (Paul Ellis/AFP via Getty Images)
Since 2018, annual operating costs for Anfield have increased by nearly 40 per cent. This is mainly due to market-driven factors and rising inflation impacting wages, labour-based contracts, utilities and rates. Over that same period, administrative expenses have increased by 70 per cent from £320million to £562m with staff costs up 79 per cent from £208m to £373m.
What’s been said?
Unsurprisingly, given FSG’s track record, one of the keywords which cropped up in Liverpool managing director Andy Hughes’ assessment of the accounts was “sustainable”.
“Operating this great club in a financially sustainable manner and in accordance with football’s governing principles has been our priority since FSG acquired LFC in 2010,” he said. “Despite the significant growing costs of football, the success of our commercial operations demonstrates the strength of our underlying financial position so we can continue to operate sustainably while competing at the highest levels of football.
“Having a record league attendance this year demonstrates just how far we’ve come since starting the significant capital investment to redevelop Anfield 10 years ago. Matchday revenue is a hugely important part of our overall financial sustainability model. Having the ability to grow our controllable income streams is a crucial part of our long-term plans which enables us to continue reinvesting both on and off the pitch to support both our men’s and women’s teams’ ambitions.
“While these financial results are a moment in time on our journey, what remains constant is the growing global appeal of the club. LFC continues to be the most globally followed club in the Premier League.”
(Top photo: Justin Setterfield/Getty Images)