Liverpool FC financial accounts reveal record profit, record turnover and record investment in playing staff
JAMES PEARCE EXPLAINS LIVERPOOL’S RECORD-BREAKING FINANCIAL RESULTS
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Liverpool FC have announced record-breaking financial results with a pre-tax profit of £125million.
The latest accounts for the year to May 31 2018 show that turnover rocketed by 25% – a £90million annual increase to £455million.
It covers a season when Liverpool sold Philippe Coutinho to Barcelona and enjoyed a lucrative run to Kiev in the Champions League final.
Some £137million came into the club from player sales with around £190million spent on strengthening the squad.
Read the reaction to LFC’s accounts announcement and build up to Klopp’s press conference here
Of the three main revenue streams, media increased by £66million to £220million, commercial was up by £17million to £154million and matchday received a £7million boost to £81million.
Liverpool moved up two places to seventh in the Deloitte Football Money League.
The pre-tax profit of £125million (£106million after tax) is the highest in the club’s history – up from a figure of £39million after tax 12 months earlier.
It shatters the previous best of £60million before tax which was announced three years ago and included the sale of Luis Suarez to Barcelona.
Although the latest accounts show a huge profit, the money has already been reinvested into Jurgen Klopp’s squad by owners Fenway Sports Group, who don’t take money out of the club.
There was a £173million outlay on transfers in the summer of 2018 for Alisson Becker, Naby Keita, Fabinho and Xherdan Shaqiri and those deals aren’t covered by this set of figures.
Andy Hughes, Liverpool’s chief operating officer, told the ECHO: “I think this is a continuation of a trend over a number of years of continuous financial improvement across the club.
Liverpool FC accounts
Profit After Tax
“We’ve seen continuous turnover growth since FSG acquired the club in 2010. Last year was a record at £364million. Now it’s up to £455million.
“Liverpool FC is in a much stronger financial position. We have been reinvesting all of our profits back into the club. You can see that in this period as well.
“We invested £190million in new players in this period and we continued to invest in the summer 2018 window.
“Across the board it’s a really strong set of results which demonstrates FSG’s commitment to the club and reinvestment into the future of Liverpool FC.”
“There are certainly one off elements in this set of results – namely selling Coutinho and reaching the Champions League final,” he explained.
“When you sell a key player and reinvest that money into the squad, you see a spike in profitability and then you see a dip in future years.
The role Suarez played in move
“That’s because when you sell a player, the profit or loss on disposal of the player is recorded in the accounts on the date of sale.
“When you buy a player, the cost of the acquisition is spread across the life of that player’s contract.
“On the media side, that’s driven largely by performance on the pitch and reaching the Champions League final was the main reason for that big uplift to £220million. In the previous season we didn’t have European football.”
The fee agreed for Coutinho in January 2018 was understood to be £106million potentially climbing to £142million with add-ons.
During the period covered by the latest accounts Liverpool also sold Mamadou Sakho, Lucas Leiva and Kevin Stewart.
They brought in the likes of Mohamed Salah, Virgil van Dijk, Andy Robertson, Alex Oxlade-Chamberlain and Dominic Solanke.
Commercial performance was boosted by eight new partnerships, including the new shirt sleeve sponsorship with Western Union and global deals with Falken Tyres and Joie.
Try your hand at the LFC FSG quiz here
Liverpool also renewed contracts with four existing partners, including Nivea and Draft Kings, while the 125 anniversary kit proved to be the best selling in the club’s history.
Matchday revenue climbed by £7million largely due to the extra matches the Reds enjoyed due to their run in Europe and an increase in hospitality sales.
That figure of £81million underlines the success of the new Main Stand which opened its doors in September 2016 and increased capacity to 54,000.
John W. Henry (L), the owner of New England Sports Ventures, delivers a statement in the offices of the law firm Slaughter and May to announce his purchase of Liverpool Football Club on October 15, 2010 in London, England.
John W. Henry (L), the owner of New England Sports Ventures, delivers a statement in the offices of the law firm Slaughter and May to announce his purchase of Liverpool Football Club on October 15, 2010 in London, England. (Image: Oli Scarff/Getty Images)
Prior to the redevelopment of Anfield, annual matchday revenue stood at £62million.
Liverpool enjoyed significant digital growth as they passed 60 million followers across social media platforms.
It’s a far cry from the financial mess FSG inherited when they completed their takeover of the club in the High Court back in October 2010.
“My personal view is that this is a really significant turnaround,” Hughes added.
“From when FSG acquired the club, we’ve followed a very consistent policy of reinvesting the upsize in our performance and our profits back into the club.
“As the performances have improved, the investment levels have improved. We’ve come from near bankruptcy not that long ago to being really successful and competitive and improving across the board.
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John W. Henry (Second Left), the owner of New England Sports Ventures, delivers a statement in the offices of the law firm Slaughter and May to announce his purchase of Liverpool Football Club with club chairman Martin Broughton (R) and Managing Director Christian Purslow (L) on October 15, 2010 in London, England.
The failed transfer which served as hint
“You’re seeing strong performance on the pitch and strong performance off the pitch, improving financial results and increased investment back into the football club.
“We’ve built the Main Stand in that period and we’re investing in a first class new training ground in Kirkby.
“We’re going to continue with our strategy of continuous improvement. We’re looking at every aspect of the club and we’re always reviewing our cost base.
“We’re looking at all our revenue streams to drive future growth. That continues week by week, day by day to improve the performance of the club.”