With the Liverpool financials being released and Deloitte releasing their annual top earning football club report, now is a good time to look back at how the club is doing as we come up on the 5 year anniversary of wunderbar coach Jurgen Klopp joining the team. Klopp has done wonders for the team on the field and in terms of creating a good foundation with a winning mentality, but how has that translated into pounds? The report shows that the 2018-19 financials are a mixed bag compared to the prior year, but the 5 year outlook is a bit rosier for Reds supporters.
As with standard practice, the financial information is broken down into 3 types, Matchday revenue, Broadcast Revenue and Commercial Revenue, and we will look at each one individually to see both the Liverpool growth and the growth in comparison to other top teams.
Matchday Revenue
Matchday revenue, revenue related to actually selling seats, is a hard one for most clubs to drastically change. When Klopp took over at Liverpool there were just under 45,000 seats in the stadium and they were being sold out every game. And while the product on the field has improved, there was no way to increase matchday revenue unless ticket prices were dramatically increased which is not feasible.
Enter the Anfield man stand expansion. Adding an additional 8,500 seats, or almost 20% more capacity had the desired effect and the Liverpool mathday revenue increased by 15% in 2017-18. Other years the increase was between 1% and 5% in line with competitors.
The total growth for the last 5 years is a healthy 27%, which while not enormous is putting us ahead of most of the teams in front of us. In the EPL for example, the two teams in front of Liverpool in revenue, Man U and Man City both grew less than 10% in mathday revenue over 10 years, meaning that Liverpool is gaining on them revenue-wise.
Unfortunately in the larger football world, Barcelona grew 36% with a massive stadium that does not sell out and so a good product on the field has brought more fans into the seats, something a sold out Anfield can’t provide. Also PSG grew an astounding 49%, working in their favor is the fact that even though their stadium is smaller than Anfield, they are able to charge more per seat being in the city of Paris. Additionally it is worth mentioning that the team behind us in terms of total revenue, Tottenham, has taken advantage of their new stadium to grow matchday revenue by 72%, thereby closing the gap on Liverpool and showing nearly the same gameday revenue now.
All of this sheds more light on the Liverpool management’s pursuit of additional seats in trying to expand the Kop end of Anfield. The additional seats proposed there would be another gain for the team that is currently maxed out in matchday reveue. That expansion, while smaller than the main stand expansion, would still look to put an additional £10M-£12M into the matchday revenue for the team which would put Liverpool over $100M annually, which would be the 5th most of any football team.
Broadcast Revenue
Liverpool has grown immensely over the last 5 years in terms of broadcast revenue. This has been primarily though making it to the finals of the ultra-profitable champions league as well as having success in the EPL meaning that more games are broadcast live. This combination has led to an 82% growth in revenue over the last 5 years which puts Liverpool in good standing financially.
Compared to other teams ahead of them Liverpool is slightly behind Man U and Bayern who have nearly doubled their revenue in the last 5 years, but is still ahead of the rest of the top teams and is gaining ground on the two large La Liga teams that have traditionally been top of the heap.
In fact, with the EPL signing more and more lucrative deals and with Liverpool progressing far into champions league, the broadcast revenue for Liverpool in 2018-19 was actually the highest of any football team. The down side is that to keep this record revenue Liverpool will have to maintain these lofty standard of making it to the champions league final and having virtually every game being broadcast in England, but it is a good position to be in.
One item of note is that the other EPL teams have also grown their revenue as a result of the lucrative EPL deals, and as such Tottenham who is right behind Liverpool in total revenue grew 122% in 5 years. In fact, Man U, Man City, Liverpool and Tottenham who are all in the top 8 revenue teams in the world are all within €20M of each other.
Commercial Revenue
Commercial revenue is the most important of the three stream as even Deloitte found it is the one that can be most easily influenced by the team. At 38% growth over a 5 year period, Liverpool commercial revenue is growing faster than most teams in front of them, but still slower than Barcelona and Real Madrid who grew 57% and 44% respectively. Additionally, as in the two previous categories, Tottenham grew their commercial revenue a ridiculous 117%. In fact in terms of absolute numbers Liverpool is clearly not in the class of the upper teams:
| Commercial Revenue (€M) | |
| Barcelona | 384 |
| Real Madrid | 355 |
| Manchester United | 317 |
| Bayern Munich | 357 |
| PSG | 363 |
| Manchester City | 261 |
| Liverpool | 211 |
There is a bright spot in this picture, that while Liverpool’s 5 year growth is good but not great, their growth from last year to this year is fantastic. Previously Liverpool have seen single digit growth in commercial revenue, however in the last year the growth was 23%, which is a reflection of a new emphasis that Liverpool have clearly put on this revenue stream.
The new Nike deal clearly shows Liverpool are interested in building their brand and the online content that Liverpool is working on creating (like The Team Meeting) is further evidence of this push. Liverpool have a long way to go to catch up to the other teams in front of them and to stay ahead of a Tottenham team that is growing in leaps and bounds in commercial revenue, but there is hope that they will be able to harness social media and use this current winning period to increase the LFC brand name and the commercial revenue.
Overall
Liverpool overall revenue growth for the 5 year period was 54% which is higher than any of the teams in front of them. And while Barcelona had growth of 50%, the rest of the teams were in the 30’s, meaning that Liverpool is making up some distance. However the growth of the team right behind Liverpool in 8th place should be recognized, as at 102% Tottenham has taken huge strides in the last 5 years and Liverpool must continue to focus on growth not just to catch up to the teams in front of them but maintain their position and not fall below Tottenham.
And all the while Klopp and management keeps pushing the team forward to a higher 5 year revenue growth than the teams in front of them, the non-financial signs are good as well: there is a great team on the field, there is an air of optimism around the organization, infrastructure steps (such as the development of the new training ground) are being made. In the long run these non-financial gains will help to translate into further financial gains and hopefully the time will come that Liverpool will move up in the revenue ranking and perhaps one day become the top revenue team in football, to match their top team in the world cup win.
Daniel is a professionally designated accountant who has spent 20 years in the finance and data analytics field which has skewed his view of the sporting world. Instead of seeing simply an athletic competition, he sees a financial exercise waiting to be unlocked by data analysis. He enjoys reading professional publications such as the annual deloitte football report and team financials as well as spending hours putting together and analyzing football data, which saves his readers from having to do it themselves.
