We have seen enough this season to know that Jurgen Klopp is leaving a Liverpool FC squad primed for future success when he departs Anfield at the end of this season.
But only now have we been able to see how things are shaping up off the pitch for the Reds ahead of a summer that promises seismic change.
That insight comes courtesy of the club’s latest set of financial accounts, a summary of which has been published this morning.
And, though we must wait for more granular detail via Companies House, the information provided paints a picture of an organisation well positioned to sustain its strong position under new management.
On the surface, a pre-tax loss of £9 million and a revenue figure that has not budged from the previous year’s £594 million are hardly worth shouting about.
The context behind the numbers
But, as ever, context is key, and in this case the contrast between the first team’s fortunes across the last two seasons cannot be ignored.
Liverpool were always going to endure some financial pain as a result of going from a quadruple push to early exits from the Champions League, FA Cup and League Cup.
And that is evident in the £26 million deficit created across both matchday and media revenue by the loss of several knockout games in each competition.
However, this has – rather encouragingly – been almost entirely offset by a £25 million jump in commercial revenue to a record £272 million.
This has always been a particular area of expertise for Fenway Sports Group, who continue to capitalise on the strength of the Reds’ brand by bringing in more and more partners.
That said, it is unlikely they will be able to entirely cover off the biggest financial consequence of last season’s struggles: the complete absence of Champions League revenue this time around.
Fortunately, Liverpool are on track to return to Europe’s premier competition next term, while the monetary benefits of Sunday’s League Cup win, deeper runs in other cups, and involvement in a title race should tell in the meantime.
The extra revenue generated by an expanded Anfield Road Stand, which is now finally fully operational, will also start to show.
Admittedly, there are plenty of unknowables in the coming years for Liverpool, including whether administrative costs that essentially account for a £7.5 million pre-tax profit turning into a £9 million loss over the last 12 months will continue to grow at such pace.
It will also be interesting to see what effect the Dynasty Equity’s recent purchase of a minority stake will have on a net bank debt figure that, as of May 2023, is understood to stand at £123 million.
But, on the early evidence provided by today’s snapshot of Liverpool’s financials, Klopp will be leaving behind a club that is in rude health both on and off the pitch when he departs this summer.
