Liverpool set to find out true value of Champions League with heavy loss to be announced

Liverpool set to find out true value of Champions League with heavy loss to be announced

Liverpool are set to publish their 2023/24 financial accounts at the end of February

Liverpool principal owner John Henry

In the here and now, things are going swimmingly for Liverpool. Six points clear at the summit of the Premier League with a game in hand and leading the way in the UEFA Champions League has the Reds riding high in Arne Slot’s first season in charge.

Financially, the club is in rude health under the ownership of Fenway Sports Group, who while taking criticism from some quarters of the fan base over a perceived lack of investment in the product on the pitch, have managed to oversee a title-challenging side pieced together through a sustainable business model.

‌

Looking ahead, should Liverpool win the league this season then they would not only secure another lucrative crack at the Champions League, but they would also claim merit payments of some £56.4m for finishing at the top of the pile, a figure that will be further boosted from 2025 when the Premier League’s new domestic and international TV deals kick in at an increased rate, albeit for providing more games to broadcasters annually.

The Champions League is also more valuable than ever, and Liverpool, should they finish top of in the group stages, would add £8.5m to the £9.4m from knockout qualification, meaning that the club could book £32.3m in prize money before even considering going deeper in the competition, or the £4m-plus that the club generates from matchday revenue for home games. Winning the competition would be worth, all told, some £120m.

‌

There are, of course, some expensive decisions to be made around contract extensions for Virgil van Dijk, Mohamed Salah and Trent Alexander-Arnold, but in the grand scheme of things they wouldn’t skew the financial picture enormously for the Reds.

But in the coming weeks the Reds will publish their financial accounts for the 2023/24 period, covering a season where the club were without Champions League football having found themselves in Europa League hinterland following the fifth-placed finish of 2022/23, where Newcastle United pipped them to fourth spot.

Accounts, and the narrative around them, can be a curious thing as they are essentially a snapshot in time of almost a year ago, where the financial landscape for the club was considerably different. They do, however, provide the nuts and bolts of how the direction of travel of a number of key areas, such as total revenue and commercial and matchday revenue, as well as wage spend.

‌

Profit is a rarity in football, and while Liverpool have been able to make more than most of their rivals in recent years through success being aligned with a more prudent financial approach, the publishing of the 2023/24 accounts will see the club post a second successive loss, one larger than the £9m pre-tax loss, one that came on the back of a £7.5m profit for 2021/22.

Reports last month had suggested that the total loss for the club could exceed £100m based on financial forecasts, something that would be a record under FSG ownership. However, while a loss is expected and will be significant, it will be considerably lower than that figure to the tune of tens of millions and that PSR concerns won’t be an issue given past performance of the football club financially.

The club hasn’t changed its financial approach, what had changed during that period is the lack of Champions League football, with the losses understood to be in line with the loss of income from playing at the top table of European competition compared to the second tier, with the reduction in income hugely significant.

‌

While Europa League football for a season is something that can be absorbed in the short-term, prolonged absence from the competition can be heavily damaging, a concern that rivals such as Manchester United are currently toiling with, while Arsenal took some time to recover and remain behind the curve in terms of financial muscle due to their absence from the competition for a number of seasons.

It is anticipated that commercial revenue should continue to climb on the back of a number of new partnerships and renewals, while matchday income could well be impacted due to the reduction in capacity at the start of the 2023/24 season due to work that was undertaken on the Anfield Road End.

Capacity was increased to 61,000 by the end of January and the benefits of the increased number of seats will be reflected fully in the 2024/25 accounts, which will also include a significant number of home games due to the expanded Champions League format. It could well be that for the next set of accounts, for 2024/25, that the Reds join the £100m-plus club when it comes to matchday revenue.

Article continues below

But for the 2023/24 season, while the full picture won’t be revealed for a number of weeks, what it will reveal is the importance of both sustained and sustainable success, with Champions League football a vital part of the business plan at Anfield for the long term.

Click here to read article