The Reds have seen their revenue streams hit significantly by the pandemic, with officials anticipating further losses in the coming months
Liverpool have announced pre-tax losses of £46 million ($64m) as the financial impact of the coronavirus pandemic becomes clear at Anfield.
The Reds’ latest accounts, released on Tuesday, show significant reductions in key revenue streams, with matchday and media income particularly affected. The accounts cover the year up to May 31, 2020, of which only the final three months were affected by Covid-19.
Club officials anticipate that the true cost of the pandemic will surpass £100m ($139m), with supporters still to return to stadiums and Jurgen Klopp’s side struggling to secure Champions League qualification for next season.
What are the key numbers?
The headline figure is that Liverpool have recorded a pre-tax loss of £46m ($64m) for the accounting period.
That is in sharp contrast to last year, when they announced a pre-tax profit of £42m ($58m) – the fifth time in six years that the club had recorded profits.
Overall revenue stands at £490m ($680m), a drop of £43m ($60m) from last year. That can be attributed to a drop of £59m ($82m) in media revenue, with the Premier League season having extended into July due to the pandemic, and a drop of £13m ($18m) in matchday revenue, with the final four home games of last season played behind closed doors due to the pandemic.
Commercial revenue rose by £29m ($40m) to £217m ($301m), the result, the club say, of a number of lucrative new partnerships, as well as “significant growth” in retail, in particular with regards to record-breaking sales of last season’s home shirt.
The club’s wage bill has risen to £325m ($451m), with only Manchester City (£351m/$487m) paying more in terms of Premier League clubs. Much of Liverpool’s increase, in that regard, is down to bonus payments made to players due to the club’s on-field successes – the Champions League triumph of 2019, as well as the European Super Cup and FIFA Club World Cup victories.
There was a significant drop in revenue earned from their Champions League participation. Liverpool exited at the last-16 stage last season, and so picked up £71m ($98m) from UEFA, as opposed to £95m ($132m) when winning the competition in 2018-19.
What have the club said?
Andy Hughes, Liverpool’s managing director, said: “This financial reporting period was up to May 2020, so approaching a year ago now. It does, however, begin to demonstrate the initial financial impact of the pandemic and the significant reductions in key revenue streams.
“We were in a solid financial position prior to the pandemic and since this reporting period we have continued to manage our costs effectively and navigate our way through such an unprecedented period.
“Importantly, what has remained constant throughout the pandemic is the club’s desire to support the local community and those who live in and around Anfield and across the city region. We have also worked closely with our city partners and provided unwavering support to the region’s public health departments in their drive to promote the important health messages across the region to help keep local people safe.
“More recently, we willingly made Anfield available to operate as a mass testing centre and now a vaccination hub with the incredible commitment and dedication of our Anfield staff.
“We can now look ahead to the conclusion of this season and hopefully a more normal start to next season. It’s no secret that supporters have been greatly missed at Anfield over the past year and we look forward to having them back.”
The Goal View | Neil Jones | Liverpool correspondent
Understandably, there will be a lot of concerned Reds fans reading today’s announcement.
Considering these figures only take into account three months of the coronavirus pandemic, the picture they paint is a worrying one, if not a surprising one.
Football clubs are losing money. Lots of it. Even well-run clubs, of which Liverpool are certainly one, cannot plan for events such as this.
Liverpool sources had indicated from some way back that the estimated cost of the pandemic could stretch well beyond the £100m mark, and these numbers show that, if anything, that may have been an optimistic assessment. Fans are still not back inside Anfield, the retail world has been impacted massively, and Liverpool’s on-field performance has been sketchy, to say the least.
Those hoping for mega-bucks signings (Erling Haaland or Kylian Mbappe, for example) this summer were always likely to be disappointed, and failure to qualify for the Champions League, a scenario which looks pretty likely today, will certainly not help matters. The timing could not be worse, in that regard, as Jurgen Klopp himself has admitted.
But sources have insisted funds will be available for Klopp to strengthen his squad, and Liverpool believe they have a number of players who will raise decent money when sold. The market last summer was significantly diminished, in that regard, with the likes of Harry Wilson, Marko Grujic, Sheyi Ojo, Loris Karius and Taiwo Awoniyi all loaned when a sale would have been preferable, and others such as Divock Origi and Xherdan Shaqiri staying when no buyers could be found.
Liverpool have benefited from the fact that they have, generally, been run sensibly in recent years, meaning they were better placed to absorb some of these issues than other clubs.
Their wage bill is hefty, but the arrival of RedBird, who last month invested more than £500m ($693m) into club owners Fenway Sports Group, will, club sources say, provide stability during this period, and will crucially allow the club to move forward with plans to upgrade Anfield’s capacity beyond 60,000, courtesy of a £60m ($83m) extension of the Anfield Road stand.
Liverpool are not the only club hit by the pandemic, nor are they the club hit hardest, but these figures lay bare the challenges facing even the biggest clubs. And we can expect further losses in next year’s accounts too.