Five key takeaways from Liverpool's accounts as Reds post record commercial revenues

Liverpool released their annual financial accounts for the 2022/23 season on Thursday.

The Reds claimed 'record revenues' from their commercial operations, though matchday and media revenue both fell.

Cutting through the numbers and jargon, here are five key takeaways from the report.

READ MORE: Liverpool midfielder Alexis Mac Allister admits 'desire' to play for another club

---

1. On-pitch success makes such a difference

Compared to the season previous, when Liverpool competed to the end on all four fronts, there was a 15% combined dropoff in matchday and broadcast revenue, as Liverpool exited all competitions at an early stage. 

While they are competing in the Europa League rather than Champions League this season, going deep into that competition combined with their continued domestic successes will see this number at least restored in next year’s accounts, with other revenue sources also in a position to improve. 

2. Maximising matchday revenue

Liverpool have often reported that they can sell well beyond the capacity of the stadium on matchdays, and they’ve addressed this with the extension of the Anfield Road stand, which brings overall capacity to 61,000, up from the previous 54,500. These additional 6,500 seats are projected to provide an additional 7.5m-10m per season of matchday revenue. 

This will move Liverpool comfortably into second place in the Premier League in terms of matchday revenue, behind Manchester United, with Old Trafford’s capacity 10,000 more than Anfield. Of course, the more games the team plays, the more home matches can generate revenue, which puts Liverpool in a good spot to be very competitive in this space not only in England, but in Europe. 

3. The wages-to-revenue ratio is… healthy

Uefa’s new sustainability regulations, which are already being enforced, require clubs to have a wages-to-revenue ratio of below 70%. Liverpool is currently at 63%, a healthy position considering the wage bill had to contend with a record-breaking contract for Mo Salah, as well as 21 other renewals at various levels of the business. 

While FSG’s approach to spending is often criticised, they have given themselves some scope in their wages-to-revenue percentage in order to continue to comply with Uefa’s regulations. 

For perspective, this number is a little higher than rivals Manchester City (59%), Arsenal (51%) and Manchester United (51%) but with higher matchday and broadcast revenue expected, this number could come down next season. 

4. Maximising commercialisation is key

Liverpool’s revenue gap to Manchester United and Manchester City can be explained away in one place - their commercial revenue generation. The total of £272m represents a success given that this number has risen over 30% in just five years, and a number of major brands have signed partnerships in the past 12 months - meaning this number is likely to rise again. 

We can debate the validity of Manchester City’s £350m of commercial revenue in their latest accounts - and it’s very much open to scrutiny. But United’s £320m figure is nearer to reality and that’s the benchmark for what the Reds must be looking to generate in order to close that particular gap. 

A return to the Champions League will certainly help, as will the ongoing global expansion of stores carrying Liverpool branding that will help the commercial footprint. 

And with the broadcast deal with the Premier League remaining broadly static until 2029, that’s the main area of proper growth available to the club at this moment in time. 

5. Bank debt that serves a purpose

A £9m loss is modest compared to those recorded by Arsenal (£52m, and likely to be higher next year as a result of Declan Rice and Kai Havertz’s transfers) and Chelsea (over £1 Billion in losses across the past decade) and though the rise of bank debt to £123m may raise eyebrows, the additional expenditure has been constructive. 

An additional £49m was added due to the construction of the top tier of the Anfield Road stand, which will pay for itself in a maximum of five years. So unlike a certain dividend situation involving Manchester United, debt being loaded is there to secure the long-term revenue generation and profitability of the club.