The Athletic has appointed Chris Weatherspoon as its first dedicated football finance writer. Chris is a chartered accountant who will be using his professional acumen as The BookKeeper to explore the money behind the game. He is starting with a series this week analysing the financial health of some of the Premier League’s biggest clubs.
You can read more about Chris and pitch him your ideas, and his first articles exploring the books at Manchester United, Manchester City and Arsenal.
At the beginning of March, Liverpool were surging under Arne Slot. Less than a fortnight ago, Slot’s first season at Anfield was geared up to be one of the greatest in club history. The Premier League was a procession. A Carabao Cup final awaited. The Champions League was theirs to snaffle up, too, after topping the revamped league stage.
Not so now. In the space of six days, Liverpool’s lofty season has tumbled. From looking so imperious during the Dutchman’s first six months at the helm, now Slot’s side are left with just the Premier League to play for — though it would take quite the implosion for that to fall out of their grasp. The Carabao Cup and Champions League are gone.
While those defeats against Newcastle United and Paris Saint-Germain both smarted, their financial ramifications differ wildly. Liverpool’s torpid display at Wembley against Newcastle will have hurt Merseyside pride, but the cost to club coffers is minimal; League Cup compensation is miserly, even for the winners. By contrast, coming out on the wrong side of the enthralling two-leg tie with Paris Saint-Germain has robbed them of a significant windfall.
Winning the revamped Champions League would have banked Liverpool €52.5million (£44m; $57m) more than they will now receive, not to mention a further €5m had they gone on to win the European Super Cup. They still earned an estimated €100m, underlining just how lucrative UEFA’s premier club contest has become.
This season should still bring record revenue for the club and that was the case last year too, even as Liverpool played in the Europa League. The club booked income of £613.8m in 2023-24, a £20m (three per cent) annual increase, despite broadcast revenue falling by £37.9m (16 per cent) without the Champions League.
That dip was partly offset by improved matchday income, as work on extending the Anfield Road End completed mid-season (Liverpool also received £8.6m in compensation for lost revenue after delays to the works), with the club making over £100m in gate receipts for the first time. They joined Manchester United, Arsenal and Tottenham Hotspur as the only English clubs to break that mark.
More consequential to the top line was Liverpool’s commercial income. The club-record £308.4m was an impressive 13 per cent increase on 2022-23. Commercial revenues have increased 42 per cent in five seasons, and more growth is on the horizon — a kit-manufacturer deal with Adidas, beginning in August 2025, is expected to generate even more than the club’s arrangement with Nike.
Despite the recent missteps, Slot’s side have still been wildly impressive for much of this season. Those 2023-24 financials, recently released, underlined the strength of foundation laid for him. Liverpool spent a net £0.1m on transfer fees this season and the squad has largely remained consistent between Slot and predecessor Jurgen Klopp.
Speaking of Klopp, the 2023-24 accounts confirmed he and his backroom staff had been rewarded for their significant efforts over the years with fully paid-up contracts, which cost Liverpool £9.6m. That went some way toward removing confusion about a wage bill that went up £13.2m in a season the club weren’t Champions League participants. That said, last year saw Liverpool book a £57.1m pre-tax loss, the worst financial result in the club’s history, and a stark departure from the £206.6m in profit they booked between 2017 and 2019.
What do Liverpool’s recent finances look like – and what’s their PSR position?
Fenway Sports Group’s (FSG) takeover of Liverpool in October 2010 bought them a club at a low ebb. It is easy to forget just how much financial peril Liverpool were in back then. While the Glazers had already made themselves the poster family of leveraged buyouts in English football, it wasn’t long before they had some willing pretenders.
Tom Hicks and George Gillett’s takeover of Liverpool in February 2007 borrowed straight from the playbook used at Old Trafford in 2005, but the ruinous impact on the club they bought arrived with far greater haste. Three years on from Hicks and Gillett rocking up at Anfield, Liverpool were on the hook for £378.4m of debt, £234m of it owed imminently to banks at chunky rates, the rest to a holding company moored in the Cayman Islands, with annual cash interest payments of £29.8m (comprising 16 per cent of the club’s entire total income, no less) having just contributed to a club record £54.9m loss. With the club’s auditors warning about Liverpool’s ability to survive, and fans in revolt, it took a High Court ruling to wrest the club from the grasp of its two American owners.
The resulting buyer, of course, was FSG. The group spent £230.4m on adding a Premier League football club to its portfolio and, though the early going was tricky — Liverpool lost a combined £139.6m during FSG’s first three seasons in charge, and hovered between sixth and eighth in the table — it ultimately transformed an institution on its uppers. Last season brought Liverpool’s worst pre-tax result but the club are close to breaking even during FSG’s tenure.
What’s more, even with that hefty loss, over the last decade Liverpool remain England’s most profitable club. Their £136.2m pre-tax profit between the 2014-15 season and 2023-24 is unmatched, with only Manchester City (£126.4m) coming anywhere close. Liverpool buck the trend and then some; over that time, only seven other Premier League or EFL Championship clubs were profitable.
It seems odd to declare a business in good shape on the back of a near-£60m loss, but Liverpool, at least in the context of football, are fine. Last season’s deficit was impacted by several things, not least that lack of Champions League football and the decision to pay up Klopp and his staff. Player sale profits drooped but will rebound this season, while player amortisation costs should remain static or even fall after the quiet activity last summer. Other than the reduced broadcast income, the biggest contributor to Liverpool’s increased loss was £29.2m in non-staff expenses excluding depreciation, a byproduct of the club’s increased commercial activity, the costs of hosting at a bigger stadium and general inflationary pressures. None of those costs will disappear this season, but improvements in income will offset the burden.
From the perspective of profit and sustainability rules (PSR), Liverpool had no issues last season even with that large loss. The club’s pre-tax loss over the three-year PSR cycle was £58.6m, £43.6m over their allowed loss of £15m. That loss limit is lower than the £105m maximum afforded to Premier League clubs, as FSG has not provided any equity funding in recent years. Yet Liverpool remain far from trouble once we deduct allowable costs — depreciation accounted for £39.2m of that three-year loss, and removing that already nearly gets the club back to the £15m limit. Our PSR calculation is necessarily heavy on estimates but, after the allowed deductions, The Athletic projects Liverpool had around £73m of PSR headroom in 2023-24.
Similarly, they should be free of trouble this season. Calculations where the final financial year of the PSR cycle hasn’t even ended yet are even more reliant on conjecture, but Liverpool will be safe from a regulatory standpoint. We estimate the club could lose £75m this season and still comply with Premier League PSR — and it is far more likely they’ll book a decent-sized profit in 2024-25.
UEFA’s PSR is different, with a lower loss limit and regulations dictating how much clubs can spend on their squads. Liverpool will be fine here, too, to the extent there’s little point going into too much depth. As a rough idea, on the latter squad cost ratio (SCR) rule that the European governing body requires clubs to comply with, The Athletic estimates Liverpool’s SCR figure was around 61 per cent last season and will be 53 per cent this year, both of which are comfortably within the respective 80 and 70 per cent limits.
Surging commercial income
Liverpool’s £613.8m revenue last season was a new club record, with their growth in commercial income the key contributing factor. Commercial revenue now comprises more than half of total revenue for the first time. What’s more, their commercial income is now second-highest in England, only trailing Manchester City. Tellingly, Liverpool’s £308.4m has outstripped Manchester United — a feat the Anfield outfit had never before managed (at least in the Premier League era). As recently as the 2015-16 season, United’s commercial activity out-earned Liverpool’s by £153m, so the latter really have made significant strides here.
Liverpool’s commercial income was higher last season even as United played in the Champions League while Anfield only hosted Europa League football, which perhaps reflects sponsors’ views on the longer-term trajectories of the two clubs.
Liverpool’s commercial income is driven by several big deals, including the kit supplier agreement with Nike now due to end on July 31 this year. That Nike deal only guaranteed the club a base of £30m per year, but uplifts including 20 per cent net royalties on club merchandise sales pushed their earnings from the deal over the £60m mark. The new Adidas agreement, accordingly, is expected to bring in yet more — albeit the incentivised nature of the deal does mean amounts can fluctuate according to sporting performance and global sales.
Other key commercial contracts behind that sizeable overall figure include front-of-shirt sponsorship with Standard Chartered (£50m per year), training centre naming rights and training kit sponsorship from Axa (£20m, since renewed at a slightly higher rate) and Expedia sleeve sponsorship (£15m). Liverpool entered new deals in 2023-24 with UPS, Orion Innovation, Google and Peloton, expected to bring in more than a combined £45m per season, to go alongside longstanding link-ups with Carlsberg, EA Sports and Nivea. The 2024-25 season has seen partnerships inked with Engelbert Strauss, Husqvarna, Japan Airlines and Visit Maldives.
Rising wages – but transfer fees trail rivals
When Deloitte released its annual Football Money League report in late January, plenty of Liverpool fans were bemused to learn the club’s annual wage bill had actually increased, even as they played in a lower European competition and several high-earners had left the previous summer. Only Manchester City’s wage bill was higher in the Premier League last year.
The subsequent release of the accounts helped explain the rise, with that Klopp pay-off being included in the wage figure — yet even without that, Liverpool’s wage bill still rose by £3.6m. The primary driver behind the increase was the club’s qualification for this season’s Champions League. A return to competition was secured in 2023-24, meaning Liverpool’s obligation to pay those bonuses crystallised last season. Correspondingly, the qualification bonuses were booked into the latest set of accounts.
Liverpool also happen to be one of English football’s biggest employers. To the end of last season, only Manchester United employed more administrative staff than Liverpool — and United are on the well-publicised path of cutting their workforce. Last season, Liverpool employed an average of 782 admin staff, only 30 behind United and 21 per cent higher than next-placed Chelsea (646 staff). Liverpool don’t split out player wages separate to their main wage bill, and UEFA no longer discloses them in reports that once did, but based on previous information the club’s non-playing wage bill landed at 21 to 22 per cent of overall staff costs. In 2022-23, that amounted to around £109m, not far shy of the £115m estimated non-player wages United spent that year.
Both clubs employ over 2,000 matchday staff, whose costs also fall into that bracket. While Liverpool’s administrative staff numbers only rose by 12 last season, the size of the club is such that their non-playing wage bill swamps every Championship club and even some at the bottom of the Premier League. Movements in the wage bill at clubs of this scale aren’t just brought about by new signings and sales.
While Liverpool are one of English football’s biggest wage payers, one area they have kept a firm handle on in recent years is transfer fees. The club’s player amortisation cost — the accounting impact of transfer fees, spread across the life of player contracts — was £114.5m last season, which, though a club record, sits a long way behind peers.
Liverpool are fifth in England in that regard, but the gulf to fourth-placed Manchester City (£165.1m) is over £50m, and Chelsea’s extreme activity in the transfer market means their amortisation bill isn’t far off double that at Anfield (£203.3m in 2022-23).
Liverpool’s amortisation figure has barely budged, growing just £2.7m (two per cent) since the 2018-19 season. Among the Premier League’s ‘Big Six’, that’s by far the lowest growth. In fact, it’s one of the lowest increases among last season’s top-tier teams, with only Everton and Crystal Palace reducing their amortisation bills over the last six years.
Liverpool’s transfer spending in recent years has been lower than their main domestic rivals, with a £562m gross spend on players in the last five seasons, and a £376.3m net spend in the same period each coming in as only England’s seventh-highest, trailing each of their ‘Big Six’ peers and Newcastle United. They may even drop to eighth once Aston Villa publish their 2023-24 accounts. That relatively low transfer spend helps explain why player amortisation costs have grown at a far slower rate than elsewhere. Of course, as we’ve seen, Liverpool have been one of the highest wage payers recently, choosing to retain star players for long periods.
Liverpool’s squad cost of £749.4m (as of May 31, 2024) is the seventh-highest in European football, and the fifth-highest in England, trailing Chelsea, the two Manchester outfits and Arsenal. The gap to the top four domestically is sizeable: Arsenal’s squad to the end of May 2024 cost £133m more than Liverpool’s to assemble. The club’s squad cost actually fell last season, despite a £194.5m spend on new players. Passing them on the way out was a cohort that had cost a collective £232.2m over the years, including Naby Keita, Fabinho, Alex Oxlade-Chamberlain, Roberto Firmino and Jordan Henderson.
Liverpool’s squad are on course to be the cheapest to win the title since the club last managed it in 2019-20.
This season’s champions-in-waiting cost around £350m (32 per cent) less to assemble than the group that notched City’s record fourth consecutive title last year.
That £194.5m spent on new players and contract extensions in 2023-24 — the former comprised principally of Dominik Szoboszlai, Alexis Mac Allister, Ryan Gravenberch and Waturo Endo — wasn’t a club record for a single season, but the amount of cash Liverpool dispensed on new signings was. The club’s cash outlay last year was £181.6m, while they recouped only £49.1m cash from player sales. That net cash spend on transfers of £132.5m was a new high, and by some margin too, comfortably eclipsing the net cash outflow of £89.5m in 2019-20.
Correspondingly, Liverpool use instalment payments in their transfer dealings far less frequently than their peers, with a net £69.9m fees owed being lower than 11 other Premier League clubs. They owe far less on transfers than some of their ‘Big Six’ rivals, with Manchester United (net transfer debt of £300.1m at the end of December 2024), Spurs (£268.7m, June 2023) and Arsenal (£229.3m, May 2024) all needing to meet transfer liabilities in excess of £200m. Chelsea, who don’t disclose transfer debts, are almost certainly above that level too. Liverpool’s much lower figure here should mean the club has more free cash for new transfer activity, as they’re not hamstrung by large payments on historic deals.
One final note on transfers concerns Liverpool’s selling abilities. The enormous sale of Philippe Coutinho to Barcelona in January 2018 was arguably the most successful deal in the club’s history, setting in train events that propelled them to domestic and European titles. Yet the bumper profit on Coutinho has also skewed the figures and might be hiding a problem area for the club when it comes to deriving value from the transfer market.
Over the past decade, Liverpool’s £453.9m profit on player sales is only bettered by Chelsea (£755.4m, 2014-23) and Manchester City (£583.7m, 2015-24). Yet limit looking back to just five years and it’s an altogether different story. Since the beginning of the 2019-20 season, Liverpool’s £150.1m in player-sale profits is bettered by nine other English clubs.
Some of that has been a choice, as Liverpool have generally held onto their stars, but it’s still a key area where they now appear at risk of falling behind. Nobody more obviously highlights that than Trent Alexander-Arnold, who the club are perilously close to losing for nothing this summer. Alexander-Arnold is only 26 and as recently as the start of the season was being valued at £75m, even with less than a year to run on his Liverpool contract.
Considerable investment in the long-term
Liverpool spent £56m on capital projects last season, principally on completing the extension of the Anfield Road End and buying back their old Melwood training ground, the latter so that it can be used by the women’s first team and academy. That’s the third-highest capital expenditure among Premier League clubs’ most recent financials, only topped by Everton (Bramley-Moore Dock Stadium build) and Manchester City (Etihad Stadium extension and surrounding works).
More notably, it took Liverpool’s total investment in capital works to £368.4m in the past decade. For context, that’s the highest of any English club that wasn’t building a brand new stadium in the same timespan, with only Tottenham Hotspur and Everton undertaking greater capital spending. Liverpool’s expenditure was over £100m more than Manchester City (though they’ll reduce that gap this season through those Etihad works), and over £200m more than each of Manchester United, Arsenal and Chelsea. Much of that cost has gone on improving and expanding Anfield. Liverpool’s home capacity is now 61,276 — over 16,000 higher than 10 years ago.
Sustainability: A key plank of FSG’s strategy
With such hefty spending on capital projects last year and that huge cash outflow on players, alongside a cash balance at the end of May 2023 of just £3.4m, a pretty obvious question arises: where did Liverpool get the money to pay for it all?
In the first instance, the club remains a strong cash generator, recording inflows from operations (ie, before any of the transfer or capital spending) of £83.7m. That’s good, albeit also a sign of the lack of Champions League football biting. Other than the Covid-19-hit 2020-21 season, that was Liverpool’s lowest cash generation from operations since 2017, with each of the rest of the ‘Big Six’ (other than City, who don’t publish a cash flow statement) topping £100m in their most recent accounts.
While good, that amount alongside the low existing cash balance plainly wasn’t enough to fund transfer costs, never mind completing the works at Anfield and the Melwood buyback. The money required instead came via a £127.3m loan from FSG, the first time the owners have provided cash funding since 2016, and a sum which pretty much doubled their total funding of the club since taking over. In all, FSG provided Liverpool with cash funding of £263.6m. Combined with the initial purchase cost, their total outlay sits at £494.0m.
Things aren’t quite that simple. While last season’s £127.3m loan did come into the club via FSG, the cash itself arose through a deal completed in September 2023, whereby Dynasty Equity bought up a small stake in FSG. The proceeds from the sale were then recycled into Liverpool. The size of the stake sold to Dynasty was unspecified but believed to be in the region of three per cent. Dynasty didn’t buy shares directly in the club, and it’s unclear which entity they did acquire shares of. It would make sense though if that entity were FSG Football, LLC, given the only real asset in that company’s downstream is the club (whereas the wider FSG entity owns, for example, Major League Baseball’s Boston Red Sox).
The transaction was announced as a ‘equity minority investment in Liverpool F.C.’ at the time and, since no shares in the club have changed hands, this statement makes more sense if Dynasty bought into the parent company that only oversees the football side of things. Assuming they did, their investment values FSG’s football arm at a cool £4.24bn, or over 18 times what Liverpool were bought for back in 2010.
Separately, the same announcement placed paying down bank debt first in the list of what the funds would be used for, yet the club’s bank debt only fell by £9.8m last season. The majority of the cash influx instead went on the final costs of extending the Anfield Road End and meeting those significant transfer payments.
FSG has now injected over £250m into Liverpool during its tenure (even if half of it came via a share sale, so could be argued wasn’t initially its own money), but plenty of fans have long wondered about the group’s strategy when it comes to funding their club. Set alongside the huge sums poured into rivals over the years, FSG’s executives have sometimes been viewed as penny-pinchers, not least during recent contract negotiations with Mohamed Salah.
Liverpool are one of the Premier League’s bigger spenders on wages but are still to secure the futures of three key players (Photo: Carl Recine/Getty Images)
Whether that’s a fair view of Liverpool’s owners is hard to say. On the one hand, their inputs pale compared to Manchester City and Chelsea, both of whom have benefited from over £800m in owner funding since FSG arrived 14 and a half years ago. On the other, the group rescued Liverpool from an incredibly grim situation, turning fortunes around both on and off the pitch. The only club in recent years to consistently better Liverpool has been City who have far deeper reserves to draw on whenever needed.
Liverpool fans might ask if Klopp would have had more than one Premier League title to show for his nine years in charge if only that £350m squad cost gap had been narrowed, and maybe he would have, but it’s not like Liverpool have been skinflints; as we’ve seen, they’re the second-highest wage payers in England. In the transfer market, they’ve more often than not been savvy, assembling a world-class squad for less than anyone else managed.
FSG haven’t been flawless by any stretch. But it’s difficult not to wonder if they might be more appreciated if football weren’t a sport that, for myriad reasons, often views spending money as worthy of praise in and of itself, regardless of whether that spending turns up the desired results.
What’s next?
Back in the Champions League and with the biggest slice of the Premier League prize pot within their grasp, Liverpool will break another club record for revenue this season. They should top £700m in income in 2024-25, a barrier only previously broken by Manchester City on the domestic front.
That, combined with minimal, if any, wage and amortisation growth, as well as improved player profits and an uptick in matchday income now the extended Anfield Road End is operational for a full season, will see Liverpool return to overall profitability. Predicting a club’s bottom line is fraught with danger, but The Athletic’s estimate suggests Liverpool’s pre-tax profit this season could hit the £40m-50m mark. The big unknown is where the wage bill will land this season. Even if it reaches £400m, Liverpool could still clear £30m profit.
Trying to figure out Liverpool’s PSR headroom for next season is even trickier, given it involves combining estimates of the deductions for previous years with those 2024-25 profit projections. Even so, all of it points to one conclusion: they have plenty of scope under PSR to spend this summer, whether it’s on extending the contracts of Salah, Alexander-Arnold, Virgil Van Dijk and Ibrahima Konate (who has only a year left to run on his existing deal), or on snaffling Alexander Isak from Newcastle, even with the latter’s reported £150m asking price.
Of course, PSR headroom and the actual ability to spend real money are completely different things. Do Liverpool have the cash to spend? On the face of it, they should do. The club has, at least in a relative sense, low outstanding debts on transfers, and should see operating cash flows leap now they’re back in the Champions League. Capital expenditure will drop now numerous big projects are complete, so there will be cash to use. That being said, moving for someone like Isak would be contingent on raising further funds through the sale of Darwin Núñez, with Liverpool highly unlikely to sanction a big money striker signing without first moving a fellow forward off the books.
How much of that gets spent on new transfers may depend on FSG’s approach to the debt. Its decision-makers are known to be keen to reduce Liverpool’s bank debt (£115.6m at the end of last May), not least because it will reduce the £8.7m in interest paid last year. Whether they look to recoup some of the interest-free £198.7m owed to themselves is another matter.
Trying to predict how much Liverpool will spend is impossible but it’s evident they have scope to invest in the squad if they choose to. Financially, FSG has got the club on track, even with last year’s blip. On the pitch, for much of this season, Slot’s men looked near unbeatable but the aura has faded in recent weeks. Slot has done a sterling job with tools that were already in place. This summer would be a good time to equip him with some new ones.
(Top image: Eamonn Dalton for The Athletic, images: Getty Images)
