Liverpool announce first profit in seven years thanks to Premier League TV deal
Liverpool have announced a first profit in seven years thanks mainly to the Premier League broadcasting deal that increased revenue to £255.6m in the year ending 31 May 2014. The club’s profit before tax was a modest £900,000 but, compared to a loss of £49.8m in 2013, the sum underlines the financial recovery that the owner Fenway Sports Group has implemented since taking over from Tom Hicks and George Gillett in 2010. Furthermore, these figures also help us understand why Liverpool were last week cleared of any financial fair play breaches by UEFA, who had studied the club’s books following the 2012-13 losses plus a £40.5m loss in the 10-month period before then. Liverpool’s revenue increased by 19% in 2013-14, with media revenue up by 46% to £100.9m thanks to the current television deal and commercial revenue, which has increased since this financial period due to tie-ins with the likes of New Balance and Nivea, also showed a 5% rise to £103.8m. Net debt grew from £12.2m to £57.3m largely as a result of player transfers and transfer payments due during the period, but Liverpool’s overall debt has decreased from £237m when FSG took over in 2010. The Reds have also returned to the Deloitte Money League’s top ten clubs in the past 12 months, now standing ninth. The figures just lodged at Companies House and covering the 12 month period to May 31, 2014, reflect the second year of Brendan Rodgers’ time as manager, a period in which Liverpool had no European football and came within a whisker of winning the Premier League. Neither do these latest accounts cater for the £70m plus record fee received from Barcelona for Luis Suarez. The chief executive, Ian Ayre, said: “With a hugely supportive ownership we have brought financial stability back to this football club and we now have the right structure, platform and ambition to continue growing on and off the pitch.”
These numbers might not seem so impressive on their own but if one compares them to a club like Manchester United who have reported a drop in revenue of 14 per cent for the second quarter of their financial year. The club’s gross debt has gone up during the three-month period from £356.6m to £380.5m. United’s revenues for the three months to December 31, 2014, were £105.7m compared to £122.9m for the same period a year ago, but the drop was not as great as some analysts had predicted due to a reduction in the club’s costs and a rise in commercial income. As expected, United’s failure to make the Champions League has once again impacted on their financial results, with broadcasting revenue down 39.4 percent and the club’s overall revenue down by 14 percent with match-day revenue is also down 8.3 percent.
A top football prediction would suggest a prosperous future for Liverpool, mainly due to the age of the squad that continues to decrease, as they plan for the future, but also financially.