Having entered the last quarter of their fiscal year, Liverpool have finally made available the financial statements from the previous fiscal year running June 1, 2012 to May 31, 2013. Lots of numbers, lots of growth, lots of things to be positive about on the books.
"Over the past four or five years, revenue has been consistently increasing from around £170 million in 2009 to over £200 million today," said Ian Ayre, "and external debt has decreased significantly to less than £50 million.
"With a hugely supportive ownership group, we have taken a measured approach to bring back financial stability to this great club by ensuring it is properly structured on and off the pitch."
For the financial nerds amongst us, you can read the entire Directors' report and financial statements for the year ending May 2013 should you feel inclined, but we've pulled out some details — big and small — that are of interest.
Keep in mind that many of the revenue increases or expense decreases being reported in the media are in comparison to the previous fiscal year that was only 10 months long owing to the fact that Liverpool moved the end of their fiscal year to coincide with the end of the season.
Revenues vs Expenses
Revenues: £206.1 million
- Commercial: £97.7 million
- Media: £63.8 million
- Matchday: £44.6 million
No breakdown was provided as to how much of the matchday revenue is comprised of ticket sales vs other revenue (e.g. food and beverage, etc.), but previous estimates have put it around £11-12 million.
This also doesn't include the £23.7 million reduction in revenue attributed to "Cost of Sales" nor is there much of an explanation as to what those sales entail.
Expenses: £232.3 million
- Administrative : £215.1 million
- Disposal of Player Registrations: £12.7 million
- Interest: £4.5 million
Total loss before taxes: £49.8 million, or almost one Fernando Torres.
Strategy and Key Performance Indicators
While there are no fixed values assigned to the club's business strategies and key performance indicators, they do provide some insight as to the club's priorities in a given period.
The club has four main elements in its strategy:
- Improve football performance through a positive playing style and strategic player investment;
- Improve the scouting and player recruitment process;
- Improve the fan experience and interaction with the Club; and
- Leverage the Club's global following to deliver revenue growth.
The last point is relevant insofar as the club does measure revenue geographically in addition to by category. Of the £206.1 million earned last year, 96% of that revenue was generated in the UK, with the remaining 4% ( just slightly more than £8 million) generated worldwide. Given the size of Liverpool's international fan base, there seems to be a hugely untapped market in this area. Regular summer tours abroad suddenly look far less like PR stunts.
Key Performance Indicators
In 2013, the key indicators were:
- Performance against target of continued qualification for the Champions League
- Attendance versus capacity
- Performance of all squads
They made special note that "football success is a key driver of commercial success," which should put to bed any theories that the owners would ever be content to sacrifice trophies in favour of continued existence in the Premier League.
Liverpool FC are very much central to the city in which they reside and while many of their charitable outings are often seen as PR stunts by the more cynical amongst us, there is a rather substantial amount of money spent on charitable efforts and community engagement. The club made £183,500 in charitable donations in the previous fiscal year, and have a "fully funded" community department that works on local projects at a cost of £385,000 per year (presumably this includes staffing costs).
In addition to providing numerous full-time jobs, Liverpool employ over a thousand part-time staff as well, with 1212 of those working each match day and 67 employed as scouts or coaches.
This is by no means an exhaustive list of items documented in the financial statements, but we've erred on the side of not mentioning the minutiae of various taxes and transfers and who knows what else that make up the more detailed elements of the club's budget. There may be a lot more work to be done in order to bring the club into a positive position with regards to Financial Fair Play rules, but the club have already come a long way in a few short years.
"Given where Liverpool Football Club was only a few years ago," Ayre concluded, referencing the club nearly entering administration in 2010, "the progress that has been made since FSG acquired the club has brought back much needed stability with an ambitious vision which everyone is focused on."