Liverpool have been tipped for a “significant rise” in revenue after the pandemic, with their new kit deal with Nike earning the second-most in the Premier League.
The Reds announced a loss for the second year running as they revealed their financial results for the 2020/21 tax year, though that has fallen from £41.5 million to just £4.8 million.
That showed the impact of the COVID-19 pandemic on the club’s income, with the loss of matchday revenue contributing significantly to the club’s financial hit.
However, Liverpool are expected to enjoy a “significant rise” in the years to come, with business of football expert Swiss Ramble analysing the results in a must-read thread on Twitter.
Perhaps most notable is that the club’s commercial revenue rose again after a big jump from 2018/19 to 2019/20, with a fee of £218 million their highest-ever intake.
Nevertheless, #LFC £218m remains third highest commercial revenue in England, still a fair way behind #MCFC £272m, though quite close to #MUFC £232m. Post-pandemic Liverpool will expect a significant rise in this revenue stream, especially with the new Nike deal. pic.twitter.com/S3bJD8Q3Mk
— Swiss Ramble (@SwissRamble) March 4, 2022
They remain behind both Man United (£232m) and Man City (£272m) in this respect, though Swiss Ramble has predicted that the club’s revenue will increase significantly as their kit deal with Nike continues.
Liverpool agreed a lower base rate (£30m) when switching from New Balance to Nike in 2020, but their agreement is largely based on royalties.
Swiss Ramble has projected that the deal will earn the club at least £70 million per season, and along with Standard Chartered and Expedia sponsorships, this goes up to £120 million.
#LFC Nike kit deal replaced New Balance in 2020/21: lower £30m base, but 20% merchandising royalty takes it to estimated £70m. Standard Chartered shirt sponsorship £40m. AXA training kit £20m expanded to include training centre. Expedia replaced Western Union as sleeve sponsor. pic.twitter.com/vTBttLiyA4
— Swiss Ramble (@SwissRamble) March 4, 2022
This is on par with Man City‘s kit deal (£120m) and below only Man United (£149m) in terms of the Premier League. City’s deal with Puma, however, covers the entire City Football Group.
It demonstrates the benefit of shaking hands on an incentivised deal with Nike, rather than a higher base rate as was the case with New Balance, as their on-field success and commercial growth will continue to boost this revenue.
“These latest results demonstrate the significant financial impact of the global COVID pandemic, which affected all areas of the business,” managing director Andy Hughes explained upon the release of Liverpool’s financial results.
“We have worked really hard these past years to get us into a really strong and sustainable financial position.
“Despite navigating through a very challenging and uncertain period, overall revenue remained flat, demonstrating the underlying financial strength of the business.”
Hughes added: “It is imperative, however, that we continue to live within our means and operate within football’s regulations and financial fair play.
“But we’ll continue to reinvest on and off the pitch to further strengthen our position and compete at the highest levels right across the club.”
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