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Arminius

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Notification just in from Companies House:
THE LIVERPOOL FOOTBALL CLUB AND ATHLETIC GROUNDS LIMITED
Group of companies' accounts made up to 31 May 2018
This document is being processed and will be available in 5 days.


It'll be interesting to see the state of the cash flows and borrowings, rather than the headline grabbing turnover and profit numbers.
I was a little surprised not to see them there already after all the 'record-breaking profit' stories, so I will be curious. In particular, I wonder what the club's commercial revenue growth has looked like.
 

Lowton_Red

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I was a little surprised not to see them there already after all the 'record-breaking profit' stories, so I will be curious. In particular, I wonder what the club's commercial revenue growth has looked like.
According to this club press release, commercial revenue increasing by £17million to £154 million.
 

Arminius

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According to this club press release, commercial revenue increasing by £17million to £154 million.
So not as good on a percentage basis as the prior year, but still over 10% growth. That is encouraging after the doldrums of the previous couple of years, and I would guess that with a CL final appearance and now a title challenge, the commercial department has been running downhill of late.
 

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So not as good on a percentage basis as the prior year, but still over 10% growth. That is encouraging after the doldrums of the previous couple of years, and I would guess that with a CL final appearance and now a title challenge, the commercial department has been running downhill of late.
Still crap though for the reasons you refer to. Increasing commercial by 18% in a year without European football (2017) was a good effort if you ignore the low base we were starting from. A slower rate of increase in commercial revenue (13%) in a year where our profile could hardly be higher is a bit meh.

Chelsea's commercial revenue, for example, has gone £116.5m > £133.3m > £165.4m (2016, 2017, 2018) when we've gone £115.7m > £136.4m > £154m.

We largely tracked Chelsea over 2016 and 2017 but then were outperformed by them to the tune of £11m in 2018 with them achieving nearly double the rate of growth at 24% compared to our 13%?! In a year we got to the Champions League final and they finished 5th?! Who knew that the FA Cup continued to be such an earner, eh?
 

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Still crap though for the reasons you refer to. Increasing commercial by 18% in a year without European football (2017) was a good effort if you ignore the low base we were starting from. A slower rate of increase in commercial revenue (13%) in a year where our profile could hardly be higher is a bit meh.

Chelsea's commercial revenue, for example, has gone £116.5m > £133.3m > £165.4m (2016, 2017, 2018) when we've gone £115.7m > £136.4m > £154m.

We largely tracked Chelsea over 2016 and 2017 but then were outperformed by them to the tune of £11m in 2018 with them achieving nearly double the rate of growth at 24% compared to our 13%?! In a year we got to the Champions League final and they finished 5th?! Who knew that the FA Cup continued to be such an earner, eh?
It should be noted that the Chelsea numbers have jumped ahead in large measure because their new shirt deal came on track in 17/18, which was not an opportunity available to LFC in the same time frame. But your broader point holds - although the growth is solid, we aren't gaining ground on Chelsea, and we remain well behind ManU and ManC.
 

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It should be noted that the Chelsea numbers have jumped ahead in large measure because their new shirt deal came on track in 17/18, which was not an opportunity available to LFC in the same time frame. But your broader point holds - although the growth is solid, we aren't gaining ground on Chelsea, and we remain well behind ManU and ManC.
Agree some of Chelsea's growth last year was attributable to the new kit deal (an area we really need to make a big leap with in the next twelve months before the bubble bursts) but we're still behind where we should be, imo.

Also an element of a drag effect to commercial revenue with it somewhat reflecting immediately previous on pitch performance.

Still, we ought to be comfortably ahead of Chelsea and yet we're behind.
 

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Still crap though for the reasons you refer to. Increasing commercial by 18% in a year without European football (2017) was a good effort if you ignore the low base we were starting from. A slower rate of increase in commercial revenue (13%) in a year where our profile could hardly be higher is a bit meh.

Chelsea's commercial revenue, for example, has gone £116.5m > £133.3m > £165.4m (2016, 2017, 2018) when we've gone £115.7m > £136.4m > £154m.

We largely tracked Chelsea over 2016 and 2017 but then were outperformed by them to the tune of £11m in 2018 with them achieving nearly double the rate of growth at 24% compared to our 13%?! In a year we got to the Champions League final and they finished 5th?! Who knew that the FA Cup continued to be such an earner, eh?
Wasn't that increase for Chelsea the year after they won the league? And wouldn't any increases on our revenue due to the champions league run show in the following years accounts? Not the year during which it happened?
 

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Wasn't that increase for Chelsea the year after they won the league? And wouldn't any increases on our revenue due to the champions league run show in the following years accounts? Not the year during which it happened?
Yes and no. There is often the lag you allude to but also many commercial agreements provide for compensation to track performance 'real time' even if it's as basic as tv exposure or games played in the CL etc.
 
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I think we’re doing well for where we are. We haven’t won anything yet. If we win the EPL and/or ECL any time soon our commercial bargaining power will increase significantly. Winning one or both of these titles this season could be hugely significant for us in terms of any current ongoing commercial negotiations.
 

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And wouldn't any increases on our revenue due to the champions league run show in the following years accounts? Not the year during which it happened?
Yes, new deals struck this year would be registered upon date of invoice/payable date and will be reflected on year end account. If our year end falls in June, then whatever we did last July till this May, will be reported to the public after the account is audited and signed off. So it depends on when is our accounting cycle year-ending and how much revenue we received throughout the campaign that falls under that timeline.
 

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Yes, new deals struck this year would be registered upon date of invoice/payable date and will be reflected on year end account. If our year end falls in June, then whatever we did last July till this May, will be reported to the public after the account is audited and signed off. So it depends on when is our accounting cycle year-ending and how much revenue we received throughout the campaign that falls under that timeline.
Our year end is now 31 May.
 

Lowton_Red

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It should be noted that the Chelsea numbers have jumped ahead in large measure because their new shirt deal came on track in 17/18, which was not an opportunity available to LFC in the same time frame. But your broader point holds - although the growth is solid, we aren't gaining ground on Chelsea, and we remain well behind ManU and ManC.
Every year, at about this time, we appear to have the same conversation regarding our commercial income.

And every year we see that since 2010 the overall growth in our commercial income is relatively poor, when compared with the other "top six" clubs:


(the figures in italics are Deloite's estimates)

The growth in our commercial revenue over the period, expressed as a percentage, is the worst of the six.

Put another way, had our commercial revenue grown at the same rate as the other clubs, our commercial earnings would be:

So, even though there might be mitigating circumstances, there is no room for self congratulation or complacency.
Here's hoping our next kit sponsorship deal is an absolute stonker.
 

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Every year, at about this time, we appear to have the same conversation regarding our commercial income.

And every year we see that since 2010 the overall growth in our commercial income is relatively poor, when compared with the other "top six" clubs:


(the figures in italics are Deloite's estimates)

The growth in our commercial revenue over the period, expressed as a percentage, is the worst of the six.

Put another way, had our commercial revenue grown at the same rate as the other clubs, our commercial earnings would be:

So, even though there might be mitigating circumstances, there is no room for self congratulation or complacency.
Here's hoping our next kit sponsorship deal is an absolute stonker.
I think if we continue to sustain our current progress we will see a good jump in our commercial revenues wont we? Kit sales appear to be going strongly with the store having to re-order stock and the kit deal being renegotiated at a time when we are also challenging for the title and going strongly in the CL while several of our rivals are in freefall.
 

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looking at those figures isnt it plausible that the differences can be explained by us already having a large fanbase which is ageing and being out of regular CL football? Now that we are back in there, the scope for getting increasing revenues is larger through greater tv exposure?
Still crap though for the reasons you refer to. Increasing commercial by 18% in a year without European football (2017) was a good effort if you ignore the low base we were starting from. A slower rate of increase in commercial revenue (13%) in a year where our profile could hardly be higher is a bit meh.

Chelsea's commercial revenue, for example, has gone £116.5m > £133.3m > £165.4m (2016, 2017, 2018) when we've gone £115.7m > £136.4m > £154m.

We largely tracked Chelsea over 2016 and 2017 but then were outperformed by them to the tune of £11m in 2018 with them achieving nearly double the rate of growth at 24% compared to our 13%?! In a year we got to the Champions League final and they finished 5th?! Who knew that the FA Cup continued to be such an earner, eh?
How much of Chelsea's revenue comes from non football events? Do they rent out for concerts and so forth?
 

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(...)

The growth in our commercial revenue over the period, expressed as a percentage, is the worst of the six.

Put another way, had our commercial revenue grown at the same rate as the other clubs, our commercial earnings would be:

(...)

So, even though there might be mitigating circumstances, there is no room for self congratulation or complacency.
Here's hoping our next kit sponsorship deal is an absolute stonker.
It's always the area where suspicions that FSG (via FSM) are skimming off the top are the most plausible.
Yeah, I find it a bit fishy to be honest. FSG/FSM aren't more stupid than the owners of other clubs, and you'd think that the commercial aspects of handling the club's rising reputation should be one of their strong points. And yet, we fall back behind the other top clubs in England.

At the end of the day, it's not a major issue as long as there is money available for Klopp when he needs it. But it's still a bit strange.
 

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Yeah, I find it a bit fishy to be honest. FSG/FSM aren't more stupid than the owners of other clubs, and you'd think that the commercial aspects of handling the club's rising reputation should be one of their strong points. And yet, we fall back behind the other top clubs in England.

At the end of the day, it's not a major issue as long as there is money available for Klopp when he needs it. But it's still a bit strange.
FSM wouldn't be charging more than they charge other commercial clients so it is minimal as to how much (if any) they would be taking out via that method.

At the end of the day, FSG owns Liverpool too and I don't think that they are that hungry about yield that they need to take it out in a backhanded way.
 

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Every year, at about this time, we appear to have the same conversation regarding our commercial income.

And every year we see that since 2010 the overall growth in our commercial income is relatively poor, when compared with the other "top six" clubs:


(the figures in italics are Deloite's estimates)

The growth in our commercial revenue over the period, expressed as a percentage, is the worst of the six.

Put another way, had our commercial revenue grown at the same rate as the other clubs, our commercial earnings would be:

So, even though there might be mitigating circumstances, there is no room for self congratulation or complacency.
Here's hoping our next kit sponsorship deal is an absolute stonker.
I wonder how much of the commercial revenues come from the local market though??? Not every sponsor is global... In fact, I would expect a large portion of it to be local and in that regard we can't compare to London or Manchester in terms of wealth.
 

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FSM wouldn't be charging more than they charge other commercial clients so it is minimal as to how much (if any) they would be taking out via that method.

At the end of the day, FSG owns Liverpool too and I don't think that they are that hungry about yield that they need to take it out in a backhanded way.
It might not be that minimal - a commission of 5-10% would not be shocking, but would have a material effect on those numbers. By comparison, all of ManU's comparable work (and costs) are inhouse and shown in their financials.

As a mechanism, I don't really have a problem with it as long as growth continues at a reasonable pace. Although I am not blown away by the current rate, it is solid - and I think the last two years are probably more indicative of the current norm than the entire time frame LowtonRed posted about. These numbers might shift dramatically with the next shirt deal - the Warrior/NB was category-changing at the time, but being the first has meant that every subsequent deal has outstripped it.

I would personally prefer to have that amount transparent, but at the end of the day, LFC is a private company and we already have far more information than is available about the Red Sox finances. There would always be fans raging over every pound that FSG directed to itself as being 'LFC's money', ignoring the reality that the club was purchased with 100's of millions of FSG money - much of which likely came from a similarly structured Red Sox marketing deal.
 

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Excluding debt owed by LFC to FSG's holding vehicle, LFC's bank debt was £79M in the last reports filed (May 2017). Basically the stadium debt, if I recall correctly a five year term so the imminent May 2018 ones will like show around ~£60M.
The bank debt under the rolling credit facility is now down to £55.103m (from £71.709m). The intercompany loan has reduced in accordance with its planned repayment schedule so that is now at £99.919m (from £109.949m).

I wonder how much of the commercial revenues come from the local market though??? Not every sponsor is global... In fact, I would expect a large portion of it to be local and in that regard we can't compare to London or Manchester in terms of wealth.
The club's total turnover was £455.089m (up from £364.508m). Of which £440.842m is said to be generated from within the UK, £6.511m from the EU and £7.736m from the Rest of the World. This last figure in respect of the Rest of the world is actually down from the previous year's figure of £11.717m.

It might not be that minimal - a commission of 5-10% would not be shocking, but would have a material effect on those numbers. By comparison, all of ManU's comparable work (and costs) are inhouse and shown in their financials.

As a mechanism, I don't really have a problem with it as long as growth continues at a reasonable pace. Although I am not blown away by the current rate, it is solid - and I think the last two years are probably more indicative of the current norm than the entire time frame LowtonRed posted about. These numbers might shift dramatically with the next shirt deal - the Warrior/NB was category-changing at the time, but being the first has meant that every subsequent deal has outstripped it.

I would personally prefer to have that amount transparent, but at the end of the day, LFC is a private company and we already have far more information than is available about the Red Sox finances. There would always be fans raging over every pound that FSG directed to itself as being 'LFC's money', ignoring the reality that the club was purchased with 100's of millions of FSG money - much of which likely came from a similarly structured Red Sox marketing deal.
Agree. I would prefer to see greater transparency around that arrangement as I'd expect FSM to be taking money out of the deal before it hit our books. I just think they ought to account for that but then many fan groups will feel that they shouldn't take anything from their ownership of the club and that they should take whatever gains they make upon sale. That's rather shortsighted, in my view. Whilst they continue to be good custodians I think they should be encouraged to feel that they are being sufficiently compensated rather than feel that their only way to make a return is with a sale.

I agree that up to 10% could be lost from our commercial deals in this way. In fact, I kind of assume that it is. However, even if you add that 10% to the club's overall commercial performance that would still only put us at £169.717m (£154.288m x 1.1) broadly level with Chelsea (£165.37m). I think we ought to be doing better than that.

Liverpool FC, of all clubs, paying zero tax? Shameful.
You'll be pleased to know that last year we paid ten times more corporation tax than the year before, £5.237m compared with £527,000 for 2017. Overall we paid £4.904m in tax last year after accounting for double taxation relief and rebates due for foreign tax compared with £646,000 the year before.

Incidentally, wages have jumped by nearly £50m. They're up from £184.999m in 2017 to £232.672m. They do cover all employees rather than just players but even though those not in the playing, management and coaching staff have increased from 589 to 659 it's safe to assume that the players are more responsible for the increase. Number of players, managing and coaching staff have increased from 155 to 178. Total wages (including social security costs and pensions) increased from £208.278m to £263.615m. Peter Moore's being paid more than Ian Ayre too. Good for him. He's on £1.329m in comparison with the £907,000 earned by Ayre the year before.

I would expect next season's accounts (year end 2020) to show a very small increase in total wages, if at all. This season's wage bill will probably top £290m (including social security and pensions).
 
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Billy Biskix

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Yeah, I find it a bit fishy to be honest. FSG/FSM aren't more stupid than the owners of other clubs, and you'd think that the commercial aspects of handling the club's rising reputation should be one of their strong points. And yet, we fall back behind the other top clubs in England.

At the end of the day, it's not a major issue as long as there is money available for Klopp when he needs it. But it's still a bit strange.
It really isn't fishy. It's their little dividend. The numbers involved are not so huge as to make that much of a difference to our ability to compete regardless of what some people might like us to believe. Hardly an epic swindle.

I actually think the commercial performance is OK. Not stellar but then the thing that is overlooked when comparing with other clubs during their ownership period is that we haven't been that successful on the pitch. Commercial success will be driven by football success, not the other way round. In that table which @Lowton_Red published showing commercial revenues all the other clubs had appeared in the CL more than we had in those years and 3 of them had won the PL title more than once. During that same period we had only been in the CL twice and won one League Cup.

It's all going in the right direction but I think the time to judge FSG on commercial activity will be over the next 3 years. Everything now is in place. Next season will be our 3rd consecutive CL campaign. We have the most marketable manager in the world, some of the most marketable players in the world and a team that plays great football. All it needs is a PL and/or CL win and the whole thing should go ballistic.
 

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It really isn't fishy. It's their little dividend. The numbers involved are not so huge as to make that much of a difference to our ability to compete regardless of what some people might like us to believe. Hardly an epic swindle.

I actually think the commercial performance is OK. Not stellar but then the thing that is overlooked when comparing with other clubs during their ownership period is that we haven't been that successful on the pitch. Commercial success will be driven by football success, not the other way round. In that table which @Lowton_Red published showing commercial revenues all the other clubs had appeared in the CL more than we had in those years and 3 of them had won the PL title more than once. During that same period we had only been in the CL twice and won one League Cup.

It's all going in the right direction but I think the time to judge FSG on commercial activity will be over the next 3 years. Everything now is in place. Next season will be our 3rd consecutive CL campaign. We have the most marketable manager in the world, some of the most marketable players in the world and a team that plays great football. All it needs is a PL and/or CL win and the whole thing should go ballistic.
Oh yes, I don't say that there is an epic swindle or anything in that kind, we are far, very far from the g+h times, thankfully so.

Maybe it is a means to optimise tax issues if the mother company takes some of the profits of the commercial deals? Anyway, I'm not bothered for the time being. Klopp and Edwards have had the money available to buy absolute top players recently while being able to keep all the key players together, and that's the most important thing. All the newest contract renewals are a good sign of this too.
 

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The accounts seem to suggest that after 31 May 2018 we've contracted to spend somewhere between £50m and £65m more on player acquisition(s) than we've so far been reported as spending...

Edwards not hiding player acquisition(s) up his sleeve is he?
 

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The accounts seem to suggest that after 31 May 2018 we've contracted to spend somewhere between £50m and £65m more on player acquisition(s) than we've so far been reported as spending...

Edwards not hiding player acquisition(s) up his sleeve is he?
Well Icardi would be about 40 of that, no?
 

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Hah! I'd think he'd be more, he's such a quality player who defies all the haters in the name of love. He'd be way, way more...surely? ;-)

To me the shortfall looks more like the size of a Werner...
No, it is classic money ball, 90M talent but with all sorts of hair around the deal that gets you the knock-down price. It is a done deal, I am telling you.