On the same day that rumours stated FSG were putting Liverpool up for sale, Manchester City released their financial reports for 2021/22.
In becoming the first Premier League team to boast a roster worth £1bn or more, Manchester City has shown how difficult it will be for Liverpool to compete with them.
This morning, the Etihad club released their financial statements for the 2021/22 season, wherein they won their sixth Premier League championship. Late in the day, The Athletic reported that Liverpool’s owners, Fenway Sports Group, had officially listed the club for sale.
City chairman Khaldoon Al-Mubarak described the past year as “the most successful financial year in the club’s history,” citing record revenues of £613 million (second highest in Premier League history), the first-ever squad in the top flight to cost more than £1 bn., and commercial revenues of £309 million (some £91 m more than that of Liverpool’s in 2020/21). That assertion was supported by their record-breaking earnings of £41.7m.
The results that City have produced highlight the immense task for the rest of the Premier League in keeping up with Pep Guardiola’s side, at a time when the Reds and their owners FSG are being asked to spend considerably in the first-team squad.
After a season in which they reached the Champions League final, came in second to City in the Premier League after a dramatic final day, and won the FA Cup and the League Cup, Liverpool are expected to post record revenues of £602m, commercial revenues of £241.2m, and a profit of around £76m when they publish their accounts for 2021/22 in early 2023.
Off The Pitch estimated City revenues of £610m (off by about £3m), with commercial revenues of roughly £296m (off by £13m). That indicates that the Reds’ numbers are probably an accurate approximation.
Liverpool had a great season last year, but they still couldn’t keep up with Manchester City in terms of commercial revenue despite drawing nearly the same number of fans, winning more money in the Champions League, being more cautious in the transfer market, and having a much larger global fan base than City.
City’s website boasts a whopping 46 worldwide and regional partners, with the success of the commercial operation attributed to the signing of new sponsors and the revival of concerts at Etihad Stadium. There has been a resurgence in concert attendance at Anfield in Liverpool.
City’s record-breaking expenditure of £1.08bn on a Premier League team represents a new high. That’s a whopping £368m more than Liverpool’s £709m in assets.
Payroll costs for City decreased marginally, but new hires like Erling Haaland and Kalvin Phillips are not reflected in the numbers. They had a payroll of £384m in 2021/22, which was £73m more than the Reds’ $311m in 2020/21 (although the Reds’ 2020/21 total is expected to be higher once their 2021/22 accounts are revealed).
City also benefited greatly from transferring players and making money from player sales, two areas in which Liverpool has excelled in recent years. In the most recent financial reports, City’s operational deficit was reduced from £23 million to a profit thanks to the selling of around £68 million in players.
City CEO Ferran Soriano stated in a statement that the club had made £67.7 million from the sale of player registrations, bringing the total made over the last five years to over £250 million.
“This will increase even higher in 2022-23, helped by the greatest ever gross player earnings in Premier League history, both in a summer window and across a calendar year, created by the extraordinary postseason summer of transfer activity.”
City were placed on a UEFA watchlist earlier this year where they would be “monitored closely” after the governing body accused them of violating Financial Fair Play regulations by inflating sponsorship deals in 2020. This decision and City’s ban from European competition were later overturned on appeal to the Court of Arbitration for Sport. The Premier League has not finished its inquiry into them.
Liverpool must continue investing in their first team and exploring new methods to increase their commercial profits and capitalise on their worldwide appeal if they are to keep pace with City. It will be crucial for the Reds to maintain their dominance over City in the Premier League to ensure they maintain their Champions League status, which was worth over £100 million to the club last season.
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