Liverpool have announced record revenues on Tuesday but the rise in costs shows that the Reds could struggle to compete in the future.
Although it did not have a fairytale ending, last season was a memorable one for Liverpool as Jurgen Klopp’s team went the closest of any English team to winning the quadruple and played every game possible.
The accounts for the season show that the Merseyside club recorded a small pre-tax profit of £7.5m, reports The Athletic.
Overall revenue for the year to the end of May 2022 climbed by £107m to a club record £594m. However, Liverpool’s wage bill also rocketed to £366m – an increase of nearly 17 per cent on the previous 12 months. That was the main reason why total administrative costs rose by £69m to £545m.
This could be a problem for the Reds’ owners FSG in the future as the club’s wage-to-revenue ratio is at 61.6 per cent and growing closer to UEFA’s recommended 70 per cent mark.
Liverpool’s staff costs have risen by 76 per cent over the last five years, rising from £208m to £366m. The reason this is a problem for FSG is that the wages are eating away at the club’s revenue, hampering their ability to spend money on new signings unless players are sold.
This could be a reason why FSG are looking for investors as the revenue could cover the wages while new income could go towards making signings.
Liverpool are still third domestically in terms of commercial revenue behind Manchester United (£262million) and Manchester City (£316m).
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