Liverpool are expected to publish their 2023/24 financial report at the end of February

Things are going well for Liverpool in the here and now. With a six-point lead at the top of the Premier League and a lead in the UEFA Champions League, the Reds are on the rise in Arne Slot’s first season as coach.

Financially, the club is in great shape under the leadership of Fenway Sports Group, which has faced criticism from some sections of the fan base over a perceived lack of investment in the on-field product, but has managed to oversee a title-challenging team through a sustainable business model.

Looking ahead, should Liverpool win the league this season, they would not only secure another lucrative crack at the Champions League, but also claim performance payments of around £56.4 million for finishing at the top, which will also be the case will be further increased from 2025 when the Premier League’s new domestic and international TV contracts come into force to a greater extent, albeit in order to provide broadcasters with more games each year.

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The Champions League is also more valuable than ever and Liverpool, should they emerge victorious in the group stage, would add £8.5m to the £9.4m from the knockout qualifiers, meaning the Club could previously record £32.3 million in prize money There is even talk of going deeper into the competition or cashing in on the over £4 million the club generates from matchday revenue for home games. Winning the competition would be worth around £120 million in total.

Of course, there are some costly decisions to be made surrounding contract extensions for Virgil van Dijk, Mohamed Salah and Trent Alexander-Arnold, but on the whole they would not hugely distort the financial picture for the Reds.

But in the coming weeks the Reds will publish their 2023/24 financial reports, covering a season in which the club was without Champions League football after struggling to finish fifth in the 2022/23 season, where Newcastle, in the Europa League hinterland, relegated United to fourth place.

Accounts and the narrative surrounding them can be strange as they are essentially a snapshot from almost a year ago, when the club’s financial landscape was significantly different. However, they do provide insight into the direction in which a number of key areas are trending, such as total revenue, advertising and matchday revenue, and wage expenditure.

Profits are a rarity in football and while Liverpool have been able to make more than most of their rivals in recent years thanks to success that has come with a more prudent financial approach, the club is set to record a second profit with the publication of its 2023/24 accounts Consecutive loss, one greater than the pre-tax loss of £9m, which was based on a profit of £7.5m for 2021/22.

Reports last month suggested the club’s total loss based on financial projections could exceed £100 million, which would be a record under FSG ownership. Although a loss is expected and will be significant, it will be well below this figure and in the region of tens of millions and PSR concerns will not be an issue given the football club’s past financial performance.

The club has not changed its financial approach. What has changed in this time is the absence of Champions League football, with the losses being in line with the loss of income from competing at the top of the European competition compared to the second tier, with the drop in income being hugely significant.

While a season of Europa League football is something that can be absorbed in the short term, a prolonged absence from the competition can do major damage – a concern that rivals such as Manchester United are currently struggling with, while Arsenal took some time to get to grips with it to recover Due to their absence from the competition for several years, they lag behind the competition in terms of financial strength.

Commercial revenue is expected to continue to increase due to a number of new partnerships and renewals, while matchday revenue could well be impacted due to the reduction in capacity at the start of the 2023/24 season due to work carried out at the Anfield Road End.

Capacity was increased to 61,000 by the end of January and the benefits of the increased seating will be fully reflected in the 2024/25 balance sheet, which will also include a significant number of home games due to the expanded Champions League format. It could well be that the Reds join the £100m-plus club when it comes to matchday revenue in the next 2024/25 tally.

But for the 2023/24 season, while the full picture won’t become clear for a few weeks, it will show the importance of both sustained and sustainable success, with Champions League football being a key part of the business plan at Anfield will in the long run.