Speaking to the Liverpool ECHO, Billy Hogan explains what plans Liverpool have to continue financial growth.
Over the past decade Liverpool have grown more than any other Premier League club when it comes to revenue.
From the financial year 2012/13 to the most recently published 2021/22 accounts, the Reds sit at the top of the pile when it comes to how much they have increased revenue, with a surge of £388m, from £206m in 2012/13 to £594m inn 2021/22, a rise of 188 per cent.
That £594m figure – a club record – puts Liverpool second in terms of revenue, behind only Manchester City (£613m) and a place ahead of Manchester United (£583m). Some £113m back in fourth are Chelsea.
But while revenue has grown, so too has the wage bill at Anfield, which in jumping from £131m in 2012/13 to £366m in 2021/22 saw a rise of £235m (179.4 per cent), the highest in the Premier League over that period.
The transfer market continues to inflate and the cost to get involved at a high level to compete for top assets across the globe, through both transfer fees and wages, means that it all has to be paid for through continued growth.
Broadcast rights are the biggest driver of revenue for the Premier League, with English football’s top tier having a three-year £10bn deal in place both domestically and internationally that runs until 2025. Both the hope, and expectation, from member clubs and the league is that the value of the next cycle of rights will be even higher to allow for the continued financial growth of the competition, which has positioned itself as the most globally attractive.
Individually, though, clubs cannot rest on their laurels, and after a decade of remarkable financial growth under the ownership of Fenway Sports Group, where success on the pitch under Jurgen Klopp was able to be leveraged at a time when the Premier League’s global appeal was thriving, Liverpool have to think about what comes next.
“It’s simple to say more of the same, but to some degree it is,” explained Liverpool CEO Billy Hogan, speaking to the ECHO in Singapore.
“Matchday is an area which, with the new stand, there will be increased revenues. Our focus has principally been around partnerships – there’s the extension with Standard Chartered, the renewal with Expedia, a number of new partnerships which have been announced more recently – and Ben Latty our commercial director and Kate Pratt Theobald, who is head of global sales, and the entire team have done a really good job in that regard.
The retail side of the business is a big growth opportunity as well. The relationship with Nike has been a really strong one. We are in year three now, we have the LeBron collaboration which we have launched, Converse collaboration we have launched, so finding ways to grow those revenue streams is principally where we are focused.
“We are always asking how we can improve. In the beginning, there is what we might call low-hanging fruit. But now it really is down to strategic thinking of how you continue to drive those parts of the business going forward.
A big focus in the last several years has been partnering with blue chip brands. When you look at the family of partners we have – from the very top, Standard Chartered, Nike, AXA, Expedia, four really strong brands, and there’s also Carlsberg and Nivea – you can go down the list. We’ve just done a deal with Peloton, another strong, innovative, new brand.
“’The company that you keep is a focus in our partnerships. That maybe wasn’t in our thinking 10 years ago. It’s always about continuing to grow. Sometimes that’s more challenging than others, but in this case the team we have off the pitch is an incredibly strong one and they’ve done a really good job..”
One area that FSG would consider would be real estate development in or around Anfield, although Hogan stressed that there was “nothing imminent” and that there was no obvious next project, but that the club and ownership would assess opportunities to improve the supporter experience at the stadium.
In Boston, FSG have just been given the green light on a £1.2bn project, dubbed Fenway Corners, which is a major real estate development in the parcels of land that surround the home of the FSG-owned Boston Red Sox that includes retail, hospitality and residential units
The company continues to be in growth mode, with Red Sox CEO and FSG partner Sam Kennedy having dubbed the third decade of sports team ownership for owners of the Reds, Red Sox and Pittsburgh Penguins as ‘FSG 3.0’ last year.
That plan for the next decade focuses on potentially acquiring new teams but also on growing the assets that exist in FSG’s portfolio, with FSG principal owner John Henry having confirmed his company’s commitment to Liverpool despite an investment search, when speaking exclusively to the ECHO earlier this year.
Hogan said: “FSG 3.0 – as it’s now being called! – is really about a continued intent to grow as an organisation. For example, we have a lifetime renewal with LeBron James which could be deemed as part of FSG 3.0. There’s real estate development around Fenway Park. There was an announcement a couple of weeks ago that FSG have partnered with TMRW Sports, which is the Rory McIlroy-Tiger Woods PGA Tour project which is an innovative new golf event platform.
In terms of it relating to Liverpool, the opportunities those deals provide for us is something that will be additive. The more opportunities we have to partner with other organisations, the more we can learn from them and vice-versa.
“There is a lot of collaboration that goes on between the teams – Red Sox, Penguins, Liverpool – such as best practices and those kinds of things.
“It doesn’t distract from what we’re doing on a daily basis. But the idea is that overall, as FSG continues to grow, it’s only adding to the properties that are already in the portfolio.
The financial success achieved by the Reds for 2021/22 was one that was aided in no small part by success on the pitch, most notably in Europe where they raked in more than £100m for their run to the Champions League final where they would eventually be beaten by Real Madrid.
This coming season sees them in the Europa League for the first time since 2016/17 after a fifth-placed finish in the Premier League last season. And while the goal is very much to get back into the top four and challenge for the title once more, Hogan admits the lack of Champions League football is financially impactful, with the Europa League’s earning power significantly diminished in comparison with European football’s elite knockout club competition.
Hogan explained: “Not being in the Champions League is a hit financially. That’s no secret. Obviously our goal is to win trophies and certainly finish in the Champions League spots and that wasn’t possible last season.
We have to react accordingly. From a business side, that means what can we do to manage our cost bases, which is something the team off the pitch has done a really good job in sorting a budget.
“Ultimately our goal is to run as a sustainable club, so we need to react based upon the revenue projections we think we’re going to have for that particular season.”
For Liverpool, there are plans within their control to grow the business, but plenty of it remains tied up in how successful they can continue to be on the pitch in the coming years.
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