Clubs generate money from three sources, matchday, broadcasting and commercial.
In the case of Liverpool and Everton, both clubs have made progress, although Liverpool’s
total income of £364m for 2016/17 more than doubles Everton’s £171m, as you would expect.Breaking
that down into elements, Liverpool’s matchday income increased 18% to over £73 million.
Whilst they are still trailing rivals Manchester United and Arsenal, the gap has decreased,
and they are now above other members of the ‘Big Six’ clubs, which gives Jurgen Klopp
additionalthe resources to compete in the transfer market.
Everton, under new owner Farhad Moshiri, took a different approach and cut ticket prices
for both adults and children.
This resulted in a £4 million decrease in matchday income, but many delighted Evertonians.
Broadcast Income
For Broadcasting income, both clubs benefitted from the new £5 billion BT/Sky domestic broadcasting
deal that commenced in 2016/17.
Liverpool’s increase was lower due to the club not competing in European competition
last season, whereas they earned €37 million the previous season in reaching the Europa
Cup final.Qualifying for Europe is still very important.
It is worth £40-90 million to clubs depending upon how far they proceed in the tournament,
so Liverpool will show a big increase in 2017/18 through their continuing involvement in the
Champions League.
Everton, by finishing 7th last season compared to 11th in 2015/16, earned an extra £8 million
in prize money as well as the new TV deal money.
Commercial Income
If clubs want to grow their income and compete with other clubs then establishing relations
with commercial partners is crucial.Liverpool’s income grew by £20 million, reflecting their
incoming kit deal with New Balance, as well as the main stand extension generating more
corporate box and catering income.
Everton’s commercial income rose by £6 million, mainly due to their training ground
being sponsored by USM Holdings, who are owned by Alisher Usmanov’s Russian metal trading
company.The main costs for a football club relate to players, in the form of wages and
player transfer fee amortisation.
Liverpool’s wage bill grew by £50 million in 2016.
They managed to keep a lid on wages in 2016/17 due to the departure of some big money earners
such as Mario Balotelli.
Liverpool only spent £57 on wages for every £100 of income last season compared to £69
in 2015/16.Everton’s wage bill rose significantly in 2016/17, reflecting Farhad Moshiri’s
investment in the club and his backing for the manager in the transfer market.
Whilst the wage bill increased the club only spent £61 on wages for every £100 of income
compared to £69 the previous season.
This is due to the extra TV and commercial income.Both clubs have also shown a major
improvement in profit in 2017.Pre-tax profits were much higher, in Liverpool’s case through
not spending the extra £62 million of income on player wages, and in Everton’s from selling
John Stones to Manchester City and making a £51 million profit overall on player sales.
These profits can be reinvested in the playing squad for future seasons.Liverpool spent a
lot of money in 2016/17, mainly on Mane and Wijnaldum, but also sold Benteke, Ibe and
Allen, so the net cost was only £4 million.
The accounts reveal that the club has however spent a net £146 million in the summer 2017
transfer market, which is before buying VVD and selling Coutinho in the January 2018 window.Everton,
under new ownership, had a net spend greater than their city rivals for the first time
in many years, as players such as Bolasie, Schneiderlin and Williams came to Goodison
on significant fees.
The sale of John Stones was the major departure from a financial standpoint.
In conclusion:
Both clubs had an excellent year financially in 2016/17, the competition is tough, but
there is scope for things to get even better in the future too.