Sunday, 22 April 2012

The Changing Shape of LFC's Revenue Model

The 2012 Deloittes Money League was recently published, and there were some interesting numbers for Liverpool fans.

We continued to slide down the Money League table, falling behind Inter Milan into 9th place (our 2009 high point was 7th).

Here is Deloittes 5 year view of our total revenues:

What is really interesting is how the revenue model is changing. Here is how things look in a snap shot:

As you can see, we have lost significant revenues from TV and Match Day due to the lack of Champions League football. However, we have made up some of these losses due to the strong sponsorship deal signed with Standard Chartered. 

When we participated in The Champions League, "Broadcasting" accounted for 43% of our total revenue. Last year, it dropped to 36%. Before we signed the deal with Standard Chartered, "Commercial" made up just 34% of out total revenue. It now represents 42%. 

What these numbers show is just how good a job Ian Ayre did as Commercial Director, bringing in the revenue to enable us to compete in the transfer market with clubs enjoying the financial benefits of Champions League football. The numbers also show us just how crucial it is that we get back into that competition for the 2013/14 season.

Next year's accounts will show a further shift towards "Commercial" as the key driver of revenue. "Broadcasting" and "Match Day" revenues will fall further due to non-participation in the Europa League whilst our commercial revenue will grow thanks to the new kit deal with Warrior. It is looking highly likely that "Commercial" will soon account for 50% of our total club revenue.

There are only two ways we can buck this trend: 1) Get a new stadium 2) Get back into the Champions League. The big risk is that the longer we go without both of these revenue drivers the harder it will be for us to strike such lucrative sponsorship deals.

The 2012/13 season will be a crucial one for Liverpool's future, both on and off the pitch.

Follow me ...!/JoeScouse_LFC

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