The challenge facing Liverpool to compete with Manchester City has been demonstrated after the latter became the first club in Premier League history to have a squad costing £1bn or more.
The Etihad outfit this morning published their financial accounts for the 2021/22, a season when they won their sixth Premier League title. Later in the day a report from The Athletic claimed that Fenway Sports Group, Liverpool's owners, have put the club up for sale.
Revenues of £613m, the second highest in Premier League history, the first-ever squad in the top flight to cost more than £1bn. and commercial revenues of £309m - a figure some £91m higher than that of Liverpool's in 2020/21 - made for what City chairman Khaldoon Al-Mubarak described in an accompanying statement as "the most successful financial year in the club's history". That was backed up the fact that they made a record profit of £41.7m.
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At a time when the Reds and their owners FSG are being urged to invest significantly in the first-team squad, the results that City have posted show the enormous challenge for the rest of the Premier League in keeping up with Pep Guardiola's side.
Liverpool haven't published their accounts for 2021/22 yet - they are due in early 2023 - but based upon predictions from analysts at football business website Off The Pitch, they are set to post record revenues of £602m, commercial revenues of £241.2m and a profit of around £76m after a season in which they reached the Champions League final, came second to City in the Premier League after a dramatic final day, and in which they won both the FA Cup and League Cup.
Off The Pitch predicted that City's revenues would stand at £610m (just £3m out) while commercial revenues were predicted to stand at around £296m (£13m out). That suggests that the figures for the Reds will be a reasonable estimation.
But even after such a fine campaign for Liverpool last season, despite averaging almost identical crowds, accruing more prize money than City in the Champions League, a more conservative approach to the transfer market and having a considerably larger global fan base, the Reds have been unable to keep pace with the Premier League champions' commercial revenues.
A total of 46 global and regional partners are listed on City's website, the success of the commercial operation being put down to the acquisition of new sponsors and the return of concerts to the Etihad Stadium. Liverpool, too, have seen concerts return to Anfield.
The cost of assembling City's squad breaks new ground in the Premier League, the figure standing at £1.08bn. That is some £368m higher than Liverpool's £709m.
City's wage bill fell slightly, although the financials do not include the signings of the likes of Erling Haaland and Kalvin Phillips. In 2021/22, they spent £384m on their payroll, which is £73m higher than the £311m the Reds spent in 2020/21, although that latter figure is likely to be higher when their 2021/22 accounts are published.
Player trading and profit on player sales was also of huge benefit to City, something that Liverpool themselves have enjoyed success with in recent years. City made almost £68m in player sale profits in their latest accounts, something that turned a £23m operating loss into a profit.
City CEO Ferran Soriano, in a statement, said: "The £67.7m profit City generated from the transfer of players' registrations took the total from the last five years above £250m from this increasingly material source of income.
"This will grow even further in 2022-23, boosted by an unprecedented post-season summer of transfer activity that generated the highest ever gross player receipts in Premier League history, both in a summer window and over a calendar year."
City, who were alleged by UEFA to have breached Financial Fair Play regulations by inflating sponsorship deals in 2020 before having that decision and their ban from European competition overturned on appeal to the Court of Arbitration for Sport, were placed on a UEFA watchlist earlier this year, where they would be 'monitored closely'. They remain under investigation by the Premier League.
For Liverpool, finding new ways to grow their commercial revenues and leverage their global appeal is key, as is continued investment in the first team to ensure they stay on the coat tails of City. Ensuring that they continue to bag Champions League football, something that was worth over £100m to the Reds last season, and where they have consistently outperformed City, will be of major importance.
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