Succeeding in Europe is to become even more valuable for Liverpool from 2024.
A club with a rich tradition in European football, winners of the 2019 Champions League and beaten finalists in 2018 and 2022, the Reds have been able to use their return to the summit of football on the continent to great effect, applying the revenues generated through their success to aid transfer and contract business.
Success is key to the business model under the ownership of Fenway Sports Group, it is what allows them to re-invest in the team while making sure that the balance sheet looks strong, aiding the growth of the business and its value. It is a virtuous circle.
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Media rights are one of the most valuable revenue streams available to Premier League clubs - and they are set to become even more so when the next TV cycle kicks in from next year, worth £10bn domestically and internationally. But for clubs like Liverpool, who fight on two fronts at home and abroad and are regular fixtures in the Champions League, there are even more riches available, and like the new Premier League TV deal, they are set to become even more lucrative.
Earlier this year UEFA tasked Swiss-based TEAM Marketing to sell the 2024-2027 rights for the Champions League, Europa League and Europa Conference League. UEFA were seeking £12.5bn, something they look on course to achieve after the UK rights found homes on Friday.
BT Sport and Amazon landed the live TV rights, with BT, the home of the UK's Champions League coverage since 2015, giving up its exclusivity and spending around £918m over the three years, down from the £1.2bn it paid for the last cycle. But the slack is being picked up by Amazon, who will show 17 Tuesday night games during the competition, likely to heavily feature English teams, with a value of a rumoured £450m-plus placed on that.
The BBC are also shelling out to show highlights once a week in the evening, with the total value of the deal for the three broadcasters to show games over the three-year cycle to reach £1.5bn - the uplift that UEFA had been seeking from the UK market when they first put the rights to tender with TEAM.
The £12.5bn is expected to be achieved, and should that happen, then the prize pot UEFA and the European Clubs Association (ECA) expect, will reach €5bn (£4.2bn) per season to be dished out to competing clubs through prize money, TV revenues, market pool, coefficients and commercial revenues.
While the European Super League plans, of which Liverpool were very much party to, may have fallen apart in 48 hours last year, the desire for reform and to make more money from the Champions League has been achieved by the biggest clubs through the 'Swiss Model' that is set to be introduced from 2024 to coincide with the new TV deal. The competition will increase from 34 to 36 teams while the group stage format will change to a larger league. What it means is that there are more games for clubs, more chances for prize money and more opportunities to generate revenues through their appearances on TV.
The projected annual revenue of £4.2bn would mark a 40 percent rise on the current cycle. At present, discounting the media revenues, English clubs can make a maximum of £125m from Champions League success, something that will be pushed well beyond £150m come 2024 - including media revenues, and the potential for annual success in the competition will push £200m. The extra games and banking on a higher price paid for media rights was something of a gamble from UEFA designed to head off any other attempts for another European Super League plan. It is a gamble that may have paid off with owners getting some of what they wanted through the reform.
When the Reds won European football's elite club competition in 2019, their run to the final and subsequent lifting of the famous trophy meant they raked in £113m for their efforts, something that was a major factor in the club posting record revenues of £533m for the 2018/19 accounting period.
Before defeat to Real Madrid in Paris in May, Liverpool had banked some £102m through prize money and media rights from last season's Champions League, while around another £18m had arrived during the competition from gate receipts.
Positively, the Reds will bank £2.9m more next season, which was already assured before the defeat to Real Madrid, thanks to an improved UEFA co-efficient from next season.
Based upon the distribution of Champions League revenues for 2021/22, Liverpool received €22.7m (£19m) from the market pool. That figure was reached by the Reds receiving their chunk of the €600.6m (£502.5m) that is broken down by 528 parts valued at €1.137m (£0.95m) - and then distributed to clubs based upon their coefficient position among the 32 qualifying clubs. For example, the lowest ranked club in this year's Champions League, Moldovan outfit Sheriff Tiraspol, received €1.137m from the market pool, while the club with the largest coefficient, Real Madrid, received that sum multiplied by the number of teams - 32 - to earn €36.38m (£30.44m) from the market pool.
Liverpool's 10-year coefficient sees them in 13th on the 10-year list, behind Borussia Dortmund, Sevilla and FC Porto. The Reds move into 10th on next year's list, with all three clubs qualifying for next year's competition based on their current domestic performance. That would mean that Liverpool would claim €26.15m (£21.9m) from next year's market pool. Even if the Reds had won every game in last season's Champions League and lifted the trophy, they would still be four points short of Manchester United, who occupy ninth on the list, although they missed out on the 2022/23 Champions League and could soon be overtaken by their rivals.
Being a part of the Champions League conversation year on year has never been more important, and it will be vital for clubs that want to keep on investing to remain at the summit to be fighting on all fronts. Liverpool have been able to do that in recent seasons, but with the rest of Europe also knowing its importance, it will be an unrelenting challenge for Jurgen Klopp and his men, so too for FSG.
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