All you want to know about Liverpool’s finances

The highly impressive Swiss Ramble blog takes an in depth look at Liverpool’s recent accounts with some great graphics and tables.   The author confims that the club should not face any financial fair play problems.

Liverpool turned a profit for the first time in seven years, but rank just tenth in terms of pre-tax profits by Premier League clubs.   In other words, half the Premier League clubs returned a profit in 2013/14 (and there are still some accounts to come).

Leicester in FFP talks

Leicester City are bottom of the Premier League and increasingly look unlikely to escape relegation.  Now they face the additional problems of talks with the Football League about their £20.8m loss in the last financial year and whether it represents a breach of financial fair play rules.

From the League’s perspective it is in excess of the £8m permissible loss, but Leicester consider that £13m of the losses are due to the costs of promotion.   They have also reduced losses from £34m in the year ending May 2013.

Liverpool back in the black

Liverpool FC have reported a profit for the first time in seven years.   The margin of pre-tax profit for the year ending May 2014 is only £0.9m, but it has a broader significance.   It suggests that a club can challenge for a top four spot while still operating on at least a break even basis.

It is really increased revenues that have helped the club.   They were up 19 per cent at £255.6m. Between 2009 and today, they have increased from around £170m to over £250m.

QPR report substantially reduced losses

QPR have reported substantially reduced losses for the last financial year.   They are down to £9.8m in contrast to a massive £65.4m in the year ending May 2013.  Expenditure is down £22m, largely due to lower player costs.   Shareholders have also written off £60m in loans.

The club has faced difficulties over compliance with financial fair play rules, but these results should help their position.  

How to balance the books

I have been looking at the accounts for a tier two Conference club.   The shareholders are supporters and the shares are quite widely dispersed, although there are five or so individuals who have larger holdings.

The club reported profits of £52,000 on a turnover of £267,000 in the year ending 30 June.   This compared with £21,000 in the previous twelve months.

Big losses at Charlton Athletic FC

In many ways Charlton Athletic are typical of many Championship football clubs whose financial problems for at least five years could be solved by just one year in the Premier League. In the meantime, the club continues to make substantial losses of over £7m a year. It is difficult to see how this can be sustained, given that owner Roland Duchatelet thinks that clubs should move to a break even position.

Baggies could be for sale

West Bromwich Albion could be for sale to the right buyer.   The club is believed to have sounded out contacts in the City after the announcement of the new £5 billion Premier League television deal.  Jeremy Peace is the dominant shareholder at The Hawthorns and has been in charge for 13 years.

The club is in good financial health and is currently the top club in the West Midlands in terms of its position in the table.   Pre-tax profits of £14.7m have been reported in the year ending June 2014 on sales of £86.8m.