Liverpool’s Wage Bill Mystery – Why Are Costs Rising Despite Key Exits | OneFootball

Liverpool’s Rising Revenues and the Mystery of the Wage Bill

Despite their Champions League absence last season, the Reds continue to grow financially—though questions remain over an unexpected wage bill increase.

An Eighth-Place Finish, But Record Revenues

The Deloitte Football Money League for the 2023/24 season has been released, offering fresh insight into Liverpool’s financial position. While the club finished eighth overall, a drop from previous years, revenue actually increased compared to 2022/23. This defied expectations, as many had predicted a financial downturn following the club’s failure to qualify for the Champions League. Instead, the figures show that Liverpool’s turnover climbed to £614m, an increase of £20m from the previous season’s £594m.

This year’s report presents figures in euros, with Liverpool’s revenue officially listed at €714.7m. The increase suggests that Liverpool’s commercial operation remains robust despite missing out on European football’s premier competition. However, the club has fallen behind some of its domestic rivals, which will be noted by those pushing for a more aggressive financial approach in the transfer market.

Arsenal Overtake Liverpool for the First Time Since 2016/17

One of the more striking developments in this year’s rankings is Arsenal surpassing Liverpool in revenue for the first time in seven years. With a turnover of £616m, Arsenal edged ahead, largely thanks to the financial boost provided by their return to the Champions League and a noticeable improvement in commercial deals.

Liverpool now sit behind Manchester City, Manchester United, and Arsenal in England’s financial hierarchy. City’s turnover reached £715m, while United followed at £662m. Elsewhere, Tottenham posted £529m, and Chelsea came in at £469m. While Liverpool remain one of football’s most prominent financial powerhouses, the competition among English clubs is intensifying, with each vying for dominance both on and off the pitch.

Liverpool’s Revenue Breakdown

According to Deloitte, Liverpool’s £614m revenue was generated through commercial, broadcast, and matchday earnings. The commercial side contributed £295m, broadcasting rights brought in £206m, and matchday revenue stood at £113m. These figures highlight the club’s continued ability to generate income despite missing out on Champions League revenue, an area that has traditionally played a key role in their financial strategy.

The official club accounts, expected in March, may present a slightly different picture, as Liverpool’s internal revenue classifications differ slightly from Deloitte’s. However, the overall income structure remains clear: Liverpool’s commercial arm continues to thrive while broadcasting revenue naturally took a slight dip in the absence of elite European competition.

The Unexpected Rise in Liverpool’s Wage Bill

One of the most surprising revelations in this year’s report is the increase in Liverpool’s wage bill. Despite widespread expectations of a significant drop, wages rose by £14m, now equating to 63% of turnover (£387m). This is a particularly puzzling development, given the high-profile departures in the summer of 2023.

James Milner, Naby Keïta, Alex Oxlade-Chamberlain, Roberto Firmino, Fabinho, and Jordan Henderson all left the club, with their collective wages amounting to a significant financial outlay. These exits were expected to reduce the club’s overall wage bill substantially. While Liverpool brought in Alexis Mac Allister, Dominik Szoboszlai, Ryan Gravenberch, and Wataru Endo, none are believed to be earning salaries close to those of the departing players.

Further complicating matters is that no first-team player renewed their contract during the 2023/24 season. While young players such as Jarell Quansah and Conor Bradley were promoted and handed new deals, their improved wages would have had a negligible impact on the overall wage bill.

This raises an obvious question: why has Liverpool’s wage bill increased when it should have seen a noticeable drop?

Comparisons With Other Clubs

Liverpool’s situation becomes even more intriguing when compared with its domestic rivals. Both Tottenham and Chelsea—who also missed out on Champions League football—saw reductions in their wage bills in 2023/24. Their rising costs are an anomaly, given that Liverpool followed a similar financial trajectory.

There are few clear explanations for this increase. Some have pointed to the heavily incentivised nature of Liverpool’s contracts, which reward players for European qualification. However, this model typically results in a wage drop rather than an increase when Champions League football is not achieved. The mystery remains unresolved, and fans will be eager to see if the club provides any clarification in the upcoming financial report.

As a private limited company, Liverpool are under no obligation to disclose a detailed breakdown of their wage costs. However, the club may offer explanations through selected media outlets, particularly if questions about financial strategy continue dominating discussions.

Liverpool’s Financial Strength Amidst Uncertainty

Despite the scrutiny over the wage bill, Liverpool’s financial performance remains impressive. The club has achieved record-breaking revenues even in the absence of Champions League football, a testament to the effectiveness of its commercial strategy. The ongoing expansion of Liverpool’s commercial partnerships under the leadership of Ben Latty and Kate Pratt-Theobald has been particularly noteworthy, ensuring that the club remains one of football’s most financially secure institutions.

Projections suggest that Liverpool’s revenues for the current season could approach the £700m mark, which would likely see them climb back into the top six of next year’s Deloitte Football Money League. If the club can maintain this level of growth while securing a return to Europe’s elite competition, Liverpool’s long-term financial trajectory remains overwhelmingly positive.

However, questions over the wage bill will persist. Who, or what is responsible for the unexpected rise in costs? For now, supporters and analysts alike can only speculate. One thing is sure: Liverpool remain a financial force to be reckoned with, but as always, the finer details behind the balance sheet tell a story that deserves close examination.