Liverpool are set to finally close and surpass a gap between themselves and Manchester United that had been £217m.
Manchester United have become the first Premier League team to publish their financial accounts for the 2021/22 period.
The Old Trafford side published their accounts on Thursday with the financial period showing a £115.5m pre-tax loss for the period, up £23m from the previous year with the club losing an average of £2m per week for the 2021/22 financial period.
While revenues rose to £583m, an increase of 18 per cent, wages ballooned to £384.2m, the highest that the Premier League has ever seen, as the addition of major earners, most notably that of Cristiano Ronaldo, impacted for the first time. The Ronaldo signing, as well as additions such as Jadon Sancho and Raphael Varane, contributed to a 19.1 per cent rise (£61.6m) year on year.
The club’s net debt also went up, from £419.5m in 2021 to £514.9m this year, an increase of more than 22 per cent, something likely to do little to turn down the heat on the deeply unpopular ownership of the club from the Glazer family, who acquired Manchester United via a leveraged buyout back in 2005.
Transfer debt increased from £136m to £182m, the largest in the Premier League, while interest payments reached almost £21m, more than £17m more per year than Liverpool’s most recent.
Commercial income rose from £232m to £258m, up 11 per cent year on year, and while this is the second highest in the Premier League, behind only Manchester City, the rate of growth for United has been far slower than that of Liverpool. Compared to their 2016 figures, United have seen a decline of £10m while Liverpool, up to 2020/21 and expected to soar even higher for the 2021/22 accounts to be published early next year, have seen a rise of £102m (88 per cent).
Manchester United have strived to try and return themselves to the summit of English football through heavy investment into the playing squad, but with a rather haphazard approach to who is in charge of first team affairs and a lack of strategy linking what happens off the pitch to what happens on it, the past decade has been one of relative struggle for United compared to what went before.
Leveraging success on the pitch into success off it enabled Manchester United to dominate the financial landscape of English football, but former vice-chairman Ed Woodward’s 2018 comments during an investors call that ‘Playing performance doesn’t really have a meaningful impact on what we can do on the commercial side of the business’, have been challenged by Liverpool in recent years.
The commercial gap that existed between United and Liverpool stood at £153m in 2016, in 2022, using Liverpool’s commercial revenues for 2021 the gap was £15m. In terms of revenues, five years ago the gap between Liverpool and United in terms of overall revenue stood at £217m, with the Reds bringing in £364m compared to United’s £581m. The turnaround is set to be completed by the Reds when they announce their 2021/22 accounts in early 2023.
Analysts at respected football business website Off The Pitch have analysed the finances of clubs in the Premier League and made their forecasts for the 2021/22 financial year, one that ended in May and June for clubs.
The ‘Financial Forecast 2022’ predicts that Liverpool will finally overtake Manchester United in terms of revenue for the very first time in the Premier League era, the report forecasting record turnover of £602m for the club and a predicted pre-tax profit of £76m.
It has been the direction of travel for both clubs for some time, but the size of the gap that Liverpool have managed to close in terms of revenues over the past five years is more than the revenue total that the Reds managed to bring in back in 2013 (£206m), demonstrating the vastly altered fortunes of the two sides in the era after Sir Alex Ferguson’s Manchester United departure. Liverpool have achieved the largest revenue growth over the past five years of all the big six.