Liverpool FC: Success Depends on Building Their New Stadium
The Deloitte Football Money League released their 2008-09 annual findings today, and there is considerable food for thought for fans of Liverpool Football Club.
This league ranking is based on clubs’ revenues, excluding income generated from player transfers, and it makes for an interesting read despite the obvious time lag in these figures due to accounting procedures.
However, some fans may be surprised to find that the Reds are fairly well placed in the order of world club football’s so called "rich-list," given all the negativity surrounding the club’s finances.
Liverpool Football Club are a surprising seventh on the "rich-list" league table, and saw revenue rise 11 percent to £184.8M.
This seems to fly in the face of all the bad press that has dogged the club since its takeover by George Gillett and Tom Hicks. Gillett and those on the board of the club maintained that the club is financially sound despite all the so-called debt issues that have been splashed across the tabloids.
The fact the Liverpool Football Club are ranked seventh and have seen a healthy increase in their revenue is commendable. However, before any champagne bottles can be uncorked, it must be remembered that these are only revenue figures, and therefore do not take into consideration any costs of running the club.
These costs would of course include the servicing of the club’s debt. Hence, this revenue goes towards running the club and of course, to pay off its debt or the debt's interest.
However, the main emphasis of this article is not Liverpool’s healthy standing amongst world football’s elite clubs. It is more about what it could be or maybe, what it should be.
The real winners here in the latest "rich list league are Arsenal Football Club (£224.0M). They have leapt past London neighbours Chelsea (£206.4M), and are smartly place in fifth place.
Arsenal cannot compete with those clubs above them such as Real Madrid (£341.9M), Barcelona (£311.7M), Manchester United (£278.5M), and Bayern Munich (£246.6M) in terms of the club’s brand on the worldwide stage, or the fact that Spanish clubs are able to negotiate their own individual television rights.
The real flag ship in the Gunners' revenue-generating locker, and the sole attributable factor in their surge to become the capital’s highest revenue generator is Emirates Stadium.
Stunningly in the 2008-09 season, the Gunners’ modern arena generated more match-day revenue than any other club in the world!
Pure and simple, the benefits of Emirates Stadium are there for all to see.
Speak to any football pundit, analyst, or economist and they will all tell you the same thing: The best thing Arsenal Football Club ever did—when it came to securing their long term future on the top table of world club football—was to invest in their new stadium.
It's no coincidence that the top five clubs have the largest stadia capacity; Real Madrid (80,000), Barcelona (98,000), Manchester United (76,000), Bayern Munich (70,000), and Arsenal (60,000).
When it comes to match-day revenue, Liverpool Football Club generates over £50M a season less than Manchester United and Arsenal. This is directly attributed to the capacity of Anfield being far less than Emirates Stadium and Old Trafford.
Dan Jones, partner for Deloitte’s Sports Business Group, puts it quite bluntly, "When compared to Arsenal, Chelsea, and Manchester United, it is the area of match-day revenue where Liverpool noticeably fall short of their rivals.
“Liverpool made £42.5 million in match-day revenue whilst Manchester United and Arsenal—with their bigger stadium capacity—made more than £100 million.”
Clearly, the lack of a stadium with a capacity to rival Emirates and Old Trafford is hindering the Reds' progression, not only as a business entity, but also its competitiveness on the pitch.
Liverpool Football Club’s managing director, Christian Purslow, is fully aware of this issue and has been actively seeking new investments for the club, and such money earmarked for the proposed new stadium in Stanley Park.
With every passing game, Liverpool Football Club fall further, and further behind their rivals in terms of financial strength and hence, competitiveness on the field of play.
When George Gillett and Tom Hicks galloped into Anfield, there was a promise that they brought with them a bright new future—the centre-piece of which was an impressive new modern stadium befitting a club of Liverpool’s stature.
And a stunning design was indeed unveiled and is sadly all it currently is—a design, no more. Investment in the club to transform this design into a reality must be found. It must be the main priority for the owners and board members.
If Liverpool Football Club is to become a powerhouse in world football, it is patently evident that a new stadium is the fundamental foundation of this progression.
The longer it takes for the new stadium to be constructed, the further behind the Reds will fall financially. As is becoming evident, this has serious repercussions on the pitch, where the club will ultimately be judged.
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