Liverpool set for huge financial blow as impact of coronavirus hits Reds hard
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Liverpool are set for a £42million blow as a result of the coronavirus outbreak, according to a new market-leading report.
The Reds will publish their financial reports in the coming months after a glittering 2020 which saw them end their 30-year wait for a league title in style.
But Jurgen Klopp is still yet to celebrate the triumph with his side's fans, as the Covid-19 outbreak has sent the country into numerous lockdowns and taken a huge financial toll and Premier League clubs.
Liverpool's rivals Manchester United suffered a huge revenue hit, while Tottenham announced massive losses and warned of further "irrecoverable" blows in 2021.
Liverpool have seen decreases in broadcasting revenue and matchday income
(Image: Julian Hamilton/Daily Mirror)
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The lack of matchday income across the league means Liverpool are set to share in the hard-hitting financial impact of coronavirus.
Accounting and consultancy firm KPMG has assembled a report which will make for bleak reading for Anfield chiefs.
Assessing the finances of six league champions across Europe, KPMG found Liverpool's operating profit down €47.6million (£42.1m) – an eight per cent drop on a total figure of €557million (£502m).
Given Liverpool are yet to publish their financial statements, KPMG obtained the figures from the club's hierarchy. They found the Reds' operating profit to be made up of €82.5million (£74.5m) matchday revenue, €231.9million (£209.5million) broadcasting revenue and €242.6million (£219m) commercial and other revenue streams.
Anfield chiefs are braced for a huge hit to operating profits
(Image: Action Images via Reuters)
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Operating profit refers to the club's income subtract the day-to-day running costs of the business before tax.
The other teams investigated by KPMG were Real Madrid, Paris Saint-Germain, Bayern Munich, Juventus and Porto, with some of these clubs already releasing their financial figures.
Portuguese champions Porto were by far the hardest hit by the pandemic, with an eye-watering 50 per cent drop in operating profit. Ligue 1's PSG and Serie A's Juventus saw 15 per cent and 13 per cent drops respectively.
Liverpool bowed out of the Champions League at the last-16 stage with defeat to Atletico Madrid
(Image: Getty Images)
Does Liverpool's financial blow explain their quiet January transfer window so far? Have your say in the comments.
Four of the six clubs saw their biggest slumps come in matchday revenue, but Liverpool and Porto have been hit hardest by a decrease in broadcasting revenue.
For the Reds, this was attributed to their failure to progress from the Champions League last 16, while Porto were eliminated in the pre-group stage qualifying rounds.
Andrea Sartori, KPMG’s Global Head of Sports, said: "While recent pre-COVID-19 seasons demonstrated constant and stable growth for almost all the champions of Europe’s top leagues, the past season has been distressing for all, albeit to various extents.
"The coronavirus crisis has questioned the financial sustainability of the football ecosystem as a whole and further exposed its fragility.
"Even prior to the pandemic, inflated players’ salary, coupled with growing transfer and agent fees, placed a significant strain on clubs' finances. The crisis has magnified these flaws in the current business model.
"Football clubs suddenly had to deal with liquidity concerns with all of their income streams affected by the absence of gate receipts, in addition to the renegotiation, suspension or cancellation of payments from media and commercial agreements."
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