Jürgen Klopp's public message sent shockwaves through the world of football as he announced his departure from Liverpool FC at the end of the season. Additionally, he revealed his plan to refrain from taking on the managerial role at any other team for at least an entire year. The German manager took the reins of the Merseyside team in October 2015 and achieved significant successes, including winning the UEFA Champions League and the English Premier League during his tenure. While Klopp undeniably contributed significantly to the team's on-field development, Liverpool also made remarkable strides in financial and business realms during his time. In the following analysis, we will delve into the business and financial accomplishments of the club throughout the Klopp era.
Five years before the Klopp era, Fenway Sports Group acquired Liverpool FC on October 15, 2010, for €345 million from the previous American owners, George Gillett and Tom Hicks. Following the rather unsuccessful managerial tenures of Roy Hodgson, Kenny Dalglish, and Brendan Rodgers in the first five years of the new ownership, FSG appointed Jürgen Klopp as their new manager on the 8th of October, 2015. Fast forward to 2024, the club have won seven trophies during his time and are still competing in all competitions this season. Additionally, Klopp boasts the highest win percentage in the club's history: 60.81% in 467 games.
Before Klopp, Liverpool last won the English First Division in the 1989/90 season, the UEFA Champions League in 2004/05, the FA Cup in 2005/06, and the UEFA Super Cup in 2005. In his first three seasons, Liverpool played in three cup finals, but the fans had to wait until 2018/2019 for the first trophy under their new manager’s reign. In the six seasons before his appointment, Liverpool finished in the top 5 of the league just once. In Klopp’s seven full seasons so far, they have never finished outside the top 5 and are likely to continue this streak in 2023/24.
While the Klopp era is the fourth most successful managerial tenure in the club's history trophy-wise, some might argue that the eight silver medals indicate a stroke of misfortune. Losing the Premier League by only one point behind Manchester City twice, falling short in the Community Shield twice on penalties, and experiencing defeat in two Champions League finals against Real Madrid constitute a bitter pill to swallow.
Winning these titles would have been impossible without the right squad and the right transfers. Beginning in 2015, Klopp worked closely with FSG's president, Mike Gordon, and sporting director, Michael Edwards, sharing decision-making responsibilities. This collaboration continued until 2021 when Edwards left the club, and Klopp began to have more influence in determining the team's path.
During his tenure at the club, Liverpool spent €928 million on transfer fees, while earning €584 million from player sales. This resulted in a total transfer fee deficit of -€343 million in the Klopp era. For comparison, Liverpool's main rival in recent years, Pep Guardiola's Manchester City, spent €1,505 million on transfer fees and recouped €694 million through player departures, resulting in a total transfer fee deficit of -€811 million in the same period.
The club had a net spend exceeding €100 million only twice since 2015/16, and they made profits in three seasons. On the other hand, the Reds only surpassed €100 million in transfer fee spending on four occasions. In contrast, Manchester City spent less than €138 million only once in the last eight seasons on player arrivals (2018/19 - €79 million).
To understand how the Liverpool squad have evolved in the last 9 years, we need to compare the aggregated squad value of the club in 2015/16 with the current season. In Klopp’s inaugural year, the squad’s value stood at €375 million, while it currently stands at €1,014 million, according to Football Benchmark’s player valuation platform as of January 2024. The present Liverpool team is now part of the "one billion club" and are the seventh most valuable squad in the world, behind Manchester City, Arsenal, Paris Saint-Germain, Real Madrid, Chelsea, and Bayern München.
After Fenway Sports Group acquired Liverpool FC, substantial investments were not only directed towards strengthening the football team but also extended to other facets of the club. One major undertaking was the expansion of the Main Stand at Anfield Stadium, involving the addition of a new third tier, upgraded matchday facilities, and enhanced corporate amenities. This expansion resulted in the addition of 8,500 new seats, increasing the stadium's capacity to 54,742.
In May 2016, Liverpool council granted outline planning permission for the construction of a new 1,800 square meter club superstore development located on Walton Breck Road, situated at the corner of the Kop and the new Main Stand. Construction commenced in December 2016, with the store opening early in the 2017/18 season. The area between the new store and the stadium underwent transformation into a "fan zone," featuring new catering outlets and pre-match entertainment. The second phase of the stadium revamp will witness the addition of 7,000 seats to the Anfield Road End stand, bringing the overall capacity to just over 61,000.
Thanks to these investments, on-field sporting successes, and lucrative commercial deals, Liverpool's revenues significantly increased during the Klopp era. For example, between 2016/17 and 2021/22, Liverpool received €484 million solely from UCC revenues, the seventh-highest number across all clubs in this period. Indeed, the highest growth in absolute value in the same period is visible in broadcasting revenues, attributed to successful Champions League campaigns and the enduring popularity of the English Premier League. Commercial revenues also doubled between the 2015/16 and 2021/22 seasons and are expected to continue growing, mainly due to three commercial agreements initiated in 2023: Standard Chartered’s €57.50 million per season main shirt sponsor deal, AXA’s major sponsor deal worth €27.80 million per season, and the sleeve sponsor deal with Expedia worth €17.20 million per season.
Looking at the evolution of staff costs, it is noticeable that in Jürgen Klopp's first year, the staff costs to total revenue ratio was the highest during his tenure, exceeding 69.2%. However, the German managed to reach two consecutive Champions League finals between 2017 and 2019 with a ratio below 59% in both seasons. Throughout the Klopp era, the Reds never surpassed the former UEFA Financial Fair Play recommended threshold, which was set at 70%.
When Liverpool won the Champions League in the 2018/2019 season, their staff costs were €351.5 million, significantly higher than their final opponent, Tottenham, who had staff costs of €202.7 million. In the 2019/20 season, when Liverpool secured the English Premier League title, the club's staff costs rose to €370.7 million, comparable to runners-up Manchester City, whose costs were at a similar level of €400.1 million.
Spanning from 2015/16 to 2021/22, Liverpool secured a combined net profit of €79.7 million, however, out of these seven seasons, the club managed to record profits only in three. While the full financial picture of the Klopp era will only become clear after the release of the 2022/23 and 2023/24 official financial statements, the nearly €80 million aggregate net profit so far is indeed encouraging.
Beyond the financial aspects, the club's branding has also experienced significant development in the recent past. From the beginning of 2015 until today, Liverpool FC’s official Instagram account has grown by more than 40 million followers. Currently, the club has 139.7 million total followers on Facebook, Instagram, TikTok, X, YouTube, and Weibo combined, ranking eighth among football clubs worldwide with the most followers. The Reds boast more followers on social media than Bayern München, Arsenal, Tottenham, AC Milan, or Atletico Madrid, to name a few. Fans around the world have enthusiastically joined the Liverpool “bandwagon” during Klopp’s era, and scenes during Liverpool’s game against Norwich on the 28th of January, 2024, demonstrated how much the fans appreciate their long-serving manager.
While all the aforementioned financial and business indicators are noteworthy, nothing provides a clearer depiction of Liverpool FC’s Klopp era than the club’s Enterprise Value (EV) evolution between 2016 and 2023. During the management of the German, the club more than tripled its EV. In 2016, Liverpool held the eighth position on Football Benchmark’s list with a valuation of €1,273 million. By 2023, the club had surged to the fourth position with a valuation of €3,900 million.
The Klopp era will undoubtedly be remembered as one of the most iconic periods in Liverpool FC's history, and the German manager will rightfully remain in the hearts of the Reds’ fans, never walking alone. Although Jürgen Klopp was the face of this project, Liverpool’s success in this era is the collective achievement of the entire club, including fans, players, backroom staff, and the owners.
Liverpool and its owners are now confronted with a daunting task. They not only need to find a replacement for their iconic manager, but also rebuild the entire staff. Many key personnel who have contributed to recent successes have recently left or are set to leave soon. This includes members of Klopp’s backroom staff and Jörg Schmadtke, the sporting director hired just last year.
Note: As we eagerly await the official financial statement of the club for the 2022/23 season, we will update the numbers of the article once this information becomes available.
