Are Liverpool at risk of breaching Premier League financial rules after £57m loss? PSR status explained

Liverpool have announced a pre-tax loss for the second consecutive year after releasing their accounts for the 2023-24 season. The Reds saw a £38m drop in media revenue after they only managed to clinch a spot in the Europa League the previous season.

For the 2022-23 accounting period, the Reds posted a loss of £9m before tax while in the season before that, the club posted a pre-tax profit of £7.5m. Under the Premier League’s profit and sustainability rules, clubs face a sanction if they post losses of more than £105m over a three-year period.

Liverpool’s three-year losses now stand at £58.5m, which is well under the £105m-mark permitted by the Premier League. However, further losses for 2024-25 could see the Reds come closer to that number. The Premier League has not charged any clubs for breaching financial rules for the 2023-24 season, with the top-flight announcing that decision back in January.

Liverpool revenue likely to rise

While Liverpool have posted consecutive losses in their last two set of accounts, it is unlikely they will see another major loss ahead for their 2024-25 accounts. That is because the Reds are back in the Champions League and closing in on the Premier League title - two factors that will see their media revenue jump back up again. Even if Liverpool lose out on the league title, their media revenue would still increase by finishing second. The club have also had the ability to earn more matchday revenue with the extension of the Anfield Road stand.

The club’s matchday revenue rose by £22m for the 2023-24 season - and that was only with the new Anfield Stand only being open since the start of February 2024. While the club’s revenue could rise, there is the potential for more outgoings. Arne Slot has already claimed the club is working on signing new players in the summer while it could cost the club to secure Mohamed Salah, Trent Alexander-Arnold and Virgil van Dijk to new contracts.

Liverpool have already raised money for the 2024-25 accounts by selling the likes of Sepp van den Berg, Fabio Carvalho and Bobby Clark in the summer.

Permitted losses still allowed with PSR

Another factor in Liverpool’s favour for PSR compliance is that not all of the club’s £58.5m net losses in the last three years will count towards PSR. Investment in the academy and infrastructure, among other things, are not factored into a club’s PSR compliance. It means the Reds are set to have a bigger buffer to avoid exceeding the £105m-mark of permitted losses when it comes to their next set of accounts being filed.

Last season Everton and Nottingham Forest were both charged with breaching the Premier League’s PSR rules. Everton were hit with a combined eight-point deduction after they were changed with breaches for the 2021-22 and 2022-23 seasons. One of the deductions was 10 points but the Toffees appealed that and had it reduced to six points. A Premier League statement read: "Everton FC appealed the sanction imposed against it on nine grounds, each of which related to the sanction rather than the fact of the breach, which the club admitted. Two of those nine grounds were upheld by the Appeal Board, which has substituted the original points deduction of 10 for six.”

In March, Forest were docked four points for a breach of PSR rules for the 2022-23 season. Despite a huge loss for 2023-24, Liverpool’s transfer business should not be impacted as the entire cost of a new signing does not automatically go into the next set of accounts. It is instead split over the length of a player’s contract. For example, if the Reds signed a player for £100m in the summer on a five-year deal, it would then be worth £20m each year until the £100m is accounted for.