Football: Granada buy pounds 22m stake in Liverpool

LIVERPOOL'S DESIRE to restore their status among Europe's footballing elite is the reason the Anfield club yesterday forged a lucrative alliance with Granada. The Manchester-based media group have paid Liverpool pounds 22m for 3,482 new shares in the club, which gives them a 9.9 per cent stake.

The company will act as Liverpool's agent in merchandising and product licensing, publishing, electronic media rights as well as catering and hospitality. Granada will also be behind any future club television channel. However, Liverpool's chief executive, Rick Parry, stressed the club remains independent and that the chairman, David Moores, has not sold any of his shares. Part of the cash injection will go towards paying for the manager Gerard Houllier's pounds 18m summer spending spree, but the Frenchman will have further funds at his disposal.

Parry admitted that the drop in revenue from the club's failures both on the domestic front and, more significantly, in Europe, had hit them in the pocket. While Manchester United, Arsenal and Chelsea embark on Champions' League campaigns this season Liverpool are stuck at home, and the financial gap is widening between last season's top three and the rest of the Premiership.

Parry believes Liverpool have been a fading force for too long and needed a cash injection without selling out. "You either move forwards or backwards," Parry said. "Like it or not, you can't stand still. The money which the Champions' League now generates is about pounds 20m a club. You can't afford too many years out of it. You can't drift. You have to take decisions now. We have to be in the Champions' League. We have to finish in the top three. [The Granada deal is] a start at least."

Liverpool have failed to keep pace with their rivals, spending heavily for little reward, and Parry said: "It's not just a case of catching Manchester United, although that is part of it. We have to be up there with the best in Europe."

The Granada money will allow Liverpool to press ahead with their rebuilding programme, which has cost almost pounds 20m already. Much of that cash was spent in anticipation of this windfall. Houllier has acquired six players in the close season - Sami Hyypia, a Finnish centre-back, for pounds 2.6m; Vladimir Smicer, a Czech midfielder (pounds 3.75m); Dutch goalkeeper Sander Westerveld (pounds 4m); Erik Meijer, a Dutch striker (free); Stephane Henchoz, the former Blackburn centre-back (pounds 3.5m); and Guinea striker Titi Camara (pounds 2.5m).

Liverpool also hope to sign Newcastle United's unsettled German midfielder, Dietmar Hamann, for pounds 8m.

While such riches should improve the squad they also raise the stakes for Houllier. He must now provide a place in the Champions' League next season or face the consequences.

Future of football? page 7