Liverpool's £20m buying cap revealed in club report

Benitez must work with limited transfer and wages budget for next five years

Rafael Benitez's struggle to keep pace with the Premier League elite is revealed in documents which suggest Liverpool's net summer spending will be locked at £20m until 2014 – a figure which will also include wage increases accruing from contract renewals. The figures, which suggest the manager must continue to sell before he can buy, are contained in a prospectus published in March by investment banks Rothschild and Merrill Lynch to attract potential investors in the club.

The prospectus, which provides a sense of how desperately Liverpool's owners Tom Hicks and George Gillett need new finance, reveal the Americans were considering increasing the average ticket price by eight per cent to help ease the club's debt problems. They were also seeking to raise £100m from investors and loans as pressure built to refinance a debt of £290m.

Gillett and Hicks paid £50m four months later, in July, to get a year's extension to the debt facility they have used to purchase and run the club since their takeover in February 2007. This season they have secured a new £20m-a-year sponsorship deal with Standard Chartered Bank, a major improvement on the previous £14.6m Carlsberg deal and hope to retain a role for Carlsberg, commercial director Ian Ayre revealed yesterday.

Yet the underlying lack of finance for Benitez remains a problem. It might not be as dire a position for the club as suggested by the banner unveiled by Liverpool fans before the Carling Cup tie with Leeds at Elland Road on Tuesday – "We are the new Leeds," it read – but Benitez is clearly limited in his options in the transfer market. The section of the Rothschild/Merrill Lynch document relating to "player transfer payments" states: "Management believes that the normalised long-run level of new net player capital expenditure is £20m." The accompanying data suggests "long run" means the next five years. This figure "will grow together with increases in media broadcasting revenues," the bankers promise. Though revenues from British broadcasters are expected to drop, overseas rights should grow before 2014.

This summer the £30m sale of Xabi Alonso to Real Madrid helped offset the outlay on Glen Johnson and Alberto Aquilani. The need to generate cash to finance future purchases next summer may make it more difficult to resist selling Javier Mascherano. Meanwhile, the Liverpool managing director, Christian Purslow, indicated, in a recent meeting with the Spirit of Shankly supporters' organisation, the minutes of which are published on its website, that money spent on improved contracts for players is considered part of the transfer budget.

Hicks and Gillett eventually decided against an increase in ticket price, which would have come as the majority of the 20 Premier League clubs decided to freeze or reduce prices of some tickets for this season. But other details of Hicks and Gillett's future commercial strategy for Liverpool, outlined in the document obtained by Bloomberg News, include plans to convert 1,000 regular seats at Anfield into corporate seats and the creation of Liverpool-branded academies. New secondary sponsors will be targeted and catering facilities improved to help realise ambitions to increase commercial revenue from £59m to £111.4m in the next five years – a lofty target.

The Football Association has decided it will not charge Mascherano with violent conduct over the incident in which he appeared to swing a forearm at Leeds' Jermaine Beckford during Liverpool's 1-0 victory at Elland Road.

20

The amount in millions Liverpool will get each year from new sponsors Standard Chartered.

Life and Style
“What is it like being a girl?” was the question on the lips of one inquisitive Reddit user this week
News
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
Life and Style
beauty
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
transfers
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

Sport
German supporters (left) and Argentina fans
world cup 2014Final gives England fans a choice between to old enemies
Arts and Entertainment
A still from the worldwide Dawn of the Planet of the Apes trailer debut
film
News
peopleMario Balotelli poses with 'shotgun' in controversial Instagram pic
News
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Sport
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Sport
Javier Mascherano of Argentina tackles Arjen Robben of the Netherlands as he attempts a shot
world cup 2014
Arts and Entertainment
The successful ITV drama Broadchurch starring David Tenant and Olivia Coleman came to an end tonight
tv
Sport
Four ski officials in Slovenia have been suspended following allegations of results rigging
sportFour Slovenian officials suspended after allegations they helped violinist get slalom place
News
14 March 2011: George Clooney testifies before the Senate Foreign Relations Committee during a hearing titled 'Sudan and South Sudan: Independence and Insecurity.' Clooney is co-founder of the Satellite Sentinel Project which uses private satellites to collect evidence of crimes against civilian populations in Sudan
people
Arts and Entertainment
Balaban is indirectly responsible for the existence of Downton Abbey, having first discovered Julian Fellowes' talents as a screenwriter
tvCast members told to lose weight after snacking on set
Life and Style
More than half of young adults have engaged in 'unwanted but consensual sexting with a committed partner,' according to research
tech
Life and Style
A binge is classed as four or more alcoholic drinks for women and five or more for men, consumed over a roughly two-hour period
tech
Caption competition
Caption competition
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily World Cup Quiz
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice