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.


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

Life and Style
Living for the moment: Julianne Moore playing Alzheimer’s sufferer Alice
A propaganda video shows Isis forces near Tikrit
voicesAdam Walker: The Koran has violent passages, but it also has others that explicitly tells us how to interpret them
Life and Style
love + sex
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Victoria Wood, Kayvan Novak, Alexa Chung, Chris Moyles
tvReview: No soggy bottoms, but plenty of other baking disasters on The Great Comic Relief Bake Off
Ashley Young celebrates the winner for Manchester United against Newcastle
footballNewcastle 0 Man United 1: Last minute strike seals precious victory
Life and Style
Tikka Masala has been overtaken by Jalfrezi as the nation's most popular curry
food + drink
Benjamin Netanyahu and his cartoon bomb – the Israeli PM shows his ‘evidence’
Arts and Entertainment
80s trailblazer: comedian Tracey Ullman
Arts and Entertainment
Stephen Tompkinson is back as DCI Banks
tvReview: Episode one of the new series played it safe, but at least this drama has a winning formula
Arts and Entertainment
Jeffrey Archer holds up a copy of 'Kane and Abel', a book he says was ripped-off by Bollywood
Life and Style
food + drink
Arts and Entertainment
Fay Weldon suggested authors should tailor their work for Kindle readers
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating

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

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers