Rafa Benitez’s spending outlay on new players will be limited to £20m a season for the next five years, according to documents released by Liverpool.
The figures contained in a prospectus published in March by investment banks Rothschild and Merrill Lynch and published in today’s Independent show that net summer spending will be locked at £20m until 2014 – a figure which will also include wage increases from contract renewals.
The prospectus, which illustrates the need for Liverpool’s owners Tom Hicks and George Gillett to find 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 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.
The documents confirm that Benitez, who has frequently complained about his inability to compete financially with the likes of Chelsea and Manchester United, 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 need to generate cash to finance future purchases next summer may make it more difficult to hang on to the likes of Barcelona target, Javier Mascherano. Meanwhile, the Liverpool managing director, Christian Purslow, indicated, in a recent meeting with the a supporters’ organisation that money spent on improved contracts for players is considered part of the transfer budget.