Soccer:The extent of Liverpool manager Rafael Benitez's difficulties in terms of rebuilding his squad next season were laid bare by the publication of the club's financial accounts.
Although the figures are only dated to July 31st last year, they showed the club itself made an operating loss before tax of €19 million - down from a €12 million profit the previous year.
Kop Holdings, the company set up by co-owners Tom Hicks and George Gillett to buy Liverpool in 2007, continued to run up more debt as annual interest repayments on loans taken out to finance the purchase rose €4.2 million to €47.6 million.
That resulted in the group making a loss before tax of €65 million - up €16.6 million from 2008., which in turn contributed to Kop Holdings’ debt rising from €345 million in 2008 to €404 million last year.
Benitez, who cancelled his usual pre-match press conference today in order to avoid a drawn-out grilling on why Liverpool’s season had been such a failure, has made it clear four or five new high-quality players, which he valued around €16 million apiece, are needed to inject life into his squad.
Even a conservative estimate puts his requested transfer kitty at well over €50 million — almost as much as the company lost last year.
The Spaniard’s only hope is for a takeover to come sooner rather than later after the American co-owners put the club up for sale last month having admitted they could not — or possibly would not — take Liverpool any further.
But with debts mounting every year the likelihood of a swift resolution to the financial restraints at Anfield seems remote. In addition to the current €404 million debt and Benitez’s transfer requirements, funding also has to be provided for the new stadium which is currently mothballed in Stanley Park.
According to the directors’ report accompanying the accounts, Anfield only has a “useful economic life” of five years — and that assessment was made 12 months ago. With the finances in such dire straits Europe’s richest clubs may sense an opportunity to cherry-pick Liverpool’s top stars.
Chelsea have already been linked with a €77 million bid for striker Fernando Torres, while speculation has suggested Real Madrid may be prepared to pay €40 million for captain Steven Gerrard.
And while those sales, as unpalatable as they would be to Liverpool fans, would generate almost €120 million there is no guarantee the manager would be allowed to re-invest all of the cash in new players.
The subject of transfer funding was no doubt one of the topics of conversation yesterday when Benitez held his first long-awaited meeting with chairman Martin Broughton, brought in by the owners to oversee the sale of the club.
It was described as “constructive and cordial” but the promise of further get-togethers scheduled for the future suggests there are still plenty of issues which need addressing.
With Benitez’s escape route to Juventus seemingly being closed now the Serie A club are looking at other managerial options the Spaniard may have no choice but to sit tight and hope investment arrives in time.
But having missed out on the Champions League this season Liverpool cannot afford an extended absence from Europe’s elite competition as participation alone is worth in the region of €25 million a year.