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The manager’s remarks about Liverpool’s finances may not be earth-shattering but at least someone senior is acknowledging the truth

Byline

Rafael Benítez says Liverpool are in debt: shock, astonishment, clear the back page. The manager says Liverpool must reduce this debt and so do not have millions of pounds to spend buying players: astonishing and extraordinary.

Benítez has shocked us, in truth, with a statement of the bleedin’ obvious, but it is noteworthy that somebody in his position has finally come out and said it. Being taken over by two North American businessmen, who loaded on to the club the £174m they borrowed for their takeover, was not, after all, the most glorious event in the history of a great football club.

When Tom Hicks and George Gillett arrived, they portrayed themselves as the friendly and benevolent Americans, smiling humans compared with the odd-seeming Glazers of Tampa Bay and Old Trafford. They were not going to “do” a Glazer and load debt on to the club; they would build the new stadium on Stanley Park, which would allow Liverpool truly to compete with United; they would honour and respect Liverpool’s heritage.

Yet a skim-read of the official documents that accompanied their takeover blew away their claims to benevolence. They were in fact visiting the same awful trick on Liverpool as the Glazers did at Manchester United, just in a lower key.

The Glazers bought the world’s richest and arguably most glory-drenched football club for £831m, of which £559m was borrowed, £275m of it from hedge funds at eye-watering interest rates. The club itself, which had Sir Alex Ferguson, his conveyor belt of talent, the resources to expand Old Trafford to an opponent-busting 76,000 and cash in the bank, was itself loaded with the maddening responsibility to service repayment of those borrowings. In the three years to 2008 the club has incurred £263m in interest charges alone but the total debt has actually risen to £700m.

At United Ferguson has never truly acknowledged that monstrosity, which alienated many fans, led to a breakaway club, FC United of Manchester, being formed and produced the mass leakage of money once the Glazers arrived. Those interest payments have pushed the world’s most profitable club into losses every year since the takeover and the £81m received for Cristiano Ronaldo has patently not been spent on players or anything else.

United, however, reject the suggestion that £700m of debt has adversely affected the club financially in any way; they argue that the club makes so much money there is some for Ferguson to spend but he has not wanted to.

At Liverpool the debts are lower but the club can ill afford them because of Anfield’s smaller capacity, not a brick of the new stadium having materialised almost three years after Hicks and Gillett arrived. Their latest figures showed the club had borrowed £313m, including the costs of the original takeover, and last year paid out £36.5m to the banks in interest alone – that is Xabi Alonso plus £6.5m, gone. That helped push the club into a £42.6m loss at a time when vastly more wealth is flowing in than ever before.

Benítez now acknowledges this debt is a problem, and the need to reduce it has eaten into his transfer budget. This is not a revelation that qualifies as earth-shattering; it simply states what has been horribly plain all along. These “leveraged buy-outs” were not mystical, transatlantic, financial wizardry for which the clubs and their fans should be grateful. They were speculators’ devices which smothered the clubs in mountainous, pointless debt.

The only news here is that somebody senior has finally said it, and that is a relief.

Rafael BenítezLiverpoolPremier LeagueDavid Connguardian.co.uk