Vamos Rafa

Rafa Benitez is parting ways with Liverpool FC after six seasons as the manager, receiving a £6 million pay-off to leave the club. Under Benitez’ stewardship The Reds finished a disappointing seventh in the Premiership League Table, after being a runner-up to Manchester United in the previous campaign, and the equally disappointing were the early exits in the FA Cup and the League Cup. Liverpool failed to advance out of the Group Stage of the UEFA Champions League, which Benitez won in his first season with the club. Liverpool did advance to the UEFA Cup Semifinal before being heartbreakingly eliminated by Athlético Madrid, on an extra-time goal from Diego Forlan. The season started with high expectations, but ended with no new silverware for the trophy cabinet.

In the summer transfer window Benitez sold Xabi Alonso to Real Madrid, for €30 million, a deal that made fiscal sense, but left the club with no other holding midfielder to set up the attacking players. Naturally the offense struggled mightily early in the season, the mid season acquisition of Maxi Rodriquez did not fill the vacuum of Xabi’s departure, and the club finished with sixteen fewer goals than the previous Premiership season. Shuffling of line-ups due to performance, as well as injuries, led to the mixed results, and by mid-season it was clear that Liverpool were not in-line for any football honors. Benitez’ defensive oriented style has led to moderate success, but it has led increasingly disappointing results, like losing to Reading at Anfield. More questionable has been his personnel decisions, using ownership turmoil to expand his power Benitez had free reign over the squad, but his constant buying and selling of players finally caught up him this season as Liverpool drifted away from the top squads in Europe, and perhaps has pushed the club out of the “Big Four” in the Premiership.

The “Big Four” are Arsenal, Chelsea, Liverpool and Manchester United, the four clubs account for all but one of the League Champions since the formation of the Premiership in 1992 (The Premiership was part of a reorganization of English football, and was previously League One), and regularly finish in the top four slots in the league table, which qualifies them for the Champions League. However, Liverpool has not won a title in the Premiership, from 1975 to 1990 The Reds won ten League One titles, but have not toped the table since. Meanwhile, Manchester United has claimed ten league titles, tying them with Liverpool for the most all time. What separates the “Big Four” from the rest of the Premiership is their ability to out spend all the other clubs, after a decade of glutinous spending Liverpool maybe tapped out.

Liverpool is over £350 million in debt, and is only afloat because of a £290 million loan from RBS and Wachovia, which expires in July. American owners Tom Hicks and George Gillett have again secured an agreement with the lenders to give them time to sell the club, but KPMG, the club’s auditor, expressed a “material uncertainty” about Liverpool’s ability to continue as a going concern. However, Hicks and Gillet are holding out for an offer of over £600 million, three times what they paid for the club only three years ago, and £200 million more than RBS currently values the team. With RBS pressuring a sale, along with falling revenue it will be hard to sell the club for anything other than a discount price, but the Americans seem too stubborn to acknowledge their position, even Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai, who really wanted to purchase the club, balked at the asking price. Fans, former players and mangers, even David Moores, who sold the club to Hicks and Gillet, have spoken out against the owners, some publicly demanding a sale. Despite the club’s unfortunate position, Liverpool fans may take solace in the fact that their greatest rivals could be facing an eerily similar situation.

Manchester United has been the most successful sqaud in the Premiership, and are considered one of best in all of Europe. While United’s on the pitch results have been more impressive than their chief rivals, they have the same off the pitch problems. Manchester United has an American owner, Malcolm Glazer, and have debts that exceed £700 million. United’s board of directors have been trying to get Glazer to sell for several years, and group of wealthy fans, dubbed the “Red Knights”, have been pursuing a £1 billion takeover bid. Since 1990 Manchester United had been a publicly traded, and it took almost £800 million to purchase all the shares, most of which was borrowed against the club’s assets, the rest in PIK loans which were sold to hedge funds. Glazer will be forced to sell the club by 2017 or he will lose his shares to the hedge funds, but he could damage the club a great deal before then. Glazer would certainly be willing to sell the club, however, as will Hicks and Gillet, Glazer is seeking an excessive offer, over £1.6 billion, and has claimed that he has already turned down a £1.5 billion offer. It is only a matter of time before Manchester United is in the same position as Liverpool, and with a much greater burden of debt.

The uncertainty about the Liverpool’s future has hamstrung the club, and while this downturn may not be as severe as what financial mismanagement has done to Leeds United, it may be a while before Liverpool are playing Champions League again. Yossi Benayoun has already been linked with a move to Chelsea, Captain Steven Gerrard has been linked to Real Madrid, and it appears a bidding war for star striker Fernando Torres will start after the World Cup. Javier Mascherano, Dirk Kuyt and Glen Johnson could all also become transfer targets, devastating the clubs starting eleven, as clubs begin to pick the carcass of a not yet dead Liverpool. Interim manager Kenny Danglish, a star and later a manager during the clubs most successful run, will had pressed to keep the core of the squad together. New chairman Martin Broughton was an odd choice, considering the turmoil he is dealing with at British Airways, and his search for a new manager isn’t going to be easy, but while European mangers might steer clear, the Liverpool job is still going to be very appealing to domestic mangers despite the turmoil surrounding the club.

The financial reality is finally catching up to clubs that spend to much, revenues are falling along with team values. The last decade saw a wave of billionaires buying up teams from long time owners, who would make a huge profit, then flipping the team a few years later, as sports teams values inflated at a ridiculous rate. Liverpool is going to have to adjust to this new reality, and an era of austerity may have to be endured at Anfield. However, with a good manager, and a focus on cheaper young talent The Reds will not fall far.