Can the Reds compete with the big boys on such a budget?

Hank Hicks and Billy Bob Gillett’s popularity on Merseyside ranks somewhere between The Sun and cancer, and they won’t be winning any praise from Liverpool fans for their fiscal planning. According to an investment prospectus uncovered by Bloomberg News, the club’s forays into the transfer market will be limited by a £20m spending cap until 2014.

The Daily Mail reports:

The startling revelation was published in a prospectus back in March by investment banks Rothschild and Merrill Lynch to attract potential investors in the club.

The £20m spending cap, which will also include wage increases accruing from contract renewals, means that Anfield boss Rafa Benitez must continue to sell before he can buy over the next fives years as Liverpool chase their first league title since 1991.

While the majority of Premier League clubs froze or lowered their season ticket prices this season, the document revealed that Hicks and Gillett were also considering an eight per cent hike in admission fees to cover some of the club’s debt. This idea was

Construction to continue when economic situation improves

When Billy Bob Gillett and Hank Hicks took control of Liverpool in 2007, plans to move the club to a new 60,000-seater stadium in nearby Stanley Park were put on hiatus, so that an architect from Hicks’ native Texas could draw up a more spectacular design (and boy howdy do they know how to make a stadium in the Lone Star State).

Thanks to the global financial apocalypse, and Liverpool’s precarious loan arrangements that could bring the house of cards down at any point, preliminary building work on the site was brought to a halt last August, and it will not continue until the recession is over.

Liverpool’s new managing director Christian Purslow said:

“Construction on the stadium will begin when the

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Could a Big Four side really go down the pan?

As the Tesco Value teabags and “one square of loo roll per visit rule” at Spoiler towers demonstrates, the nation remains in the grip of a financial apocalypse.

Throughout the crunchy credit crisis, the Premier League has tried its best to remain impervious to global economics, by continuing to spend big, charge extortionate amounts for tickets and encourage potentially destabilising foreign investment. This week, however, cracks are starting to show in the supposedly invulnerable entity, whose members seem to believe they can buck the trend of a recession.

On Tuesday, The Guardian revealed that the Premier League is cumulatively £3.1bn in debt. Just over £2bn of those outstanding bank overdrafts, loans and other borrowings are attributable to the Big Four alone.

We have also learned that wages have spiralled to over £1bn for the first time, suggesting one too many clubs are operating with an unstable business model. Such a unevenly balanced ratio of wages to turnover could become a club’s undoing, particularly in light of the fact that ‘guaranteed’ income from ailing broadcaster Setanta may be about to dry up.

Perhaps the most telling sign of the fool’s paradise that is the Premiership, however, is the news that reached us this morning concerning Liverpool’s financial crisis.

In a set

More foreign money to be poured into the Premier League

According to this morning’s Sun newspaper, Liverpool’s financial chief Philip Nash and commercial director Ian Ayre have been sent to the Middle East to thrash out a takeover deal with the man above, Nasser Al-Kharafi.

The Kuwaiti, who inherited most of his £12bn net worth, is currently the world’s 46th richest man, and is said to be interested in a £400m deal for the Anfield club.

Last November, we suggested the current financial apocalypse would force out the eternally unpopular Hank Hicks and Billy Bob Gillett, and the 64-year-old father-of-five is looking to take the club away from them completely. However, at present, it is understood that Liverpool want the Yanks reduce their share to 25 per cent, with Al-Kharafi claiming the remaining 50.

Liverpool’s debts currently stand at £350m, which they owe to two banks (Wachovia and the Royal Bank of Scotland), and have even been faced with the prospect of selling their biggest stars to balance the books.

Liverpool fans and Jamie Carragher are particularly unhappy that Hanks and Gillett have pulled a profit from the club, while failing to invest in the squad and neglecting to start building the new Stanley Park stadium.

If this deal went through, the Reds could potentially be as well-funded as Manchester City, but nowhere near as laughably unpopular.

Spoiler bonus: Nasser Al-Kharafi tried to take control of Newcastle Utd last October. Check out the fact file we compiled on the prospective Premier League owner here.

Financial turmoil could flush out unwanted owners

Earlier this year, Hank Hicks and Billy Bob Gillett ran into a little money trouble and faced the prospect of offloading Fernando Torres and Ryan Babel just to pay the heating bills. Today, the papers are awash with the news that the American investors have suffered at the hands of the current financial apocalypse and will owe two banks (Wachovia and the Royal Bank of Scotland) £350m in January. They do not currently have the cash, and refinancing loans from two of the worst hit banks in the crisis will be harder than getting Ledley King to stay sober in a nightclub.

While the prospect of a fire sale right in the middle of a serious title campaign is a possible (and potentially disastrous) way of raising much-needed equity, the current predicament does have a rather large silver lining: Hicks and Gillett may be desperate to bail out, forcing

Global belt tightening brings mixed fortunes to the big four

Manchester Utd’s £14m-a-year- AIG shirt sponsorship looked to be on rocky ground earlier this week, and the future of the deal looked no more certain as the US Federal Reserve rescued the insurance behemoth with a £47bn refinancing package yesterday: rather understandably, they will no longer consider sports sponsorship a ‘core activity’.

According to this morning’s Guardian, however, the frailty of the American International Group should not concern United as much as the intentions of the Glazer family. Malcolm and co have been forced to spend $150bn on ‘PIK‘ loans in recent months, the interest on which is a hefty 14.45 per cent. A Glazer representative insists that “the investment is for the long term,” although the Guardian strongly suspects ex Football League chairman, United fan and major dealmaker Keith Harris is touting

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