Liverpool's New Owners Want Bigger Stadium - 17/03/2007

Now that they have completed their purchase of Liverpool, American tycoons George Gillet Jr and Tom Hicks have urged the club to expand the new stadium at Stanley Park beyond the planned 60,000 capacity. It is doubtful whether they would match the 76,000 Manchester United can accommodate at Old Trafford. A bigger stadium would require a new planning application, but Liverpool are confident that a 2009 completion date remains realistic. The £234m cost of the new stadium would certainly rise as a result of any changes, but having borrowed £298m to fund their investment in the club, they are prepared to borrow a further £200 million to finance the construction of a new stadium.

At £300m Liverpool is costing them far less than the £830m the Glazer family need to acquire Manchester United. The American duo are borrowing close to £300m to buy the club and assume their debts. Unlike the Glazers, they are relying on a simple bank loan which pays 1.5 per cent more than the Bank of England base rate. The Glazers are still reliant on more specialised lending which carries a borrowing cost of 12 per cent. The interest bill at Liverpool will be £21.5m which is remarkably similar to last year's profit of £22.1m before transfer spending. However, once the lucrative new televison rights deals kick in next year, they should contribute an extra £15m, although perhaps £5m of that will be taken up by increased wages. The club's finances can probably only sustain transfer spending of around £20m a year and that may not be enough to match their ambitions.