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Benitez Leaves Liverpool by ‘Mutual Consent’

(Corrects timing of statement in third paragraph.)

June 3 (Bloomberg) -- Liverpool manager Rafael Benitez agreed to leave the 18-time English soccer champion following the team’s worst league finish in 11 years.

Benitez’s six-year tenure ended by “mutual consent,” the team said in a statement on its website. Sky Sports reported the Spaniard will receive a 6 million-pound ($8.8 million) payoff.

“It is very sad for me to announce that I will no longer be manager of Liverpool FC,” Benitez said in the statement. “I’ll always keep in my heart the good times I’ve had here, the strong and loyal support of the fans in the tough times and the love from Liverpool.”

Benitez’s exit creates more instability at the team. American co-owners Tom Hicks and George Gillett put the club up for sale in April. The pair hasn’t been able to build a new stadium, saying in August 2008 that there would be a “short-term delay” because of financing problems. Liverpool owes Royal Bank of Scotland Plc and Wachovia Corp. 237 million pounds and, according to an April 30 financial statement, had net debt of 351.5 million pounds in its most recent fiscal year.

Liverpool Managing Director Christian Purslow, and former manager Kenny Dalglish, who led the Reds to their last league title in 1990, will conduct the search for a successor, the club said. U.K. bookmakers have made Aston Villa manager Martin O’Neill the favorite to take over, with Fulham’s Roy Hodgson and former Chelsea boss Guus Hiddink among other possible candidates.

Liverpool finished seventh in the Premier League last season, 23 points behind first-place Chelsea. That meant the club won’t play in the Champions League next season, its first absence from Europe’s elite competition since the season before Benitez arrived in 2004.

European Cup

Benitez, 50, started his tenure by claiming the European Cup in 2005, masterminding a victory over AC Milan that looked improbable at halftime after his team trailed 3-0. Three goals in six minutes overturned the deficit before Liverpool triumphed in a penalty shootout.

He captured the F.A. Cup the next season and the team reached another Champions League final in 2007, where AC Milan prevailed 2-1. However, Benitez failed to end Liverpool’s league title drought.

“Rafa will forever be part of Liverpool folklore after bringing home the Champions League following the epic final in Istanbul, but after a disappointing season both parties felt a fresh start would be best for all concerned,” Chairman Martin Broughton said on the club website today.

Benitez added that he had “no words to thank you enough for all these years and I am very proud to say that I was your manager.”

Battles With Owners

Benitez frequently battled with Hicks and Gillett over transfer policy, and strengthened his control over player trades when he negotiated a new five-year contract in March 2009. His opposition to the owners earned him the support of many of the team’s fans who oppose the American investors for loading debt on the club.

In April, Liverpool named Broughton as chairman to find a buyer for the club. News reports said that after talks with Broughton, Benitez was frustrated at a lack of funds to strengthen the squad.

Benitez had reinforced the club in recent years by adding players such as striker Fernando Torres for 21 million pounds, defender Glen Johnson for 18 million and goalkeeper Jose Reina for 6 million. However, he sold midfielder Xabi Alonso in the 2009 offseason to Real Madrid, and critics questioned whether last season’s squad was as strong as in the previous campaign.

Injured Aquilani

Benitez bought Alberto Aquilani from Roma for 20 million pounds in the last offseason, though he arrived injured and didn’t make start in a Premier League game until Dec. 26.

Altogether, Benitez spent 249 million pounds on players during his tenure and recouped 140 million on sales, Sky Sports said.

When Liverpool hired Benitez to succeed Gerard Houllier in June 2004, he left Valencia as the most successful coach in the Spanish club’s history. He led the team to two league titles in three years and victory over Marseille in the 2004 UEFA Cup final.

Previously his coaching career included working with youth players at Real Madrid, and he had spells at Extremadura and Tenerife.

He’s recently been linked in press reports with taking over at Inter Milan, after Jose Mourinho left for Real. Previously there was speculation Benitez might join Real or Juventus.

To contact the reporter on this story: Tariq Panja in London at tpanja@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at at celser@bloomberg.net

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