Parry's reality cheque can help keep Reds in the pink

Football's gravy train may have hit the buffers, but before it did so, the more forward-thinking engine drivers had seen the signal on red and avoided the sort of mayhem currently engulfing Leeds United and others. Standing on the footplate of the Anfield Express, Liverpool's chief executive Rick Parry somehow managed to refrain from sounding smugly self-satisfied last Wednesday as he announced the most lucrative deal the club have ever signed, with Reebok, "possibly earning in excess of £100m over the next six years".

Just as well, perhaps, that smugness was avoided; later that day the team went out of the FA Cup at home to Crystal Palace. But as Liverpool are more aware than most, after 40 years as a force in the land, there are short-term setbacks and there is long-term stability. However anti-climatic the current season turns out to be – and there is still much to play for – the club have avoided the pitfalls of two apparent quick-fix financial initiatives grabbed by so many of their rivals over the past few years: becoming a public company and taking on huge securitisation loans.

Eight Premiership clubs are now listed companies. Liverpool have always been privately owned and intend to remain so. "We think it's right for us," Parry said, "philosophically, as much as anything, because we're still a football club at heart." Not, he might have added, with reference to Elland Road, St James' Park or Stamford Bridge, a basketball team, a rugby club or a hotel chain.

"It's not for me to comment on what others have done. But we don't want to be anything other than a football club that focuses on silverware and winning trophies. Of course we have to be professional off the pitch but it's a means to an end; we are not trying to be a global conglomerate or something that we're not."

As Liverpool progress towards building a new stadium in Stanley Park by the summer of 2005, it may become necessary to take out the sort of loan favoured by clubs like Leeds, Manchester City and Newcastle. What they will not do is immediately blow it in the transfer market on players whose value can plummet even faster than stocks and shares.

"Securitisation lends itself to long-term development like a stadium. The old business maxim is that you use long-term borrowing for long-term investment. What you don't do is take on long-term borrowing for your immediate working capital. So we've never felt it appropriate to use that to fund players. We've always tried to fund players' wages and transfer fees out of the cash that we generate."

Parry has just returned from a meeting of Europe's élite G14 group (Arsenal and Manchester United are also members), where renewed protest was voiced about the plans for next season's Champions' League and Uefa Cup. Liverpool oppose knockout matches in the second stage of the Champions' League, and do not approve of group matches in the Uefa Cup.

"We feel the format was fine as it was and to keep tinkering with it is wrong. When clubs have invested heavily in squads you need a degree of stability. A personal view about the Champions' League is, if you're going to scrap a group phase then why not scrap the first one, because it's the second one in which you've got the top-quality teams.

"That made less sense to me than any of it. Our view as a club is that the Uefa Cup needs to be left as it is because it should be distinctive and different; if it looks just like a second-rate Champions' League, there's a real danger it will suffer by comparison."

It is, of course, the Uefa Cup in which Liverpool will be competing once European football resumes next week, having dropped out of the Champions' League in the autumn. Parry puts the price of missing out altogether on the latter competition at £15m and there must be a danger of that happening next season. But there will be no panic in the Anfield boardroom, no kow-towing to shareholders, no fire-sales.

Like many of the trains that run into Lime Street, the club may be a little behind schedule; there is no danger of coming off the rails.