Liverpool F.C. was founded following a dispute between the Everton F.C. Committee and John Houlding, club president and owner of the land at Anfield. After eight years at the stadium, Everton relocated to Goodison Park in 1892 and Houlding founded Liverpool F.C. to play at Anfield. Originally named Everton F.C. and Athletic Grounds Ltd (Everton Athletic for short), the club became Liverpool F.C. in June 1892 after The Football Association refused to recognise the club as Everton. In its debut season, the team won the Lancashire League, before joining the Football League Second Division at the start of the 1893–94 season. After finishing in first place, the club was promoted to First Division, which it won in 1901, and again in 1906. Liverpool won back-to-back league championships in 1922 and 1923, but did not win another trophy until the 1946–47 season when the club won the First Division for a fifth time. After losing 1–0 toBurnley F.C. in the club's first FA Cup final in 1914, Liverpool was defeated in the final for a second time in 1950 by Arsenal. The club was relegated to the Second Division in the 1953–54 season.
Soon after losing 2–1 to non-league
Worcester City FC in the 1958–59 FA Cup, Bill Shankly was appointed manager and released 24 players. He converted a room at Anfield used for boot storage into a room where the coaches could talk strategy; here, Shankly and other "Boot Room" members Joe Fagan,Reuben Bennett, and Bob Paisley began reshaping the team. The club was promoted to the First Division in 1962, which it won for the first time in 17 years in 1964. The following year, the club won its first FA Cup, before winning the First Division again in 1966. Liverpool won the league and UEFA Cupdouble during the 1972–73 season and the FA Cup again a year later; soon afterwards, Shankly retired and was replaced by his assistant Bob Paisley. Under Paisley, the club won another league and UEFA Cup double 1976, just his second season as manager. The following season the club retained the league title, won the European Cup for the first time, but lost in the FA Cup final. Liverpool retained the European Cup the following season, before regaining the First Division title in 1979. During the nine seasons in which Paisley was manager, Liverpool won 21 trophies, including three European Cups, a UEFA Cup, six league titles and three consecutive League Cups; the only domestic trophy to elude him was the FA Cup.
Paisley retired in 1983 and was replaced by his assistant Joe Fagan. Liverpool won the League,League Cup and European Cup in Fagan's first season, becoming the first English side to win three trophies in a season. Liverpool reached the European Cup final again in 1985, against Juventus at theHeysel Stadium. Before kick-off, Liverpool fans breached a fence which separated the two groups of supporters and charged the Juventus fans. The resulting weight of people caused a retaining wall to collapse, killing 39 fans, who were mostly Italians. The incident became known as the Heysel Stadium Disaster, the match was played regardless, Liverpool lost 1–0 to Juventus. English clubs were consequently banned from participating in European competition for five years; Liverpool received a ten-year ban, which was later reduced to six years. Fourteen Liverpool fans received convictions for involuntary manslaughter.
Fagan resigned after the disaster and Kenny Dalglish was appointed as player-manager. During his reign, the club won another three League Championships and two FA Cups, including a League and Cup "Double" in the 1985–86 season. Liverpool's success was overshadowed by the Hillsborough Disaster: in an FA Cup semi-final against Nottingham Forest on 15 April 1989, hundreds of Liverpool fans were crushed against perimeter fencing. 94 fans died that day; the 95th victim died in hospital from his injuries four days later, and the 96th died nearly four years later without regaining consciousness.After the Hillsborough disaster there was a governmental review of stadium safety. Known as the Taylor Report, it paved the way for legislation which required top-division teams to have all-seater stadiums. The report ruled that the main reason for the disaster was overcrowding due to a failure of police control.
Liverpool was involved in the closest finish to a league season during the 1989–90, the club lost the title on goals scored and in the last minute of the season in a home defeat to eventual winners Arsenal.Dalglish cited the Hillsborough Disaster and its repercussions as the reason for his resignation in 1991. He was replaced by former player Graeme Souness, an FA Cup in 1992 was Souness' only trophy and he was replaced by Roy Evans. Liverpool won the League Cup in 1995 and a 4–3 victory over Newcastle United at Anfield on 3 April 1996, which was named in April 2003 as the Match of the Decade in thePremier League 10 Seasons Awards.
Gérard Houllier was appointed as co-manager in the 1998–99 season, he became the sole manager in November 1998 after Evans resigned. In 2001 Houllier's second full season in charge, Liverpool won a treble of the FA Cup, League Cup and UEFA Cup. Houllier underwent major heart surgery in the 2001–02 season and Liverpool finished second behind Arsenal.Houllier was replaced by Rafael Benítez at the end of the 2003–04 season. Despite finishing fifth in Benitez's first season, Liverpool won the UEFA Champions League beating Milan 3–2 in apenalty shootout after the match finished 3–3. The following season Liverpool finished third and won the 2006 FA Cup Final beating West Ham United in a penalty shootout after the match finished 3–3.
American businessmen George Gillett and Tom Hicks became the owners of Liverpool during the2006–07 season in a deal which valued the club and its outstanding debts at £218.9 million.The club reached the 2007 UEFA Champions League Final against Milan in a repeat of the 2005 final, this time however, they lost 2–1. In the 2008–09 season Liverpool achieved 86 points, their highest Premier League points total, and finished as runners up to Manchester United. The following season the club finished seventh and failed to qualify for the Champions League. Benitez subsequently left by mutual consent and was replaced by Fulham manager Roy Hodgson. In 2010, the club were on the verge of bankruptcy with the club's creditors asking the High Court to allow for the sale of the club.
In October 2010, Boston Red Sox owner John W. Henry of New England Sports Ventures successfully bid and took ownership of Liverpool. In January 2011, former manager Kenny Dalglish was asked to take charge of the club until the end of the season after Roy Hodgson agreed to leave the club by mutual consent.