In preparation for a new crusade, in 1198 and 1199 Innocent III introduced a number of reforms. One of them was to promise crusaders that their military service would give them full remission of their sins and would absolve them of any punishment due, in this world or the next, provided they showed ‘penitence in voice and heart’ for their transgressions. This indulgence made a great impression on his contemporaries. Geoffrey of Villehardouin reports that ‘The hearts of the people were greatly moved by the generous terms of this indulgence, and many, on that account, were moved to take the cross.’ But from the outset the crusade was bedevilled by financial problems. Warfare was becoming more and more expensive. Despite the general enthusiasm for a new venture, without royal involvement knights were reluctant to commit themselves. But the kings of France and England were quarrelling again, and Richard's death put paid to a truce arranged in 1199. Innocent's response to the issue of finance was to impose the first direct taxation of the universal Church, a fortieth of all revenues for one year. This encountered some resistance and took a long time to collect. Nevertheless the nobles showed some interest, and at a tournment in Ecry-sur-Aisne on 28 November 1199 the young counts Thibaut III of Champagne and Louis of Blois took the cross, along with many of their men. Others followed suit.

Two months later, a meeting at Compiegne gave six men, including the chronicler Villehardouin and the sixty-year-old trouvere and diplomat Conon de Bethune, powers to negotiate transport arrangements with the maritime cities. The Venetians promised to provide ships which would have to be paid for, adding to these fifty galleys (armed ships) and committing themselves to the crusade as equal partners with equal share in the spoils. The fleet, which represented ‘a level of commitment unprecedented in medieval commerce [requiring] the suspension of practically all other commercial activity with the outside world’, would be ready by the end of June 1202. But the French delegates had vastly over-estimated the size of the crusading forces, and by late 1200 the actual body of crusaders amounted to no more than a third of the predicted number. A further complication was the leaders’ readiness to deceive their followers about their plans.