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More state aid for another club stadium, and perhaps a little local difficulty for Tottenham?

By Tony Attwood

Everton look to become the latest Premier League to benefit from state aid.  West Ham, Liverpool and Manchester City have paved the way in terms of stadia deals that have been supported by greater or lesser amounts from tax payers money; now Everton have been promised part of the cash that English tax payers seem perfectly willing to hand out to football clubs, without any protest.

Liverpool City Council has now agreed the plans for Everton’s new ground.   Unlike West Ham and Man City they won’t get the ground for very little indeed – they will have to pay around £300m – but that is still below the market price for a new stadium.

The council has also shown its willingness to become a guarantor for the bank loans that will be required.  It is seen perhaps as a balancing up of the fact that Liverpool were at one stage owned by their bank, which because it has not been solvent for years, was owned by and paid for by the tax payer.  I am told (but haven’t seen documents to verify it) that the local council also guaranteed loans for the recent rebuilding of Anfield).  Mind you, some people deny this.

Everton have of course been involved in all sorts of schemes to move the club for year – Kirkby was one venue, King’s Dock another.  And to be fair, Arsenal themselves looked at various locations before settling on what became the Ems, with a stadium beyond Cockfosters being one option, and a rebuilding of Highbury another (although the latter was scuppered by the local council).

Of course run down areas such as the land surrounding some of the River Mersey do need redeveloping, and sticking a football stadium there is certainly one way of helping this along.  Apparently there is also hope of their being a cruise liner terminal next door – although having recently watched the gigantic cruise liners in Sydney Harbour surrounded by the iconic Harbour Bridge and Opera House, all in the brilliant New South Wales summer sunshine, and the plethora of outdoor bars, I wonder if the people on a cruise will appreciate a few days docked on the Mersey.

But anyway it is going to be “a world class, high quality, mixed-use waterfront quarter… competing with the likes of Hamburg, Boston, Toronto and Barcelona in terms of the scale and diversity of its waterfront offer and associated economy.”  So that’s all right then.

And the scale of tax payers investment can be seen from the fact that the building of the first new road into the area will cost £18m alone.  The next road will cost £20m and on and on…

Of course it is not all being done for Everton.  The £400m being spent on a deep water container terminal is for the industry of the area, but it is notable that while Islington council would not move in its objections to the redevelopment of Highbury, and the final ok for the Ems only went through the council by a majority of one, (very much in keeping with the way Islington council tried to stop Arsenal moving to Highbury in the first place by supporting the Highbury Defence League), Liverpool council argued in their draft Liverpool plan last year that, “Both Goodison Park and Anfield stadia represent major tourist and visitor centres and as such play an increasingly important role in the economy of the city. The city council is keen to maintain this position by supporting the development plans of both clubs, where this will assist in the social and economic improvement of Liverpool in general.”
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Indeed I’ve often thought that much more could be made of the Arsenal museum, making it much brighter and open, but the problem is that there is no too much around the area other than Finsbury Park that attracts people in (although Untold has done its bit by promoting the quality of the Swimmer as a decent local pub).   Liverpool are however planning to build a new theatre in the area, and that must be applauded, (at least by the likes of me).

And what will it mean to Everton?

I’ve run this chart before, but it always seems to me worth considering.  What happens when clubs move to a new staduim?

Between 1935 and 1995 no major new football stadia were built.  Since then we have had quite a few although not always accompanied by success on the pitch.  Each new club assured its fans that they would “not make the mistakes” of those who had gone before, but most did.

“D3” and similar below means the third tier of English football.  Where grounds have since changed their name the original name is used but place in italics.

Stadium Club Built Promotion/Releg
Riverside Stadium Middlesbrough 1995 Relegated 1997
Britannia Stadium Stoke City 1997 Relegated 1998
Reebok Stadium Bolton Wanderers 1997 Relegated 1998
Pride Park Stadium Derby County 1997 Relegated 2002
Stadium of Light Sunderland 1997 Relegated 1997
Madejski Stadium Reading 1998 Releg to D3 ’98
JJB Stadium Wigan Athletic 1999 Won D3 2003
St Mary’s Stadium Southampton 2001 Relegated 2005
KC Stadium Hull City 2002 Prom from D3 2005
Walkers Stadium Leicester City 2002 Relegated 2004
Etihad Stadium Manchester City 2003 Won League 2012
Liberty Stadium Swansea City 2005 Prom D4 2005
Emirates Stadium Arsenal 2006 FA Cups, 2014/15
Cardiff City Stadium Cardiff City 2009 Won D2 2012

It is also interesting that all this stadium building comes at a time when English teams are not doing very well in Europe.

Manchester City with a stadium gifted to them are out, Arsenal, having paid for their own stadium, are out, Tottenham about to move into Wembley en route for their new stadium, are out (twice).  Man U, who have not moved since building Old Trafford in 1910 are still in the Europa, and so are Leicester with a new stadium in 2002.  Chelsea, yet to start on their rebuilt stadium, didn’t join in this season.

As for Tottenham they now have permission to play 27 home games at Wembley next season in front of 90,000 people for each game after Brent Council overturned its own rules to allow them in.  No comment seems to have been made by the FA about what happens if Tottenham progress to the semi-final and final of the FA Cup, and would thus effectively be playing at home.

 

However there is a story doing the rounds that Tottenham, after all the effort of getting permission might not take up the Wembley offer.   That might be because of the problems they had getting results at Wembley in Europe this season (just as Arsenal did in our two years at Wembley) but there is also a story (mentioned in the Guardian recently) that the club is assessing “whether their new stadium next to White Hart Lane will be completed in time for the start of the 2018-19 season.”

As a result the paper argued, “Tottenham could yet stay at their current ground next season and play home games at Wembley in 2018-19, before moving into the new stadium for the 2019-20 campaign.”

That notion has only just emerged.   I wonder if work is going a little more slowly than previously anticipated.  But it was just one suggestion in one paper, and you know what the papers are like.

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20 comments to More state aid for another club stadium, and perhaps a little local difficulty for Tottenham?

  • Poul

    So you write about Arsenal winning the Cup…but nothing about Wigan winning the Cup or Leicester winning the League…….. Then Again you are talking about state aid to Everton. You do know that Liverpool Council will recieve 4 mill £ a year…..hardly state aid isn’t…

  • Mickey Blue Eyes

    Just one more Tony, Manchester United’s Old Trafford was bombed during WW” and had to be rebuilt, during which time they played at Maine Road. On completion they ended up with a new ground on the same site.

  • Tony Ateman

    Liverpool Council pay not one penny to fund EFC’s new stadium. In fact the will get £4.4 million a year for 40 years to act as guarantors. If it all goes belly up the Council will have first call on all of EFC’s collateral – players, ground, etc, which exceeds the projected £300m building costs. So it is a good deal for the city. So, if you choose to comment on it, get your facts right.

  • Wirralblue

    Mr. Atwood,

    You really should do some basic research into the financing model for this EFC stadium project before publishing such an inaccurate version of events.

    The LCC council report is out there for all to read, in fact, if you read it, you may feel a tad embarrassed.
    In short, this will not cost the taxpayer any additional money, it will however earn LCC £4m per annum.

  • Mike T

    The Tottenham project is interesting and to be fair to them is hugely ambitious. My understanding is that the d day in terms of them signing up for Wembleynesxt season is just 7 days away.

  • Mike T

    Tony

    Whilst I don’t agree with your take on a number of issues one things many of your articles do is stimulate my thought processes.

    The Spurs reluctance to sign up to Wembley seemed odd . My limited digging suggests that a couple of weeks ago local government wanted proof that funding was in place for what is now a £750 million project.

    Daniel Levy responded by confirming that the company arranging finance (The Tavistock Group) have hardened their view and clearly are concerned as to the level of funding required for a company with a turnover of £250 million. In other words there is a clear financial risk in the project.

    The suggestion clearly is that Levy and or Lewis are going to have to sell a% of their shares to part finance the project or ( my reading ) possibly they may well have to sell a player or two.

  • ian

    The etihad stadium wasn’t paid for by tax payers, it was built with national lottery funding. City in fact pay the council to rent the stadium. So far from benefiting from a handout from the tax payers they actually contribute a large sum to council funds.

  • Ian, I think the people who buy national lottery tickets are tax payers

  • I will try and explain a little further the situation as I understand it.

    Liverpool is considered by some to be what the Guardian has called a “cash-strapped local authority”. But because it is a local authority, and local authorities do not go bust as private companies can do, (because the government will always bail them out) the authority has a higher credit rating, than many companies and thus get charged a slightly lower rate of interest than private companies.

    A Special Purpose Vehicle (SPV) company is being set up with the council in it, to help get the loans at more favourable interest rates. But the SPV which is part owned by the council, has costs and part of those costs will be paid by the council at the very least at the start. Likewise if anything goes wrong (and as the table in the article showed, this happens more often than not) Everton might not be able to pay their share, in which case the council will be having to pay. As security against this Everton have to start paying into the SPV company, but there is still a risk, because Everton will not be paying all the cost of the stadium into the SPV. If for example Everton followed the examples of some other clubs with new stadia and got relegated then as has been confirmed in various publications the council would have to pay off the debt.

    It is true that the council would then be the sole owner of the SPV, and some suggest that this could be beneficial. But if it is just the land and the stadium is not yet built, the land would probably be worth less than before because the development has failed. If the stadium does exist and Everton occupy it Everton’s ability to repay would depend on income.

    Whichever way you look at this, Liverpool council money is going in because they will be paying part of the set up charge of the SPV (they cannot simply lend their name to the SPV to get the lower interest rates) and then it is taking the risk of nothing going wrong. Plus it has all the costs of setting a deal like this up, which has to go through the council, otherwise the council cannot claim the lower interest rates.

    I am aware it is being presented otherwise, but we have seen this before with other stadia, and generally it does not represent a happy story for tax payers either at the start or at the end. We can all remember how some of the earlier Liverpool FC projects were set up; one rarely gets the whole story, but the way such projects work out is never a bad guide to what will happen.

  • Pat

    SPVs are dangerous!

  • JimB

    Spurs will be playing at Wembley next season. No question about it.

    The stadium construction is, by all accounts, a little behind schedule in some respects and a little ahead of schedule in others. Overall, I believe that the club and project managers, Mace, are reasonably satisfied with progress thus far. There is a little over 16 months before the start of the 2018-19 season – more than enough to complete the three quarters of the stadium currently under construction.

    The concern has always been about the the single tier end, the sliding pitch and the roof, construction of all of which cannot even begin until after the final home game against Manchester Utd. But since that concern will be exactly the same whether Spurs leave at the end of this season or the next or the one after that, there is nothing to be gained by delaying the move.

    That Spurs have yet to confirm that they will take up the Wembley option is somewhat puzzling, I guess, but it is most likely just Levy being ultra cautious and / or adopting a negotiating stance – as is his wont.

  • Mike T

    Jim B

    As I said in an earlier post the Spurs project is hugely ambitious but with that ambition there appears to be additional challenges from finances to project time limes
    The additional expense and configuration of a stadium for 2 NFL games a year seems strange having said that I read that Levy may well be gambling that a readily equipped NFL stadium would help enhance the business case should Spurs bid for a the much discussed Eureopean NFL franchise.
    In respect of timelines that’s an interesting one. To deliver the project completed and with the appropriate licences having run test events in time for the start of season 2018 for me seems extremely tight.The PL rules do not allow a club to play their games at two or more grounds in the same season.
    Most projects of this size and indeed of lesser complexity would allow around 9 months as a minimum once construction was completed to carry out the internal fittings.Chelsea are allowing 10 months to carry out this phase of their rebuild.
    The fact that there are whispers that Spurs want to build a year contingency in the Wembley deal is an issue as is the rumour that the moniey raised through ENIC taking increased equity and other sums raised for the initial stages of construction is as anticipated in the project plan, exhausted coupled with the published exchange of an email exchange between Levy , London Mayors office and the local authority regarding the funds to complete the project only adds to the intrigue.
    Of course rumours are rumours and not facts but until Spurs sign the contract with Wembley I wouldn’t speak with any certainty about where Spurs play next season and with projects of this size more often than not run overtime and with the challenges the economy in the U.K faces keeping to budget will not be easy

  • That is a very interesting commentary – and it makes me wonder about where Chelsea want to play during their rebuild 3 years. If Tottenham get a deal to play at Wembley for two years, then that excludes Chelsea – Brent Council did give Tottenham the right to play the matches to full crowds, but I can’t imagine there is any way in which Brent would give two clubs the right to play at the ground in one season. That would be electoral suicide. So Chelsea could object, which would mean, if Tottenham do need an extra year, Milton Keynes is back on the agenda.

  • Mike T

    Billy

    My understanding albeit limited is that Chelsea wanted exclusive use ,inPL terms of where they play for the three seasons they say the rebuild of SB will take.Ofcourse they may well have to compromise
    That’s the first part of the whole debate around the one season Spurs want to play away from WHL.For as I say earlier that really is a challenging timeline
    Ok we know that construction has started at WHL but clearing the current infrastructure will take time as will the groundworks and indeed the siting of services to facilitate the new structure.
    For comparison Chelseas stadium rebuild is in 4 distinct phases and will require 3 full seasons away Chelseas current thinking is as follows. 1 )Oct 17-Oct 18 when playing at the stadium to create walkways over the exiting rail and underground tracks and demolition of buildings dotted around the site such as the hotels.

    2)June 18-Oct 20 demolish the current stadium itself and build the new one

    3) December 20- July 21 Fitting out the stadium and remaining external works

    The reason I detail Chelseas plans is so you can see the sort of time lines being planned for SB. Ok Spurs have started the works already but there is still significant works to be stated let alone completed. I am no project manager but you cant help but feel that there is one massive section in the risk register around completion on time and that then comes back to how long will Spurs need to be away from WHL
    .Had Chelsea not also need a temporary home then it wouldn’t be an issue but the fact that Chelsea want to sign an exclusive deal over 3 years muddies the water.
    I am still far from sure where the two clubs will play but here’s an interesting fact that SB is closert to Wembley than WHL and WHL is closer to the Olympic Stadium than it is to Wembley.
    I still wouldn’t rule anything out or indeed anything in

  • JimB

    Mike T

    – The only significant added expense of configuring the new WHL to meet NFL needs is the sliding pitch. And that will more than pay for itself in time. Not only will there be a MINIMUM of 2 NFL games there for the first ten years of the stadium’s existence but the versatile surface will allow for quick and easy conversion for all manner of events – sports or music. – without harming the grass playing surface. Besides which, the NFL tie up will allow Spurs to sign a far more valuable naming rights deal. Could be worth an extra £50m + over ten years.

    – Fit out of some internal areas is already underway! With at least 15 months remaining before the first test event is likely to be held, progress is well within your expected time frame.

    – Spurs don’t “want” to negotiate a contingency of an extra year at Wembley. They did so from the outset, many months ago. It isn’t a sign that the project is slipping dangerously behind schedule. It was simply a sensible precaution at the time of agreeing the terms of the contract.

    – The email exchange between Levy and the Mayor / TfL / Haringey was simply Spurs highlighting the fact that the other parties involved in the regeneration of the area had not, at that time, kept their side of the bargain. The promised redevelopment of WHL station has not even begun. The good news is that the email seems to have done the trick, with the relevant parties being stung into action.

    – As to funding, there’s little doubt that costs have risen significantly as a consequence of Brexit, overtime and design improvements. But all sources are suggesting that funding isn’t an issue. The money is there – even if eventually from no other source than Tavistock Group itself. Besides which, you have to take into account the club’s increasing ability to service debt. Improved TV deals adding at least £40m per annum; £30m per annum kit deal from next season (as opposed to the current £10m); circa £60m extra per annum from the new stadium etc etc. Spurs’ income will be in the region of £350m once they have settled into the new stadium – more than adequate to pay interest on and repay any debt drawn down while still remaining competitive on the pitch.

  • JimB

    Billy The Dog

    I repeat, Spurs will be playing at Wembley next season. There is nothing to be gained from delaying the move. The three quarters of the stadium currently under construction is on schedule and will be ready in ample time. The remaining quarter, plus sliding pitch and roof, cannot even be started until Spurs have vacated the current stadium. That dilemma will remain whether Spurs move out this summer or next or the one after that. So they will move this summer.

    Staff and contractors at the club have been told that they will have to vacate within 12 hours of the final game, against Man Utd. Local residents have been sent details of road closures necessitated by the demolition works. The evidence is overwhelming. Spurs are moving out.

  • Mike T

    Jim B

    The released photos of the internal fit, as I understand is one defined area.
    As for funding The Tavistock Group is quoted in that email exchange as having hardened its stance in view of the potential borrowings for a company with a £250 million turnover. That doesn’t suggest that funds won’t eventually be there just that they will be more expensive.
    The funding was supposed to have been in available as long ago as last November but as recent as late February the funding was still not in place
    The configuration for NFL , as I understand it is far more than just the pitch indeed I believe there will be a distinct and dedicated area behind the scenes incluging NFL locker rooms as well as support/ medical and administrative suites.
    Come Friday we will know a lot more for that is the last date the agreement with Wembley can be signed.

  • JimB

    Mike T

    – There have been no officially released photos of the internal fit out. An unofficial photo was posted on twitter a few days ago. But that doesn’t mean that the area shown in the photo is the only area that is currently undergoing work. In fact, the person who posted the photo added that internal work was a lot further along than many would have thought.

    – The added cost of installing the NFL changing rooms, medical areas etc is, in the context of the overall construction, pretty small. Maybe a million or two. As I said, the only materially significant cost of the NFL tie up is the sliding pitch.

  • JimB

    Mike T

    You’re correct to say that completing the southern end of the new stadium in 15 months will be a challenge. However, anyone old enough to remember the early days of the Premier League, just after the Taylor Report had delivered its verdict, will have seen that plenty of stadia all over the country had new stands built over the same 15 month timescale. It’s by no means an impossible ask.

    In respect of the southern end of the new WHL, the earth works will be comparatively straightforward since the stand will not have a basement; it will have a steel frame structure topped with SPS terracing. So once groundworks are complete, it should go up very quickly. And the fit out should be fairly rapid too since there will be no high end corporate areas to slow progress. The sliding pitch will be on preformed concrete trays (one has already been delivered). So again, installation should be relatively quick.

    The biggest concern, I guess, would be completing the cable net roof in time. Without it, Spurs won’t get permission to play games at the new stadium. But so long as the weather isn’t especially uncooperative, the builders should have ample time. Of course, there might be a few non essential jobs unfinished come late August, when the stadium hosts its first competitive game – much as there have been at Anfield this season – but that wouldn’t prevent Spurs from moving in.

  • Brickfields Gunners

    May be Everton could raise fund through sales of their top earners ? Heard in the local news this morning that Arsenal are to bid for Ross Barkley !
    And Kasper Schmeichel , too .