Building a new stadium is not just to make fans more comfortable.

By Tony Attwood

Stadia are pesky things.  They cost a lot, they take time to build, and ultimately they go out of date.

Of course it used to be so much easier.  Henry Norris built Highbury in about four months, the Emirates took rather longer.

But I don’t think it is the construction time that we will all remember on looking back at the Ems development – it is the way the cost of the stadium impinged on the club’s ability to sign top players and pay top wages, at a time when the oil clubs were coming to the fore.

One way forwards for clubs is to get local council help – which has always seemed the wrong approach to me.  A football ground for use by a top league team is not the same as a football pitch for under 9s, or a library or a bus station.  That is what councils should be spending money on.

But Everton have seen Man City’s government assisted building scheme and instead of seeing it as morally incorrect they think it a good idea.  A 50,000 seater stadium. based on the model of Manchester City’s move to the Etihad.  Everyone has their own views of what is right and what is wrong, obviously.

Liverpool City Council have been helping Everton since the last attempt at moving (“Destination Kirkby”) with the stadium being part of a wider regeneration scheme – in the mode of Tottenham presumably.

The Commonwealth Games stadium (City of Mancs Stadium to be exact) was  built for the 2002 Commonwealth Games and is still amazingly the property of Manchester City Council.  The oilmen are tenants.  Everton want the same.

But even though Everton would avoid the cost of building – a cost that Arsenal had to take on – they will still have to get money to help pay for the development, and this money will have to be borrowed.  They won’t borrow so much, but they won’t get anything like the income Arsenal get, firstly because they are paying rent, second because the ground is smaller and third because income in Merseyside is always less than in London.

Everton’s relationship with the council has not always been positive, as when they had a gigantic falling out over the new training ground, where council people were called all sorts of nasty names.

Now the issue is one of buttering up, with a sense of blame game being prepared.  Here’s one statement made today by the chief exec  Mr Elstone: “In Everton’s case we will need a collaboration with a number of partners, the principal partner being Liverpool city council.  We need the council to be supportive and at the moment there are signs that they are being that and that has to be welcomed.

“As a case study you can present [Manchester] City as a great example of what can be achieved through a sporting led regeneration and that’s a tremendous blueprint that we hope we can follow.”

In others words, if it all goes wrong, we know who we are blaming.

The new ground will increase capacity by 10,000, and because of lower ground income in Merseyside the club could not recover the £200m to build the new ground, from the extra income, in the way that Arsenal did.

So why do it?  A new ground is obviously nice, but also Everton want investors – in the style of Man City, and the only way they can think of getting them is to have an exciting new stadium which the oil men can name as their own.

Robert Elstone, the chief exex of the club said, “It’s as much about future-proofing and potentially about attracting new investment, but the business case on a day-to-day basis is less than compelling which is why the board is currently looking not only at this opportunity but also the associated risks and the debt that the club might have to take on to deliver it.

“The key to our success is how well we outperform all our rivals – developing young players, scouting, trading players etc – and we’ve done all those things well and achieved regular fifth and sixth-place finishes in the league and contending for a Champions League slot. Would it be easier with more revenue coming in from a new stadium? Of course it would be.”

Liverpool council have no option but to help, given the way they have backed the development of Anfield, with all its compulsory purchases of houses in the area.

But the finances are not cut and dried.  Elstone added: “If you’ve got a new stadium with 10,000 extra seats and you fill it every week it generates about £5m per year. When you’ve paid for extra security, maintenance, cleaning, lighting, heating, £5m per year might be the wages of one Premier League player or one and a half Premier League players. It comes back to the economic imperative of this which is if we build a new stadium we’re not going to be signing three or four Champions League players on the back of that new stadium. That’s why this is more challenging for the board than it might have been in Arsenal’s case or one or two other clubs who have moved stadium.”

In other words – what they really want is a oil rich backer, and the building of a new stadium is just about the only way they can see of getting it.


The books

25 Replies to “Building a new stadium is not just to make fans more comfortable.”

  1. I think proposed financiers of this project have just been given a solid rationale for backing out. I mean why build a new stadium at a huge cost when it will not improve your income in any reasonable way?

  2. wonder if they will have a new stadium by 2017…like someone else …..

  3. City are already looking to expand to (I think) 55000 in a city with one other huge stadium and in the light of this Everton’s project doesn’t seem all that ambitious. Surely 60000 from the off would be much more viable, or is their support not up to filling a very large stadium, in which case how do they expect to attract investors.

  4. So this is what the oil money has done. Instead of coming down hard on the oilers, FIFA and UEFA have let them run riot for too long, now other clubs feel they need a sugar daddy of their own to compete. I think they call it ‘escalation’. So where are we heading? A league of billionaire owners slogging it out to see who has the biggest wallet? What about supporter-owned clubs, like Bayern? Can’t that model work? (Ok, 82% of Bayern’s stock is held by the club, according to Wikipedia).

    Well anyway, another dodgy deal from Chelsea surfaced recently, involving Lazar Markovic, a Benfica player:

  5. @ Mandy

    I read an article a week or two ago (cant find it now) but it was talking about the benefits or should I say the risk, Spurs face in financing a new stadium.It seems that like Liverpool, now that match day income is not the dominant income stream, there would be an un acceptable risk to those income streams based on performance.
    In effect they were saying that for each seat extra it will cost £20k to fund if that were to happen then the belief is that it was not so much a Sprat to catch a Mackerel more a Mackrell to catch a Sprat.

  6. @Quincy
    Re your comment about Markovic. Third party ownership is only outlawed in France & England. Whilst you cant play a player in these leagues who isn’t owned outright by a club third party ownership involving EPL clubs is not banned as neither UEFA or FIFA will legislate against this practise.

    They should.

    Until they do the suggestion that Chelseas part ownership of a player is dodgy is not correct.

    I dislike the practise but from my understanding Chelsea aren’t the only EPL club that part owns players world wide

  7. Tony, it is very obvious to anyone, that the 4 places for the Champions League qualifiers and mini-leagues, is the Holy Grail!

    IF 3 teams in London, 2 teams each in Liverpool and Manchester plus 1 in Newcastle; all looking for the extra £40 millions annual income.

    No wonder the wish is for the Europa Cup to have a higher and more lucrative profile.

    It would seem to me, that Liverpool City Council are hoping for Tesco, M&S, Sainsbury, or even Aldi and Lidl (?), to start the regeneration of the area(s). One and only one, makes sense. Liverpool (American owned) or Everton (Bill Kenwright)?

    Who blinks first!

  8. All i can say is that i am so glad Arsenal started when they did. I see so many clubs now wanting to move up and build or expand their stadium, but it is starting to become increasingly difficult.
    Clubs who do manage to do this, are going to now go through and see what Arsenal has done over the last 10 years.

  9. Interesting Mike T, both clubs at least appear to be dithering. Some spurs fans seem to think the owner will pay for the stadium then sell to red bull…or someone like that at a profit..cannot see it but who knows. Others hope Usmanov will get pissed off with arsenal and fund spurs in revenge. Guess hope springs eternal. But can see Liverpool and Everton sharing. Maybe we can let the Spuds use our stadium for …say….thirty mil plus bonus ……a well as a defumigating cost after each time they play there! ….that could be what is costs them for a while!

  10. @Mandy Dodd,
    I still feel vaguely uneasy over the continued presence of both Usmanov AND Kroenke at each shareholders meeting at the Emirates.
    One day we may (have to) welcome the Russian with open arms although for the life of me, I cannot envisage under what terms.

  11. @nicky

    If he gave you a cheese sandwich…….

    (only joking – I don’t have any time for him!)

  12. The Guardian has published its annual review of Premier League finances:!/vizhome/FinancialPerformance_0/PremierLeaguePerformance201213

    Interestingly, in the 2012/23 season only 54% of our turnover was spent on wages, which was the second lowest after Manure (but how?). That’s something to think about next time you criticise our ‘socialist’ wage structure.

    Manure had the highest turnover, we were second. Manure’s turnover was 28% higher than ours!

    Comparing wages to league position, Swansea was the best, followed by West Brom, the worst was by far QPR, then Aston Villa. We were right where we were supposed to be, in fourth.

  13. Know what you mean Nicky. Usmanov certainly thinks one day we will welcome him with open arms, though Stan claims to be a long term investor. Not sure how much harm or otherwise it does to the club, maybe it has lead to more caution, who knows, but if we mess up, there is always a self interested critic at the gate under the present status quo….as seen after RVPs leaving statement….such things do not help with a fractured fanbase. Maybe they have reasons for not letting Usmanov on the board, after all he has over thirty percent….whatever that means….maybe not. There are others who wish to own our club, if Stan does sell in coming years have a feeling it will not be to Usmanov

  14. Usmanov IS Russian, although Uzbek-born. And Uzbekistan is a former Soviet state anyway… so not much difference there.

    Going back to the stadium issue is it any wonder Wenger, and the Arsenal board, don’t get credited for having the vision to see the need for a bigger modern stadium more than a decade ago, and planning so well for it in advance.

  15. Financial goals

    In place of goals, a lot of successful people have systems. What’s the difference? A goal is a target with an end date. A system is a way of doing things all the time. Scott Adams, the genius behind the Dilbert comic, writes in his book How to Fail at Almost Everything and Still Win:

    A system is something you do on a regular basis that increases your odds of happiness in the long run. If you do something every day, it’s a system. If you’re waiting to achieve it someday in the future, it’s a goal.

    He gives a few examples:

    The system-versus-goals model can be applied to most human endeavors. In the world of dieting, losing twenty pounds is a goal, but eating right is a system. In the exercise realm, running a marathon in under four hours is a goal, but exercising daily is a system. In business, making a million dollars is a goal, but being a serial entrepreneur is a system.

    I’d add to this list:

    · Graduating college is a goal, but learning throughout your entire life is a system.

    · Having enough money to retire is a goal, but working in a job you love so much you never want to retire is a system.

    · Beating the market is a goal, but investing in good companies for as long as you can is a system.

    Goals can be dangerous because they tempt you to do crazy things to achieve them on time. If your goal is to increase your net worth by 20% in the next year, you might put all your money into the riskiest stock you know and hope for the best, thinking it’s the only way to meet your goal in time. That might work. Or it could blow up in your face. Saving each month and investing for the long haul is a better bet. And that’s not a goal. It’s a system.

    What you want is a system that allows you to be happy and successful, rather than goals that guide your system. For investors, a smart system probably includes:

    · Saving as much as you can while remaining happy from each paycheck, consistently throughout your life.

    · If not dollar-cost averaging, then waiting until attractive investments arise, however long that takes.

    · Having enough cash to handle a job loss or market crash.

    And it means avoiding:

    · Price targets.

    · Annual return assumptions.

    · Time-specific goals.

    Doing this will probably make you a better investor and lead to less stress — which is actually a pretty good goal.

  16. On a quiet Saturday evening ……

    The new definition of liquidity: Liquidity is when you look at your retirement funds and wet your pants.

    One day, long, long ago, there lived a woman who did not whine, nag, or bitch. But it was a long time ago, and it was just that one day. The end.

    A wife complains, “Our wall clock almost killed my mother today. It fell only seconds after she got up from the couch.” The husband mumbles, “Damn clock always was slow.”

    A man checks into a motel, gets his key and says to the clerk, “I want the porn channels in my room to be completely disabled.”
    She replies, “We only have one kind of porn at this establishment, you sick bastard!”

    Q: What’s the worst thing a bride can say on her wedding night?
    A: “I’m glad I didn’t throw my vibrator away.”

    Judi, the blonde, runs crying into the office. “What’s wrong?” gasps her best friend Carol. “It’s my boyfriend. He was working on the engine under the hood of his car when the lid came down and cut off a finger!” “My god,” shrieks Carol. “Did it amputate his whole finger?” “No, thank goodness,” sniffs Judi. “But it was the one just next to it!”

    A man sees a nice-looking girl in a bar, so he goes up and starts small talk. Since she seems receptive, he asks her name.
    “Carmen,” she replies. “That’s a nice name,” he says, warming up the conversation, “Who named you, your mother?” “No, I named myself,” she answers. “Oh, that’s interesting. Why Carmen?” “Because I like cars, and I like men,” she says looking directly into his eyes. “What’s your name?” the woman asks.
    “Beervagina,” he replies.

    Q: What’s the worst part about getting a lung transplant?
    A: The first couple of times you cough, its not your phlegm.

  17. AL

    Wenger and Credit in the same sentence, in the British media.

    Not going to happen my friend.

  18. @Brickfields

    Some good posts – I’m glad my breakfast was well down before I read the one about the lung transplant!

  19. Some fine humour from

    “Women are confusing. They hate it when you ask how old they are, then they turn around and bite your head off if you forget their birthday.”

    “There’s only one thing wrong with wife swapping.
    You get another wife.”

    “Does an angry bride make veiled threats?”

    “War is hell. Sweeping up afterward is worse.”

    “Don’t condemn people for their ignorance. Use it against them.”

    “I have a hectic schedule. I’m busier than someone
    who works at the Lemming Suicide Hotline.”

  20. I agree, Al, shows our board and club in a very good light. We stand on our own two feet.

    @ Mandy and Nicky
    The only reason we’d have to welcome Usmanov is if he bought all or some of Stan’s shares, and I am 99% sure that will not happen. He’s not entitled to a seat on the board, so again, I don’t see why he would get one unless he showed he could make some sort of contribution in the form of expertise or contacts. Sp*rs are welcome to Mr U – he hasn’t done anything for us, (and he has had the opportunity to be a sponsor) so I doubt if he would do much for them except suck out money if he was able to.

    I don’t lump Kroenke in with Usmanov. One is a legitimate businessman whose dealings are transparent. The other one…well, we just don’t know, do we?

  21. Thanks for the financial advice Brickfields.

    Was it a goal or a system for the spuds to be down 2-0 to WHam? 🙂 Lawro had it a tie on performance, I guess spuds lose based on the referee bias.

  22. @Gord

    I didn’t see the whole match; the Spuds seemed to be poor in the first half, Kaboul was sent off & WH then scored two goals.

    After half time the Spuds pressed a lot more, looked more dangerous, but WH had their share of attacks/breakaways – no more goals but some close shaves at both ends.

  23. Looking at cost, adding 10,000 capacity does not make financial sense, however adding 35,000 to 40,000 do. Because of Liverpool demographic, Everton can’t rely like Arsenal do on a core of 20,000 premium (Club Level) season ticket holders. They would need to compensate that by extra extra extra capacity. IMHO, Everton should go for a 75,000 or even a 80,000 seats stadium. Also they may need to take domestic Cup seriously. With that new capacity, adding one extra round in the Carling or FA cup could add 2 millions of revenue. They could also have their own tournament and invite more prestigious teams. Arsenal runs the Emirate Cup, because that helps them making money. It also attract fans who don’t usually go during the season.
    Another possibility would be to share a ground with a capacity of 100,000 to 120,000 stadium with each club having 40,000 season ticket holders. Derby games would be sellout premium games.
    Looking at Liverpool finance, next season they will fall foul of the FFP. Their chance is that this season they were out of Europe and therefore out of Europe control. They already run at a loss with a massive debt. They conned the local authorities, so they could get properties on the cheap. However despite that trick, the financial cost/benefit of building a new stadium is still not proven.
    Football clubs are suddenly discovering that banks are not so willing to lend money, especially if the club has no other collateral and no multi billionaire owner acting as guarantor. And when they do, it is at fairly high rate and with stringent conditions. Spurs is facing that same problem. They need to expand to reach the champion’s league, but they need the champion’s league money to expand.
    Arsenal did its expansion at the right time. One of Arsenal’s loan covenant was that the team had to operate with annual 20 millions profit that should be put into a special account. If the same term were applied to Liverpool for the next 5 years it would mean that even if they were to sell Suarez for 100 millions they would have to break even for the following 10 transfer windows. I can’t see that happening. Even less at Everton. Without massive owner investment, any club who want to build a new stadium from scratch now and be successful could only survive on loans from bigger clubs or discovering and selling one star player every season.

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