New Everton Stadium

[Efcjake]

dunno, there may be technical differences between being a guarantor for a loan if it goes wrong and physically arranging the loan and re-loaning it. There probably is but it will be to do with government policies on capital spending (ie to encourage councils to spend on capital and infrastructure they will loan at a cheaper rate.)

Ahh that's a good distinction you have made there and that could be what has caused the different language being used to discuss the arrangement.

 

[davek]

Ahh that's a good distinction you have made there and that could be what has caused the different language being used to discuss the arrangement.

The real significance of the change in the deal is that it indicates that private investors aren't buying this scheme one bit.

 

[eddy]

Who says we won't start paying back as soon as the funds are released? (they may not release the whole lot in one go through, depends what the contract is with the builders)

It looks like Moshiri may actually be playing a bit of a blinder here. I was astounded at the original funding model of a 40 year loan on the club
with LCC acting as guarantor at the sum of 4 mil per year. Mathamatics is not my strong point but that works out at 160 mil just for acting as guarantor!! Seems Moshiri has turned it on its head and told the council for that amount of money they can take the loan and we pay them back
May be similar to City but we have a long lease on the land and long facility on the funds for the stadium that allows us to spend elsewhere
Hope it happens either way

 

[Connor]

What will this thread bicker about when spades hit the ground?

"Should have gone to bloody IKEA and got a flatpack, would have been done now. What is taking Moshiri so long to build this stadium????"

 

[The binman chronicles]

No, they will borrow all of it. For example, they borrow £100 and are charged £2 interest, they then lend Everton £100 and charge Everton £5 interest, a net profit of £3 for doing chuff all, and money they wouldn't otherwise have had. If Everton would have gone down other channels, they would have had to borrow the £100 and pay £6 interest. Everyone is a winner apart from the koppites who will cry into their Fjords.

Yep about right, apart from the if Everton borrowed the money bit... in that case the interest would be £60, if they lent it at all!! As it's not a buildimg you can repossess and use for something else kind of leaves them without the necessary guarantees.

But what makes this particularly interesting and unique to this city which makes it better for the council, if we did ever have problems paying for it the council have a readymade alternative to buying/renting it as we know which club would jump at the chance to have a bigger ground by the river for next to nothing. (& i'm not talking about Tranmere...) They have previous taking our ground afterall.

This will help keep us on our toes to ensure the payments are correctly ringfenced so that can't happen.

 

[Efcjake]

The real significance of the change in the deal is that it indicates that private investors aren't buying this scheme one bit.

That's definitely one way to read it Dave.

I do worry about the arse going out of the TV deals. That industry is keeping us afloat but is not in the healthiest position as illegal streaming gets easier every day.

 

[Quim]

It was a reminder to all involved that any club can fall through the PL trapdoor....which just adds to all the other potential obstacles to this project.

The scheme is in its death knells, imo.

Yes but the 7m has already been earmarked from the first money into Everton’s coffers. Even in league 2 Everton could guarantee 7m a year. Don’t see that being an issue. Moshiri may be a bit loose behind a mic but he’s a ridiculously well qualified and experienced accountant. This wouldn’t have got this far if it wasn’t happening. The only stumbling block is that lots resistance but the deal is a ridiculously good one for the city.

 

[Milkman]

Theoretically from a financial sense it's a deal that *makes sense*; politically it's inconceivable.

It's just plain daft to isolate this issue from real world passions and pressures.

I blame Joe Anderson above all, that fool thinks only of his own legacy and doesn't think things through or see the bigger picture. Rattling on wringing his hands at having to make hundreds of millions of pounds of cuts and then asking his same audience to swallow a private company getting a council loan of almost £300M.

Time for him, EFC and everyone else to get real.

It's quite discomforting isn't it? It's not without risk, which makes it morally questionable (at best) to take a loan from a council with an ever-decreasing budget. I presume that LCC have assessed every possible scenario before agreeing to this loan. What happens if the build is over-budget and overdue? If Everton get relegated or our wage structure implodes or the unsustainable levels of TV money starts to drop?

I don't feel comfortable about any public money financing private investments, never mind a private company that we all love. It's either a very brave speculative punt or a total disaster waiting to happen for everyone involved.

 

[The binman chronicles]

It looks like Moshiri may actually be playing a bit of a blinder here. I was astounded at the original funding model of a 40 year loan on the club
with LCC acting as guarantor at the sum of 4 mil per year. Mathamatics is not my strong point but that works out at 160 mil just for acting as guarantor!! Seems Moshiri has turned it on its head and told the council for that amount of money they can take the loan and we pay them back
May be similar to City but we have a long lease on the land and long facility on the funds for the stadium that allows us to spend elsewhere
Hope it happens either way

Yes that was the idea all along. The normal funding for a stadium is to pay the bulk back as quickly as possible as lenders can only see your income (TV Deal) is fixed for a relatively short period. That means high risk which means high interest rates, (even though in reality the risk is minimal) you have to knock it down asap for it to become manageable. By getting the council to borrow it the lenders are relaxed that it is a long term small interest loan, safe in the knowledge that LCC income stream is guaranteed and the loan affordable. That means we can pay back it on a longer term basis which mean relatively small payments, this allows us to keep spending on the team and not have to go through the type of budget cuts like Arsenal went through while they repaid their stadium debt.

 

[davek]

That's definitely one way to read it Dave.

I do worry about the arse going out of the TV deals. That industry is keeping us afloat but is not in the healthiest position as illegal streaming gets easier every day.

Exactly mate. People seem to think it's a never ending source of massive revenues. It wont be - certainly not over 30-40 years debt repayment.

 

[Kal El]

lollollol

 

[davek]

It's quite discomforting isn't it? It's not without risk, which makes it morally questionable (at best) to take a loan from a council with an ever-decreasing budget. I presume that LCC have assessed every possible scenario before agreeing to this loan. What happens if the build is over-budget and overdue? If Everton get relegated or our wage structure implodes or the unsustainable levels of TV money starts to drop?

I don't feel comfortable about any public money financing private investments, never mind a private company that we all love. It's either a very brave speculative punt or a total disaster waiting to happen for everyone involved.

I said yesterday on this subject that it feels like a staged retreat: ask for the impossible from a L.A. while stressing the cost could rise even further.

It feels like a ruse to knock this plan on the head. Private investors wont touch this with a barge pole. The decision makers wont be long in (initially) kicking this into the long grass then killing it off officially.

 

[terraloon]

I haven’t missed the point about Brexit but if as being suggested the council take out the loan then in effect that is the councils money.
The point about Brexit is that for some time we will be governed by European Court rulings meaning that if the council pass on the loan and charge interest at a rate below the commercial levels other clubs can obtain loans then the loan would, by my understanding be considered as state aid and with that opens up a whole can of worm

 

[Hickson9]

It's a risk so great there's no takers from private investors thus far and it falls to the council to loan the club money.

It's a bum prospect. It's fraught with logistical, planning and political difficulties.

This cant last much longer, imo. We'll see a line drawn through this in the coming months.

You have no idea there are no takers from private investors.

 

[OneTrueLegend]

That was the original model announced a while ago. The situation has definitely changed. The Council will be taking out the loan now themselves and passing the money to Everton for a healthy fee. See here:
http://www.liverpoolecho.co.uk/news/liverpool-news/liverpool-council-loan-everton-millions-14136195

Ok, thanks, so the council lend us £280m, we pay them back over 25 years, at £18.2m a year and they make £175m profit. That doesn’t sound like a bad deal for the council. The scale of this is probably unique in the coty of Liverpool,but I would imagine local councils do this sort of thing with other businesses and organisations