New Everton Stadium

[The binman chronicles]

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 would imagine we would try and get the build on a fixed cost price. It will have to be written into the contracts who takes up the extra and if Everton are liable for it I guess we would need secure funding (not borrowed - so Farhad has to dip into his funds) to cover it. As no way the council will allow us to owe 280 to them and say another 350 to other lenders, I don't think any lenders would do that either as the council will have first dibs on our income.

If we get relegated the parachute payments help clubs acclimatise. (Sell players on larger contracts) Did Newcastle implode after dropping down a division? No. Could they still afford 15 million on top? Yes. Wage structure implodes??? You are having a laugh there. We buy and sell based on this, we are run by an accountant not Peter Ridsdale. TV deals are sorted ahead of time so you would have prior warning to any big drops, at that point players would be offloaded for little or nothing. Of course there would be players who will expect you to honour deals but most are done over 3 to 4 years, you will have 2 years notice to start winding down the wage bill.

 

[mawders]

it's an interesting sounding deal. Council get better rates, so borrow the money and give it to us. We pay it back at a higher rate but still lower than the rates we could have got ourselves. The result being as being able to finance the deal at a lower cost and the council able to get some guaranteed revenues for keeping things like libraries and other public services open. I fail to see the problem

 

[rstevens]

As a business venture if this is such a great deal why isn't there any other financial institution or investors interested? Because the exposure is to great giving a high risk factor. The costs are pretty much guaranteed to be higher than 500+ million as well (given brexit and the high complexity of the build). this could kill off the city and everton.

 

[Jacko93]

There's been almost half a billion quid LCC have had slashed from their budgets since 2010. Anderson proposes loaning £270M to a football club on the strength of raising *upwards* of £10M a year back in payments.

Does that sound like a great idea to you?

It sounds nuts to me.

Not really. For LCC its not the case of *upwards* of £10M a year back in payments or a £270m lump sum. Its *upwards* of £10M a year back in payments or nothing. Sounds llike a wonderful idea to me.

 

[Frang]

What I’m concerned about (rightly or wrongly) is that at this point in time the only funding we have secured is that from the council - what have we been doing since the announcement to find the other partner? The longer it takes the higher the stadium cost due to inflation etc.

exactly, a world renowned billionaire businessman, connected to some of the most serious players in the world financial market, cann not attract any serious investment in a worthy project after 2 years of trying.

if people can not see this for what it is then they need to take their blue tinted specs off.

 

[EFC78]

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.

You both don't seem to understand the deal fully. Everton 'taking' the money from LCC has no impact on the Council's budget for things like services. The Council simply cannot take money in that way in order to improve day to day services like it can for the Stadium Project:

The mayor says the money for Everton would NOT come out of cash earmarked for day-to-day services. "The revenue support grant and council tax pay for services. There are restrictions on what we can do." The mayor says the council simply does not have £300m to lend, so will borrow the money itself at low interest rates. That means, he says, that the loan will not affect existing council services.

What the project will actually do is generate £7m a year for the Council so that they can then use that money on day to day services. Money it wouldn't get otherwise, at a time when council funding from the Government is being reduced massively.

“It will stimulate growth and new business in the Liverpool North Dock area, it will compliment and supplement what we're doing with the Ten Streets scheme to the tune of around £300m in business rates and new business rates coming into the city in 10 years' time. “It will create 10,000 plus jobs, it will accelerate growth, it will bring in investment and it will provide new housing."

So this deal actually gives the City of Liverpool a chance to progress and become revitalised instead of standing still, whilst the Government continues to cut funding year on year. There is always risk associated with any big project and nothing would get done anywhere if people took this frightened attitude, since anyone or anything that has become successful has to take risks at various points. However, the risk people are mentioning appears to be around hypothetical worst case scenarios where even then, the consequences are not certain. Just scaremongering with little evidence to back up the claims.

 

[Frang]

Potential risk as well. Plenty of non football fans will not want the risk on LCC coffers. Looking at the terms on the SPV it says 40 years for the loan.

Everton get relegated or the tv deal suddenly drops in value. The council has a massive bill and has to cut into budgets like Education.

Think the Lib Dems are concerned with the deal.

any person in the city who doesn't care for football (plenty of them) will be hugely concerned about the risks with this very substantial amount of borrowing.

 

[rstevens]

any person in the city who doesn't care for football (plenty of them) will be hugely concerned about the risks with this very substantial amount of borrowing.

Football shouldnt even be a factor when it comes to this loan. People need to take the blue specs off and realise it is a massively huge and risky investment for both everton and the council, considering at this time when brexit is still a huge cloud over the economy and the fact the city is broke. and since when have everton ever had the funds to sustain a half a billion pound loan? we could barely keep up with the 150 mil loan (i think) we used to have.

not only that but even arsenal "struggled" in terms of paying off the stadium AND buying players, how are everton going to pay off the loan and invest in the squad to keep ourselves above the water? especially considering the price of transfers.

its not like we are run by Levy and have a hugely talented squad.

we are run by mosh and bill, where fighting for relegation for the first half of the year, and have already sold all are best assets.

 

[GwladysBlue]

Football shouldnt even be a factor when it comes to this loan. People need to take the blue specs off and realise it is a massively huge and risky investment for both everton and the council, considering at this time when brexit is still a huge cloud over the economy and the fact the city is broke. and since when have everton ever had the funds to sustain a half a billion pound loan? we could barely keep up with the 150 mil loan (i think) we used to have.

not only that but even arsenal "struggled" in terms of paying off the stadium AND buying players, how are everton going to pay off the loan and invest in the squad to keep ourselves above the water? especially considering the price of transfers.

Our owner said that as long as he is there, finances will never be an issue.

The fact is, nobody knows the details of this deal apart from the club and the council.

Stop scaremongering.

 

[Jacko93]

The thing is the stadium will only be open for business at year five. I am thinking then there is no return on investment
for five years seems a strange way to fund this.

I wish I'd of known this. I've been doing up my house for years, are you sayingI could've deffered any payments to my mortgage lender until after I'd finished?

 

[davek]

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

Does it sound from what's been said by the club like we have investors taking this opportunity up?

 

[Jacko93]

Football shouldnt even be a factor when it comes to this loan. People need to take the blue specs off and realise it is a massively huge and risky investment for both everton and the council, considering at this time when brexit is still a huge cloud over the economy and the fact the city is broke. and since when have everton ever had the funds to sustain a half a billion pound loan? we could barely keep up with the 150 mil loan (i think) we used to have.

not only that but even arsenal "struggled" in terms of paying off the stadium AND buying players, how are everton going to pay off the loan and invest in the squad to keep ourselves above the water? especially considering the price of transfers.

its not like we are run by Levy and have a hugely talented squad.

we are run by mosh and bill, where fighting for relegation for the first half of the year, and have already sold all are best assets.

Mostly by our owner getting investors (or the council as it happens) to pay for the stadium, while the owner continues to invest in the playing staff. He laid out the strategy alongside Usmanov as part of an open letter to Arsenal fans when they were getting their built. They saw the pitfalls that Arsenal would experience in terms of funds available to do both and suggested this way to counteract it.

 

[Hickson9]

Does it sound from what's been said by the club like we have investors taking this opportunity up?

Maybe over the course of negotiations LCC have offered our club this opportunity and it has therefore become Plan A. Then once it is secured we will go in to the market for the rest.

That is just as plausible.

Neither of us know.

 

[davek]

Not really. For LCC its not the case of *upwards* of £10M a year back in payments or a £270m lump sum. Its *upwards* of £10M a year back in payments or nothing. Sounds llike a wonderful idea to me.

It's not though, is it?

There are some hefty weights on the other side of that scale they need to balance.

I await with interest the next LCC cabinet meeting on this....whenever that is.

 

[RobSpurs]

any person in the city who doesn't care for football (plenty of them) will be hugely concerned about the risks with this very substantial amount of borrowing.

Yep, and you wonder if FSG might be tempted to push for judicial review like Spurs and Orient did around West Ham's loan from Newham which led to the eventual collapse of the first Olympic Stadium bidding process. I know the circumstances aren't the same in the two situations, but it's still a substantial loan (far more substantial than Newham's was) from a council to a private business.

Setting it all out coolly and rationally like EFC78 has done shows the risk probably isn't huge, and the return for both parties should be substantial. But this feels like a far riskier political move which could be challengable by third parties, and might not ease through the council as easily as the last proposal did.