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New Everton Stadium

I will be honest and admit I do not understand the financing aspect of the deal much at all so would appreciate an education on it from anyone who may be able to help.

In his update, the Esk says:

In numerous press and media calls yesterday (Wednesday 10th January) Joe Anderson went further with his details confirming £280 million of funding over 25 years. This would create an annual profit of £7 million for the Council.

As lender, the Council would face no greater financial risk than being guarantor, yet the potential income or profit increases significantly.

So why are people so concerned about the risk now than they were back in March? What are the additional risks now than they were with the previous deal? He doesn't seem to think there is any greater risk.
 
eddy said:
He took a punt the Commonwealth Games would provide this.
Then took a punt on the Council acting as Guarantor but still could not raise the funding
Now final throw of the dice get the Council to pay for it, which will probably not happen as
they will not be allowed to shoulder any forseeable `risk`
Click to expand...

Whether the council are guarantors or they take the loan out themselves and give it to Everton makes no difference at the end of the day as it's the same risk.

The only thing is that the loan is less than the build and we would need to raise the extra finance without having another (large) loan on top. We will see if Moshiri can stump up this cash.
 
Moomin said:
That's not true. A lot of non sport fans will be against risking the tax payers money which could affect budgets if it all goes tits up.

We need to take off our blue tinted glasses.
Click to expand...

Everton will take full liability for the finance despite LCC acting at guarantors.

Football aside this is to provide thousands of jobs and transform a rundown site with so much potential.

The money the city will generate from kickstarting the project will provide so much private investment.
 
indieman1 said:
If the esk is right and assuming this was a standard loan to be repaid in full, rather than refinanced at the end of 25 years, the annual repayments to the council could be in the region of 22m assuming the council can borrow that much at standard local government rates and the differential charged to Everton is over 4%.

That is alot in its own right.

The interest rate on any debt the club takes on via other routes is likely to be significantly higher than that. 8% would be optimistic. Were the club to try and borrow all of the residual £220m on a similar term and repayment basis to the council facility then annual repayments would be circa £19m.

Even if the repayment periods were stretched there is no way is this thing is generating sufficient additional revenue to comfortably cover it's costs and increase the spending power of the club. And that is regardless of how they may plan on using it away from matchdays.

Put simply I struggle to see how this is viable unless Morishi puts in some very significant equity.
Click to expand...

Lol.
 

GwladysPhil said:
Everton will take full liability for the finance despite LCC acting at guarantors.

Football aside this is to provide thousands of jobs and transform a rundown site with so much potential.

The money the city will generate from kickstarting the project will provide so much private investment.
Click to expand...

You need to take your blue tinted specs off and see it from the view of a person who might be concerned.

They will be asking why a multi billion pound industry which Everton is a part of and its majority owner is a multi billionaire is getting LCC to loan us the money.

What happens if Farhad leaves or passes away, Everton get relegated from the premier league or the TV deal goes backwards in value.

It's all risk. LCC could be left with a hefty loan to pay cutting into budgets that are scraped to the bone already.

Thats how it will be viewed by some voters and Joe Andersons opponents.
 
Just let it play out lads. None of us know what's going with this, as seems to be the general theme since Moshiri took control. If it fails then we know the owner is not as all powerful as some think, if it goes ahead we likely have one of the best stadiums in the UK.
 
Moomin said:
You need to take your blue tinted specs off and see it from the view of a person who might be concerned.

They will be asking why a multi billion pound industry which Everton is a part of and its majority owner is a multi billionaire is getting LCC to loan us the money.

What happens if Farhad leaves or passes away, Everton get relegated from the premier league or the TV deal goes backwards in value.

It's all risk. LCC could be left with a hefty loan to pay cutting into budgets that are scraped to the bone already.

Thats how it will be viewed by some voters and Joe Andersons opponents.
Click to expand...

Like I’ve said it will transform and strengthen a vacant area of the city.

That’s why LCC are willing to help us secure the finance.
 
I’m told the council interest margin will be 2.5% putting annual repayments at £20m including capital repayment (which is what the Mayor implied, the debt will be cleared after 25 years). This MIGHT (not a slam dunk) be covered by increased revenues but it is a risk. Breaking it down:

Assuming similar pricing and high occupancy c.55k matchday revenues would only increase by £5-6m (£14m annually at the moment). If they successfully sell the rumoured 4K premium seats as part of this (about 2500 more than Goodison) this number might get to nearer £10m but that is a big IF. The rest has to come from bigger commercial deals, more tv use, non matchday use, better catering/other deals etc. It can be done but we won’t have loads of spare cash and we still need a lot more cash to build it.

Eddy’s basic point above holds that EFC need to Finance the rest primarily through partner deals (naming rights etc.) and new investment (Moshiri or new shareholders) not more debt. Another say £150m of private finance would add a minimum £12m pa repayments (including capital repayments) and there is no realistic way that additional cost is also getting funded from direct revenue increases attributable to the stadium including enhanced commercial sponsorships. We cannot just assume a shiny new stadium in a great location makes us a CL club!

Given all the above why do it? 1. Goodison cannot survive forever 2. Image/prominence and brand-building that can better attract agents, players, sponsors, investors...that MIGHT ca Apuleius us not regular European football etc. which would transform the finances over a decade 3. The benefits to the City/catalyst for a more sustainable future 4. Thinking about the next 100 years not just 25 (but a lot can change in that timescale) 5. Many successful entrepreneurs would probably say sometimes you just have to think big, take a leap and challenge/trust yourself to succeed (think small/be small...of course sometimes think big, big mistake...).

IF the club can successfully deliver a 55-60k stadium at BMD it would be more likely to be an Emirates-style financial constraint in the early years than to promote instant riches but it would also shift the narrative about us from ‘the other club in Liverpool’ to ‘resurgent big club, big ambition’. It IS a big risk but without taking it nothing will change.

Food for thought. No ‘right’ answers. For me a risk we need to take and a chance to build something special but I understand why it scares/worries others. I also understand why this will be considered controversial and by no means a slam dunk to get council and public support. If LCC deliver on this it should put to bed for all times Blues whining the council does not work for us...though it also sets a precedent you can guarantee the Reds will exploit the second the ink is dry and spades in the ground for us.
 
Moomin said:
You need to take your blue tinted specs off and see it from the view of a person who might be concerned.

They will be asking why a multi billion pound industry which Everton is a part of and its majority owner is a multi billionaire is getting LCC to loan us the money.

What happens if Farhad leaves or passes away, Everton get relegated from the premier league or the TV deal goes backwards in value.

It's all risk. LCC could be left with a hefty loan to pay cutting into budgets that are scraped to the bone already.

Thats how it will be viewed by some voters and Joe Andersons opponents.
Click to expand...

Don't forget it could be under water in 80 years too.

http://theconversation.com/new-ever...-up-underwater-thanks-to-global-warming-75247

Bit concerned about North Korea specifically targeting the new stadium as well with a test missile.
 

Moomin said:
What happens if Farhad leaves or passes away, Everton get relegated from the premier league or the TV deal goes backwards in value.

It's all risk. LCC could be left with a hefty loan to pay cutting into budgets that are scraped to the bone already.
Click to expand...

What would have happened if this scenario occurred under the previous deal with the SPV, and LCC acting as guarantor instead of the lender? Genuine question. The Esk seems to suggest in his write up that there is no greater financial risk to LCC.
 
EFC78 said:
What would have happened if this scenario occurred under the previous deal with the SPV, and LCC acting as guarantor instead of the lender? Genuine question. The Esk seems to suggest in his write up that there is no greater financial risk to LCC.
Click to expand...

Not really sure myself, people would still be weary to that option.

You will always have opposition when it comes to public money and how it is spent.
 
Moomin said:
Not really sure myself, people would still be weary to that option.

You will always have opposition when it comes to public money and how it is spent.
Click to expand...

Well as I said myself, I won't claim to know much about it either, but it seems to me like a lot of people are jumping to conclusions and being overly negative when they don't really seem to know the details involved. There was always risk with the previous deal but a lot more people seemed to go along with it back then and come round to the idea. Thankfully the ones who are dealing with the Stadium actually have in depth knowledge of the situation.

From the Echo article in March 2017 where they summarised what had been revealed it said:

* Doesn’t this put the council at risk? What if Everton get relegated?
  • Essentially the council, through the SPV, gets first dibs on some of Everton’s most important sources of income – like season ticket sales.
  • Everton FC has had to provide a “security package” as part of the deal to ensure that the SPV always gets paid.
  • The Mayor said: “Liverpool Council will have first take on season tickets, on the players themselves, on the naming rights, on the ownership of the stadium and of the television rights.”
In the latest Echo article after they summarised the new deal:
  • The mayor says the money for Everton would NOT come out of cash earmarked for day-to-day services.
  • The council would have first dibs on some of Everton’s most important sources of income, potentially including TV income and season ticket sales, meaning repayments should be guaranteed.
So unless I am misunderstanding, in the event of things turning really serious, the risk still seems to be the same, yet there appears to be far more opposition on here now...Not sure why.
 
Moomin said:
You need to take your blue tinted specs off and see it from the view of a person who might be concerned.

They will be asking why a multi billion pound industry which Everton is a part of and its majority owner is a multi billionaire is getting LCC to loan us the money.

What happens if Farhad leaves or passes away, Everton get relegated from the premier league or the TV deal goes backwards in value.

It's all risk. LCC could be left with a hefty loan to pay cutting into budgets that are scraped to the bone already.

Thats how it will be viewed by some voters and Joe Andersons opponents.
Click to expand...
The car industry amongst others get backhanded off governent to build factories here, it is similar to that. It greases the wheels of industry.
 

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