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New Everton Stadium

davek said:
Commercial lenders to Spurs wont be second in the queue for club revenue streams should the club hit the buffers. They would be for the BMD *stadium*. Interest terms would reflect that.
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I thought the initial instrument would be secured by the Council. So there's no real risk of the bank getting their money period unless the city is going under. I'm not following your "queue" comment.

Think it's also worth noting that those terms in the Spurs deal was AFTER a ton of cost overruns. I'm simply using it as an example of how there's no reason Everton couldn't get the same or better deal. So of course the commercial lenders are first in line, much like they'd be at Everton. But if the council didn't provide a better deal, the commercial route seems pretty available. It just seems to debunk the idea that there are no commercial takers for a financial deal and that the council would be a fall back options. Seems to me it's just the opposite.
 
catcherintherye said:
We will get lent money, but what worries me are the repayment charges if we have to make them. Back of a [Poor language removed] packet figures suggest £5-£7 million p/a interest and around 11 million p/a on capital repayments on capital (over 25 years) for the council part. The other part, around 1/2 of the council amount, could well attract similar interest (which could be a best case position) and capital repayments of around £5/6 million. We are looking at repayments of around 25-30 million pounds p/a which could well increase significantly if costs aren't kept under control.

This should be manageable by the money we bring in. Increased stadium revenues on tickets alone and additional boxes should account for up to 25 million pounds p/a at least. Likewise stadium sponsorship, given Spurs were apparently pitching at 40 million, we ought to be looking at something equivalent.

What worries me in all of this, is that Elstone is already making worried noises. He's talking about rising costs like he has no control over it. His job is simple, keep costs under control and start raising commercial sales to offset the interest costs. I have little faith in him to do either particularly effectively.
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Agreed. I still think your numbers could be a bit on the high side, but there are plenty of factors invovled including interest rate flux so I digress. But cost overruns would be the biggest issue. However, considering the level of interest we were paying before and the financial benefits of the new stadium, none of those numbers seem concerning.
 
catcherintherye said:
We will get lent money, but what worries me are the repayment charges if we have to make them. Back of a [Poor language removed] packet figures suggest £5-£7 million p/a interest and around 11 million p/a on capital repayments on capital (over 25 years) for the council part. The other part, around 1/2 of the council amount, could well attract similar interest (which could be a best case position) and capital repayments of around £5/6 million. We are looking at repayments of around 25-30 million pounds p/a which could well increase significantly if costs aren't kept under control.

This should be manageable by the money we bring in. Increased stadium revenues on tickets alone and additional boxes should account for up to 25 million pounds p/a at least. Likewise stadium sponsorship, given Spurs were apparently pitching at 40 million, we ought to be looking at something equivalent.

What worries me in all of this, is that Elstone is already making worried noises. He's talking about rising costs like he has no control over it. His job is simple, keep costs under control and start raising commercial sales to offset the interest costs. I have little faith in him to do either particularly effectively.
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Pretty conservative on matchday revenue there. I'd expect a lot more than that.

Then again, I'd be very surprised if costs were as low as £500M.
 

catcherintherye said:
We will get lent money, but what worries me are the repayment charges if we have to make them. Back of a [Poor language removed] packet figures suggest £5-£7 million p/a interest and around 11 million p/a on capital repayments on capital (over 25 years) for the council part. The other part, around 1/2 of the council amount, could well attract similar interest (which could be a best case position) and capital repayments of around £5/6 million. We are looking at repayments of around 25-30 million pounds p/a which could well increase significantly if costs aren't kept under control.

This should be manageable by the money we bring in. Increased stadium revenues on tickets alone and additional boxes should account for up to 25 million pounds p/a at least. Likewise stadium sponsorship, given Spurs were apparently pitching at 40 million, we ought to be looking at something equivalent.

What worries me in all of this, is that Elstone is already making worried noises. He's talking about rising costs like he has no control over it. His job is simple, keep costs under control and start raising commercial sales to offset the interest costs. I have little faith in him to do either particularly effectively.
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Repayments on the council facility should total roughly £22m per annum.

Even assuming a 6% interest rate and a similarly generous loan term to the council facility an additional £220m of loans would require annual repayments of around £17m.

So even on those unrealistically generous terms, if this thing is to be entirely debt financed it needs to be generating £39m of additional revenue just to not leave the club worse off during the repayment period and that needs to be the case in even a 'worst case' year with circa 20 home games including one friendly.

Personally I can't make a case for additional ticketing revenue of much above £20m pa in those worst case seasons assuming a 60k capacity and matching demand, especially with Elstone's recent comments on corporate demand. So the residual gap is getting on for £20m pa and this would need to be covered by other income.

I think people just need to be realistic with this naming rights lark. Recent evidence is not encouraging. The similarly 'camera friendly' and iconic multi-use ex Olympic stadium couldn't achieve £6m per annum. Our friends from over the park were also conspicuously unsuccessful with their new stand on that front.

£40m p.a with no Champions league matches likely in the early years is just simply not going to happen. And that is what really matters to sponsors - not location but match exposure and association with success. Personally I think we'll do well to get £6m p.a no matter how iconic Meis manages to make it.

Then you have 'second sponsor syndrome' once the first contract ends.

Are other income sources really going to make up the gap? I'm cynical.

None of this says we can't afford to build a stadium...... Just that we can't afford to build a £500m+ one with debt alone.

If Morishi won't pay for the bulk of the non council element then we'll be hearing rather more in the way of worried noises from Elstone in the coming year
 
davek said:
Pretty conservative on matchday revenue there. I'd expect a lot more than that.
.
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Really depends what they do with ticket prices.
Currently season tickets are on average a fair bit less than £30 a game and GA tickets a fair bit more than £30 a game.

Assuming they stay roughly where they are, say £30 average and the 15k or so new general admission seats are split between season tickets and single tickets then additional revenue from the new seats in a worst case season would be just over £9m.

Corporate income is a complete shot in the dark but an additional £12m-£15m from 5000 or so new seats is my best guess assuming we can sell out.

All complete and utter conjecture mind you..... And yes, no doubt they will sodomise us on ticket prices if that is what is needed to get this to stack up
 
So it should given the price.

They will be interesting to watch in the next couple of years. The costs really got away from them during the build. Massively reliant on corporate demand and European football.

The value of their naming rights deal Will be especially interesting if they don't make top 4
 
Basically Moshiri took a punt and not getting the Commonwealth Games was Bramley Moores death knell
On a positive note we are throwing cash at players like never before we just need to buy some decent ones
 

roydo said:
Eh? Durban still had the games when he came to town. IMO, the whole CWG "bid" was a fig leaf that allowed LCC to get involved.
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A more likely scenario was that they genuinely thought they could do this for £300m and that the spv with the council would allow them to fund 100% of it through debt at an affordable rate.

They also had the Usmanov/ USM comfort blanket on the naming rights but you rather suspect the Panorama thing on the paradise papers has done for that unless Usmanov really wants to push his luck
 
CRIMHEAD said:
I thought the initial instrument would be secured by the Council. So there's no real risk of the bank getting their money period unless the city is going under. I'm not following your "queue" comment.

Think it's also worth noting that those terms in the Spurs deal was AFTER a ton of cost overruns. I'm simply using it as an example of how there's no reason Everton couldn't get the same or better deal. So of course the commercial lenders are first in line, much like they'd be at Everton. But if the council didn't provide a better deal, the commercial route seems pretty available. It just seems to debunk the idea that there are no commercial takers for a financial deal and that the council would be a fall back options. Seems to me it's just the opposite.
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I recognize I'm replying to myself at this point, but I'm going to qualify a bit of the above. I think the Spurs deal was a 5 year note, that honestly, they are going to be getting killed on right after the stadium opens. If the stadium does indeed double matchday revenue, they might be looking at another 50M, but not sure how that's going to pay off 400M in 5 years. Seems to me without greater commercial deals, that's coming out of Levy's pockets in some fashion.

Beyond that, as much as I like disagreeing with Davek, he's not a moron (except maybe about Dowell going out on loan...ha). So could there be limited commercial appetite for the investment, thus turning to the counci? I personally don't believe the market for a council backed vehicle would be absent, but, to consider the opposite, when you think a bit about how banking works, what type of institution would want a 25 year note? Some would, but most banks like shorter terms assets that they can balance with their more common shorter term liabilities. That's how they make money.

That does kind of limit the market a bit. Financial instituations that are holding Pension Plan assets, have longer term insurance contracts, they could do a longer term deal. The council backing would also assist in terms of course. It would be multiple banks as well. Still should be a market, but you also gotta convince banks about the future revenue streams. When we've been THAT poor in terms of the kitbag deal, sponsorships, licensing, so although the USM deal, SportsPesa/Angry Birds deal helps, the kitbag deal and the mediocre performance is not so good.

However, if the council approves the deal, the remaining 150M shouldn't be that much of a concern. But we start heading over 500M, we could run into problems quickly. Not stop the stadium problems, but can't use our revenue for players problems.
 
indieman1 said:
A more likely scenario was that they genuinely thought they could do this for £300m and that the spv with the council would allow them to fund 100% of it through debt at an affordable rate.
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My take on that, at the time, was it was a way the scheme could be De Risked for the big institutional players to cough up. As we stand however, that either didnt work, or hasnt worked yet.

Probably the former.
 
People seem to be worried about the extra money we need to find above what the council will help facilitate. But bear in mind how our training ground is sponsored. I can see a similar thing being arranged, ala Etihad for Man City.

Slightly dodgy maybe, but it could very realistically cover the extra annual costs being mentioned here.
 
Not sure what some people expect in terms of getting a stadium and how that relates to debt. Of course we will have a big exposure for 2 or 3 decades, that's how you buy a new home. That exposure in real terms is scary but so long as affordable year on year payments the headline number is irrelevant.

When I look at my mortgage it is terrifying amount of debt but what matters is the monthly payment which is well within budget.
 

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