marty mcfly
Player Valuation: £40m
Wow. You would like to think if that will go up to over double we could easily afford a new stadium and still keep our players.
It makes you wonder what the bloody hold up is.
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It makes you wonder what the bloody hold up is.
I find that really surprising - not that you don't know but that it has not been mentioned in some of the plans/options.
Surely, what happens to GP if we moved, is a reasonably big issue? If we could sell it to developers/council/redevelop ourselves (not saying that I advocate any of those) it could possibly provide a some money to help fund a new stadium?
The Esk
Player Valuation: £70m
In all likelihood it would be sold to a developer. It is currently mortgaged so any proceeds would be net of any outstanding debt charged against it.
marty mcfly
Player Valuation: £40m
I think I also read somewhere that it might be turned into park area but that could be my memory playing tricks on me.
The Esk
Player Valuation: £70m
For those that haven't read the home page:
https://www.grandoldteam.com/2015/0...ity-investment-new-stadium-highly-improbable/
With news that Liverpool City Council will update the public on progress or otherwise before the end of October, it is worth looking at what a new stadium means in terms of finances, and how it could possibly be financed.
Let’s look at the revenue side first.
Assumptions:
New stadium: Capacity 55,000
Average attendance: 50,000 (an increase in 11,000 from today’s attendances)
Ticket prices increase by 10% on existing prices
Hospitality: Everton attract 2,000 more hospitality clients per game paying £175 per head
Running Costs – difficult because it’s not possible to say what Goodison costs to run, but I’m going to assume a new ground is more efficient and suggest it costs £2m a year less to run than Goodison.
Naming rights:
A real stab in the dark as it is difficult to get meaningful figures from other clubs but I’m going to go for a figure of £2 million per year.
So, taking into account all of the above match day revenues would increase by approximately £20 million a year, so approximately £ 1 million per match.
Now let’s look at the costs…..
How much would a new stadium cost?
Frankly I have no idea, but for the purposes of this article let’s assume there’s contributions from public bodies and perhaps some EU funding (?) and that Everton’s contribution is funded by debt. From this we can look at how much the cost of borrowing certain amounts are (i.e. total cost of stadium minus financial assistance from third parties = amount of debt Everton would have to carry). I’ve also assumed the existing long term debt is carried over so has no impact.
I’m going to look at three different debt levels, £150 million, £200 million and £250 million
Assumptions:
Length of debt: 30 years
Interest rate 8%
Annual repayment and debt servicing costs:
£150 million: £13.2 million per annum
£200 million: £17.6 million per annum
£250 million: £22.0 million per annum
Taking into account the projected increase in revenues, we’d have cash flow figures for the following debt levels of:
£150 million debt: positive cash flow of £6.8 million
£200 million debt: positive cash flow of £2.4 million
£250 million debt: negative cash flow of £2.0 million
From the above figures we can see a fairly healthy rise in income levels (if assumptions are correct) but a stadium where the Everton contribution is funded by debt begins to look far less attractive, and frankly hugely risky for the club and lender.
I would be amazed if the club could find such levels of debt funding based on the business case above. Just a small change in the club’s (or the Premier League) fortune would create a very vulnerable position.
The benefits are marginal and the risks huge – it would not make sense to fund a stadium largely on debt.
Where does that leave us?
It leaves the Board no alternative but to seek equity investors if a new stadium is to become a reality.
This can be from (i) the Board themselves – unlikely in my opinion, (ii) from attracting new investors into the club – highly dilutive given the levels required and almost certainly meaning the Board losing their majority control, or (iii) by selling the club to investors with sufficient capital to achieve the above.
What is it to be?
https://www.grandoldteam.com/2015/0...ity-investment-new-stadium-highly-improbable/
With news that Liverpool City Council will update the public on progress or otherwise before the end of October, it is worth looking at what a new stadium means in terms of finances, and how it could possibly be financed.
Let’s look at the revenue side first.
Assumptions:
New stadium: Capacity 55,000
Average attendance: 50,000 (an increase in 11,000 from today’s attendances)
Ticket prices increase by 10% on existing prices
Hospitality: Everton attract 2,000 more hospitality clients per game paying £175 per head
Running Costs – difficult because it’s not possible to say what Goodison costs to run, but I’m going to assume a new ground is more efficient and suggest it costs £2m a year less to run than Goodison.
Naming rights:
A real stab in the dark as it is difficult to get meaningful figures from other clubs but I’m going to go for a figure of £2 million per year.
So, taking into account all of the above match day revenues would increase by approximately £20 million a year, so approximately £ 1 million per match.
Now let’s look at the costs…..
How much would a new stadium cost?
Frankly I have no idea, but for the purposes of this article let’s assume there’s contributions from public bodies and perhaps some EU funding (?) and that Everton’s contribution is funded by debt. From this we can look at how much the cost of borrowing certain amounts are (i.e. total cost of stadium minus financial assistance from third parties = amount of debt Everton would have to carry). I’ve also assumed the existing long term debt is carried over so has no impact.
I’m going to look at three different debt levels, £150 million, £200 million and £250 million
Assumptions:
Length of debt: 30 years
Interest rate 8%
Annual repayment and debt servicing costs:
£150 million: £13.2 million per annum
£200 million: £17.6 million per annum
£250 million: £22.0 million per annum
Taking into account the projected increase in revenues, we’d have cash flow figures for the following debt levels of:
£150 million debt: positive cash flow of £6.8 million
£200 million debt: positive cash flow of £2.4 million
£250 million debt: negative cash flow of £2.0 million
From the above figures we can see a fairly healthy rise in income levels (if assumptions are correct) but a stadium where the Everton contribution is funded by debt begins to look far less attractive, and frankly hugely risky for the club and lender.
I would be amazed if the club could find such levels of debt funding based on the business case above. Just a small change in the club’s (or the Premier League) fortune would create a very vulnerable position.
The benefits are marginal and the risks huge – it would not make sense to fund a stadium largely on debt.
Where does that leave us?
It leaves the Board no alternative but to seek equity investors if a new stadium is to become a reality.
This can be from (i) the Board themselves – unlikely in my opinion, (ii) from attracting new investors into the club – highly dilutive given the levels required and almost certainly meaning the Board losing their majority control, or (iii) by selling the club to investors with sufficient capital to achieve the above.
What is it to be?
Frank Gallagher
Player Valuation: £50m
seeing as we couldnt afford scott dann from crystal palace, especially with his 60k a week wage demands then i think a new stadium is way way way way way off with this current board.
cattington jones
Player Valuation: £100k
we would be stupid to pay 12 million for scott dan
Aar_the_Toffees
Player Valuation: £10m
The city council would surely help with the funding would they not?
No, they have specifically said that they will not be providing funding. What they are providing is the land as an "enabler" for development. They and Everton would be hoping that the developer will provide some cross subsidy of the stadium as part of the overall project.
....that must be the longest mortgage in the history of mankind. I managed my finances to pay mine off a number of years ago but unlike our directors I'm not a successful businessman.
SingBlue
Player Valuation: £1.5m
In the really, really, good days, a developer would get 20% margin on projects. I don't know what margins they're getting these days (don't particularly care, but it's cited as one of the reasons why a lot of brownfield sites are dormant), but just exactly how big a development of WHP would be needed to subsidise a new stadium, given Everton's likelihood of not being able to provide significant funding directly?
marty mcfly
Player Valuation: £40m
Why would they need to. We will be getting 50m extra a year from the 2012/13 season and we haven't exactly spent a lot extra on transfers or wages.
50m!!!!!! In 3 years that pays for a stadium without even going into debt.
marty mcfly
Player Valuation: £40m
I think the brownfield and green belt sites are dormant so as to artificially keep the price of housing high. If they increased the supply then house prices would fall which would hit the banks and the middle classes who have a lot of their money tied up in property and the rental market. Of course it hurts people who are then forced to pay high rent due to this lack of supply but no one cares about them.
Well that's my tin-foil hat theory
bizzaro
LOVE GOT JUST THE WAY IT IS #ALWNV
I think the brownfield and green belt sites are dormant so as to artificially keep the price of housing high. If they increased the supply then house prices would fall which would hit the banks and the middle classes who have a lot of their money tied up in property and the rental market. Of course it hurts people who are then forced to pay high rent due to this lack of supply but no one cares about them.
Well that's my tin-foil hat theory
Er. If there is a flood of property developments onto the market that decreases property prices.
That reduces profits or the likelihood of profit from those developments and increases the risk of creditors investing in them. Therefore funding also dries up.
Basically it's a balancing act.
To make adequate development land available versus deflating the market so much it becomes not worthwhile.
Less tin hat. More real world economics.
1966efc
Player Valuation: £20m
When I'm in a happy place, I can ignore the Club's average attendance record where we've achieved a 50,000 average on only a couple of occasions. In more sober mood, I wonder whether a thirty year debt period wouldn't include at least one severe recession hitting personal finances & therefore attendance. Or if with money poured in to the stadium would cripple wages and recruitment meaning a dip in form, and again hitting attendance.