Any model has to have assumptions built behind it, so I'll explain the assumptions then offer a conclusion.
Assumptions:
Revenue:
Revenue per regular seat rises from current net £20 per seat per game to £25 per seat per game.
Executive seats generate net £200 per seat per game.
Costs:
Build costs: £6,000 per seat
Financing costs: 6% per annum over 25 years.
Capital contribution: £150 million, all other costs met by debt.
Whilst I agree we need to build a stadium appropriate for our future needs, interestingly the capacity of the stadium makes no difference in cashflow terms whether it be 55,000, 60,000 or 65,000.
The key to the financial contribution a new stadium makes is the number of "executive seats" built and sold.
50,000 regular seats and 5,000 executive seat stadium
Additional regular seat revenues: £9.3 m
Additional executive seat revenue: £19 m
Cost of stadium: £330 million
Debt £180 million
Financing costs pa £13.9 m
Net positive cash flow: £14.4 m p.a.
55,000 regular seat and 5,000 executive seat stadium
Additional regular seat revenues: £14.1 m
Additional executive seat revenue: £19 m
Cost of stadium: £390 million
Debt £240 million
Financing costs pa £18.6 m
Net positive cash flow: £14.5 m p.a.
60,000 regular seats and 5,000 executive seat stadium
Additional regular seat revenues: £14.1m
Additional executive seat revenue: £19 m
Cost of stadium: £330 million
Debt £180 million
Financing costs pa £18.3 m
Net positive cash flow: £14.8 m p.a.
Therefore the size of the stadium is largely a function of the future anticipated demand for seats, and the willingness of Mr Moshiri to debt fund the construction.
The key is the number of executive seats the club can sell and at what price not the total capacity of the ground.
A 50,000 regular seat stadium and 7,000 executive seats makes more commercial sense than a 55,000 regular seat and 5,000 executive seat stadium.
Every 1,000 executive seats sold is worth £3.8 million a year. (At £200 net per seat)