New Everton Stadium Discussion

[roydo]

We’re selling the naming rights to USM and they’ve already stumped up £30m for the privilege of being at the front of a non existent queue.

Still makes me smile that.

 

[LEONARD]

Still makes me smile that.

You wont be mate, when we blow that £30 million on some mercurial, non scoring winger, from Albania.

 

[BlueStevie35]

2-0 up against a crap team, and entering injury time.

Why should we worry that this will all come to fruition?

What has the Newcastle game got to do with the stadium exactly?

 

[LEONARD]

What has the Newcastle game got to do with the stadium exactly?

The fact that as a club we have a genius for snatching defeat from the jaws of victory.

So whilst the stadium looks 99% nailed on, you just never know.

(ps) I know it was 2-2, but you know what I mean.

 

[Martin Alvito]

Errrrmm thanks for the cash flow / balance sheet lesson mate....

You’ve still not either answered my question or backed up his assertion. You’ve also overlooked a number of key aspects.

Dave took the position that Moshiri could bankrupt the club with BMD whilst simultaneously making a killing himself. This is completely impossible given he’s already put £350m onto the balance sheet in interest free Directors loans. It also makes the daft assumption that servicing the annual debt repayment on the stadium would somehow be large enough to cause the business a financial impact severe enough to somehow topple it, again this is absolute bobbins. As even if we got relegated at some point, the debt would simply be rescheduled.

No one has given us the land btw, we bought it from Peel for £30m. We’re selling the naming rights to USM and they’ve already stumped up £30m for the privilege of being at the front of a non existent queue. Given they’re already paying us £12m a year for naming rights to our training ground, it’s hardly a leap to suggest the annual charge of this for the ground will be at least double that and will likely cover the loan repayments on its own, irrespective of incremental revenue from the stadium. Which won’t merely be more ‘bums on seats’ on a match day, it’ll be the revenue generated from having a riverside stadium so close to the City, and the multi use options that’ll provide.

I’d refute the claim that the cost of the stadium automatically increases the value of the business by the same amount btw. As what use is the stadium to anyone other than the football club? The value of the tangible asset and therefore it’s balance sheet value is its commercial value of the land / building on the open market.

You're being pedantic, and are undermining the argument in favor of the project. Adjust the cost of the stadium by 30 million pounds for the price of the land, and be sure to adjust the stadium value downward for depreciation at time of sale if you want to be precise about it. Adjust the value of the stadium downward if you think it's worth less than construction cost at completion.

Ticket prices (and concession sales) are going to be based on fans' willingness to pay. Empty seats are worth $0. If we had a worldwide fanbase (especially with a base in London), I might be willing to make the assumption that we can broadly charge more for seats/concessions at a premium property and still fill the place. As it stands, that assumption seems a little heroic. As far as multi-use, keep in mind that you're competing directly with that other lot to attract those events, which tends to depress quantity and prices.

On financial alchemy with respect to naming rights, we already know that you do not need to build a stadium to engage in that. To justify the project as cashflow-positive in the near-term for the club's finances, you would need to argue that the prospective increase on naming rights for a new stadium, plus any increase in revenue, is going to outpace interest costs plus debt service payments. We both know that's bollocks. It'll be years before we see stadium-related revenue, but we start payments right away.

It's not impossible that the stadium could bankrupt the club; all that has to happen is that Moshiri or his successors decide to stop throwing good money after bad. As I said, I don't think that's a likely outcome. These projects usually overrun estimates (the Emirates being one of the only exceptions I am aware of), but it would take Cowboys or Rams-level overruns to make withdrawal defensible and this project isn't that ambitious.

I think that you are better off understanding Dave's "bankrupt the club" as the statement of someone less familiar with the business side and the precise meaning of terms than we are, and read it as "screw over our finances for the next decade." What I'm saying is that this is not mutually exclusive with Moshiri making money on the deal.

Put into a nutshell: if you're correct and we will make money on the stadium right away which will be plowed into developing the squad, why hasn't that been the experience of Arsenal and Tottenham? My argument is that these deals happen because they make owners better off, that they tend to come at the expense of fans' interests, and that the empirical evidence tends to support those assertions. I'm not seeing anything here that convinces me otherwise.

 

[b-rad]

Eh?

I still say it's a charade.

I think you're a bit confused here.

It’s a charade - so they’re not hoping to make a pile of money from it?

I can’t keep up.

 

[Foot Long Hot Dog]

You're being pedantic, and are undermining the argument in favor of the project. Adjust the cost of the stadium by 30 million pounds for the price of the land, and be sure to adjust the stadium value downward for depreciation at time of sale if you want to be precise about it. Adjust the value of the stadium downward if you think it's worth less than construction cost at completion.

Ticket prices (and concession sales) are going to be based on fans' willingness to pay. Empty seats are worth $0. If we had a worldwide fanbase (especially with a base in London), I might be willing to make the assumption that we can broadly charge more for seats/concessions at a premium property and still fill the place. As it stands, that assumption seems a little heroic. As far as multi-use, keep in mind that you're competing directly with that other lot to attract those events, which tends to depress quantity and prices.

On financial alchemy with respect to naming rights, we already know that you do not need to build a stadium to engage in that. To justify the project as cashflow-positive in the near-term for the club's finances, you would need to argue that the prospective increase on naming rights for a new stadium, plus any increase in revenue, is going to outpace interest costs plus debt service payments. We both know that's bollocks. It'll be years before we see stadium-related revenue, but we start payments right away.

It's not impossible that the stadium could bankrupt the club; all that has to happen is that Moshiri or his successors decide to stop throwing good money after bad. As I said, I don't think that's a likely outcome. These projects usually overrun estimates (the Emirates being one of the only exceptions I am aware of), but it would take Cowboys or Rams-level overruns to make withdrawal defensible and this project isn't that ambitious.

I think that you are better off understanding Dave's "bankrupt the club" as the statement of someone less familiar with the business side and the precise meaning of terms than we are, and read it as "screw over our finances for the next decade." What I'm saying is that this is not mutually exclusive with Moshiri making money on the deal.

Put into a nutshell: if you're correct and we will make money on the stadium right away which will be plowed into developing the squad, why hasn't that been the experience of Arsenal and Tottenham? My argument is that these deals happen because they make owners better off, that they tend to come at the expense of fans' interests, and that the empirical evidence tends to support those assertions. I'm not seeing anything here that convinces me otherwise.

I wasn’t being even vaguely pedantic.

You chose to jump in and argue that Dave’s contradictory stance i.e. that the BMD project could simultaneously bankrupt the club whilst seeing the owner profit, was in some way valid. It isn’t, it’s puerile nonsense that stands up to zero scrutiny.

You’re now trying to move the goalposts to a debate around whether ANY stadium development carries risk. Whilst ignoring the specifics of our situation.

 

[davek]

It’s a charade - so they’re not hoping to make a pile of money from it?

I can’t keep up.

It;s easy really:

It's not happening, but if it did the owners would make a packet out of it.

Itls really not that hard a task to grasp those two concepts.

 

[JLW]

It;s easy really:

It's not happening, but if it did the owners would make a packet out of it.

Itls really not that hard a task to grasp those two concepts.

Of course they will want to make a packet!! Isn’t that what business is all about invest to make profit?

 

[davek]

Of course they will want to make a packet!! Isn’t that what business is all about invest to make profit?

Yes it is. And, again, this is besides the point.

*sigh*

 

[Foot Long Hot Dog]

It;s easy really:

It's not happening, but if it did the owners would make a packet out of it.

Itls really not that hard a task to grasp those two concepts.

So you’re lining up your next anti stance for when the planning passes and it gets built. I see.

Mugging us off with this fantastic new riverside stadium they are, open your eyes lads.

Booooorrring.

 

[JLW]

Yes it is. And, again, this is besides the point.

*sigh*

What is your point?
You don’t believe it will happen but if it does the owners are only in it to make a profit?

 

[Martin Alvito]

I wasn’t being even vaguely pedantic.

You chose to jump in and argue that Dave’s contradictory stance i.e. that the BMD project could simultaneously bankrupt the club whilst seeing the owner profit, was in some way valid. It isn’t, it’s puerile nonsense that stands up to zero scrutiny.

You’re now trying to move the goalposts to a debate around whether ANY stadium development carries risk. Whilst ignoring the specifics of our situation.

If you're going to hinge everything on an accurate and precise meaning of "bankrupt", I can think of any number of real world examples where hedge funds have profited wildly while literally bankrupting the company they own. The idea that a healthy company can be looted is not puerile nonsense, nor is the idea that Everton cannot be looted to the tune of recovering Moshiri's investment.

I don't think that's what's going on here. I think that the most likely outcome is that Moshiri benefits and that the fans do not, I've stated my reasoning and I've provided examples.

You're determined to read what I'm saying as advocacy for Dave's position, but that's not when I've been saying from the get-go. If you read my original post, what I stated was that the two ideas he was holding are not mutually contradictory, as they are not. I've gone on to say that I think that the project is most likely going to benefit Moshiri rather than the club's fans. That's not an argument regarding risk. If you choose to believe other things than I do about the numbers, I can't stop you. But I can say that the things you're choosing to believe are not supported by the experiences of other clubs.

To oversimplify on causality: Arsenal and Tottenham built new stadiums, did not reinvest in their squads and started sliding down the table after completing those projects. Liverpool renovated Anfield rather than build a new stadium, continued investing in the squad, lifted the European Cup last season and is running away with the league. Which approach deserves your support?

 

[Foot Long Hot Dog]

If you're going to hinge everything on an accurate and precise meaning of "bankrupt", I can think of any number of real world examples where hedge funds have profited wildly while literally bankrupting the company they own. The idea that a healthy company can be looted is not puerile nonsense, nor is the idea that Everton cannot be looted to the tune of recovering Moshiri's investment.

I don't think that's what's going on here. I think that the most likely outcome is that Moshiri benefits and that the fans do not, I've stated my reasoning and I've provided examples.

You're determined to read what I'm saying as advocacy for Dave's position, but that's not when I've been saying from the get-go. If you read my original post, what I stated was that the two ideas he was holding are not mutually contradictory, as they are not. I've gone on to say that I think that the project is most likely going to benefit Moshiri rather than the club's fans. That's not an argument regarding risk. If you choose to believe other things than I do about the numbers, I can't stop you. But I can say that the things you're choosing to believe are not supported by the experiences of other clubs.

To oversimplify on causality: Arsenal and Tottenham built new stadiums, did not reinvest in their squads and started sliding down the table after completing those projects. Liverpool renovated Anfield rather than build a new stadium, continued investing in the squad, lifted the European Cup last season and is running away with the league. Which approach deserves your support?

Go on then, explain how the stadium bringing about the demise of the business can happen simultaneously with Moshiri somehow recovering his investment?

I’ll wait.

 

[Baldynut]

Seriously these discussions with Davek are tiresome and is making this site sound more and more like Talksport, he’s GOT’s very own Adrian Durham and you are all biting...He’s obviously been neglected as a child, just put on ignore