New Everton Stadium Discussion

[street end]

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.

A non answer here Dave, you adamantly say it’s not happening but then back out saying if it does go ahead.... add negative.

Why not just wait and find out in a few months if the planning is approved and then a contractor appointed.

 

[Brisan123]

And she certainly wouldn't be sat on her own.

@Bungle would be in the sear beside her

 

[b-rad]

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.

I can grasp them both just fine.

I’m not the only one grasping here.

 

[b-rad]

A non answer here Dave, you adamantly say it’s not happening but then back out saying if it does go ahead.... add negative.

Why not just wait and find out in a few months if the planning is approved and then a contractor appointed.

I think it’s called covering your bases. Whatever happens you get to be negative about it and pretend you were right all along.

 

[degsy]

The Stadium is about two, three, things...(maybe more?)
We needed a new stadium.
There is hopefully, money to be made in the sell on.
There is money to be made in Liverpool Waters.

Any extra money the stadium might generate will go towards covering the debt, the team won't see a bean of it

 

[Jacko93]

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 believe that as an artist/tour manager will likely not have an opinion on the clubs that are housed at either ground, there are far more bonuses to the potential of a gig at BMD than at Anfield, even just from a logistics point of view. Thats why they are trying to get all they can in now. I would also suspect that with the difficulties that they had in getting permission t run such events, on a rolling review as well btw, they may not even retain their license if a better alternative was freely available without genuine argument as to measurable benefts. There will be nothing that Anfield adds that BMD cant, but plenty that BMD can, which Anfield cant.

 

[Toffeelover]

I didn't. I gave a list of owners of the club. I didn't say they were all current owners.

*sigh*

Then why mention them they have nothing to do with BMD.

 

[Pudsey]

I believe that as an artist/tour manager will likely not have an opinion on the clubs that are housed at either ground, there are far more bonuses to the potential of a gig at BMD than at Anfield, even just from a logistics point of view. Thats why they are trying to get all they can in now. I would also suspect that with the difficulties that they had in getting permission t run such events, on a rolling review as well btw, they may not even retain their license if a better alternative was freely available without genuine argument as to measurable benefts. There will be nothing that Anfield adds that BMD cant, but plenty that BMD can, which Anfield cant.

Numbers will dictate choices and Anfield will remain bigger and have the "name" that will act as a draw to artists. BMD will have to offer itself as the cut price alternative I fear.

However, Manchester shows that both Old Trafford and the Etihad stage gigs, and so does the cricket Old Trafford too. Maybe both can prosper.

 

[Dr Baxter]

Numbers will dictate choices and Anfield will remain bigger and have the "name" that will act as a draw to artists. BMD will have to offer itself as the cut price alternative I fear.

However, Manchester shows that both Old Trafford and the Etihad stage gigs, and so does the cricket Old Trafford too. Maybe both can prosper.

Don't see it like that at all. It's the bottom line that will count. Far more opportunities to make more money down on the river given how many bars etc there will be at BMD.

 

[Jacko93]

Numbers will dictate choices and Anfield will remain bigger and have the "name" that will act as a draw to artists. BMD will have to offer itself as the cut price alternative I fear.

However, Manchester shows that both Old Trafford and the Etihad stage gigs, and so does the cricket Old Trafford too. Maybe both can prosper.

But the numbers wont realistically be that much different. I'm also not convinced that PInk or Bon Jovi went to Anfield because of who plays football there during the winter. There is also the fact that the permission for them to even hold concerts is temporary anyway, as there was a lot of local kickback from Anfield residents.

Essentially time will tell, but BMD will be vastly superior in terms of transport, accessibility and all round logistical issues.

 

[chippy1722]

Essentially time will tell, but BMD will be vastly superior in terms of transport, accessibility and all round logistical issues.

It’s gonna come down to whether we can take advantage of that, I’m not convinced we will.
Liverpool make every penny they can from every opportunity available, it seems for years like we don’t even try, or certainly don’t have people at the club who know how to.

 

[Dr Baxter]

It’s gonna come down to whether we can take advantage of that, I’m not convinced we will.
Liverpool make every penny they can from every opportunity available, it seems for years like we don’t even try, or certainly don’t have people at the club who know how to.

It's has been down to who has been running the club and the fact that we did not have the facilities at a decrepit Goodison Park. We aren't building a new state of the art stadium for it to be used only 20 odd days a year. Do keep up.

 

[Onwards Evertonians]

They've already stated in the planning application that it won't be used solely for football.

predominantly for football use with the ability to host other events

Online Standard Details

northgate.liverpool.gov.uk

 

[Brisan123]

Asset valuation and cashflow are not the same thing. There are ways to make an asset (in this case, Everton) worth more while causing it to generate less cash day-to-day.

Suppose that you take a piece of otherwise worthless land and invest to redevelop it. You borrow to do this. This causes the underlying land to become worth more, but costs you the price of servicing the debt. The value of the asset goes up, because the stadium is basically worth what you pay for it and the land value increase is more or less free since the dirt costs you nothing, but you're paying interest and generating less day-to-day cash to accomplish that.

Now suppose that the local government, in addition to giving you the worthless dirt to redevelop, hooks your asset up to a transit system. You get the spillover effects from this for free since the transit system is on the government's nickel, further increasing the value of your asset.

The net effect is that you have less to spend on players annually, because you're paying more in interest than you're getting back in new revenues from the project. (If you don't believe me, run the numbers on gate receipts from an increase in capacity yourself, and compare to the likely interest costs. Remember that you don't start getting the gate receipts until the project is done, but start paying interest right away.) However, you pocket both the increase in the value of the dirt and the transit system spillover effects when you sell the asset.

As long as the asset price increase is greater than the difference between your total interest costs and the total bump in gate receipts by the time you sell, you come out ahead on the deal.

If you screw this up really badly in terms of cost overruns, you bankrupt the club. That's a risk rather than a certainty, and Dave's not communicating that very well. A more realistic interpretation is that Moshiri comes out ahead and the fans lose until the debt is fully serviced, at which time the club's finances are probably better off than they were before. But you're probably looking at a decade on that, and we're not going to live forever.

Oh look another lad who knows more about finance than a couple of billionaires

 

[Brisan123]

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.

Lads dont seem to see this