Usmanov

[Brisan123]

Thanks both and I'm not saying the new stadium won't earn or create anything of value. Of course it will but whether it goes beyond say the possible £500m build cost I'm sceptical. The point below is the only real concrete one but is, ironically, the hardest to measure.

"Firstly, the ageing old Lady was an issue that needed resolving, as it doesn’t meet the requirements of a top tier stadium in the current era. As a result, it’s replacement was as much about necessity as it was about increasing matchday revenue. Therefore the value of the business reflected the requirement to solve the conundrum, ergo once it’s solved that inhibitor disappears."

A £500m outlay at say a min 7% cost of money requires a huge return every season to just break even. Is there huge scope to increase ticket prices and the match going attendance? A bit but not much. Same for corporates. The RS have hoovered up most of the local big business and regional players.

Naming rights? Yes absolutely. But need to consider the difference between what you'd sell naming rights at Goodison for ones at the new stadium. There's nothing actually to stop us taking that cash in today.

As for the wider Dock area we are only leasing the area for a stadium and basic ancillary amenities. We won't benefit from any wider residential development etc.

Is Everton a more valuable commodity to the far eastern TV market if we're sat in a shiney new stadium. yes probably but is that sufficient for the return on £500m? Presumably only as a rich man's plaything.

As for the wider Dock area we are only leasing the area for a stadium and basic ancillary amenities. We won't benefit from any wider residential development etc.

Everton the club may not benefit but our owners and their business partners will have positioned themselves favourably with Peel and the council

 

[Charlie Sweet]

A lot of interesting points in this. As a point of order it's worth stating that Spurs are borrowing close to 2% so I doubt we are borrowing at 7%, I suspect we will be around 3%.

I do think there is a wider picture with the stadium linked to broader business interests. I also think, it's a very effective way to help navigate some of the needlessly stringent rules around FFP. Thats why it's being pursued I would say. As a knock Everton get a new stadium on the waterfront, so it's a bit of a win win.

I'll double check but I'd be stunned if spurs have borrowed that huge sum at 2%. Local authorities borrowing from central government is higher than that.

What we borrow at is only part of the equation and I think I've misscommunicated. Interest charges add to the cost of the project. The 7% (or probably more accurately 10%) I referred to is the cost of the money in terms of the opportunity cost for whoever deployed the cash. If old Usamov has £500m to play with he's going to want a min 7-10% return a year to get out of bed (or more likely deploy in a host of other ways).

 

[Charlie Sweet]

Everton the club may not benefit but our owners and their business partners will have positioned themselves favourably with Peel and the council

What does that achieve though? Surely both Peel and Liverpool Council are already falling over themselves to meet rich investors?

The latter are constrained by red tape as to rules and regulations what they can do with a 3rd party (not to mention state aid rules). Peel are a shameless private property company who will always sell to the highest bidder?

 

[Brisan123]

What does that achieve though? Surely both Peel and Liverpool Council are already falling over themselves to meet rich investors?

The latter are constrained by red tape as to rules and regulations what they can do with a 3rd party (not to mention state aid rules). Peel are a shameless private property company who will always sell to the highest bidder?

No one knows what’s already been agreed
Maybe as a sweetheart deal for building the stadium our owners were given certain assurances or first options
No one knows
It’s like the inside of Usmanov private jet , very few have seen it and they ain’t talking

 

[catcherintherye]

I'll double check but I'd be stunned if spurs have borrowed that huge sum at 2%. Local authorities borrowing from central government is higher than that.

What we borrow at is only part of the equation and I think I've misscommunicated. Interest charges add to the cost of the project. The 7% (or probably more accurately 10%) I referred to is the cost of the money in terms of the opportunity cost for whoever deployed the cash. If old Usamov has £500m to play with he's going to want a min 7-10% return a year to get out of bed (or more likely deploy in a host of other ways).

With the bank it was 2-3%. Most loans are at around that point. I see no major reason why it would be as high as 7% never mind 10%. I attained a 5 year fix on a mortgage last year at just over 2%.

 

[catcherintherye]

Everton the club may not benefit but our owners and their business partners will have positioned themselves favourably with Peel and the council

That's basically it. There is a much bigger game going on here. Charlie is correct to say, on numbers terms alone 52k makes little sense. You'd want to be more aggressive. However I suspect they see Everton as a bit of a means to an end.

Also, a stadium is a very handy way to get around FFP. You can attribute a lot of losses down to stadium costs (which will be very helpful) and it opens up all sorts of new sponsoring arrangement and potential.

 

[Brisan123]

I'll double check but I'd be stunned if spurs have borrowed that huge sum at 2%. Local authorities borrowing from central government is higher than that.

What we borrow at is only part of the equation and I think I've misscommunicated. Interest charges add to the cost of the project. The 7% (or probably more accurately 10%) I referred to is the cost of the money in terms of the opportunity cost for whoever deployed the cash. If old Usamov has £500m to play with he's going to want a min 7-10% return a year to get out of bed (or more likely deploy in a host of other ways).

Not if it helps to
A ) Boost his ego
B ) Put to fingers up to Kronke and Arsenal,A kind of here is what you could have had
C ) Positions him favourably with Peel and the council
Its a long game these lads are playing
This goes back to 2012 when Red and white holdings had 30% of Arsenal

 

[mahermi1]

Always thought the more you borrowed off banks etc, the better, more favourable are the rates.

 

[Brisan123]

Always thought the more you borrowed off banks etc, the better, more favourable are the rates.

banks in Europe and Japan lend at better rates than British banks
Having a couple of Billionaires guarantee your loan will also get you a better rate

 

[light_has_colour]

So Everton sell Richarlison to Barcelona for 200 million in this window. With a loan back for the season deal. This is a very common deal. The deal also includes a buy back clause of 200 million again very common. Everton obviously enable the buy back clause. Amortize his fee over 5 years so that is 40 million in the next accounts and have 160 million to spend on FFP rules this year.

The other one Everton loan James Rodriguez for 2 years with a guaranteed buy at then end of the loan. The FFP stuff is pushed forward 2 years.

If Everton have money to spend on players I'm sure there is 100's of ways without dodgy sponsorship deals for the club to sign all the players they want.

 

[Foot Long Hot Dog]

I'll double check but I'd be stunned if spurs have borrowed that huge sum at 2%. Local authorities borrowing from central government is higher than that.

What we borrow at is only part of the equation and I think I've misscommunicated. Interest charges add to the cost of the project. The 7% (or probably more accurately 10%) I referred to is the cost of the money in terms of the opportunity cost for whoever deployed the cash. If old Usamov has £500m to play with he's going to want a min 7-10% return a year to get out of bed (or more likely deploy in a host of other ways).

Spurs financed the stadium at a rate of 2.66%. I would guess our rate will be slightly higher given the greater perceived risk, so probably circa 3 to 3.5% would be my guess.

As for the ROCE rates you’ve mentioned there, that’s precisely why they won’t use their own cash to fund the build.

 

[Brisan123]

Spurs financed the stadium at a rate of 2.66%. I would guess our rate will be slightly higher given the greater perceived risk, so probably circa 3 to 3.5% would be my guess.

As for the ROCE rates you’ve mentioned there, that’s precisely why they won’t use their own cash to fund the build.

I hadn't a clue so I googled it

Return on Capital Employed


ROCE values
A higher ROCE shows a higher percentage of the company's value can ultimately be returned as profit to stockholders. As a general rule, to indicate a company makes reasonably efficient use of capital, the ROCE should be equal to at least twice current interest rates.3 Apr 2019

 

[Toffeelover]

Everton the club may not benefit but our owners and their business partners will have positioned themselves favourably with Peel and the council

Yes, Usmanov and Moshiri knew how to pull strings or they did not get to where they are now.

 

[Brisan123]

Yes, Usmanov and Moshiri knew how to pull strings or they did not get to where they are now.

Lads think they won their billions at a casino

 

[deipnosophist]

there is 15 trillion of negative yielding debt in the world...Everton should be able to issue at 0-0.5% interest rates. That is a very high yield for yield hungry investors. I note Austria issued a 100 year bond...if Everton could issue 100 year zero coupon debt (say half a billion present value) at 0.5%, I think that would be a great deal for an investor. (NB I would insist on a zero coupon deep discount, as this ameliorates interest payment considerations throughout the issues existence)