This morning saw the greatly anticipated business meeting “Everton Football Stadium and Associated Regeneration” hosted by “Downtown in Business” featuring Everton’s current CEO, Robert Elstone and Liverpool City Council Mayor, Joe Anderson.
The meeting was split into two parts, Robert Elstone speaking first followed by Joe Anderson. I don’t intend going through the meeting verbatim but recording my observations from the comments made and the answers to questions asked.
Firstly, the positive news. Although a number of Evertonians still doubt the Bramley-Moore Stadium will happen there is now an overwhelming body of evidence that it will. Despite finances still not being totally in the bag, it’s pretty clear that the expectations are that it will happen. The club, in Robert’s words, is spending money on the project now, and given the usual caution Everton display on such matters, that to me is a clear indicator.
Perhaps the biggest questions remain about the budget, and the implications of that in terms of capacity and ultimately even design.
I’m trying to be objective, but try as he might, after a surprisingly up-beat start, Robert soon drifted into his usual more cautious speak, referring to costs but also referring to the business case. I’m hoping this is his natural caution rather than the belief of the whole board, but presenting the case for a £500 million capital investment in a new stadium as “future-proofing” rather than the big leap ahead that other stadia presented other clubs is at best unnecessarily cautious, at worst demonstrates a continuation of the limited thinking of the last 20 years.
It seems odd to me that we can sell 33,000 season tickets in an antiquated but much loved Goodison Park with its poor sight lines, obstructed views and very limited food, beverage and entertainment facilities, yet only project 35-40,000 season tickets in an iconic stadium at Bramley-Moore. All the case evidence from Arsenal, Manchester City, Southampton, Sunderland etc is that season ticket sales rise substantially when a new stadium opens. The challenge I would suggest is retaining those ticket holders in future years, not finding them in the first place, but that becomes a footballing issue – success on the pitch keeps bums on the seats.
Similarly, there is the view expressed today that the stadium will not be substantially geared to executive or premium seating. From a business modelling perspective this makes no sense. If the concern is that executive seating destroys atmosphere then surely the challenge is passed to the architect to solve, not as appears to be the case reduce the number. As a rule of thumb, 10% of the capacity being premium or executive seating of different categories should generate more than 50% of the overall income of the stadium. Given Everton’s desire to keep regular seating prices as low as possible (to be applauded) surely the premium and therefore opportunity to subsidise regular seating should be taken?
Additionally, if the business case is as tight as Robert suggests, being less aggressive on premium seating accentuates the problem, it doesn’t solve it. Airlines don’t become more profitable by reducing premium classes at the expense of economy, they develop their product to increase demand. I suggest we take that view also.
There was talk that “phasing” was back on the agenda – meaning a design that permits for capacity to grow. However, as Robert admitted to in his comments, the extra investment required to future proof potentially higher capacity in the future doesn’t produce an immediate return on investment, so again what is the business logic in this?
In addition to the business case concerns, the issues relating to World Heritage Status still feature although Joe Anderson robustly defends the idea that having WHS does not mean we should be a monument but a “living, vibrant city”.
Bullish Joe Anderson
As much as Robert is naturally cautious, Joe Anderson is the exact reverse and his enthusiasm for the project has to be admired even if the reality takes a while to catch up with his words. It is clear that the stadium has two major benefits for Anderson. Firstly, it bookends the Liverpool Waters development, accelerating other developers plans, bringing forward much needed future revenues through increased land values and therefore business rates, plus the multiplier effect of increased economic activity and future visitors to the City. Secondly, the stadium represents a significant proportion of his “invest to earn” income now and in the future. With the prospect of £7 million in revenues from Everton, that represents 20% of his future income from these schemes – something which should not be lost when considering his enthusiasm.
On timeframe, there’s now a clear sight of what is expected and when. We can argue about what on earth has happened since nearly a year ago the “guarantor scheme” was first announced and the now very obvious lack of progress throughout 2017, but now there’s a clear timeline.
The key points in the timeline are as follows: confirmation of the City Council funding by early summer, ongoing to conclusion confirmation of the additional funding (perhaps as much as £220 million). Start of the formal planning process beyond the summer (informal meetings are already taking place), granting of permission in early 2019 followed by work starting by the summer of 2019. On that basis, although tight (in Robert’s words) we will kick off the 2022 season in Bramley-Moore.
To conclude, perhaps there’s not much that’s been learned from today, but the significance of the first face to face talks in public shouldn’t be over-looked.
With or without Robert – the subject was banned from today’s meeting, I‘m pretty sure we go into the next few months without him, Everton through the direction of Moshiri, who has to address the lack of progress to date, perhaps already has, need to be much more assertive. They need to be confident in the outcome, and that once built the stadium is a great success. They need to grasp the nettle and get on with it. I think fans have a role to play too – the consultation process continues with Richard Kenyon set to announce the planned workshops. We have to demonstrate our confidence in Bramley-Moore, not a cautious, scaled back version of what might have been, but the biggest it can be, best it can be, most iconic stadium that stretches Moshiri’s pockets to the limits. He said at the AGM in January that whilst he was here, funding would never be an issue – well let’s hold him to his word, and demand the best, something that meets the club motto, Nil Satis Nisi Optimum!
Categories: Everton finances