Skip to main content

The pluses and minuses of stadium rebuilds

Football stadiums remain unused for most of the year, so it makes sense for clubs to use them for other activities where possible, such as sporting events and music concerts, in order to boost match day income.

For example, Old Trafford is used for the annual Rugby Super League Grand Final, while Arsenal hosted Arctic Monkeys at the Emirates and Tottenham staged the World Heavyweight showdown between Anthony Joshua and Oleksandr Usyk.

In fact, Tottenham’s new stadium has been designed as a multi-use facility, leading to a 10-year deal with the NFL to stage American Football games, whereby Spurs apparently take all the catering and merchandising revenue.

Three key stadium expansions are:

  • Liverpool – third tier added to the Anfield Main Stand, adding 8,500 seats, increasing capacity to 53,000. Opened at start of 2016/17 season.
  • Manchester City – third tier added to the South Stand, adding 7,000 seats, increasing capacity to 55,000. Opened at start of 2015/16 season.
  • Tottenham Hotspur – the new stadium added 31,000 seats, increasing capacity from old White Hart Lane’s 32,000 to 63,000. Opened in April 2019 with the first full season in 2019/20.

The stadium expansion has boosted match day revenue at all three clubs. There were steep increases at Liverpool, up from £62m to £84m, and Manchester City, up from £43m to £57m, while Tottenham’s income has more than doubled from £45m to £95m.

Of course, the other side of the coin is that a club still has to pay for an expanded stadium in a number of ways, which we can see by looking at the impact on Tottenham’s accounts.

First of all, the cost of the new stadium was funded by financial debt, which has shot up to £853m, the highest in the Premier League.

In itself that is not a major issue, but Spurs do have to find the money for higher interest payments. Even though they were very smart in refinancing their debt at a very low 2.7% interest rate (with repayment terms extended to 2051), they still had to pay a chunky £22m in 2021/22.

Finally, there are additional costs in running a larger stadium, which have been reflected in Spurs’ other expenses rising to a new high of £120m.

Despite their financial challenges, Everton are progressing with work on their new 52,888 capacity stadium at Bramley-Moore Dock, even though it will cost as much as £760m according to Farhad Moshiri. Former chief executive Denise Barrett-Baxendale said, “It will boost and safeguard our ability to compete financially alongside this country’s football elite.”

Their city neighbours Liverpool are in the process of extending the Anfield Road Stand, adding 7,606 seats to take the capacity to 61,000, though the £80m development may be delayed after the main contractor, the Buckingham Group, filed a notice to appoint administrators.

Manchester City have recently received planning permission to expand the North Stand, adding 6,000 seats to increase the Etihad’s capacity to 61,000.

 

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000.  The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts.  Money brought in from football has gone up too. Match day ...
Post a Comment
Read more

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...
Post a Comment
Read more