Bramley Moore & 60,000
GWLADYS
If we take an industry accepted average of around £6,000 a seat for a stadium build, what impact does a much
higher cost for the final seats have? If I assume it costs £9,000 per seat for the last 6,000 seats that adds
£54,000,000 to the build cost. If all of that money is borrowed at 5.25%, then the additional cost is around
£3.9m a year. That means the last 6,000 seats cost £650 a year each to build. In a 20 match season, and with
perhaps just two additional events per year, that brings the cost down below £30 per event. Whilst I accept
that this cost will only just be covered by ticket prices in the early years, once moderate ticket price inflation
is accounted for over 25 years the investment pays for itself. It doesn’t take into account the additional food,
beverage and retail sales, as a result of the higher capacity.
The increase in net revenue as a result of the increased capacity:
If we assume we borrow £350 million the capital and interest repayments over 25 years at 5.25% are approxi-
mately £23.2 million. Shareholder contributions, sponsorship and naming rights make up the additional capital.
The increase in net revenue as a result of the increased capacity:
One of the primary objectives in building a new stadium is to generate more cash over and above the costs of
servicing the debt occurred in building it. Using conservative assumptions on ticket prices the 52,000 seat sta-
dium would generate approximately £40 million, whilst a 60,000 seat stadium would generate £49 million from
a 19 home game football season.If we assume we borrow £350 million the capital and interest repayments over
25 years at 5.25% are approximately £23.2 million. Shareholder contributions, sponsorship and naming rights
make up the additional capital. The net income (revenue minus loan repayments) for a 52,000 seat stadium
starts at £17 million, whilst the net income for a 60,000 seat stadium starts at £25 million. I stress this is based
on a very conservative pricing model. If more aggressive (perhaps realistic) pricing is used then the difference
between the two stadia increases proportionately. The 52,000 seat stadium hardly generates more cash than
Goodison Park does currently which would suggest a significant price rise in ticket prices would be necessary.
Clearly a higher capacity stadium, sold out, might not require such price hikes.
Ambition:
Ultimately, the stadium comes down to the ambition and willingness of the club and particularly the major
shareholder to finance its build.
The business case is clear for a larger stadium. All the historic evidence based on other clubs is that new stadia
attract far more spectators than most would reasonably model for. In addition, the figures above demonstrate
the demand, and how a 60,000 seat stadium can be filled. It also demonstrates the significant increase in mar-
ginal income from the higher capacity, even before taking into account the higher food, beverage and retail sales
from the higher footfall.
A higher capacity stadium also makes a statement to the footballing and commercial world, that under Moshiri
we are re-building a club that not only can compete at the highest levels but is making the investment and
commitment to be at the top-table once more.
Anything less than the best and the biggest the site can hold reduces that claim, and condemns us to remaining
behind our once peers. Whatever we decide in the very near future shapes the club going forward – it will deter-
mine the level of our ambition and our likely status in the game for generations to come.
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