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KEIOC Funding Proposals

By Graham Atherton :  14/03/2009 :  Comments (0) :
I remain to be convinced by the KEIOC arguement in terms of where the money is going to come from so I had a quick read through their funding proposal.

The funding is to be from the following:

ESR Funding £110M
Securitisation of New Stadium Naming Rights £25M
Sale of Goodison Park £7M
Sale of Bellefield £4M
Long Term or Syndicated Debt £19M
Equity Funding £30M
Supporters Trust fund £25M
Total £220M

6.1.4 The main element of this funding plan, Equity Seat Right (ESR), provides a contribution through the securitisation of corporate seats. This methodology provides stadium funding yet adds no debt the club. The company responsible for marketing this financial product, Stadium Financing Capital Group, normally expect to finance the construction cost through 10% of the seating capacity being handed over to ESR, but after discussions with a representative it was felt that the club demographic would only yield £110M. The loss of corporate revenue during the season can be offset by an outsourced operation of a 200 bed Hotel, Conference & Banqueting facility, similar to those operated by Millennium Copthorne at Sheffield, Reading and Chelsea.

As I read this, we have to build a 200-bed hotel to fund this 'securitisation' out of the same money and then give away some of the most profitable seats for an undefined amount of time?

5,000 corporate seats are going to be worth £50-100 a game and that adds up to £5-10 million a season at today's prices.

Capethorne makes £160 million out of nearly 100 hotels worldwide. It will be very difficult to make £5 million in Liverpool.

£25 million from supporters? If we are to take that figure seriously we need some indication that there are people willing to pay — the clubs demographics would suggest not.

Neither of these suggestions are thought through enough or based on solid enough foundations to convince me that their alternatives have more than a faint chance of success.

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