Bramley-Moore Stadium, financing options and costs?

A look at financing the new stadium a Bramley-Moore Dock, some unanswered questions and the cost of delay. In the absence of an AGM, these questions have to be asked publicly

Paul The Esk 20/04/2022 40comments  |  Jump to last

In Greek mythology, Tantalus, son of Zeus, once stole ambrosia and nectar from the gods in Olympus to allow his people to benefit from the supposed gift of immortality and to have the divine secrets revealed. By means of penance, some time later, he decided to sacrifice his son Pelops and feed his body to the gods. Unfortunately for Tantalus, all but one god realised what they had been served, not eating the meal put before them.

The gods reserved their punishment for after Tantalus had died. When Tantalus die,d he was punished by the gods for eternity, standing in a pool of water beneath the boughs of a beautiful fruit tree. When he reached for the refreshing fruit, the boughs lifted themselves out of reach… and when thirsty, he stooped to drink the cool, clear water but each time the waters receded.

According to the myth, what he most longed for remained tantalisingly out of reach for ever.

Evertonians, in their quest for a successful club and perhaps a stadium fit for what will soon be the second quarter of the 21st Century, might have some sympathy with Tantalus’s feelings.

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However, whilst the wait for success on the pitch may still be extended beyond what will be 28 years next season, unlike for Tantalus, the new stadium at Bramley-Moore Dock appears almost within reach.

Walls of worry….

There’s an expression often used in stock market investing that “markets climb walls of worry”. Essentially it describes a bull market’s ability to see through near-term problems to extend gains further. In a sense, the building of the new stadium is an example of such – despite the appalling performance on and off the pitch, despite a pandemic, despite the loss of commercial partners, despite the huge financial losses of recent years – we can see the physical structures growing out of the infilled dock.

Finding the financing has been a long trip…

Farhad Moshiri has always promised to meet the funding costs of the stadium over and above what was borrowed and what is contributed by a commercial partner. Long assumed (and indeed part paid for) to be USM Holdings, that commercial partner route is no longer available to the club and no doubt alternatives are being sought after.

Moshiri himself has contributed in excess of £100 million for the enabling works (the dock infill and preparatory work) and quite probably more this year as the development continues. However, it was always intended that the majority would come from an external source, most likely a senior debt provider.

In 2017, Liverpool City Council offered to act as guarantors for £280 million of the (at the time) expected £500 million cost of the stadium. In January 2018, Mayor Joe Anderson stunned the Everton AGM with a proposal to borrow £280 million from the Public Loans Work Board, lend it to Everton, thereby enabling the City of Liverpool to earn approximately £7 million a year in interest. Ultimately this proved unworkable and undesirable for both parties (the council and Everton) and – despite considerable due diligence which had started in 2017 (including the failed 2022 Commonwealth Games bid) – it was quietly dropped.

It has been an open secret since 2018, that the bulk of Everton’s funding for the new stadium was expected to come from the  US private placement market – the market that Tottenham Hotspur tapped so spectacularly in 2019, raising £525 million of long-term debt at between 2.6 and 2.9% for stadium financing and again in May 2021 a further £250 million, average maturity of 20 years, at 2.8% to repay their £175 million CCFF funding from the Bank of England.

In January 2019, the then Director of Finance, Sasha Ryazantsev, told the Everton AGM: “We are having very advanced discussions now with financial institutions which are encouraging. The money will be available.”

A year later, January 2020, Farhad Moshiri was unable to attend the AGM due to being in “deep discussions with a potential investor over the club’s proposed new home at Bramley-Moore Dock.”

By January 2021, the AGM was told by Denise Barrett-Baxendale: “While the club waits for the determination of the planning application, we continue to pursue a range of funding opportunities including senior debt”.  In a major update in October 2021, the CEO failed to mention the financing of the new stadium.

Just prior to Easter 2022 (a week ago), the club released details of signing contracts with Lang O’Rourke committing both parties to the completion of the stadium. In a statement short on specific detail, Barrett-Baxendale said the contract signings “brings clarity on the overall costs of our new stadium.”

I have to challenge this on a number of points – does this mean the costs are fixed? What is the expected completion date? And how is it to be financed? Whilst construction costs are the most significant part of the build costs, in terms of the life-long cost of the asset, financing costs are considerable. Equally, delays in completion create an effective cost in terms of missing income streams.

In the absence of AGMs, in the absence of any formal or informal communication with board members, then fans such as myself and others are left asking questions for which it is unlikely that answers will be forthcoming.

The conditions for corporate lending in the last few years have been the most benign ever. Record low interest rates and constant pumping of money into financial systems across all major economies have reduced the cost of borrowing significantly and caused yield-hungry investors to buy corporate debt at levels never seen before.

In such an environment, how is it that the club and Farhad Moshiri have been unable to secure the primary source of financing for the stadium? Is it a result of poor financial performance? Is it a result of a lack of governance or an absence of a suitable board? Or does the business case not meet the requirements of the lenders?

As shown by Tottenham’s success in using the private placement market, there is an appetite for long-term fixed-cost lending to Premier League clubs. How can Tottenham raise funds on two occasions and we seemingly – despite being in the market since 2018 – only have a non-prime lender in Rights and Media Funding?

I want to show the costs of funding corporate debt over the last 30 months or so – one for the lowest investment grade of BBB and the other for more risky high yield (junk) lending. I want to show the yields (interest costs in plain language) and the cost of borrowing £350 million on an annual basis:

“High yield index” yield Cost in £m Date BBB yield Cost in £m
5.28 18.48 01-Jan-20 3.11 10.89
9.50 33.25 01-Apr-20 4.61 16.14
6.72 23.52 01-Jul-20 3.03 10.61
5.96 20.85 01-Oct-20 2.47 8.65
4.40 15.40 01-Jan-21 2.16 7.56
4.34 15.20 01-Apr-21 2.46 8.61
4.00 14.00 01-Jul-21 2.21 7.74
4.20 14.70 01-Oct-21 2.38 8.33
4.46 15.60 01-Jan-22 2.74 9.59
5.86 20.50 01-Apr-22 4.08 14.28
6.36 22.26 14-Apr-22 4.29 15.02

High yield = ICE BofA US High Yield Index Effective Yield, BBB = ICE BofA BBB US Corporate Index Effective Yield

I’m aware that the club was seeking the equivalent of a BBB rating which, in rating agency terms, means the company (Everton) has adequate capacity to meet financial commitments, but is more subject (than higher grade companies) to adverse economic conditions. Below BBB indicates a more speculative investment with higher default risk and therefore less security for lenders. Given the absence of a lending deal, one has to assume this (the BBB rating) has not yet been achieved.

So what does this mean?

Let’s say we had secured a BBB rating and, on 1 January 2021, we raised £350 million of funding. Based on the index, that funding would cost us £7.56 million a year in interest payments. Had we not achieved BBB and were more typical of a high yielding investment opportunity, then on the same date, a £350 million loan would typically cost £15.4 million in annual interest payments. Quite a difference based on perceived credit risk.

However, bond yields in recent months have started climbing as inflationary concerns (before the Ukraine invasion… and even more so now) have required investors to demand higher fixed returns for their cash.

A loan to a BBB-rated company on 14 April 2022 would now yield 4.29% – a £350 million loan would now cost £15.02 million in annual interest payments.

A loan to a less creditworthy company (“high yield”) on 15 April 2022 would now yield 6.36% – a £350 million loan would now cost £22.26 million in annual interest payments.

Put it another way, a loan agreed on 1 January 2021 would on a per seat basis cost £142 a year for the stronger BBB grade and £291 for the higher yield. Let’s remember that these costs are fixed for the period of the loan – 20 and up to 30 years in some cases.

On 14 April 2022, on a per-seat basis, the cost of the same loan increases to £283 per annum for BBB, and a huge £421 if considered higher yielding.

Given that one of the primary reasons for moving stadium is income generation, making us more competitive against a growing number of challengers, the increase in funding costs is significant and impacts either the price of seats, the amount spent on the stadium (possibly more value engineering?) or the marginal income gains from the stadium.

Based on those figures and assuming an average maturity of 20 years, the cost of financing increases by between £137 million and £149 million if closed today rather than 15 months ago.

These figures matter. As mentioned earlier, the purpose of building the stadium is to generate more revenue, making the club more profitable and thus more competitive in the future. Tottenham carry an interest cost of approximately £21.7 million on their private placement debt. The new stadium increases Tottenham’s income (from the old White Hart Lane) by much more than £65 million (ignoring naming rights) – so the stadium after financing costs is hugely cash generative compared to the old stadium.

Everton hope to go from £15-£17 million (estimated after future ticket price increases) per season at Goodison Park, to something approaching £50 million per annum generated from the new stadium at Bramley-Moore Dock. However (assuming the debt-funded model goes ahead), if interest costs are £15-22 million based on the figures above, the marginal income gain is significantly smaller – estimated then at £13 – 20 million. Useful, of course, but not the game-changer the investment deserves – or indeed from the considerably higher ticket prices paid for by fans. It also ignores potential relegation and/or the prospect of even higher interest costs from corporate debt providers.

Timing of the opening also matters. Employees of the club informed shareholders in a recent site inspection that the start of the 2024 season was a viable opening date. Others, including well-informed media observers point to a start possibly 12 months later.

The point of this article is to inform, create discussion points, and hopefully draw information from the owner and/or club in terms of how the stadium is financed. Last year, it was suggested by the club that the first premium packages would be first sold in the summer of 2022. A few months from that and there’s still huge questions that require answers. Answers that the fans and other stakeholders require and deserve.

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Reader Comments (40)

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Jimmy I'Anson
1 Posted 21/04/2022 at 09:02:57
Who are the "well informed media observers" and how are they qualified to say that a 150-week construction project is expected to be 52 weeks late?

What is the basis of this when Laing O'Rourke have stated that the project is progressing as per schedule?

According to The Construction Management Plan, submitted as part of the planning application, Site Prep and Substructure – 26 weeks, and Superstructure Concrete (not including terracing) – 26 weeks.

This is where we seem to be at the moment so to suggest we are 52 weeks behind schedule is something I would expect from a kopite ranting on one of the Echo Bramley-Moore Dock articles.

John Chambers
2 Posted 21/04/2022 at 09:20:14
All the reports I have read indicate the project is on, or possibly slightly ahead of, schedule so where does the 52 week delay come from these “informed media observers”?

Also, I just question the income figures referred to. Is this only matchday income as one of the other benefits is all the other commercial revenues the club could gain that Goodison does not permit, eg, corporate events?

Jimmy I'Anson
3 Posted 21/04/2022 at 09:21:36
To be a bit more specific:–

Weeks 1-25 – Substructure to North and South stands, main docks infilling works

Weeks 25-50 – Steelwork and precast to North and South stands, substructure to East and West

This is exactly where we are at the moment.

I think it's worth pointing out that this stadium is not very complex in an engineering or construction sense. Even though it looks fantastic, it's very basic in its structure. The architect Dan Meis alludes to this when he says that it's a performance stadium, “A Ferrari not a Bentley”.

This is probably why the recent deal on construction costs was agreed. All the risk of this project was in the dock infilling and the foundations and this is now all but completed.

John Raftery
4 Posted 21/04/2022 at 14:52:29
None of the publicity from the club has mentioned any delay in the build.

As mentioned in previous threads, it was Paul Joyce in The Times who said it had emerged the stadium would not be ready until after the start of 2024-25 season, leaving the club with a decision to make about postponement until the start of the following season. The club has yet to deny this.

Derek Moore
5 Posted 21/04/2022 at 16:23:05
All the Greek mythology I've read holds that Tantalus sacrificed his son Pelops not as penance (as Paul writes above), but rather as a means of testing the gods' omniscience. To test if the gods really did know everything.

For his attempted deception and for his theft of ambrosia, Tantalus's father Zeus condemned him to his terrible punishment in the afterlife. That of being forever tempted by food and water but never able to satiate his temptation. The myth is often viewed as a warning on the dangers of overstepping the boundaries between man and god.

The myth also holds the gods restored Pelops to life, with an ivory shoulder replacing the portion of him that had been inadvertently consumed.

I write this not as mere pedantry, but as an example of how small changes in the details alter the story considerably. One reading Paul's version might think Tantalus was hard done by; being punished after sacrificing his own son to appease the gods. The truth is rather different. Tantalus was punished for well and truly overstepping the mark.

There's a direct parallel with the stadium issues Paul goes on to raise in the rest of the piece. Incorrect assumptions or minor errors in the details can lead one to some very wrong conclusions.

Whilst I welcome Paul calling for more detail on the stadium project, there are many assumptions and speculative details presented more or less as facts in the above article:

"I'm aware that the club was seeking the equivalent of a BBB rating"
"the purpose of building the stadium is to generate more revenue"
"It also ignores potential relegation and/or the prospect of even higher interest costs from corporate debt providers"
" there is an appetite for long-term fixed-cost lending to Premier League clubs."
"the bulk of Everton's funding for the new stadium was expected to come from the US private placement market"
"Others, including well-informed media observers point to a start possibly 12 months later"

These are just a few such assumptions and speculative tidbits contained within. Some or all of which may well prove to be correct. But equally could be wrong altogether.

Moshiri owns 94% of Everton and thus answers to absolutely nobody. Whilst we would welcome more detail or information on the new stadium at Bramley-Moore Dock, there's absolutely no obligation or need for any to be provided to us either. I have already stated that I welcome Paul calling for more information. But it should surprise or even concern nobody if none is forthcoming.

Jim Lloyd
6 Posted 21/04/2022 at 16:34:12
I'm not so sure that the fans have any need/or right to challenge the details. Our club are building a stadium. If the stadium plans fall apart for financial reasons, then we play at Goodison Park.

I sometimes think we are a bunch of financial backers risking doom should the finances become more difficult to source. We're fans; let the club get on with their plans to build us a new stadium.

Peter Mills
7 Posted 21/04/2022 at 16:42:34
Thanks for your article Paul.

The threat of relegation has to be a major factor in the minds of any potential financiers, surely only when that is clarified will commitments be made.

I cannot remember the last time I spent any money inside Goodison. I went to Spurs recently and spent about £20 inside the ground, where the catering facilities were good, and fast. That's hardly a scientific study, but a decent food and drink offer could make quite a bit of money per head.

I suspect our game-going habits may have to change. With only 2 or 3 gates in the dock wall, people may want to get into the outer concourse space early and leave later, they will be seeking refreshment, be it anticipatory, celebratory or sorrow-drowning.

Tom Hughes
9 Posted 21/04/2022 at 18:18:11
After the likes of the Kirkby debacle, I wonder why anyone would question the fans' rights to want to know fundamental details about the stadium finances etc.

I would've thought this was only further exacerbated given our parlous financial figures over a number of years, the sanctioning of our primary sponsor, our league position, and the current economics.

So, I welcome anyone trying to put some flesh on the bones, especially so many years into the process and in the absence of any AGM.

Jim Lloyd
10 Posted 21/04/2022 at 19:04:20
I think the Kirkby debacle was a different set-up. We had so much lying from Kenwright about a) the state of Goodison Park, not passing it's safety certificate and b) a "virtually" free stadium, c) leaving the City, d) the transport system and maybe worst of all, the Lies about the planning application.

As far as I'm aware, none of this applies to the new stadium at Bramley-Moore Dock.

I'll look forward to going down Sandhills and seeing the stadium host its first game. As far as I'm aware, none of the above concerns apply,

Kieran Kinsella
11 Posted 21/04/2022 at 20:00:06
Patrick Boyland said in September, they were using phased funding for each stage of the project, which makes sense. You wouldn't want to start paying interest on £350 million if you're not in need of all that money yet.

I know here on commercial construction, they often secure a line of credit against the land. Then, when building reaches a certain point, refinance into a fixed loan secured by the land and structure, for example.

Brian Murray
12 Posted 21/04/2022 at 20:02:19
Jim Lloyd @10.

If he had a shred of decency, he would stay well clear of the new stadium at Bramley-Moore Dock. Failing that, he needs to be told firmly to stay away from any grand opening. Fuckin curse on EFC...

Tom Hughes
13 Posted 21/04/2022 at 20:03:43
Kenwright is still chairman, so why wouldn't his well known propensity for fibs be no longer relevant?

Publically, according to Knowsley's Planning Department, everything was kosher regarding Destination Kirkby's planning application. That's what tends to happen when a local authority is desperate to have a massive investment on their turf.

As could equally be the case with LCC and Peel regarding a catalyst for their floundering Liverpool Waters scheme. It was only when the likes of KEIOC went digging around the details of Destination Kirkby that the issues were fully exposed. It was quite late in the process that the finer detail of the transport plan deficiencies were brought to light by people questioning those actually responsible for modelling the transport.

As far as I'm aware, the modelling data for transport to and from the new stadium at Bramley-Moore Dock isn't in the planning application.

The finances for the new stadium at Bramley-Moore Dock have been clear as mud. Up to recently, no-one has been particularly bothered because we've always had the Usmanov safety net to rely on.

Our financial performance in recent years has left us bottom of the FFP league and there are still many unknowns and things of potential concern.

Peter Mills
14 Posted 21/04/2022 at 21:33:58
Tom #13,

I've followed your posts on here for a number of years. You are very obviously knowledgeable and committed to the cause. You have made many coherent comments, particularly for the retention of Goodison. So this is a genuine, respectful question.

Given where we are now, what do you think we should do?

Paul [The Esk]
15 Posted 21/04/2022 at 21:51:25
Interesting response, thank you all.

Borrowing by way of the US private placement market has always been part of our funding plan. The fact we've not achieved it so far is down to the performance and management of the club. More recently, Covid has been a factor but, as I evidenced, didn't stop Spurs from tapping the market for another £250m at 2.8% over 20 years.

Our inability to secure financing over the last 5 years is a question that would normally be asked of directors at shareholder meetings. Given they're not likely to happen anytime soon, then fan sites and podcasts are the only medium for challenging the owner and board. I make no apology for that.

Tom Hughes
17 Posted 22/04/2022 at 10:37:22
Peter #14,

It's difficult to say because we still don't really have that clarity to be able to judge.

My concern is that, even at this comparatively advanced stage in the process, we still don't have some of those fundamental elements in the affordability equation laid out. Some of those appear to still be very much a moving target due to other changes, some of which are beyond our control.

My basic understanding is that the quickest way for any club to effectively sink itself is by spending beyond its means (which some people think we have been doing quite dramatically), incurring FFP sanctions and/or by loading itself with unsustainable debt, by investing in infrastructure it cannot afford or which doesn't generate the additional income required to help fund itself.

I don't profess to know much about the world of loans and finance, so I'm happy to see people with that knowledge attempt to explain how it all works in our case. So we can more clearly see if it all adds up and conversely also for others to counter those financial arguments from alternative angles, if they exist.

Hopefully by doing this exercise, we can all better judge the viability of this project and not have to rely on blind faith in the current incumbents, who seem to have happily operated under a scattergun approach of throwing money at every issue, many of whom will possibly be gone by the time the first interest payments are due, with that debt loaded onto the club or its new owners.

That said, I should also say that I haven't got a cause other than wanting Everton to get the best possible stadium deal. I am as excited at the prospect of the new stadium at Bramley-Moore Dock as the next blue and I am not a bit averse to moving per se, but have some reservations based on some aspects of the project and those glaring gaps in the finances that are still relative unknowns.

I happily voted for Kings Dock because I felt it ticked all the new stadium design, planning and affordability boxes that I could identify. Destination Kirkby didn't come close on any count and was built on multiple lies and ineptitude.

The reason I've mentioned the redevelopment option in the past, is simply because I'm very familiar with some of the possibilities, but primarily because it is always going to be the baseline option that all alternatives should be measured against. But that can only ever be done when proper studies of that option are carried out and when full costings and other comparative analysis of those alternative options are in place to make a full comparison.

At present, we cannot even nail down our future interest payments, so it's difficult to imagine the validity of any earlier decisions regarding redevelopment and those comparisons that all clubs have had to make.

I think in our desperation to realise our stadium dreams and aspirations, many of those concerns were slightly brushed under the carpet because of the USM safety net or some other philanthropic backing by our owner and his mate. I don't know where we stand on all that.

If Moshiri is going to end up funding the lot or most of it and gifting it to the club, then all well and good. If he is going to convert it to debt or equity, then we need to do those sums and understand what it means.

Peter Mills
18 Posted 22/04/2022 at 11:14:57
Tom #17, thank you for your thoughtful answer.

I am one of those who has applied a degree of blind faith around the new stadium project. And, yes, “the cause” I referred to is simply Everton FC.

Mike Owen
19 Posted 22/04/2022 at 13:44:34
This is all Greek to me.
(Boom, tish)

Seriously though, by the very nature of the stuff (I am yet to get my head around high yield index), this is in parts a heavy read. And so I don't think the number of comments will be a large one.

But the hugely important questions that Paul is raising are not going away. And need answering.

Over the last few years, we have had lots of gleaming, computer-generated images of what a new stadium might look like, but an inconvenient fact remains that a large amount of borrowing is required.

While Farhad Moshiri will very likely be the one arranging this borrowing, it will "at the end of the day" be EFC making the repayments.

And, before construction goes any further, we should be told how much this loan, or loans, will cost us over the next 20 or 25 years or so.

There is very little chance of Moshiri, 67 next month, still being involved in Everton 20 years from now.

Surely, being a businessman, his aim will be to sell his 94 per cent shareholding in the club by 2030, at the very latest, to some other person, company or entity.

If we take on loans that we eventually cannot repay, there is the possibility that the very existence of the club, as we know it, could be at risk.

Jerome Shields
20 Posted 22/04/2022 at 21:19:09
It is a concern that Everton have not secured long-term financing, having adopted a pay-as-you-go methodology financed by Moshiri to start with, and calling on short- to medium-term funding as needed up to now.

I always found it was better to have short-, medium-, and long-term funding agreements in place from the start for the very reason of an increase in funding costs as Paul the Esk has outlined. Which can get nasty.

If what Paul the Esk has stated is right, it is a concern. The whole funding attitude has changed with the Ukraine Crisis. I know of one business who had £1. 3 million in funding in place last year for a Capital Project, only to find it pulled on them 2 weeks ago.

I still think that Moshiri is more dependent on long-term offshore peer-to-peer funding, which has its own problems now.

Michael Kenrick
21 Posted 23/04/2022 at 16:12:02
An alternate view of the stadium finances seems to be cast from the same mould as that wonderful question everyone has been asking: "What would Everton do?"

It is understood that several Premier League executives have reached out to the club privately to express how impressed they have been at the finances of the deal. Tottenham’s stadium, for example, ran to costs of over £1 billion despite initial predictions of £400 million. Everton’s has basically remained on budget.

This from a rather interesting and quite well-written piece in a new media organ called The Post that I have linked to here:

At Everton, the past weighs heavy on the present

I'm also curious: What are the requirements for public disclosure if Moshiri continues to directly fund the stadium construction, say by continuing to provide cash to EFC for paying each monthly invoice or period payment required by Lang O'Rourke?

Tom Hughes
22 Posted 23/04/2022 at 18:47:05
Michael,

I think it depends on how valid the comparison is. The Spurs' stadium is a bigger and much more complex design with: multiple tiers, moving pitch, 80 large boxes and whole corporate tiers. It also depends on which initial costings are referenced, as the design changed quite a lot over a very long gestation period even the architects changed.

Also, that billion-pound price tag is a whole project cost, which includes several surrounding developments, with stadium construction costs being significantly less than that total. Clubs often inflate stadium costs or combine with full project costs to alleviate any concerns about the quality (a la Kirkby when £400M was often quoted, when the stadium was just £100M).

We have no idea how big a contingency was built into the new stadium design or if that was the costing of a larger initial design. If Moshiri is meeting the whole bill, then the only issue is if or how we pay him back.

Michael Kenrick
23 Posted 23/04/2022 at 19:01:56
Yes, some good points, Tom. It's certainly not like for like, is it?

There's also scepticism expressed in that article about how many jobs the new stadium project will generate, which seems a suspect claim.

Bill Gall
24 Posted 23/04/2022 at 20:16:04
For a start, I think building a stadium in the London suburbs is going to cost a lot more than on an unused dock in Liverpool.

We would all like to see the club put out actual costs and how it will be covered financially. But Moshiri has always promised to meet the funding costs over and above what was borrowed, and what is contributed by commercial partners.

Yes, we have lost one commercial partner, but we can't count out that they were the only commercial partner Moshiri is involved with. His finances of £2.85 billion have not changed so it's not like he can't afford it, and as a certified accountant, he will have covered for any of his losses.

This stadium has created not only a football ground, but from there to nearly the Pier Head, valuable land for development, that has most probably attracted developers, and Moshiri could be involved in that area..

Like other people, I am only assuming what is happening but, if you have the money, is it better to be paying the bills or loosing money on the interest?

Tony Abrahams
25 Posted 23/04/2022 at 21:36:00
I always thought that was one of the major reasons why Moshiri was at Everton, Bill, because of his mate's steel, and all the land that is hopefully going to start being redeveloped.

But the only rumour that I'm hearing, and from a very good source, is that Moshiri now just wants to sell Everton, and has even put in place a price reduction, just in case the unthinkable happens, which might even indicate that something is already in the pipeline regarding a sale?

Bill Gall
26 Posted 24/04/2022 at 00:44:53
Tony,

I am not sure what you mean because of his mate's steel.

Go to Laing O'Rourke's home page and you will find that all materials on a project are supplied by in-house suppliers. And if you look at all the projects they have done, Evertonians will be very happy with the construction company chosen.

Don Alexander
27 Posted 24/04/2022 at 01:30:25
Just how anyone at all can have a scintilla of faith in the "enterprise" of Moshiri and his chosen ones in the boardroom is completely beyond me. Not once in decades has anyone owning or, err, "governing" us shown anything other than ineptitude or, more accurately, gross incompetence.

If we're relegated this season the club, the new stadium at Bramley-Moore Dock, and us lot, are fucked – for years.

Meanwhile, Kenwright will get time to ponder how to further embellish his own life on account of the ginormous price paid to him by our alleged owner.

Sigh... as ever with Everton since we last won a trophy!

Tony Abrahams
28 Posted 24/04/2022 at 10:05:44
I meant that I thought with Usmanov owning steel, this would have come in handy once “the whole” of the area started getting regenerated, Bill. Once this stadium is built, then surely this is what is going to start happening.

I always thought they were here for the long-term, because there must be at least 30/50 years work starting, once this project really begins. But things have obviously changed with the sanctions on the oligarchs. Although they've made such a bad job of Everton, maybe they had already decided it wasn't for them?

Jerome Shields
29 Posted 24/04/2022 at 10:49:00
Actually, Russian money, namely the London property boom, was financed by money, for those with access, raised on the Hong-Kong market. This money ultimately comes from the Bank of China.

The Chinese economic boom was financed by no interest rates and flexible payback terms. This could be an example for the 'no panic' attitude to financing the stadium and coming in on budget. It is interesting that Everton are seeking clarification of future costs. Nailling things down, so to speak.

Tottenham may have been successful at raising finance, but I bet Everton won't be on that front. They have more cost-effective other sources.

Philip Bunting
30 Posted 24/04/2022 at 14:49:29
From all that is written above how do we come to the assumption that financing has not been secured, I mean even the steels are in manufacture and due onsite on the summer.. How can it be claimed we have not been progress. Surly at the very worst Moshiri can fund it himself and charge us the club an acceptable percentage interest rate. He can't lose here or am I missing something.
Bill Gall
31 Posted 24/04/2022 at 15:13:41
I agree Philip
Supporters should go on the Laing O.Rourke home page and see how they go about building a contract, and the facilities they have to do it.
They don't look like a company that will even start a project without adequate financial contracts approved, by their owners and lawyers.
Yes it would be nice for the club to say how this will be paid, but with Moshiri promising to meet the funding costs over and above what was borrowed, and him being a Billionaire I don't think this stadium will be cancelled no matter what division we end up in.
Pete Hughes
32 Posted 24/04/2022 at 15:22:36
Burnley 1 up ffs,
Not looking good at all for us is it?
Tom Hughes
33 Posted 25/04/2022 at 23:12:20
Philip #30, Bill #31.

We can come to that assumption because nothing has been announced contrary to that (several years into the project) and everything that has been done thus far has been funded by Moshiri directly. Why wouldn't we have secured those loans at those historically low interest rates if we could?

Laing O'Rourke will continue to work while their costs are covered – that's the simple fact. As regards them not signing up to anything where the funding wasn't in place, they signed up for Merseytram and it still didn't materialise, so that really isn't definitive policy on their part.

Yes, it may be possible that Moshiri can pay for, or underwrite it all. However, that will probably take his total expenditure on the club beyond £1Billion so far, and we still need to know how that all works for the club's finances going forward.

Paul [The Esk]
34 Posted 28/04/2022 at 13:35:12
Tom (33) you absolutely make the right point. LOR will have satisfied themselves that at worst Moshiri can fund both Everton's losses and the stadium.
However other stakeholders, particularly the fans need to hear from Moshiri as to how he is going to do this and dare I say it justify the extraordinary sums he is committing. There's no such thing as a billion pound free lunch.
So what's his plans for our club?
Tom Hughes
35 Posted 29/04/2022 at 09:38:42
Paul #34,

This has been my view from the start. I'm as excited as any blue about the prospect of a new stadium, but that has always been tempered by a few niggling reservations. Such as the conspicuous absence of any real explanation of how the funding mechanism works, and ultimately what it will mean for our finances going forward.

I've probably allowed some of those concerns to be slightly appeased by the assumption that USM would essentially cover the bulk of those costs, with a ridiculously high sponsorship deal. This at least had some credibility given the amounts he'd already pledged just for first dibs at naming rights and the other deals for sponsorship that were already in place. That "can-do, money-no-object" attitude from our owner and perhaps more importantly his backer, was the only thing holding the whole thing up as far as I could see. However, I always knew that there could be multiple financial consequences and there would probably be some shortfall and a loan, but there has never been any real clarity of what that all would mean. The financial results of recent seasons (even taking Covid into account) and the apparent loss of USM and our current precarious position surely only adds to the need for greater clarity and understanding. So your attempt to frame some of the maths and put numbers in the boxes is much appreciated though slightly frightening!

Brian Harrison
36 Posted 29/04/2022 at 10:00:14
Tom

While I can well understand yours and Pauls scepticism as to where the funding is coming from for the new stadium, and how that will impact on the club going forward. I still believe that the stadium will be built and I am sure Usmanov had put his money were no British or American government could get at it. There are so many tax havens around the world and it wouldnt surprise me if Usmanov was still providing the money from an offshore account.

Obviously FFP doesn't have an impact on clubs spending on infrastructure so the cost of the new stadium doesn't come into the equation. But for me the most worrying aspect of our financial position is that 94% of all our income goes on wages, this is completely unsustainable. Even more concerning is that nowhere in the players contracts does it state that they will have to reduce their salaries should we go down. Now obviously if that happens there will be a mass exodus of players to try and offset this, our expenditure for new players will be a lot less than we spent last summer. Then added to that the possibility of our U23s being relegated says we have very little coming through, the question of who is funding the new stadium is not the top of my list of questions.

Clive Rogers
37 Posted 29/04/2022 at 10:09:17
The silence from Moshiri has been deafening. He has not come out and said the new ground will go ahead even if we are relegated, so I am assuming it won't. It will be put on hold or even abandoned. There is no case for a 52,888 seater stadium in the Championship.
Justin Doone
38 Posted 29/04/2022 at 10:27:31
The new stadium is a huge, long term investment to ensure future revenue growth.

A new stadium is long overdue. The league or division we play in does not change that fact. It will only help increase the worth of Everton for our owners.

If the unthinkable happens, that will be looked as a terrible but only short term blip. It has very little impact on the stadium.

As always, I try and concentrate on supporting the team and not worry about the finances and off-field activities. I know it's all linked but the most important things for me is game day. Get that right more often than not and everything else becomes easier.

Tony Abrahams
39 Posted 29/04/2022 at 10:43:45
The silence from Moshiri is just normal, Clive. I just hope that the rumours about him being desperate to sell Everton are actually true.

I was told there is a relegation clause in the sale but, more importantly for Evertonians, that there is another clause saying the new ground must be built, but only time will tell.

Tom Hughes
40 Posted 29/04/2022 at 17:58:52
Justin #38...

I think we are all concentrating on supporting the team but that'll be on matchday. The thread is about the club and stadium finance issues and surely that can be discussed without infringing on that support.

I agree completely that the stadium is a long term and much needed investment, but think we should've really had a much clearer picture of what that all means financially long before this relatively advanced stage of proceedings. We have seen what a scattergun, throw money at it strategy has done for our team building.

I also agree that it should increase the value of the club for the owners. Infact that may be the main purpose of the exercise packaging the club for a sale perhaps. However, the numbers still have to add up we would still want to know the financial implications because they can greatly affect our future as illustrated by some of the figures in the article.

I've seen no definitive information about revenue growth (I could've missed the projections during the consultations etc). It is not necessarily ensured for instance: when West Ham moved to the London stadium, they almost doubled their capacity, yet their matchday income actually dropped because they had to significantly cut tkt prices to fill that additional capacity. I've no idea what the price elasticity of demand is for our fanbase. However, we have had to keep our ticket prices low just to fill our current capacity and haven't got the luxury of being able to lower them further because unlike them, we're actually paying for our new stadium.

I don't think I share your optimism regarding relegation not affecting this. Yes, in theory it can still be built if Moshiri has the readies and is prepared to fund it all. but how do we pay it back with significantly reduced income?

Whenever it is mentioned on various forums it seems to be met with guestimates and people asserting that a Billionaire accountant will know what he's doing. Have we really seen that thus far?

Barry Hesketh
41 Posted 29/04/2022 at 18:08:18
I agree Tom, questioning how the finance may be raised and what effect that may have on future purchasing power is a valid and relevant question to pose and doesn't mean that we are less supportive of the football team.

The uncertainty surrounding which division we'll be playing in next season obvously affects any future financial planning, however, the uncertainty of the owner and his intentions, following the tragic events in Ukraine, may well be relevant too.

As usual with Everton Football Club, many times through no fault of its own, the answers we seek to a variety of questions, often, seem to be lost in a fog of uncertainity.


Clive Rogers
42 Posted 29/04/2022 at 18:35:37
Tony, 39, I just can’t see it if we go down with our financial problems.

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