In Bizarro America, city council am saying no to funding new football stadium

Big news from Liverpool, where the city council has just turned down a request from Everton for funding for a new 50,000-seat stadium:

Liverpool City Council says it will not fund Everton’s new stadium

Also, where the city council has just promised to support Everton’s new 50,000-seat stadium in any way possible:

Liverpool City Council back new Everton stadium

Okay, what the council actually said was that it “is clearly not in a position to fund the costs of a new stadium,” but would consider funding “a wider regeneration scheme, subject to a sound financial and economic rationale for doing so.” Which leaves the door open to lots of things, but not to Liverpool building a stadium and then renting it to Everton, which is what team execs wanted.

Of course, we’re still talking about a team offering to pay rent at a publicly built stadium, which almost never happens in the U.S., and then a city council saying, “No, we might help, but go build it yourself,” which also pretty much never happens. No wonder the Pilgrims got the hell out of Dodge.


6 comments on “In Bizarro America, city council am saying no to funding new football stadium

  1. The Manchester City ‘model’ is more than a bit of wishful thinking. That stadium was built for the Commonwealth Games. Man City totally lucked out in that respect. Then they lucked out again seven or eight years later when they were bought by the bottomless pit of money in Sheik Mansour.

    Everton are pretty much broke. I say that having not looked at their financials, but they simply don’t have the resources of their nearest rivals on the table (If I’m not mistaken they’ve done some terrible commercial deal including selling all of their merchandise rights or something similarly stupid). But that makes a fantastic case for wanting public money, “Hi, we’re couldn’t possibly generate enough revenue to service the debt we’d take on if we built the stadium ourselves, but we really want it anyway. So would the city of Liverpool just give us one? Kthnx.”

    But then again, after seeing how much Arsenal have been hamstrung for a good 7 or 8 years by the cost of building their new stadium, I’m sure nobody in the Prem wants to deal with a similar handicap.

  2. Those Socialists, don’t they believe in US capitalism. Again the reason why football and baseball can’t expand internationally, until other countries decided to support with billions in welfare.

  3. Oops. Edit function requested… deals (plural). And “we couldn’t” not “we’re couldn’t”.

  4. Michael:

    Everton is not on the same footing (in terms of turnover) as the four/five big clubs in England. That said, they are hardly broke and many other clubs would love to be in their position (they are owned by a billionaire too, though not one who believes his businesses should lose money annually).

    Arsenal are actually in a similar situation. They are very profitable. While their stadium payments do cut into the cash available for potential signings, the fact is their player costs are modest compared to their annual turnover. Their stadium payments are far less annually than Man United’s interest payments on the loans the Glazers attached to the club and, crucially, their payments end earlier than the Glazers will. In a few years, Arsenal will have paid off their 60,000 seat stadium and will have additional revenue available for “competitive” use. Other clubs (LFC, Everton, Tottenham, Chelsea) will still be either trying to build stadia (that will be dramatically more expensive than Arsenal’s was) or trying to survive on the match day income from 40-45,000 seat facilities.

    I agree with you totally on Man City… and it’s no accident that their “made of money” owner is hurriedly planning an expansion of Eastlands to approx 60,000. Both the PL and UEFA have adopted cost control measures that – if enforced – will make significant deficit spending for member clubs difficult.

    Both Arsenal and Everton operate like actual businesses. I suspect each could spend more than they do on players (certainly Arsenal could), however they choose to remain profitable instead. This is not the case with Chelsea, Man City and – due to the Glazers highly leveraged purchase – Man United.

    As we’ve seen in the past, the day will come when the wealthy owners of some premiership clubs lose either the will or the ability to write 8-9 figure checks to cover operating losses. What happens then is anybody’s guess… but I doubt it’s going to be a positive change for the fans of those clubs.

  5. “Everton is not on the same footing (in terms of turnover) as the four/five big clubs in England.”

    Pretty sure I admit as much when I said they don’t have the resources of their nearest rivals on the table (that includes immediately below (Spurs) and above (Arsenal), although the can still catch the latter or be caught by the former… ). This is a couple of years old, but the Swiss Ramble is pretty essential reading for getting a good picture of where a club stands financially.

    http://swissramble.blogspot.com/2011/09/everton-no-blue-skies.html

    They have manageable debt, but negative cash flows pretty consistently over the last five years (as of that writing). They have been operating at the upper ends of their limited financial means (on paper they are close to Villa and Fulham, the latter of whom is still in serious danger of getting relegated this season). But it’s no secret that Bill Kenwright has openly pined for a benefactor to take over the club.

    So by “broke” I mean they have no room to take on additional debt (it wouldn’t be sustainable), nor do they have any place they could expect to find a heretofore untapped well of cash (especially as it looks like they will miss out on the CL and the Europa doesn’t really pay that much).

    Yes, they are run like a business, but they are not flush. And they can’t rack up massive debts, then convert those to shares in a shell corporation that are then debts to another entity (cough*Abramovich*cough). And some of Everton’s commercial deals have been really poor (they did indeed sell off their merchandising).

    But hey, the sold Fellaini for 2x what they bought him for and if Martinez can continue to become a home for loanees, they might be okay. Or they could slide out of the upper table when Lukaku, Delafeu, Barkley and any number of 4 or 5 other key players are gone next season.

    I’d say it’s too bad they are likely to come up just short of the CL as it would be interesting to see what Martinez could do with that extra injection of cash. But I am an Arsenal fan (and as such keenly aware of their financial position as well) and I don’t give a crap who misses out at our expense (not a done deal yet, so I don’t want to jinx it). It’s 38 games, if you come up short, it’s not bad luck.

  6. One footnote to this: Notice that Everton FC has not—and will not—threaten to move to another city if it doesn’t get its stadium. Such a thing is as unthinkable as the University of Alabama’s football team moving to Los Angeles.

    *There is one notorious exception in UK football history: the relocation of the club formerly known as Wimbledon FC to Milton Keynes, where it is now known as MK Dons. To replace it, the fans of Wimbledon started a new club, AFC Wimbledon.

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