The trouble with new stadiums 4 (and final)
Posted by John Beech on August 10, 2010
[See also The trouble with new stadiums 1, which looked at the argument that “We’re a club with ambition and we need more seats to reflect that ambition“, The trouble with new stadiums 2, which looked at the argument that “We’ve got the wrong sort of stadium. We need one better suited to maximising our revenue streams.”, and The trouble with new stadiums 3 which looked at the argument “There’s this amazing property deal we can do. We’ll sell the old stadium for redevelopment and there’ll be loads of money to build the new one.“.]
This final posting in the series looks at whether there are cases where a new stadium can be justified, and begins with a look at Premier League clubs, for it is at this level one might expect to find any evidence that a new stadium has been a successful strategy – it is these clubs which have the highest revenues and which should thus be in the strongest financial position to finance a new stadium.
First, the big 4. Of these, only Arsenal have opted for a new stadium, Chelsea and Manchester United having opted for stadium redevelopment, and in Manchester United’s case considerable expansion of seating capacity. Arsenal have made a reasonable success of the new stadium, the only significant qualification being the downturn in the property market which has hindered the redevelopment of the old Highbury site. Liverpool have opted for a new stadium policy – they could certainly justify an expansion of capacity – but their financial situation, with debts of £350m, doesn’t augur well for the timing of such a strategy.
Three of the big 4 have particular local rivals. Manchester City are a rare example of “If it seems too good to be true, it may actually still be true“. The financial deal that Manchester Council offered them was definitely a very attractive one, and they would have been fools not to have accepted. Everton are in a similar situation to Liverpool – the sound business case for a new stadium is rather weakened by the debt level they try to go forward from. Tottenham’s plans for a new stadium next door to the current one have got bogged down in the planning process – the government’s advisor on architecture, urban design and public space, the Commission for Architecture and the Built Environment, have objected that “an overall masterplan for the site is not evident: the three components – the stadium, supermarket, and housing – feel like very separate projects without convincing spatial relationships between them” (2).
Overall the situation in the Premier League
- The clubs with new stadiums: Arsenal, Bolton Wanderers, Manchester City, Stoke City, Sunderland and Wigan Athletic, a total of six. Of these, only Wigan has ‘shown ambition’, built a new stadium, and risen up the pyramid. Notwithstanding the professed objection of their Chairman, Dave Whelan, to a ‘debt culture’ (3), the club has only once turned a profit in the last eleven years, and in its most recent accounts has long-term liabilities of just under £48m – it’s dependent on its benefactor for its continued existence.
- Those with new stadium plans of varying seriousness and immediacy: Birmingham City, Everton, Liverpool, Tottenham Hotspur and West Ham United, a total of five. West Ham would have fallen into the next group but for the exceptional possibility of ‘doing a Manchester City’ at the 2012 stadium.
- The rest, who have in varying degrees redeveloped or plan to redevelop their existing stadiums: Aston Villa, Blackburn Rovers, Blackpool, Chelsea, Everton, Manchester United, Newcastle United, West Bromwich Albion and Wolverhampton Wanderers, a total of nine.
The evidence that building a new stadium is a sensible strategy is thus not strong even where you might expect to find it.
In the Championship, Cardiff City, Coventry City, Hull and Preston North End have all paid a high price in opting for a new stadium. Middlesbrough and Reading have survived a new stadium through the benefaction of Steve Gibson and John Madejski respectively.
The decision to opt for a new stadium rather than redevelopment is of course a leap, with no in-between option. The scale of cost does however vary. From my own data, I estimate that the cost per seat can vary by a factor of over 10, so there may be some scope for restraint at the planning stage in order to make a planned new stadium more viable.
Now, most fans will be tempted to put a case that their club is an exception. “The current stadium is particularly awful/inappropriate/decrepit” (remember, I’m a Pompey fan) is a frequent lament. I would argue that only in one group of clubs are there exceptional circumstances – clubs in exile or with a lease which cannot be renewed – but even in this case the danger is that optimism overrides realism. It would be mean-spirited to do other than wish, for example, Brighton and Hove Albion well in the new Falmer Stadium when it opens next year, but the project does carry with it the assumption that Tony Bloom’s benefaction and committment are long-term. I’m certainly not suggesting that there is any reason to think otherwise, merely pointing out that there is a risk associated with the development.
There may even be a case for a very small group of clubs who may reasonably expect to be on a longer-term ascendancy through the pyramid AFC Wimbledon and FC United of Manchester are the obvious ones that spring to mind. Even at the lower levels of the pyramid there is no reason in principle why a club on the ascendancy should not develop a realistic model to develop a new stadium. A club to watch in this context is Runcorn Linnets, who offer a different approach to building a stadium by virtue of the fact that they are owned and operated by a Supporters Trust. Perhaps it is the case that fans are only really realistic when they have chosen not to follow the broken benefactor model of ownership.