‘To move or not to move’ – the question thats facing Liverpool
The lack of movement over a new stadium has been a source of much frustration for Liverpool fans for nearly four years now, as promises haven’t been kept, deadlines have been missed and indecision runs riot, but do the club need to focus all of their attention out on the pitch before thinking about moving homes?
The club finished a disappointing and lowly eighth in the league last season under the stewardship of Kenny Dalglish, their lowest league finish for 18 years. The gap between expectation and performance was clear for all to see, as a whole swathe of new signings failed to both settle and gel, with the side’s profligacy in front of goal bordering on the unbelievable at times. The point is that should the club be concentrating their efforts on a new stadium when there are such clear and obvious troubles out on the pitch? Isn’t that like putting the cart before the horse?
The club’s owner John Henry seems to think so, arguing last month in favour of redeveloping Anfield: “A long-term myth has existed about the financial impact of a new stadium for Liverpool. A belief has grown that Liverpool FC must have a new stadium to compete with (Manchester) United, Arsenal and others. No-one has ever addressed whether or not a new stadium is rational. New stadiums that are publicly-financed make sense for clubs – I’ve never heard of a club turning down a publicly-financed stadium. But privately carrying new stadiums is an enormous challenge. Arsenal is centred in a very wealthy city with a metropolitan population of approximately 14 million people. They did a tremendous job of carrying it off on a number of levels but how many new football stadiums with more than 30,000 seats have been built in the UK over the past decade or so? New stadiums increase revenues primarily by raising ticket prices – especially premium seating.”
Now by looking at my bank account, I’m pretty certain that I have a loose grasp on the value of money, but John Henry seems a pretty clued up chap, so I’m happy to take his word on the ‘myth’. It’s clear that FSG don’t have the money to pay for such a large project themselves up front, just in the same way that Tom Hicks and George Gillett never didn’t either, so to avoid any leveraged debt situations arising, it seems the sensible course of action for the time being.
There are various avenues that the club could go down. The first being the issue of naming rights to any proposed new stadium, something which Arsenal took up upon their move from Highbury to the Emirates. However, the knock-on effect as Henry attests to of privately financing a stadium is that Liverpool simply aren’t in the same position as Arsenal were. Anfield could not be bought up by property developers and turned into expensive, luxury flats and it’s been well-documented how incensed the fan-base has been by the sharp spike in ticket prices in North London.
The ‘premium seating’ is far from a throwaway line either, as it’s essentially a nod to the fact that the club will have to install more corporate seating and VIP boxes instead of creating the expected space for more seats on the terraces. FSG may have dithered terribly over the stadium issue for 18 months or so now, but they appear to finally be getting to grips with the matter and coming to a definitive conclusion that in a tough economic climate such as this, in the grip of a double-dip recession, it simply isn’t financially viable to take on a project of this magnitude just yet and it represents a huge risk.
Henry followed up with this: “That’s why I say that it is a myth that stadium issues are going to magically transform LFC’s fortunes. Building new or refurbishing Anfield is going to lead to an increase from £40million of match-day revenue to perhaps £60-70m if you don’t factor in debt service. That would certainly help but it’s just one component of LFC long-term fortunes. Our future is based not on a stadium issue but on building a strong football club that can compete with anyone in Europe. This will be principally driven financially by our commercial strengths globally.”
The emphasis is clear, build the side up on the pitch first, make the club more commercially driven and successful as a ‘brand’ across the globe, and wait until a move makes more sense. There’s no urgency to it, moving stadiums is not going to all of a sudden bridge the gap in quality on the pitch, or even off it when you factor in the wealth that both Chelsea and Manchester City have at their disposal.
Arsenal as a club seem well-prepared for the implementation of the Financial Fair Play (FFP) rules, but their saving has come at great expense on the pitch and they haven’t been able to invest anywhere near to the same level required, bound by serviceable debt repayments. It’s a cautious approach and one that could pay long-term dividends, but it’s been widely unpopular.
Patience is the key with concerns to the topic of whether Liverpool need a new stadium or not. In the long run, Anfield will either need to be dramatically redeveloped or the club will need to move if they are to achieve their ambitions, but the problem has only arisen from the lack of activity and indecisiveness rather than a pressing financial need for the move in the short-term.
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