After lunch, the afternoon session began with Robert Elstone fielding questions from Colin Fitzpatrick on behalf of KEIOC.
Colin began by asking Robert Elstone to explain what was his previous involvement in the scheme prior to assuming responsibility. Robert Elstone explained that this involved the stadium search, the naming rights deal and he’d also had a major input into developing the business plan. Colin enquired further, “after the sudden departure of Keith Wyness has there been any major changes to that business plan?” “No” replied Robert Elstone.
Highlighting the statement in Robert Elstone’s proof of evidence concerning the identification of 13M Evertonians, Colin enquired how this figure related to other premiership clubs; Arsenal, Manchester United, Liverpool, Tottenham, Aston Villa and Newcastle. Robert Elstone replied that web traffic was a good method of estimation. Colin asked if they’d simply extrapolated the figure from this but Robert Elstone explained no, they used independent experts to identify it. He didn’t know the figures for other clubs.
Colin went on to explain that prior to relocating to their new stadium at Ashburton Grove, Arsenal had identified their worldwide fanbase as 15M which had been attributed to their constant participation in the Champions League and the winning if the Premiership and other cup competitions, “What would you attribute Everton’s 13M fanbase to?” “Heritage, tradition and family ties” reponded Robert Elstone. “Do you know what Arsenal used this 15M figure for?” Asked Colin, “No” replied Robert Elstone. Colin informed the inquiry that it was apparently used to secure their stadium naming rights deal.
Colin then asked, “Emerging football finance guru Miss Amanda Staveley, owner of PCP Capital Partners, speaking on behalf of Middle Eastern Investment vehicles such as DIC and QIA [Qatar Investment Authority], you’re familiar with QIA?” Robert Elstone replied “No, don’t know them.” Colin continued “Ms Staveley has described English Premiership teams as “the key provider of digital content on media platforms worldwide”. Does this have any significance to the aforementioned figure and would an identified large worldwide fanbase encourage potential owners of football clubs to buy into clubs that were on the market?” Robert Elstone replied, “Our media assets are limited, they’re distributed by the Premier league.”
Turning to past investment, Colin asked Robert Elstone to confirm that recent investment in Goodison Park had been practically non-existent, Robert Elstone confirmed this was the case. “Yet others, notably Manchester United, Aston Villa, Newcastle, Chelsea, Blackburn and Liverpool have invested in their current facilities have they not?"
“Yes, they have” responded Robert Elstone. “In fact in para 3.6 you say that premiership clubs have invested £1.8 billion, by comparison, and just to confirm, how much have Everton invested in this same period (fourteen years)?” “£13M over fourteen years, it's been modest, small investment in lounges and for safety reasons, investment in disabled areas, small last year, approximately £1.5M, including maintenance.”
“Why haven’t Everton invested in their stadium during this period and whom are the people responsible for this lack of investment?” asked Colin. “There are constraints that Goodison Park presents, its footprint…..” Mrs Wendy Burden interjected “I think the question is whom Mr Elstone, not what!” “Well, the board, on the basis that they didn't have the facility to.”
“There’s a site favoured by many in the Scotland Road area; has the owner of the site attempted to meet with the club?” asked Colin, “I’m not aware that he has” responded Robert Elstone. “You’re aware that he’s spent £30,000 on a feasibility study that confirms that this site, adjacent to the city centre, is suitable for a 55,000-seat stadium?” Robert Elstone stated that it was not affordable or deliverable.
“Are you also aware that the site has the full backing of the council?” Mrs. Wendy Burden again interjected: “This is a question for Mr. Potts.” Colin persisted “Can you confirm that Everton have insisted in the past that there needs to be 500,000sq ft of enabling attached to any site?” Robert Elstone responded, “No, we have confirmed that we need substantial support to deliver a new stadium.”
“Keith Wyness specifically mentioned a figure of 500,000sq ft, did he just pluck it out of the air?” Robert Elstone didn’t offer an answer, Colin continued, “You know you’d never get that in Liverpool don’t you?” “Yes I Know.” Colin persisted “So is this to prevent other alternatives to Tesco’s proposals?” Robert Elstone chose not to offer a reply. Colin tried again “Would you agree that this insistence is little more than a device to prevent the emergence of a viable alternative (to Tesco’s proposal) that would be located in Liverpool?” Robert Elstone; “No.”
Colin next turned his attention to the subject of relocation. “Are you aware that this isn’t the first time the club has attempted to relocate to the Kirkby area?” Robert Elstone confirmed that he was. “The then chairman, Peter Johnson, advocated a relocation to Kirkby Golf Course, the second site was Gilmoss, just up the road from where we are and the final location was Cronton in South Knowsley, two miles away from Widnes town centre, in Cheshire. Are you aware of these failed plans?" Robert Elstone: “Yes”.
Colin continued, “The current chairman, Bill Kenwright, was opposed to this relocation away from Goodison Park was he not?” Robert Elstone: “Bill's preference would be to Keep Everton In Our City.” Colin, “I’d agree, in fact are you aware that he was so opposed to the idea of leaving Goodison Park that he gave a substantial financial donation to the supporters group opposed to the move at the time?” Robert Elstone replied “No.”
Colin pushed on; “I appreciate that he’s now the chairman but why is he now so keen to relocate to Kirkby and what has changed?”
“The financial circumstances have changed for clubs in this league, this is now viable and deliverable, one that was unique” offered the CEO. “You also know that Everton attempted to relocate to the Kings Dock on Liverpool’s waterfront, why did this fail?” “Complexity of the scheme and rising costs, the risks were too great.” Colin challenged this by asking “Everton told LCC that their £30M contribution was ring-fenced didn’t they?” Robert Elstone replied, ”All I know is the costs were increasing.”
Returning to Goodison Park, Colin now asked “Are you aware that at the time of the first proposed relocation to Kirkby a study by Ward McHugh Associates, designers of Twickenham, indicated an ultimate capacity of 55,000 (through extending the footprint of Goodison) could be achieved? Yet you claim in para 7.2.2 that a redeveloped Goodison could now only have a maximum capacity of 36,000, how is this?” “Based on the advice I've been given, yes” responded Robert Elstone
. “This report was paid for by a supporters group after being told by the then chairman that Everton had in their possession a report stating that they could only redevelop Goodison Park to a smaller capacity than it currently held at that time, it was later admitted that no such report existed” stated Colin. “Not aware” was all that Robert Elstone was prepared to say.
Colin continued; “This latest report is lower than the current capacity is it not? Who produced this report?” Robert Elstone replied “We have consistently looked at if (the redevelopment) is doable, it's highly risky and highly expensive. We revisited it before the EGM, a fresh look. No agenda. That work suggested that the club couldn't redevelop.”
“What was the scope of this latest report, the one indicating a redevelopment figure of 36,000? What were the terms of reference?” Robert Elstone explained “One: what can be done on the existing site for a modern stadium, two, can we extend the footprint and three, what can we achieve with £78m. KSS got to £50m without added hospitality. We could go to 44,000 for £71m."
Colin; “You say in para 3.7 that Everton’s inability to invest in its stadium has resulted in the club being at a competitive disadvantage to other clubs do you not?” “Yes.” Colin continued, “Yet during this period of time Everton has enjoyed above average attendances but they’ve been unable to follow what other clubs have done?” “We haven't been able to invest due to shape of site.”
Colin pressed further; “Would it be fair to say that the situation Everton find themselves in, you describe it in para 3.5 as ‘the deficiencies of Goodison Park’ and the apparent inability to afford the redevelopment or construction of a new stadium is primarily a consequence of the failure of successive owners of Everton to invest in their Stadium?” Robert Elstone; “Restrictions of site have made investments impractical and unworthwhile.”
Colin, returning to investment asked, “In the main, highly successful business people typically own these Premiership clubs, how do these owners obtain a return on their investment?” In a bizarre reply for a chartered accountant, Robert Elstone told the inquiry “In a variety of ways: emotion, profile, status.” A clearly confused Colin put the question another way, “would you agree that they take the long view, that they’ll obtain their return when they sell their club?” “There is evidence of substantial capital growth in the Premier League.”
Obtaining the accountants answer he wanted Colin went on to ask “You indicate that Everton have failed to invest in their revenue generator, their stadium, would it be a fair observation to state that the current board have never invested a single penny in the club?” Robert Elstone answered honestly, “Yes, that's true, so when they sell, that's a return.”
Now once again changing quickly to finance Colin asked “This asset utilization and disposal plan that has been adopted by the board, it can’t be sustained forever can it?” ”No” came the reply. “It’s inherently unsustainable, won’t the assets run out and the loan repayments overwhelm the clubs ability to provide sufficient funds to obtain better players?” “We have a highly qualified finance team and a good relationship with the bank. That wouldn't be allowed to happen” replied Robert Elstone.
“The lack of available funding clearly indicates that a change is needed” continued Colin, “we can completely understand the need to become facility led. One would assume that improvements in the Stadium would, if correctly managed, lead to increased revenue streams from ticket sales, increased ticket prices that reflect the better amenities available, increased catering, hospitality and corporate sales and higher commercial and merchandise revenue, this is what you’re after is it not?” “In broad principles, yes” replied the CEO.
Now moving on to the site of the proposed stadium Colin, somewhat mischievously asked Robert Elstone, “This criteria, Available, Suitable, Accessible, Viable and Deliverable, was this developed by Everton or was it borrowed from Tesco? It seems to be for a supermarket and retail park development?” Robert Elstone replied, “Seems sensible to me, I’m not aware that it's a Tesco plan.”
“The reason I ask is that in many people’s eyes this location doesn’t meet the stated criteria, does it in your opinion?” “It does” “We’ll agree that it’s available, Knowsley have bent over backwards to accommodate you, some would say forwards but as for being suitable it's a park on a former tip with class one and two waste isn’t it?” “We have engaged with experts who say the site is possible.” Replied Elstone.
Colin came back again, “Do you know if the site is going to be excavated or compacted?” “Don't know.” Said Elstone. “So that'll be an additional cost?” “Our advisors will have costed this.” “Even if they don’t know if it’s to be compacted or excavated?” “It’s been costed.”
“The stadium was originally described as a 55,000-seat stadium but was capped at 50,401 in this application; do you believe that a town of 42,000 after experiencing an influx and rapid departure of 50,000 supporters over a four-hour period, would agree to a 20% increase in capacity?” “Yes, ask Mr. Ellis of SDG.”
“Would you agree that this proposed stadium has clear and apparent access issues? In paragraph 7.1.3 you describe access as critical, yet you’re so concerned with access issues you’ve borrowed another tactic from Tesco and you’ve set up your own transport group, haven’t you?” “Yes” Elstone agreed, “we have set up a group.”
“Do you agree that Evertonians of all ages should me made to walk up to 45mins, queue for buses that may or may not be available or wait in pens for over one hour and a half before being “crush loaded” onto trains?” Colin received no reply so he pushed on, “Have you considered that the old and the infirm will be the slowest to exit the stadium so, being last to arrive at the bus or coach facilities, they will wait the longest. I’m amazed that anyone would claim that this criterion has been met?”
At this point, Mr. Patrick Clarkson QC, acting for Tesco, perhaps wishing to protect his witness, interrupted and pointed out that these were matters for SDG and that Mr. Fitzpatrick had been so informed. Mrs. Wendy Burden agreed that it was a matter for another witness. Colin protested, “Madam, I appreciate what you’re saying but I would point out that I’m asking the CEO as we’re talking about his customers here.” Mrs. Burden reinforced her point.
Colin continued “When it comes to viability the cross subsidy is clearly available, have we decided if it’s still coming from the critical mass of retail or is it now being provided by another source such as the value of the land provided by Knowsley and purchased by Tesco?” “Yes” responded Robert Elstone.
Colin went on to ask “We’re sitting in a public inquiry surrounded by neighbouring authorities citing significant departures from a whole host of planning policies, how can you say that this is deliverable, Isn’t it the case that three of the qualifying criteria are clearly unsatisfied Or is two out of five acceptable?” Robert Elstone: “We believe it is deliverable.”
Now switching to the ability of the stadium, Colin asked: “What research have you conducted to assure and confirm that this figure can be obtained?” Robert Elstone replied “We've looked at the volume of ticket buyers and the dispersion of the fan base. 75% are within 12 miles of Kirkby. We will also be working on new marketing programmes.”
Colin continued, “You’ve previously told me and shareholders that Goodison generates £800,000 of revenue everytime it opens it gates?” “Yes.” “Does this figure include everything? Ticket sales, catering, hospitality?” “Yes.” “So you could say that over the course of a nineteen-game Premiership season and three additional cup competition games, on the basis that an average attendance of 37,000 generates 800,000 per event an increase of 10,000 would generate an additional £5m per season and a further £1m from the six additional events as outlined in para 10.3.2?” “That information is confidential.” “But it’s confirmed in a letter from Deloitte, Dan Jones stated from our work with the club to date on its business plan we understand the annual potential business to the club of the new stadium is of the order of £6M” “Robert Elstone replied “That’s profit not revenue.”
“And just to confirm” Colin asked, “this figure is based on a target of 47,000?” “Yes” was Robert Elstone’s reply. Colin then asked; “What research have you undertaken to prove that you can fill the stadium?” Robert Elstone replied that he had responded to this earlier in the day when he gave details of ticket sales analysis. “In para 8.1.8 you tell the inquiry that Everton conducted a ballot in 2007, what was the result?” “Other schemes were mentioned at the time and we got 60%” answered Elstone. “40% of your customers were against this?” “Yes.” “Has there been some unrest since this?” Robert Elstone laughed and said “you could say that, yes.”
“You say in para 8.4.4 that Everton has a pool of 60,000 matchgoing supporters, 25,000 season ticket holders and 35,000 that you describe as active buyers, is that correct?” “ No, 30,000 had held a season ticket over the last three years, a further 60,000 individuals had attended at least one game” “So, you’re now saying there are 90,000? Most match going Evertonians weren't given the vote, but you’re now expecting them to flock to Kirkby? Why where they not included?” “We canvassed the most active” was the CEO’s response.
Colin continued “Have you surveyed the fanbase since the ballot to ascertain if their feelings towards Kirkby have changed?” “No” came the reply. “Why haven’t you done this? Is it because some people are alleging that the club and Sir Terry Leahy misled the fans and that the result of any survey would be detrimental to your claim surrounding a mandate?” “I don't think it prejudiced the ballot” responded Robert Elstone. At this point an attempt to refer to material surrounding Keith Wyness and Terry Leahy was challenged by Mr. Patrick Clarkson and upheld by the planning Inspector.
Colin, dropped that particular line of questioning and began a new attack; “Other clubs have elected to follow the relocation route in a bid to increase their stadium derived revenue, Arsenal have already relocated to a 60,000 seat stadium Ashburton Grove, around the corner from their traditional Highbury home. Tottenham are building a 60,000 seat stadium next door to White Hart Lane, West Ham are hoping to relocate to a new ground in the east end of London and our nearest and dearest across the park; Liverpool, are attempting to build a 60,000 seat stadium in Stanley Park next to their ground at Anfield. Can you tell me Robert what was Arsenal's season ticket waiting list before their move?” Robert Elstone; “Not sure.”
Colin; “It was 20,000, what’s Tottenham’s?” Elstone again;“Not sure, it's substantial, 28,000?” “It’s 22,000 and West Ham is 8,000, no laughing, what’s Liverpool’s?” This time it was Robert Elstone who asked the question; “Go on?” “It’s 65,000 according to their website, it probably includes 32,000 Norwegians but none the less it’s substantial. What’s Everton’s?” “We don't have one,” replied Elstone, before claiming that “Other clubs have filled stadia without waiting lists.” “Really?” Asked Colin. “Bolton, Middlesbrough and Sunderland prior to the development of their new grounds didn’t but that the new stadiums were filled after the completion of the development.” “Really?”
Colin pressed on. “As the person responsible for delivering commercial growth, principally via filling the stadium at higher yields, as confirmed by you in para 1.2, could you describe what measures you will employ to overcome the loss of the new stadium effect?” The CEO answered, ”We will work with the local community.”
What’s happening to Goodison’s attendances at the moment, where are they in relation to last seasons 37,000?” “As I said earlier…….” Came the reply.
Colin once more changed tack. “While I remember, at lunchtime I was sat with three other Evertonians, between the four of us we had over two hundred years of attendance at Goodison yet not one of us had ever heard of the 53% figure for obstructed views that you mention in para 5.3.11. When was this introduced? For the inquiry?” Robert Elstone explained; “It’s been there forever. It's not a figure I was familiar with though.”
Colin continued ”Do you discount all of these tickets?” “No” replied Elstone. “Thought not,” said Colin, before continuing; “you go on to say in para 8.4.4 that Goodison Park only has 3, 500 obstructed view seats, which is it, 3,500 or 21,000?” “It's clear in the application. 17,000 obstructed, 3,500 can't see the goal mouth.” Colin clearly wouldn’t let this go, “so that I’m clear here, it’s a 40,000 seat stadium and we have 25,000 season tickets, you’re telling me that we have 6,000 season tickets holders who have paid for seats with obstructed views?” “Absolutely” said Elstone, “yes.”
“Returning to demonstrating future demand,” Colin continued, “have you conducted a survey of match going Evertonians as to what their requirements are?” Elstone was clear; “No.”
“The route Everton has elected to take, relocation, rather than redevelopment, how successful has it been for other clubs?” “Arsenal, Sunderland, Man. City, Bolton they’re all successful.” “Really? Table 8.2 lists all the new stadia constructed since 1992, do you know what the combined average attendance is for these stadia? Elstone was again clear; “No.” “It’s 77%,” replied Colin, “that would mean an attendance figure of 38,000, that wouldn’t be good would it?” Elstone was in no doubt; “No.”
Colin asked “What steps have you taken to ensure Everton will be nearer Arsenal’s attendance than Sunderland’s?” Mr Patrick Clarkson once again interrupted saying that this was old ground.
Colin started again “In section 8.4 you list the financial benefits of moving to Kirkby, you claim that you’ll achieve substantially increased ticketing revenue, I think we’ve established that this may not be the case. You next claim that corporate hospitality sales will improve. You appear to be doing what you’ve done with the stadium here, you’re putting forward a build it and they will come plan. What evidence have you got that people will flock to the new corporate facilities at Kirkby, what research have you done, have you surveyed people?” “None, that I know of” was Elstone’s reply.
“Are the current hospitality facilities at Goodison over subscribed?” “No not all of them.” Said Elstone. “How many lounges are there?” “Eleven.” “And how many are under-subscribed?” “Nine.” “So the vast majority then”
“The marquee, does it sell out on a regular basis?” “Irregularly.” Replied Elstone. Colin asked “Why?” “It's a poor facility in a poor location, you have to walk across the car park.” “But it’s true Liverpool wanted to use it as they have too many guests to cope with at Anfield?” “Yes” said Elstone. “Would this have brought money to a club with limited funds?” “Yes” confirmed the CEO. “Who prevented it going ahead?” “The board didn't like it.”
Colin continued; “So Liverpool could fill it but we can’t?” Again, Elstone agreed; “Yes.” “Despite telling all and sundry how poor the facilities are could you just tell me how good the hospitality is at Goodison?” “It’s the bottom of the league” said Elstone, “the parking facilities are poor, like I said earlier”
Mr Clarkson again felt the need to interrupt proceedings, claiming that this had been covered by other people, Colin remained firm “Madam I have a point to make, it hasn’t been covered.”
“So these are poor are they? Can you confirm that they are in fact award winning services, didn’t they win the directors choice award when the opposition was Arsenal, Newcastle and Chelsea amongst others?” Robert Elstone explained “that was just for directors hospitality.” “No it wasn’t, the club also won a Certificate of Achievement award for the overall hospitality experience.” “That was just for service…….” “Let me read out the examination criteria “PARKING, SIGNAGE & WELCOME, FOOD QUALITY & STANDARDS OF SERVICE”
Colin continued; “So can I ask you again, why, is it that Everton can’t sell these award winning services and can you demonstrate that you will in Kirkby?” Robert Elstone responded, “The Marquee arose out of surplus demand but the quality has deteriorated. The majority of our buyers are Evertonians, currently 75% of hospitality members were fans of the Club, we don't benefit from neutral corporates.”
Colin once again changed tack: “Does location play any part in this conundrum? Wasn’t it Konrad Hilton that once said the three most important things for a hotel are location, location, location does this not apply to a football club?” Robert Elstone replied “I don't believe it will have a significant impact”
“Won’t being nine miles from Liverpool City Centre provide an extra challenge to the management team at Everton?” Colin asked, before continuing; ”What research have you conducted, have you surveyed the fans, the bulk of which live in Liverpool, Wirral and North Wales, on if they will make the extra journey that will prove very time consuming due to congestion?” “Don’t Know” replied Elstone, before asking “is Kirkby five miles from Goodison?” “Yes, it’s not me that saying it, it’s the RAC, the average distance a premiership club is from their major center is 2.6 miles, Bolton is 5.5 you’re proposing taking Everton 9 miles.“
Colin then explained that he wanted to close by asking some questions on Everton’s ability to pay. Colin asked, “First the securitisation of a stadium naming rights deal. Can you just describe how these deals are structured? Are there various elements such as a basic award and then bonus performance related payments? Which element is securitizable?” Robert Elstone; “It depends on the partner, brands won't commit without planning permission.”
“Where are Everton with their deal, you said it would be concluded in December and here we are, what’s the status?” A smiling Robert Elstone explained, “It’s delayed.” “Why?” “Because it requires a stadium!” “Was Mr Wyness correct when he said Everton are expecting £25M?” “Don't want to put target figure in public domain” said Elstone. “He’s already stated this last year, it’s already in the public domain and there’s no change of business plan.”
Once again Colin, “It was originally stated that Everton would receive £15M for Goodison, would you say that this is optimistic, what are the land values in Walton?” “We have targets” replied Elstone “and are confident about delivering the funding mix.”
Colin moved to the sale of Bellefield, “The sale of Bellefield, do you still believe that you’ll obtain £8M or have you revised your estimate? I’d be amazed if we’re not looking at finding approx £45M through the last two methods” Robert Elstone responded “None of the sources are guaranteed. We can raise the money at the right time.” Colin informed the CEO that “this isn’t what Everton’s barrister told the inquiry in Liverpool into Bellefield.”
“To bring this all together it would appear to many, and I must say I’m even more convinced that this is not right for Everton. Would you agree that what we have here is a scheme that nobody knows the true cost of, that nobody knows if the fans will travel to Kirkby, that nobody is completely certain where the money is coming from and that all the indications are that it is being promoted as something it isn’t; that is a long term cash generator that will be beneficial to Everton Football Club? Didn’t Everton have to prove to Knowsley that they have the funds?” Robert Elstone responded, “I’m not aware that KMBC asked if Everton had the money.” “Really?” Asked Colin. Robert Elstone said “Yes.”
Colin closed with “Everton have a wish list of methods to raise funds, how much money from that list has been secured to date?” Robert Elstone answered “Nothing.” “You’re saying you haven’t got a penny?” “No.” “Isn’t it the case that this was little more than a Trojan horse that was originally promoted as the means to deliver an inappropriately sized supermarket and retail park and that on close inspection it would appear to have the capability of transforming into yet another of Kirkby’s infamous white elephants.” “No” replied Robert Elstone, “I believe the main beneficiaries are our children.
Colin thanked Robert Elstone and Mrs Burden, Mrs Pethard from the Grange then took over the questioning, her first question concerned the possibility of concerts being given planning permission in the future, contrary to the current planning application. Robert Elstone explained that he was unaware of that condition being removed in the future.
Mr Clarkson then took the opportunity, as is his right, to cover any of the points that he felt needed some clarification.
We Interviewed Colin at the close of the inquiry he explained “It was a lot tougher than I imagined, Robert Elstone was a very credible witness who put on a good performance but I thought we scored a few points.” He came over for a friendly chat afterwards, there was no animosity, irrespective of the inquiry we’ll be taking up a few of our concerns particularly surrounding the future performance of a new stadium in Kirkby!
The KEIOC campaign would like to thank the donator who came forward at the end of the day and presented the campaign with a cheque for £500.'
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