Time for Boldness
"Being bold de-risks, being timid increases risk and reduces the prospects for success. Mr Moshiri, time to be bold in every sense."
Whilst attention understandably has switched to the final games of the most disappointing season imaginable and particularly the leaving date of the soon to be departed Allardyce and CEO Robert Elstone, it's probable matters are coming to a head in the boardroom regarding the final budgets, design and capacity of Bramley -Moore.
It's a well-worn path, particularly in this column, but the case for a 60,000 seat stadium needs repeating. This case hasn't gone away on the back of a poor season. If anything, the case for being bold and benefiting in future years from that boldness is accentuated by what's been witnessed at Goodison Park this season. What's happened at Goodison this year is the result of a series of poor decisions, some over many years, others more in the short term. It is not however, just a case of bad luck. We need to reverse the process of poor decisions and execution.
I've heard a lot about risk, the risk that a 60,000 seat stadium can't be filled, it will be too expensive, we can't raise the finance. Well correct me if I'm wrong but professional sport is a “risk” business. Ask Ellis Short at Sunderland, ask Randy Learner, ask Hicks and Gillett. In their own ways they dared to dream, put their and others' capital at risk, to say nothing of the clubs themselves. Each of course, failed losing significant sums of money and putting the clubs in perilous positions.
They failed because they formed poor plans and did not invest in their management teams to bring in sufficiently good people to see those plans improved and executed well.
What's that got to do with the current position at Everton?
Well, it's my assertion that what is considered to be the “low-risk” option by many, one of a less aggressive increase in capacity perhaps to 50-52,000 is actually much riskier than going for the maximum the Bramley-Moore site can hold, thought to be around 60,000.
How can this be the case? Simply the marginal increase in revenues after financing costs generated by the smaller increase in capacity when weighed against the debt the club carries, plus the level of impact of that marginal increase on our competitive position makes our ability to compete with the “big 6” and perhaps some of the remaining 14 Premier League clubs lessen not increase. Thereby decreasing the long term viability of the project, and ultimately the club.
The way of de-risking the move to Bramley-Moore is not by reducing costs and the debt burden, not of making it comfortable to fill the ground to capacity, it's in making the team successful and competitive on the pitch. We de-risk Bramley-Moore through our Premier League position, our competitiveness in domestic cup competitions and through regular participation in European competition. Not only would that ensure higher attendances, but would generate significantly higher revenues across all income streams.
We can only become competitive on the pitch by maximising every income stream available to the club, one of which is matchday income after financing costs. I've demonstrated time and time again that based on reasonable cost and revenue assumptions a 60,000 seat stadium generates significantly more net revenue than a 52,000 seat stadium (for example).
Vanity has its uses
I've heard people question whether 60,000 is just a “vanity” exercise, arguing that if it is then it's not worthwhile. I've usually said it's not, it's based on sound economics. However, in one very important aspect it is a vanity exercise. It's a vanity exercise to our commercial partners present and future. It's a statement about our ambitions, our intent and where we wish to aim the club. That translates into future value for our commercial partners, improving our current negotiating position and in future generating higher commercial revenues on the back of our boldness and ambition.
Whilst the Bramley-Moore stadium says a lot about our future ambitions it can't be viewed in isolation in terms of the future progress the club makes. It has to be viewed in the context of a portfolio of decisions the club must make in the very near future.
Because there are so many decisions to be made — stadium, stadium financing, CEO, manager, Director of Football, possible change of Chairman, changes in commercial relationships with kit manufacturers and distributors in the next 12 months, choice of naming rights partners, the temptation (almost natural response) is to err on the side of caution. Yet to do so will condemn Everton to many more years of absolute and relative under-performance. Simply, the gap between us and those above us will continue to grow at ever increasing rates.
If that happens we have no chance of a sustainable competitive position in the Premier league. We will at best be “the best of the rest”. Apart from being unattractive from a fan's point of view, I believe increasingly it will become unattractive to sponsors.
The value of hope
We often say as Evertonians “it's the hope that kills you”. Well for commercial partners that's true also. There's currently a small premium we receive versus the “rest” based on the hope value that we become one of the newly formed “big 7”. The less likely that appears to be the case the smaller that “hope” premium and our commercial value will be in future years. Whilst the big 6 increase their commercial values the remaining clubs will probably see a flattening out and possibly a reduction based on lack of “hope” value and the marginal increase in risk of relegation.
So, returning to Bramley-Moore. A 60,000 seat stadium increases the marginal revenues over financing costs — that helps support the improvement in playing squad. It also sends out a “vanity” message and much more to other commercial partners, it demonstrates ambition and by arguably improving the prospects of improved performance on the pitch increases the commercial attractiveness of the club. That in turn generates more revenue. More revenue improves the team, assures the stadium is filled to capacity and becomes a virtuous circle.
However, for that to happen the correct decisions have to be made now, not sometime in the future. Those decisions have to be linked with improvements in the management of the business at board level, C level and below. With those improvements better deals can be struck with better partners and progress ensues.
Thus, we really are at critical juncture. I'm sure we will make changes in the footballing management in the widest sense and bring about better strategy and decision making — that seems the easy bit in all honesty. Equally critical is the off-field management and decision making. One of the most pressing decisions from which a great deal of other decisions will hang is getting the stadium and its size right. Being bold de-risks, being timid increases risk and reduces the prospects for success.
Mr Moshiri, time to be bold in every sense.
You read more from Paul at his theesk.org blog and hear regular his musings on the Everton Business Matters podcast.
Follow @Theesk
Reader Comments (58)
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2 Posted 07/05/2018 at 10:23:00
I haven't paid too much attention to the detail as I am an old cynic who will believe it when I see it. If the architect says that the stadium can't be developed further once built then send the designs back until he provides one that does.
It would be great to have a stadium that hosted football, American football, cricket, Rugby, concerts, retained a great atmosphere and be the envy of the league. We can dream anyhow.
3 Posted 07/05/2018 at 11:09:48
4 Posted 07/05/2018 at 11:11:34
5 Posted 07/05/2018 at 11:37:27
6 Posted 07/05/2018 at 11:37:30
There's no point going for less in today's premiership climate , 60 000 puts us on the map.
Anything less leans towards a club below the top level.
Ps ; sorry about the ‘floating' pun , it was unintentional!
7 Posted 07/05/2018 at 13:45:50
8 Posted 07/05/2018 at 13:50:28
9 Posted 07/05/2018 at 13:54:50
The road Moshiri & most Blues want to take will still leave us potless & continue to be just a afterthought for a global audience.
To the Winners go the spoils !.
10 Posted 07/05/2018 at 14:32:07
My reasons were manifold, think big and positively, and get the right Management and Team members in place, and the success will surely follow.
I also like the idea of being able to host other sporting and non-sporting events, which will bring a revenue in to the Club too.
11 Posted 07/05/2018 at 14:36:52
Robles (last game)
Kenny (great prospect)
Keane (improving)
Funes Mori (decent & goal threat)
Baines (we all love him)
Klaassen (needs to start)
Baningime (yeah... instead of Gana)
Garbutt (still rate him... ok)
Vlasic (floating role, hard to mark)
Walcott (he's always wanted to play up top)
Tosun (Main Man & this time would have a strike partner)
No doubt Peter Lee & others will be shaking their heads in disbelief... lol. Fuck it, I'm past caring. I just want something fucking different for once.
12 Posted 07/05/2018 at 15:00:59
If you build a 50,000 seater and fill it every week, you create a bear pit and have more "guaranteed" revenues - knowing the place will sell out.
While we are busy blowing the neighbors, The Red Sox have a capacity in Fenway of just under 40,000. They have an amazing game day experience and play to a packed house every night in the summer.
I'd follow the Red Sox model. Nothing looks worse than an empty or spotty upper deck playing Huddersfield in a near meaningless game.
Keep it full. Keep it rockin'. That's good business. It's not always about the hypothetical numbers because the assumption you'll actually get 60,000 every game is an.,.,.,..,. assumption!
13 Posted 07/05/2018 at 15:02:57
14 Posted 07/05/2018 at 15:14:59
15 Posted 07/05/2018 at 15:15:09
16 Posted 07/05/2018 at 15:18:25
17 Posted 07/05/2018 at 15:46:56
18 Posted 07/05/2018 at 15:55:54
6/7 games to glory...or
38 games to more misery...time to choose Blues !.
19 Posted 07/05/2018 at 16:10:50
There just isn't a problem of not having a capacity audience in a modern stadium.
All the big arenas blank out the top tiers, or the back rows, if they anticipate a below capacity event. These areas are then released, if required. Atmosphere is not affected by pockets of empty seats.
60,000 would want tickets for the Derby and other top games which account for about 25% of the fixtures. For the 'lesser' fixtures well, what an opportunity that presents for marketing the spare seats to those that don't normally go, perhaps because they can't afford to.
The 1892 Everton committee, and their successors, had the vision and confidence to go for a large capacity at the new Goodison ground. The current Everton board need to have the same courage and conviction.
20 Posted 07/05/2018 at 16:28:28
"It seems a long time ago that 𧹈m was the ballpark figure. Then, it became 𧾦m and 𨀊m, and now, nobody would be surprised if it reached a billion. Tottenham have taken out 𧹈m in bank loans, which are repayable over a five-year period. This month they announced in their financial results for the year ended 30 June 2017 that the “cumulative spend†on the project had increased from 𧴫.3m to 𧷳.1m. The club's profits were robust. They stood at 㿕.2m after interest and tax. But whichever way you dress it up, there is a lot of money to find. It is no wonder chairman Daniel Levy “struggles to sleep at nightâ€, according to Pochettino."
Before we start getting "bold" we had better make sure we're not bankrupting the club or starving the manager, whoever it turns out to be, of funds to strengthen the side. Or we could find ourselves with the best stadium in the championship...or worse.
21 Posted 07/05/2018 at 16:29:28
22 Posted 07/05/2018 at 16:38:08
23 Posted 07/05/2018 at 16:39:26
24 Posted 07/05/2018 at 16:46:40
I'll go with the former,but YOU FOLKS knew I'd say that...if only Mosh thought the same way...jeez.
25 Posted 07/05/2018 at 17:03:41
Oh to be there with thousands of Smiling Blues in the sun playing footy with the locals having bagged two pieces of Silverware that had eluded us for so long...yeah I know,I'll carry on dreaming of chasing a top four dream that leads to nowt but more wedge for Mosh,Bill & Co.
COYB
26 Posted 07/05/2018 at 17:10:13
I personally think any talk of new grounds should be put on the back burner until the squad is far better than it is now and we have the manager situation settled.
27 Posted 07/05/2018 at 17:12:04
28 Posted 07/05/2018 at 17:23:29
Good luck seeing how we had no wins verses the top six this season.
The real tragic thing is Mosh & the rest of us Blues share your wishes.
NOT ME !!!.
29 Posted 07/05/2018 at 17:33:04
The good times are just around the corner check out manures and Arsenal's trophy cabinets before Ferguson and graham
30 Posted 07/05/2018 at 17:39:48
31 Posted 07/05/2018 at 17:44:27
32 Posted 07/05/2018 at 17:51:25
Oh to do 'em in Europe would be unreal,but unless we pull our fingers out & truly compete in the Cup competitions that dream will never be realized.
Maybe IF those fuckers bag their 6th European Cup,then mindsets on the Blue half might change,Cups are the key to OUR future success,a tangible sign of progress & hope for all of us going forward,23 years without a pot is a total discrace for a club of our stature & history & you all know it too !.
33 Posted 07/05/2018 at 18:36:38
How many times do I have to say this?
34 Posted 07/05/2018 at 18:40:29
What a Chairman...jeez.
35 Posted 07/05/2018 at 18:43:49
Kenwright should have gone years ago, he should have been forced to sell up by us fans and perhaps we'd be in a much healthier and better position now. Ofcourse he's one of us, only difference is he's managed to pockets millions without putting a penny into the club. What a fan!
36 Posted 07/05/2018 at 18:58:08
We have this nonesense about the "Bear Pit" repeated ad nauseum
Why would 50k be a Bear Pit, whereas somehow 60k is not going to be. Why is 40K (Goodison rarely if ever these days the proverbial "Bear Pit". If we end up with a 50k stadium we will find our rightful place 7th or 8th. Might as well keep Allardyce if thats the limit of our ambitions FFS. 60k is a minimum in my eyes. I was one who voted on the poll for 70K plus tin hat on
37 Posted 07/05/2018 at 19:03:39
38 Posted 07/05/2018 at 19:28:35
39 Posted 07/05/2018 at 19:30:54
All revenue streams will increase on the back of success, the ground on match days will become so much noisier (a bear pit?) And our team will tonk the opposition, no matter who they are because they will all be below us in the league table!
Woops got a bit carried away just there and slipped back to 1969/70 memories.
COYB
40 Posted 07/05/2018 at 19:38:34
Just 6/7 games needed from the lads to turn our frowns into Joker like smiles & it starts in mid September & ends at Wembley at Easter time.
I still believe in our club motto...more fool me !.
41 Posted 07/05/2018 at 20:37:00
42 Posted 07/05/2018 at 20:59:20
We need to win a trophy ASAP and the league cup at the moment is probably our best bet next season. 23, going on 24 years is a disgrace for our club not to win anything.So let's go all out to win it, get entry into the EL, win that and then guaranteed entry into the CL group stages.
43 Posted 07/05/2018 at 22:37:22
With the option of expanding up to 70,000 in the future if needed.
Stop dreaming and be realistic, we are only going to sell huge numbers of tickets if we are successful on the pitch- winning trophies. Fact.
Yes we have a great history but that's all it is.
Both Arsenal and Man C have had good success over the years and struggle to fill their stadiums week in week out.
What chance do we have continually mediocre mid table? Seriously?
Be realistic please.
44 Posted 08/05/2018 at 01:55:07
45 Posted 08/05/2018 at 05:12:35
46 Posted 08/05/2018 at 07:21:24
At the workshops Meis said the absolute maximum for BMD was 60,000 because of the constraints of the site.
The Etihad, also a Meis design, wasn't built on a dock!!
47 Posted 08/05/2018 at 11:25:14
On the "size envy" phrase from Meis, as he's designed a few big stadiums himself I take it that it's as a brief from the club for that 'low risk' option, particularly the CEO. It's bugger all to do with size envy more keeping up with your peers. As the Esk has said a few times these clubs are moving further away from us we can't afford to be so conservative (on and off the pitch) if we want to catch them.
We've had the lowering of our expectations almost in unison throughout the club it's about time (as soon as the season ends) that that ends and the club starts being bold and ambitious. In line with the motto.
Dan I think we'd struggle to fill a 500k stadium to be honest. 61878 has a ring to it.
48 Posted 08/05/2018 at 14:19:01
They won Cup competitions first & then had the platform to truly compete for the League titles as most fans of theirs genuinely started to finally believe.
49 Posted 08/05/2018 at 16:42:53
The Architect is saying 60k is the maximum .
The fans are saying 60k is the minimum.
So stop talking and build a 60k seat stadium.
50 Posted 08/05/2018 at 17:33:14
Meis said the last 10K seats are the most expensive - especially if you don't build them at the same time as the rest of the stadium, I'd have thought!
51 Posted 08/05/2018 at 19:35:51
Their cabinets were no better than ours at that time utds probably worse with the exception of the big one. The point I was trying to make was we might seem miles away but all it will take is a good managerial appointment and patience and who knows
52 Posted 08/05/2018 at 19:38:47
But point taken.
53 Posted 08/05/2018 at 20:06:14
I would have thought all the seats cost the same price. After all they are just bum shaped bits of plastic.
54 Posted 08/05/2018 at 22:09:57
Tony #54 Not sure if that's tongue in cheek lol but, if not, what Meiss meant was they are the most difficult to sell and have a high staff to customer ratio.
55 Posted 08/05/2018 at 23:01:41
I think blocking out the top tier / bowl looks so incredibly "bush league" I can't even begin to think of it as I'll get sick.
It basically says, "we can't get our own to fill up our stadium, don't mind the ugly tarps covering the seats."
John @ 37 -
The reason I favor a smaller stadium really is down to my Boston roots and Fenway Park. I realize nowadays the mention of anything Red Sox curls Everton toes. I was adopted blue before my world was turned upside down with the NESV acquisition of the poo. My sports world, ergo, is a living breathing hellish oxymoron.
Fenway is, by far, the single greatest stadium in America in my opinion. A Red Sox game is a religious experience - the intimacy of the place and the history are unlike anything else found in North America, bar Wrigley Field in Chicago. One of the reasons for that is the "smallness" of the stadium. John Henry and Co. purposely kept Fenway under 40,000 seats to keep the charm and feel. I've been there numerous times, and frankly I love it. The second you walk in you feel you're "at home" and part of a clan of sorts. And much of that is down to the architecture and the smaller footprint.
If we're going to spend a bazillion dollars on a stadium - and let's face it we have to - I'd prefer to have a more intimate, "we're home" kind of feel to it. And when a crowd gets rocking in a smaller stadium, you feel it in your bones. I detest empty seats - you simply ruin the flavor and intimidating feel of a venue.
Bear in mind, my opinion is simply a post on a fan site. The likelihood I actually get to Goodison / The Docks / an Everton game before I die I put at 50% tops. To that end, I'd absolutely defer to "the natives" in Liverpool. If they want 60,000 I sincerely hope they get it.
But I'd not discount a smaller stadium that can be filled game in and game out. Just my experience and my preference.
56 Posted 09/05/2018 at 07:50:43
Second point: How do you prioritise a cup. I get playing your best team, but other than that?
New ground points. At the meeting with Dan Meis I attended I don't recall him giving a definitive figure on the max. capacity of the site, "around 60k" was mentioned. As I recall he was at pains to cover the restrictions which applied to the site, including the self-imposed orientation of the pitch. North-south was favoured, not compulsory. He was dismissive of expansion post- initial build. His reason was that if that flexibility is to be built in you have to build all of the supporting structures and services at the outset. This increases costs massively with no return. Trying to put the infrastructure in later was hideously expensive.
He said that he had a view about what a football stadium should "be". He thought, without saying what it was, that there was an optimum size for such a stadium. Without elaborating he said that Spurs new ground was " not a football stadium" but that if had been built in the States it would be appreciated as a great place for NFL.
All architects work to a brief and the client would have done some intensive market research or engaged him to have it done for them about what would optimise income to inform the brief.
One of the things that would have come out of that was the level of likely demand for executive boxes. The number of these in the drawings was quite small. There was a greater concentration on more flexible hospitality through better quality seating on the open stands with lounges/suites to back it up.
Like most I believe we could fill a larger stadium with a consistently successful team. Otherwise we could only do so as we are doing now, by keeping prices low.
We currently sell the maximum number of STs consistent with commitments to away fans. We do this largely on price and flexible payment options. Building a larger stadium and having to do the same to fill it makes no sense.
The club will have done their homework on numbers, demand and price across the range of possibilities. Before you queue to say "Oh yeh, but this is Everton" that data would be an essential part of any due diligence carried out by lenders including the council. The lack of proper financial projections, a failure to understand the certification process and no appreciation of timelines led to RBS pulling out of their loans to Liverpool when their new stadium was on the table. Indirectly it led to the sakecofctge club.
What we, as supporters, think, feel, desire, is irrelevant unless we are paying for the stadium with our own spare £500m.
Like other posters, I too wondered about restricting the build by not using all/part of Nelson dock to the south. Cost? I assume we got the BM option rather than bigger, already filled-in options further south because it was cheaper, insulating Peel's commercial developments from the sewage works.
57 Posted 09/05/2018 at 10:21:08
As for the Premier League, the F.A Cup, the Derbies and any other game... not fussed, just coast to 40 pts like this season will do me.
As long as we have something to show for our efforts at season's end with a REAL chance of building on it...I'm happy, Peter.
58 Posted 09/05/2018 at 10:38:49
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1 Posted 07/05/2018 at 10:07:52