Liverpool's new stadium plans not yet clear
Former Arsenal chief Keith Edelman has advised new Liverpool owners NESV to come up with a plan to either build a new stadium or increase the current Anfield capacity if they want to compete with the likes of Arsenal, Manchester United and Chelsea.
He believes that Liverpool owners need to take one of the two options sooner rather than later. Edelman worked for Royal Bank of Scotland as a consultant for six months prior to club's takeover by NESV.
He is of the opinion that Liverpool must increase their match day income if they want to sit amongst the European elite in future. “I think they have to generate more revenue and to achieve that objective they have to enlarge Anfield or develop a new stadium,”
said Edelman. “They have to do one thing or the other. They can’t stay as they are.”
Liverpool’s Anfield stadium is an icon of English football but it has its financial constraints. The 45,362 capacity is nowhere near enough to compete with top European clubs. Manchester United 75,000+, Arsenal 60,000, AC Milan 80,000+, Real Madrid 85,000+
are well ahead of Liverpool in terms of their match day incomes.
In the financial year 2008-09, Liverpool earned a modest £42m from gate and match day income. On the other hand, Manchester United generated £109m and Arsenal earned £100.1m during the same year.
These figures dropped slightly next year for both Manchester United and Arsenal and came down to £100.1m for United and £93.9m for Arsenal.
Following are some interesting facts regarding some of the big teams in England:
LIVERPOOL
Stadium: Anfield
Capacity: 45,362
Turnover: £184.8m
Match-day revenue: £42m
ARSENAL
Stadium: Emirates Stadium
Capacity: 60,432
Turnover: £379.9m (£156.9m from property sales)
Match-day revenue: £93.9m
CHELSEA
Stadium: Stamford Bridge
Capacity: 42,449
Turnover: £206.4m
Match-day revenue: £74.5m
MANCHESTER CITY
Stadium: Eastlands
Capacity: 48,000
Turnover: £125m
Match-day revenue: £18.2m
MANCHESTER UNITED
Stadium: Old Trafford
Capacity: 76,100
Turnover: £286.4m
Match-day revenue: £100.1m
TOTTENHAM HOTSPUR
Stadium: White Hart Lane
Capacity: 36,214
Turnover: £113m
Match-day revenue: £39.5m
The importance of a new stadium can be realized from the fact that UEFA will impose its new financial fair-play edict. Under this new rule, clubs need to break even beginning next year. They can maximum lose up to £39m till 2014 otherwise they will have
to face sanctions such as expulsion from European competitions.
Therefore, if Liverpool want to be a top club they will have to oblige by the new UEFA rulings. This would mean clubs will only be able to spend what they earn. This in turn means that clubs need to generate more revenue.
Gate and match-day revenues are a major source of income and all major clubs make huge profits due to their massive stadia.
John Henry, Liverpool’s new co-owner has suggested that they are keen to build the new stadium but its only one of the many issues they are dealing with at the moment. He believes that big investments are required throughout the club and wants to be realistic
in giving away a timeframe for the new stadium.
The American also warned against taking loans and building up debts for the sake of buying new players, but he did mention that the new stadium or the rebuilding of Anfield would involve taking on costs the club could yet not afford.
"We need more depth and we need to build the squad, we need stadium changes, whether we build a new park and a new ground at Stanley Park or we refurbish Anfield it's going to take investment, so obviously if you build a new stadium there's debt involved,"
said Henry.
Even Arsenal borrowed money to build the new stadium but it’s not a viable option to borrow when it comes to buying players.
Henry has been quoted as saying that at Boston Red Sox, they spent nearly three years deciding whether to build a new stadium or refurbish the existing one. However, they do not have the luxury to do that over here. The planning permission for the new stadium
at Stanley Park expires in April next year.
This puts pressure on NESV to come up with a decision as soon as possible and make sure work on stadium is started so that the club is ready to compete financially with other European giants in the coming years.
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