The Mersey Beat

Which of the Merseyside clubs will get their new stadium first?  Backed by Tesco boss and Everton fan Sir Terry Leahy, the Toffees have got the go ahead from Knowsley council for their new £200m stadium at Kirkby, five miles outside Liverpool.  Neighbouring councils such as Liverpool want the Government to ‘call in’ the project which could lead to a year’s delay.    Not all Everton fans are happy about the move outside Liverpool, but the stadium’s approval probably ends the recent revival of speculation about a ground share with Liverpool.

A group of Everton fans is seeking to convene an extraordinary general meeting, claiming that the real beneficiaries of the move to Kirkby will be the board of directors whose shareholdings will increase in value.   They argue, ‘The board of Everton Football Club promised an iconic and world class stadium for very little debt.  The reality is that Evertonians are being given “a mid range quality stadium” at a cost of £78m.’    But what is the alternative to the move?   The fans suggest either rebuilding Goodison or moving to another site close to Liverpool city centre.    However, rebuilding Goodison would not be easy and is something that Liverpool has not attempted at Anfield.    As for a site elsewhere in Liverpool, no location is mentioned.

The financing of Liverpool’s stadium is far from sorted out.   However, prospects have brightened after the two American co-owners, if not exactly on best buddy terms have toned down the animosity which has brought turmoil to the club.   George Gillett Jnr. said that the communication with Tom Hicks had ‘substantially improved’.  It could have hardly got any worse.   In what must be the understatement of the year, Gillett said, ‘It took a while for both of us to realise that we weren’t communicating very well.’  However, it is not clear whether their rapprochement extends to a shared vision about taking the club forward together.

At the other end of the football spectrum, three teams have been ejected from the Conference set up for financial failures: Nuneaton Borough (now Town), former Football League side Halifax and the unfortunate Boston United who at one time enjoyed league status.   The Conference has changed its rules which, although based on a complicated formula, meant that clubs had to limit spending on players to around 60 per cent of their turnover.    It was the initially claimed that the rules were being toughened up with a requirement to submit quarterly PAYE accounts, but it has subsequently been claimed that the changes will benefit the richer clubs in the Conference such as Oxford United and Rushden and Diamonds.

Along with some other bloggers, I had an unusual opportunity to sit round the boardroom table with the chairman of a Championship club and have a frank two hour discussion about the state of the game.  He thought that few American and Russian or other foreign investors were likely to come into English football because breaking into the top four in the Premiership was becoming increasingly difficult (although there have subsequently been unconfirmed rumours of a Middle Eastern consortium showing an interest in Spurs).   At the very most one of the top four might be displaced, but teams like West Ham has shown that one could spend a lot of money and get nowhere near breaking through.   He did think that Arsenal would eventually change hands.

He did not think the bubble would burst in the Premiership because the overseas television market was becoming more and more important.   The main driver behind that was gambling and Premiership football was seen as honest.    The Premiership wanted to reduce its numbers to eighteen and might be prepared to deal a financial deal with the Football League to achieve that.

Although a fan of what he calls ‘real’ rather than ‘celebrity’ football, he also mentioned another even more radical idea.   I don’t think that it is seriously on the table (yet) but I thought there was some kite flying going on from someone who is still in contact with Premiership clubs.    The proposal would be a switch to an American system and getting rid of the relegation threat to ‘franchises’ altogether.    There would have to be substantial compensation to the Football League.    Since we spoke, Standard and Poor’s has published a report saying that it can’t give more than BB investment ratings to Premiership clubs because of the downside risk of relegation. 

He also said that the economic downturn was making it harder for clubs outside the Premiership to get good sponsorship deals.   Reading had therefore done well to land the first ever sponsorship from a supermarket, the upmarket Waitrose, part of the John Lewis partnership.   Waitrose is headquartered in Bracknell, eleven miles from Reading’s grounds.  It is also negotiating a contract to supply its food and drink products at the Madejski stadium.

Euro 2008 has been a great financial success for UEFA.   It has spent €234m on staging Euro 2008, but is expected to recoup revenues of €1.3bn from sponsorship.  The final was anticipated to attract the biggest single viewership for a sports event this year, surpassing the 279m who watched the Euro 2004 final.    Economic turbulence has done nothing to diminish the appetite for football.

Football Economy is a monthly article about the business of football by Wyn Grant, the publisher of footballeconomy.com.