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Football clubs’ affairs off the pitch almost have as much drama as players’ on-field antics.
The stakes are high and a club’s fortune can turn on a sixpence and Everton FC is a prime example. Head of finance Martin Evans has a potentially exciting time ahead, helping the club’s exuberant chairman, Bill Kenwright, pull off ambitious plans for 2008.
The pressure is on for Everton to maintain its high-ranking position in the Premier League, and again qualify for lucrative European Cup competitions.
What’s happened...
Investment in a number of high-profile players, including Andrew Johnson, Joleon
Lescott, Tim Howard and Manuel Fernandes on loan, meant the club posted an
operating loss of £10.9m last year.
However, it appears to have pulled off a major coup, securing nearly all of the £200m it needs for its new 50,000-seater stadium in a tie-up with supermarket giant Tesco.
The club successfully gained a £120m contribution to the cost from the supermarket giant in return for allowing Tesco to build a 55,000sq ft in-stadium store. But it has smartly negotiated a deal that has seen Tesco sign away any rights to own the stadium or club, despite its chief executive, Sir Terry Leahy’s, passion for Everton (he is a season ticket holder).
The club’s major shareholders Robert Earl, founder of the Planet Hollywood chain, Liverpool businessman Jon Woods, and Everton FC’s Kenwright are stumping up £78m towards costs through asset sales and borrowing.
What happens next?
There are some obvious revenue-generating opportunities here, but the challenge
will be to ensure that plans for the new stadium go smoothly. Evans could be at
the forefront if he’s chosen to take on the new stadium’s finances a potential
feather in his cap, while at the same time appearing like a poison chalice.
The tale of Wembley Stadium’s difficult emergence with its £100m overspend and delayed opening will be fresh in everyone’s minds as a financial disaster. Not to mention the government’s current embarrassment over getting its budget for the forthcoming Olympic Games venues.
However, if Evans can keep a firm hand on costs and the club pulls off building its new stadium on time and within budget, then the rewards will be high.
One only has to think of the Millennium Stadium, which put Cardiff on the map, and Manchester’s Commonwealth Stadium, to see the revenue benefits of a well-run venue.
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