Proof that we don't need to fill SMS to expand...

[Saint Frog]

there are a few points about expanding sms that are being over looked here, sms with 32k fans in is at best a nightmare to get out of, just think what it would be like if you added another 5k/10k, the council gave us permission for 32k because of this problem, now yes we could try and sort something out but i very much doubt the council would pay the bill, so more expense for the club. I think NC will be clever and buy up some of the waterfront and surrounding areas before expanding, this way he can use the extra land to the clubs advantage, more space for more people.

 

i remember RL saying he wanted a waiting list for season tickets before expanding, now whatever you think of the guy that seems a good plan, you build when you know you're guaranteed 20-25k season ticket holders) plus your pay per match fans plus your away fans.

[yamms_schmitz]

I would rather a packed house in a small ground than what MK Dons have ever other Saturday.

[M271]

From an economics view point the decision to expand the stadium is fraught with risk. If as previous poster stated that it would cost at least £3000 (old figures) per additional seat even if the seat was 100% used by a £500 season ticket, or equivalent pay per game, it would take take 6 years just to cover the cost of the additional seat, this is without even considering the extra other overheads such as stewarding. Would my beloved Saints sell out games for at least 6 years I'd like to think so but it's a hell of an investment for an uncertain payback.

[The Kraken]

From an economics view point the decision to expand the stadium is fraught with risk. If as previous poster stated that it would cost at least £3000 (old figures) per additional seat even if the seat was 100% used by a £500 season ticket, or equivalent pay per game, it would take take 6 years just to cover the cost of the additional seat, this is without even considering the extra other overheads such as stewarding. Would my beloved Saints sell out games for at least 6 years I'd like to think so but it's a hell of an investment for an uncertain payback.

 

I think it's perhaps a start to look at how much Wolves are spending; they have budgeted £40M to rebuild two stands (Stan Cullis and Steve Bull stands) and take their capacity from 29,303 to 36,000. So that's a capacity increase of 6,697, or to put it another way, just under £6,000 per seat.

 

Using those figures alone, taking our capacity to increase the size of the Kingland and give us a 40,000 odd capacity would cost around £50M. Kind of puts it into perspective a little, doesn't it?

[Micky]

I think it's perhaps a start to look at how much Wolves are spending; they have budgeted £40M to rebuild two stands (Stan Cullis and Steve Bull stands) and take their capacity from 29,303 to 36,000. So that's a capacity increase of 6,697, or to put it another way, just under £6,000 per seat.

 

Using those figures alone, taking our capacity to increase the size of the Kingland and give us a 40,000 odd capacity would cost around £50M. Kind of puts it into perspective a little, doesn't it?

 

When you look at the figures like that it is quite sobering - so the 'break even' point would probably be some 8 - 10 years down the line, supposing they sold out the extra capacity on a permanent basis?

[Sour Mash]

When you look at the figures like that it is quite sobering - so the 'break even' point would probably be some 8 - 10 years down the line, supposing they sold out the extra capacity on a permanent basis?

A ten year pay back on an investment like that would be brilliant.

[The Kraken]

When you look at the figures like that it is quite sobering - so the 'break even' point would probably be some 8 - 10 years down the line, supposing they sold out the extra capacity on a permanent basis?

 

And that's assuming that the investment comes in the form of an interest free loan; at £50M, that's quite an assumption. Any interest payable on that amount of expenditure is going to set that break-even figure back even further.

[Micky]

And that's assuming that the investment comes in the form of an interest free loan; at £50M, that's quite an assumption. Any interest payable on that amount of expenditure is going to set that break-even figure back even further.

 

Good point, well presented - best not go to *quick quid or wonga dot com for this one then...!

 

*see thread in lounge for interest rates.

[Micky]

A ten year pay back on an investment like that would be brilliant.

 

Not sure, but as Kraken has pointed out the interest hasn't been taken into account and if the club were to be relegated anytime within that period (which is a possibility), it would have serious ramifications all round. So all in all, again it equates to a massive gamble really.

[Danny R]

http://ourscotland.myfreeforum.org/archive/portsmouth-s-new-36-000-seater-stadium-in-the-sea__o_t__t_3979.h

 

I think it's important to remember how quickly things can change. It's not long ago that we were getting 14k when struggling in the championship.

[CB Fry]

The usual drivel from the usual suspects, I see. Love these threads.

 

If there is significant over demand for tickets at SMS when we are in the Premier League, then the first thing a sensible business focussed leader should do is not spunk forty odd million quid on a eight thousand more seats, even if the thought of it does make MLG's willy go all funny.

 

The most efficient and effective thing for a business like SMS when faced with this massive over demand that the "believers" are claiming we'll have is to do one thing.

 

Put the price up.

 

Then put the price up again.

 

Then, put the price up again.

 

When faced with significant demand for a product with a finite supply the sensible thing is not to suddenly make more of the product. It's to make as much money as possible from the product you already have.

 

If, like some of the experts claim, we'll have queues round the block for a November home game against Blackburn, then charge £50 a ticket. They want to cram in, they'll pay it.

 

If, like the "look at Wolves look at Wolves LOOK AT WOLVES" idiots think we can fill 50,000 seats on a wet Wednesday versus Fulham, then charge £55 a ticket. We only need 29,000 to pay that much anyway.

 

If, like the "they said you couldn't climb Everest" spanners think we can sell just as many tickets at Liverpool, then charge £60 a ticket. After all, they said man wouldn't walk on the moon and that means everything is possible and everything will definitely happen.

 

Charge more money. That route will make us more money, allow us to sign better players, pay better wages and also won't saddle us with a load of pointless debt, as outlay would be zero. Nothing.

 

It's not as sexy as the dopey little dreamworld of 50,000 stadiums the wallies like to cherish, but it would be a billion times more sensible.

 

And it would definitely work. After all, something about Chelsea in the eighties and Roker Park and Everest and the moon and they all laughed at Christopher Columbus or something so there.

Edited 8 November, 2011 by CB Fry

[positivepete]

http://www.guardian.co.uk/football/2011/nov/08/standing-areas-grounds-stadium-architect

 

This change would add a few thousand at a fraction of the cost

[Dalek2003]

I worry that Southampton FC is getting above its station in the football world.

 

Before long we will expect a royal box and the permanent patronage of a minor member of the Royal family. Tch !

[Thedelldays]

If SMS was expanded and we were in the prem. would we get more through the gate in total over a season. Absolutely. Would our average gate go up. Absolutely. Would it be worth the total cost of it all. Have no idea. Can't see it being cheap at all to expand SMS

[Charlie Wayman]

It's worth reminding people that a loy of people were denied a seat at The Dell during the last few seasons simply because of the restricted abvailability there. This led to a pent up demand which was satisfied only when SMS opened and may explain why we sold out so often in those early days. There was the 'novelty' factor for many of just being able to buy a ticket at last afetr years of disappointment!

 

Now that that novelty effect has well and truly worn off there is less demand for most matches and only certain clubs can offer enough appeal to attract 32000. Certainly Bolton, Blackburn, Wigan, Wunderland etc are hardly worth getting out of bed for so it won't be 32000 every week even in the PL as some opine on here. Maybe four times per season - no more, so a bigger stadium will remain a pipe dream for some time ahead.

[Lighthouse]

A few of our 'crapper' home fixtures in our relegation season.

 

Blackburn - 27,400

Bolton - 30,700 (midweek)

Man City - 28,600

Birmingham - 27,500

West Brom - 31,000

Palace - 31,800

Boro - 29,000

Charlton - 31,100

Fulham - 27,300 (Midweek)

Villa - 31,900

 

For a crap Saints team for the 10 least appealing fixtures, that's a pretty healthy number. Pretty much every other game was a sell out. If you call anything over 31,000 a sell out that's 13 out of 19 home fixtures, when we were playing awful.

 

I think there is a pretty good case for expansion in the Premier League. 10 years to break even is nothing. We stayed at the Dell 103 years and there is no reason St Mary's can't be the same if it's well maintained.

[Matthew Le God]

Now that that novelty effect has well and truly worn off there is less demand for most matches and only certain clubs can offer enough appeal to attract 32000. Certainly Bolton, Blackburn, Wigan, Wunderland etc are hardly worth getting out of bed for so it won't be 32000 every week even in the PL as some opine on here. Maybe four times per season - no more, so a bigger stadium will remain a pipe dream for some time ahead.

 

Rubbish, see Lighthouse's post above about a season in which Saints came 20th, with Rupert Lowe in charge and were relegated. 13 out of 19 St Mary's fixtures were sell outs that season. Imagine a successful season...!?

Edited 8 November, 2011 by Matthew Le God

[CB Fry]

If SMS was expanded and we were in the prem. would we get more through the gate in total over a season. Absolutely. Would our average gate go up. Absolutely. Would it be worth the total cost of it all. Have no idea. Can't see it being cheap at all to expand SMS

 

Indeed, but we can have an educated stab.

 

A few of our 'crapper' home fixtures in our relegation season.

 

Blackburn - 27,400

Bolton - 30,700 (midweek)

Man City - 28,600

Birmingham - 27,500

West Brom - 31,000

Palace - 31,800

Boro - 29,000

Charlton - 31,100

Fulham - 27,300 (Midweek)

Villa - 31,900

 

For a crap Saints team for the 10 least appealing fixtures, that's a pretty healthy number. Pretty much every other game was a sell out. If you call anything over 31,000 a sell out that's 13 out of 19 home fixtures, when we were playing awful.

 

I think there is a pretty good case for expansion in the Premier League. 10 years to break even is nothing. We stayed at the Dell 103 years and there is no reason St Mary's can't be the same if it's well maintained.

 

Well, really? That time to break even is time and money not spent on wages, which would put our squad and our top flight position in peril and is funnily enough one of the major contributory factors to our going into admin in the first place.

 

 

Here's a simple case study.

 

40,000 gates at £40 a ticket - £30m gate reciepts over a 19 game season. Lovely. A whole £6,000,000 more than 32,000 seats at the same price.

 

But at a conservative £5,000 a seat to build those seats, that's a bill of £40,000,000 to cover that. Stick that on a 20 year mortgage and you're going to need to be coughing up something like £2.5-£3m a year, so that's your return down against the old stadium to £3m already. If we stick it on a "that's nothing" 10 year mortgage, well, we're making no money at all, are we? So what's the point?

 

Stick a fiver on average seats, though, and with no outlay your turnover already up by £3m.

 

Stick on another fiver and bingo, another £3m. No outlay, no risk, no mortgage, just £6m worth of juicy turnover straight into the coffers.

 

If we want money to compete then "sweating" our resources is a far more sensible option to exhaust than seat expansion vanity projects.

 

If we are selling 31,000 home to West Brom at an average of £50 per seat, with a season ticket waiting list of at least 5,000 then yes, there is a case for expanding the ground.

 

Until then, there really isn't because it makes very little economic sense.

Edited 8 November, 2011 by CB Fry

[CB Fry]

Rubbish, see Lighthouse's post above about a season in which Saints came 20th.

 

 

Lighthouse's post above prove Charlie Wayman's point. We didn't sell out every week. So, not actually rubbish at all.

[Matthew Le God]

Lighthouse's post above prove Charlie Wayman's point. We didn't sell out every week. So, not actually rubbish at all.

 

It is very much rubbish, Saints had 13 sell outs from 19 home games in a season in which they came 20th, were relegated, had little investment in the team and Rupert Lowe was in charge. As I said before, imagine a successful season if an extremely poor one had 13 out of 19 games sold out!?

[CB Fry]

It is very much rubbish, Saints had 13 sell outs from 19 home games in a season in which they came 20th, were relegated, had little investment in the team and Rupert Lowe was in charge. As I said before, imagine a successful season if an extremely poor one had 13 out of 19 games sold out!?

 

Hang on, you're the tedius pedantic one on here - Wayman said "it won't be 32k every week". You said rubbish, but it isn't because previously it wasn't, those numbers prove it and it won't be again.

 

Did we have a waiting list for season tickets? No. You don't spent £50m expanding a perfectly good stadium on the off chance of us having lots and lots of better seasons than the Rupert Lowe era, which did see us finish between 12th and eighth up until relegation.

 

And being that Stoke, Fulham, Bolton, et al have had better seasons than we have on smaller gates, a bigger ground than 32,000 is not a pre-requisite for having better seasons than finishing bottom of the Premier League.

Edited 8 November, 2011 by CB Fry

[Matthew Le God]

Hang on, you're the tedius pedantic one on here - Wayman said "it won't be 32k every week". You said rubbish, but it isn't because previously it wasn't, those numbers prove it and it won't be again.

 

Those figures are from the least successful Premier League campaign Saints ever had. Yet they still show demand from the public to watch a poor Saints side led to an average for the season of over 30k and that only 6 league games didn't sell out.

 

Currently only 10 teams in the Premier League average over 30k, Saints were able to do this whilst in the season of a relegation and Rupert Lowe in charge in 2004/05.

 

Did we have a waiting list for season tickets? No. You don't spent £50m expanding a perfectly good stadium on the off chance of us having lots and lots of better seasons than the Rupert Lowe era, which did see us finish between 12th and eighth up until relegation.

 

It isn't on the "off chance". The two go hand in hand, a successful season leads to more demand and investment in the team along with the infrastructure also helps have a successful season and larger demand.

 

And being that Stoke, Fulham, Bolton, et al have had better seasons than we have on smaller gates, a bigger ground than 32,000 is not a pre-requisite for having better seasons than finishing bottom of the Premier League.

 

My point was that a successful season will see a rise in demand compared to that of 2004/05. That season saw the team come bottom of the league and yet it still had 13 out of 19 games sold out and an average of over 30k for the season.

 

2003/04 was the season after the 8th place finish and cup final, Saints that season had an average of 31,699 which indicates most games were sold out in the year after a successful one. That was with Rupert Lowe in charge, and he didn't exactly improve the team much that year and Saints still managed 31,699 as an average for a team that came 12th in the Premier League!

Edited 8 November, 2011 by Matthew Le God

[CB Fry]

Usual rubbish

 

1. Have we ever had a waiting list for season tickets in the St Mary's Era?

 

2. Do you think we should put prices up significantly to maximise revenue from this amazing demand for tickets for a couple of seasons before we spend £40m on infrastructure we could otherwise spend on players? You know, generate some money before just spending it again.

 

Do you think you could answer those two questions to move the discussion on. Thanks.

[Joensuu]

I'm probably wrong, but wouldn't the value (or hypothetical asking price) of the club be increased by the cost of any improvements made to its infrastructure? As such wouldn't then the extra income of c. £3-4million pa brought in by say an 8k expansion, actually be considered almost as annual interest against a, say, £40 million investment - you'd be hard pressed to find an interest rate like that in a bank...

[Lighthouse]

I think you're forgetting the away fans contribution to all of this. Take the Blackburn game. First game of the season, a lot of people are either on holiday or have just got back and are skint. Saints is a pretty crap away game for them (a long, expensive journey and not a glamourous team). They probably only brought a couple of hundred. We might well have sold out our allocation, but still been 2-3,000 short of a full capacity.

 

I'm not sure where this figure of £50m to expand the stadium by 8,000 seats came from either. It only cost us £35m to build the first 32,000.

[Matthew Le God]

Have we ever had a waiting list for season tickets?

 

No

 

Here is a similar question for you....

 

Has a waiting list for season tickets been a prerequisite for every stadium expansion in the past? If not, then it is not really particularly relevant is it?

 

Do you think we should put prices up significantly to maximise revenue from this amazing demand for tickets for a couple of seasons before we spend £40m on infrastructure we could otherwise spend on players?

 

The new financial regulations don't allow for large amounts of cash from the owner to be spent on players transfers and wages. What they do allow is for as much money as you like to be spent on infrastructure. CLubs around England and Europe are looking for ways to increase revenue streams and turnover to see them through the changes, a good way to do this is to increase capacity. Hence what Wolves are doing right at the moment and other clubs have plans to do. Another way to do it is to do what Derby are doing with Pride Park Plaza, and MK Dons with the area around them and developing the site around the stadium.

 

Do you think you could answer those two questions to move the discussion on. Thanks.

 

Done.

 

And you edited my post to say "usual rubbish", despite it raising a number of points that in all the discussions we have had about this you have struggled to counter.

Edited 8 November, 2011 by Matthew Le God

[Matthew Le God]

I'm probably wrong, but wouldn't the value (or hypothetical asking price) of the club be increased by the cost of any improvements made to its infrastructure? As such wouldn't then the extra income of c. £3-4million pa brought in by say an 8k expansion, actually be considered almost as annual interest against a, say, £40 million investment - you'd be hard pressed to find an interest rate like that in a bank...

 

Yes, CB Fry always overlooks this!

 

Improvements to the infrastructure raise the price of their asset should they ever sell it on, so it is not lost money.

[The Kraken]

I'm probably wrong, but wouldn't the value (or hypothetical asking price) of the club be increased by the cost of any improvements made to its infrastructure? As such wouldn't then the extra income of c. £3-4million pa brought in by say an 8k expansion, actually be considered almost as annual interest against a, say, £40 million investment - you'd be hard pressed to find an interest rate like that in a bank...

 

Very debatable. A football stadium, particularly in Southampton, is only worth anything as a football stadium, it doesn't really do anything else. So it's only worth that money if someone will come in and actually pay the price for it.

 

Take St. Mary's for instance; it cost £32M to build. Did it add £32M to the share price? Only going by memor, but the share price in the last few months prior to our ultimate demise as a PLC only priced the whole of SLH at around £15M or so; and that included the training ground, Jackson's Farm etc.

 

It's a very imprecise calculation to just say that what you spend on infrastructure gets instantly added to the value of the club. Cost doesn't alwalys equal value, or price; particularly when investing in something as specific as a football-only stadium.

[Micky]

Personally I think that the club will have already carried out some form of market research on this anyway. I'm assuming that we don't have a waiting list for season tickets (although I could be wrong), but I would imagine negative calls to the booking office and people failing to obtain tickets on line are logged, at the very least. Hopefully that would give at least some indication of the market that they are currently failing to cater for.

 

People keep posting figures of those that are in the ground, and then assuming that there are thousands who have failed to get in. If we expanded to 40k we would need to increase numbers by 20 percent, surely if that is the shortfall now, it would have been noted by the club, media and fans themselves. Not only that - but that extra 20 percent would have to be hardcore, every home game fans and not JCL's.

 

Maybe they are there, if they are then they are keeping fairly quiet right now. Expanding on the back of what we currently get, and assuming the constant demand will be there is a fairly risky strategy I would think.

[CB Fry]

Yes, CB Fry always overlooks this!

 

Improvements to the infrastructure raise the price of their asset should they ever sell it on, so it is not lost money.

 

 

That's funny, because the Leibherr's bought St Mary's for far less than the list price to build the thing, so that development lost a shed load of money.

 

The one thing you "completely overlook" is the high likelihood that if we had a 40,000 seater stadium would probably deflate demand, especially as you're planning to build it with no season ticket waiting list.

 

A massive reason people buy season tickets is to guarantee seats for bigger games. 40,000 seats to chose from makes that a much lower imperative.

[CB Fry]

No

 

Here is a similar question for you....

 

Has a waiting list for season tickets been a prerequisite for every stadium expansion in the past? If not, then it is not really particularly relevant is it?

 

 

 

The new financial regulations don't allow for large amounts of cash from the owner to be spent on players transfers and wages. What they do allow is for as much money as you like to be spent on infrastructure. CLubs around England and Europe are looking for ways to increase revenue streams and turnover to see them through the changes, a good way to do this is to increase capacity. Hence what Wolves are doing right at the moment and other clubs have plans to do. Another way to do it is to do what Derby are doing with Pride Park Plaza, and MK Dons with the area around them and developing the site around the stadium.

 

 

 

Done.

 

And you edited my post to say "usual rubbish", despite it raising a number of points that in all the discussions we have had about this you have struggled to counter.

 

 

So we're now building hotels and leisure complexes are we - this was a debate about seats in the ground, so no idea what you are talking about there. If Cortese wants to stick a Casino on the side of the ground to generate revenue then fine if the numbers work. Never have I stated any objection to anything like that.

 

I talk about season ticket waiting list above. Basically, it's a good, genuine bellwether for demand. True demand. Not demand made up in your head.

 

I notice you didn't actually answer my question about gate prices - it is a far more efficient and immediate way to "increase revenue" (and to evaluate true demand) than spending millions on seats with no clear demand for. Also a far more efficient way to "increase revenue" than building hotels and casinos.

 

You live in a silly little computer game world where the only way to increase revenue is to spend loads of money. Not true. Just drive value from the demand that is already there. After all, there's loads of it according to you.

 

So not "done". You didn't answer the question.

Edited 8 November, 2011 by CB Fry

[Matthew Le God]

That's funny, because the Leibherr's bought St Mary's for far less than the list price to build the thing, so that development lost a shed load of money.

 

That was buying a business when in a financial disaster. Should the club be financially secure and in the Premier League when the Liebherr's do sell up it will be worth more if the infrastructure at Staplewood and St Mary's is improved.

 

The one thing you "completely overlook" is the high likelihood that if we had a 40,000 seater stadium would probably deflate demand, especially as you're planning to build it with no season ticket waiting list.

 

You keep on about "waiting lists", however answer this...

 

Has a waiting list for season tickets been a prerequisite for every stadium expansion in the past? If not, then it is not really particularly relevant is it?

 

A massive reason people buy season tickets is to guarantee seats for bigger games. 40,000 seats to chose from makes that a much lower imperative.

 

That doesn't mean by default those 40k won't sold. In any case more seats allow for more flexibility in pricing for season tickets, match tickets, family deals, free school offers etc etc.

[Matthew Le God]

So we're now building hotels and leisure complexes are we - this was a debate about seats in the ground, so no idea what you are talking about there. If Cortese wants to stick a Casino on the side of the ground to generate revenue then fine. Never have I stated any objection to anything like that.

 

I talk about season ticket waiting list above. Basically, it's a good, genuine bellwether for demand. True demand. Not demand made up in your head.

 

I notice you didn't actually answer my question about gate prices - it is a far more efficient and immediate way to "increase revenue" (and to evaluate true demand) than spending millions on seats with no clear demand for. Also a far more efficient way to "increase revenue" than building hotels and casinos.

 

So not "done". You didn't answer the question.

 

Yes it is "done". I answered your question with a "no". I then turned it back to you by asking you a question as I don't believe your question is relevant.

 

Has a waiting list for season tickets been a prerequisite for every stadium expansion in the past? If not, then it is not really particularly relevant is it?

[The Kraken]

That doesn't mean by default those 40k won't sold. In any case more seats allow for more flexibility in pricing for season tickets, match tickets, family deals, free school offers etc etc.

 

Not this one again MLG; it's an utterly ridiculous argument. Why would you spend £50M on a new stadium expansion just to give free or massively reduced prices on tickets, and thereby not actually get your expenditure back? You wouldn't, it makes utterly no business sense whatsoever.

[Matthew Le God]

Not this one again MLG; it's an utterly ridiculous argument. Why would you spend £50M on a new stadium just to give free or massively reduced prices on tickets, and thereby not actually get your expenditure back? You wouldn't, it makes utterly no business sense whatsoever.

 

Real world precedent, West Ham are intending to do just this should they move to the Olympic Stadium i.e. take advantage of the extra seating by offering family discounts, school tickets etc in larger numbers than they can if the stadium is close to sold out every week in a smaller stadium like Upton Park. I'm not saying every extra seat will be discounted, but some can be.

[Micky]

Yes it is "done". I answered your question with a "no". I then turned it back to you by asking you a question as I don't believe your question is relevant.

 

Has a waiting list for season tickets been a prerequisite for every stadium expansion in the past? If not, then it is not really particularly relevant is it?

 

Not being funny mate - but that would scare the shyte out of me. It may not be a prerequisite, but let's be honest - it's a damn good indicator for this particular project - no?

 

We have a 10k waiting list, and have had for the last 5 years - shall we expand - maybe.

We don't and never have had a waiting list for the last 5 years - shall we expand - let's do a little research and then decide.

 

It's not as though you're talking about throwing an extra bedroom in the loft here, your talking major expansion - there has to be some viability to the plan.

[The Kraken]

Real world precedent, West Ham are intending to do just this should they move to the Olympic Stadium i.e. take advantage of the extra seating by offering family discounts, school tickets etc in larger numbers than they can if the stadium is close to sold out every week in a smaller stadium like Upton Park. I'm not saying every extra seat will be discounted, but some can be.

 

West Ham are in a completely different situation to us:

 

they won't own the ground, they won't even pay a fee for the new stadium, they will pay £2M a year to lease it;

the amount of seats on offer is fixed;

they're not looking to pay an enormous sum to get comparitiviely just a few more seats.

 

They're making the most a massively Government-funded opportunity; it's an entirely irrelevant comparison.

 

There is absolutely no commerical sense whatsoever in spending £50M on a bigger stadium, only to have to give seats away or discount them in order to fill the stadium.

Edited 8 November, 2011 by The Kraken

[Matthew Le God]

West Ham are in a completely different situation to us:

 

they won't own the ground;

the amount of seats on offer is fixed;

they're not looking to pay an enormous sum to get comparitiviely just a few more seats.

 

They're making the most a massively Government-funded opportunity; it's an entirely irrelevant comparison.

 

There is absolutely no commerical sense whatsoever in spending £50M on a bigger stadium, only to have to give seats away or discount them in order to fill the stadium.

 

In the short term it might be seen as "giving them away". But what it does is creates future generations of fans that will be paying adult prices in years to come. It also allows those with families to attend games they may otherwise not have gone to due to cost (thus it is additional revenue the club wouldn't have got if the price wasn't discounted).

[Micky]

Real world precedent, West Ham are intending to do just this should they move to the Olympic Stadium i.e. take advantage of the extra seating by offering family discounts, school tickets etc in larger numbers than they can if the stadium is close to sold out every week in a smaller stadium like Upton Park. I'm not saying every extra seat will be discounted, but some can be.

 

Sorry, but absolutely not, not a real world precedent at all. West Ham are inheriting a stadium which will no doubt be quite heavily discounted. I would be surprised if they can consistantly fill it - therefore discounted seats would be much easier to justify. We are inheriting nothing - each individual seat has to have a bum on it every game for 10 years to make it worthwhile.

[The Kraken]

In the short term it might be seen as "giving them away". But what it does is creates future generations of fans that will be paying adult prices in years to come. It also allows those with families to attend games they may otherwise not have gone to due to cost (thus it is additional revenue the club wouldn't have got if the price wasn't discounted).

 

That's all very nice in your little make-believe world, but it still makes absolutely no business or commerical sense whatsoever. If you expend £50M, you want/need to see the quickest return on expenditure possible. If that is not going to be possible (and in your example you're saying it isn't), then it isn't a worthwhile investment to make.

 

How would you secure funding for this venture? "Excuse me, I want to borrow £50M, but you won't begin to see a return on investment for at least another 10 years". Oh, and by the way, we're instantly going to be discounting everything!

 

With a business plan like that you wouldn't find a bank or investor in the country to side with you, in fact you'd get laughed at.

[Matthew Le God]

Sorry, but absolutely not, not a real world precedent at all. West Ham are inheriting a stadium which will no doubt be quite heavily discounted. I would be surprised if they can consistantly fill it - therefore discounted seats would be much easier to justify. We are inheriting nothing - each individual seat has to have a bum on it every game for 10 years to make it worthwhile.

 

West Ham if the original deal had gone through wouldn't have got the stadium for free. It was still costing them a great deal of money. Newham council for example were going to be providing a £40m loan, that would have had to be paid back along with any other costs.

 

In any case St Mary's will be around for a lot longer than 10 years.

[Matthew Le God]

That's all very nice in your little make-believe world, but it still makes absolutely no business or commerical sense whatsoever. If you expend £50M, you want/need to see the quickest return on expenditure possible. If that is not going to be possible (and in your example you're saying it isn't), then it isn't a worthwhile investment to make.

 

How would you secure funding for this venture? "Excuse me, I want to borrow £50M, but you won't begin to see a return on investment for at least another 10 years". Oh, and by the way, we're instantly going to be discounting everything!

 

With a business plan like that you wouldn't find a bank or investor in the country to side with you, in fact you'd get laughed at.

 

What makes you think the Liebherr's/Cortese would borrow the money? The Liebherr dynasty has a history of not having debt in business going back to Markus' father. They may have capital reserves themselves that could easily cover the cost. Pointless paying interest to a bank etc when it can be privately funded. Have you considered the Liebherr's may be in this for the long term and not looking for a quick profit? They don't exactly need the cash and this is all relatively small fry numbers to them.

[The Kraken]

What makes you think the Liebherr's/Cortese would borrow the money? The Liebherr dynasty has a history of not having debt in business going back to Markus' father. They may have capital reserves themselves that could easily cover the cost. Pointless paying interest to a bank etc when it can be privately funded. Have you considered the Liebherr's may be in this for the long term and not looking for a quick profit? They don't exactly need the cash and this is all relatively small fry numbers to them.

 

What makes you think they're just going to give us £50M? Especially if they take your business plan of having to discount prices immediately and give away thousands of free tickets. They're successful business people and would recognise your idea as the hair-brained lunacy it truly is.

[Micky]

West Ham if the original deal had gone through wouldn't have got the stadium for free. It was still costing them a great deal of money. Newham council for example were going to be providing a £40m loan, that would have had to be paid back along with any other costs.

 

In any case St Mary's will be around for a lot longer than 10 years.

 

I didn't say that they were going to get it for free - and yes it will cost them a great deal of money. But it will still be heavily discounted due to the fact that it was built by the council for the games and one of the main prerequisites of the deal is that it must remain a multi - functional/purpose stadium.

 

West Ham's business position and ours, bear no similarities whatsoever.

[Matthew Le God]

I didn't say that they were going to get it for free - and yes it will cost them a great deal of money. But it will still be heavily discounted due to the fact that it was built by the council for the games and one of the main prerequisites of the deal is that it must remain a multi - functional/purpose stadium.

 

Well if West Ham have to pay a great deal for the new stadium and Saints have to pay to expand St Mary's, why can't a comparison be made?

[Matthew Le God]

What makes you think they're just going to give us £50M? Especially if they take your business plan of having to discount prices immediately and give away thousands of free tickets. They're successful business people and would recognise your idea as the hair-brained lunacy it truly is.

 

Where do you think the money for the training ground at Staplewood is coming from? That hasn't been designed to hang about in the Championship or lower reaches of the Premier League, it has been designed on a par with some of the best in the country.

[The Kraken]

I didn't say that they were going to get it for free - and yes it will cost them a great deal of money. But it will still be heavily discounted due to the fact that it was built by the council for the games and one of the main prerequisites of the deal is that it must remain a multi - functional/purpose stadium.

 

West Ham's business position and ours, bear no similarities whatsoever.

 

Actually they may not pay anything up front for the stadium; they won't own it, they will lease it. £35M has been set aside in public monet to convert the Olympic Stadium to a stadium fit for purpose after the games, whatever that may be.

 

West Ham will (it's only rumoured for now) only incur a £2M per year tenancy charge. and will be able to sell their old ground; a tidy little profit for the porn barons.

 

So nothing like our situation whatsoever.

[Micky]

What makes you think the Liebherr's/Cortese would borrow the money? The Liebherr dynasty has a history of not having debt in business going back to Markus' father. They may have capital reserves themselves that could easily cover the cost. Pointless paying interest to a bank etc when it can be privately funded. Have you considered the Liebherr's may be in this for the long term and not looking for a quick profit? They don't exactly need the cash and this is all relatively small fry numbers to them.

 

Far, far too many presumptions - first you presume that we have massive numbers of fans waiting to attend games, now you make the presumption that the owner will foot the bill.

 

Nobody actually knows the level of financial backing that the Liebherr family are willing to commit to, so it's more than a little speculative to make such suggestions.

[Matthew Le God]

Actually they may not pay anything up front for the stadium; they won't own it, they will lease it. £35M has been set aside in public monet to convert the Olympic Stadium to a stadium fit for purpose after the games, whatever that may be.

 

West Ham will (it's only rumoured for now) only incur a £2M per year tenancy charge. and will be able to sell their old ground; a tidy little profit for the porn barons.

 

So nothing like our situation whatsoever.

 

"Only incur a £2m per year tenancy charge"

 

You are very dismissive of a £2m fee each year. If Saints had a loan for a stadium expansion, how much do you think it would cost per year. Lets say it cost the £50m you previously mentioned and a 25 year period. Oh look, that comes to £2m a year, so in fact very similar in terms of costing.

[The Kraken]

Where do you think the money for the training ground at Staplewood is coming from? That hasn't been designed to hang about in the Championship or lower reaches of the Premier League, it has been designed on a par with some of the best in the country.

 

The training ground is, from what I'm led to believe, financed from a "pot of money" provided upon takeover that would, amongst other things, assist on a return to and within the Premier League; and therefore at such a point the return on investment would cover the cost outlayed. It's also a fraction of the cost you're looking at for a stadium.

 

£50M on an unprecedented stadium that by your own words we can only fill by immediately discounting tickets and giving them away for free is not the same. There is no similar return on investment.

 

Actually, I'm doing you a dis-service; you don't think a 40K stadium is what we're looking at, you think 45K - 50K don't you? So that's not £50M at all, that's closer to £100M. Just so we've got our facts and figures correct.