Was that the same podcast where he said Tottenham make the same income on a match day from the 10% in corporate spaces, as they do from the other 90% in the general stadium? That was a remarkable stat.
Man Utd redundancies
- Thread starter Phinius T Bookbinder
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Different one but yes he did make that point. Which is the same logic clubs like Bayern apply. Sounds like Liverpool are going that way too. Makes perfect sense.
That’s the business of football these days, general admission season tickets are the least profitable way to fill a stadium.
One point that is often overlooked is that the profit from overpriced premium seats often subsidises season tickets, without them everyone would have to pay more.
Well in the case of building a new stadium or stand, most projects would not be financially viable without substantial amounts of premium seating.
The length of time needed to pay back a construction loan from just GA season tickets would make the cost of borrowing too high.
Building a new stadium or stand is excluded from FFP and could be funded by an owner without any impact from that perspective. The money that owners bring in from sponsors, PL money (assuming we're talking PL clubs in a thread about Man United) or their own personal worth, hell, even from player sales, far, far outstrips any money from season tickets.
You’re right about FFP but that’s not the issue.
Most clubs run at loss, or at best with marginal profits, they simply don’t have the cash flow to build a new stand or stadium with the revenue they generate.
That leaves self-funding from the owners personal wealth, which is just bad business for the owner. They can borrow the money, and tie the liability with the club and not themselves, reserving their own cash to invest elsewhere.
Leeds’ owners the 49ers group are worth billions but they’re still going to borrow a few hundred million for the Elland Road development.
Most new developments are financed based on the revenue they will generate and ultimately the time it will take to pay back, hence the need to maximise revenue per seat through premium sales.
In theory a very generous and wealthy owner could build a new stadium and let everyone in for free, nothing is stopping them, but none of them choose to do it because ultimately the club is an investment for them and nothing more.
Losses and cash flow are entirely different things. Man United for instance are hugely cash positive.
Leeds' owners borrowing cash is irrelevant to the position of a club. Just because someone is worth xm doesn't mean they have that sitting in a bank somewhere. The return on investment they will get for developing the stadium will far outweigh the interest they'll be paying which is why it's worth doing. That return will come from a multitude of events they'll be able to host at the venue, not just charging season ticket holders or hospitality tickets a bit extra.
You're right, clubs are just investments, but the notion that the money to be made is from charging a bit more for season tickets is wrong. The increased revenue is a drop in the ocean. As I agreed above, it's far wiser and more profitable to charge hospitality more but even that won't produce much. It's why spurs host other sports and events at their stadium So successfully.
True, but they don’t have the cash flow to self-finance a £2B stadium either.
For sure. But financing it in a similar manner to spurs should be quite achievable.. If the glazers are happy to forgo their dividends, which I doubt.
Don’t these clever people just create another company and call the cost of the rebuild a debt to the club itself ? So ultimately they don’t risk their own money as much as they probably own the new development which has an intrinsic value that banks are happy to lend against and are happy to wait years for a return .? Unless I’m totally mistaken . Didn’t the Glazers do it for the Man Utd purchase knowing there was a revenue stream .
Not now, they've sacked the Baker.