TF90M 'Business and Current Affairs' Correspondent Joshua Oware wonders if the balance of a new stadium and successful team has ever been struck...
Business and football are so closely linked today that without any hesitation it seems only fair to label them conjoined siblings. Actions of one, bare consequences on the other. This relationship is evident in current trends on-show this very day, where the oil money of the Saudi Princes, having invested in Manchester City Football Club, is being thrown at some of the world's most prolific professionals, take Kaka, for example. Many describe the money in football as an amoeba, or an inanimate object capable of rotting football, as a sport, and preventing future talent from developing. Now I'm sceptical to such an approach, nevertheless a financial infection on football is evident, especially when referring to football stadia:
As with any type of expansion, cost is always the ‘make or break' entity. In recent times the cost of stadium construction has rocketed, to (top league) averages well above £100m. Now in any spectrum of financial capability this is a disproportionate amount of money, in many cases close to the worth of the actual football club. For a premier league club, any sort of development would be of significant size, and hence of significant cost. Costs, which have to be paid-off by both the redistribution of current incomes, and the application of loans. When I say ‘redistribution' I really mean - ‘cut-backs'...
I wish to refer you to the saying: ‘money doesn't grow on trees' and this sentiment is wholly true when referring to how clubs generate sufficient finances, to fund a new stadium. They must utilise already existing finances. For clubs in the past decade, this has directly affected wage structure, ticket prices, and more significantly - TRANSFER FUNDS.
The Emirates Stadium (capacity 60 355), home to Arsenal Football club, opened in 2006 amid serious worries that it cost too much - £430m to be exact. Of which £260m was a bank loan, augmented by the Royal Bank of Scotland. The then chief executive Keith Edelman, in 2005, refuted any claims that the club would suffer consequently, pointing to predictions that their turnover would increase from £115m to £170m. Now the turnover may have increased, but this increase would be mirrored by similar increases in loan amounts, in wages and in other costs. 4 years on Arsenal are still suffering from the Emirates fallout, with Wenger feeling curtailed in the transfer market by ‘insufficient' transfer funds. The story was the same for Manchester City, after they constructed the £110m City Of Manchester Stadium in 2002, before successive takeovers from Thaksin Shinawatra and Sheikh Mansour, respectively, resolved any financial worries.
As we have seen with those examples, stadium expansion is the precursor to tight economic times. Take Chelsea for example. It was the construction of their West Stand (capacity 13,432) that almost resulted in the club falling into administration, but for the intervention of a certain - Roman Abramovich. They, like every other club processing a stadium expansion plan, or construction, had to borrow money from the banking system, to the tune of £70m, in-fact.
Contrary to the patterns in modern times, there were clubs who have been able to complete both stadium productions and expansions, respectively, and maintain success on the field. Notably Manchester United (1995 - North Stand construction) and Liverpool (late 80s & throughout the 90s - Anfield redevelopment). Both of whom, expanded their stadiums, to significant degrees, without ramifications affecting the playing staff and transfer policy too dramatically. However, these examples strengthen the case that it is inflation, which dictates what happens to clubs after expansion. They didn't suffer due to changes in their stadiums, simply because the costs of undergoing the procedure (in raw materials and in labour) were of significantly smaller amounts.
Yes, there was a time when a new stadium didn't induce on-the-field shortfalls. Maybe it is testament to a dramatic financial shift since the late 90s. Football is unquestionably a business, and as with other Transnational cooperation's, suffers from global financial turbulence. Prices for raw materials - have gone up, prices for contractors - have gone up, prices for land - have gone up... the pattern is the same and the conclusion seems unavoidable... while football remains an integral part of commerce, costs both for the upkeep & processing of clubs, and in this case the development of stadiums, will continue to rise proportionately. Whilst it is only natural for clubs to seek development & progress, in the form of a new stadium, it likely the only ones who will survive financially, and thus on the pitch, will be those who have inordinately deep pockets. Which, sadly, in current economic times, represent only a handful of clubs. Maybe it's better to be happy with what you have...
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