Liverpool Football Club has been told it must share with rivals Everton if it wants to secure public sector grants to part finance its proposed new stadium at Stanley Park.
News of the ultimatum emerged as Everton and Liverpool’s chief executives met the leaders of two major public agencies yesterday to explore the ground share proposals. While that meeting ended with a bland formal statement being issued to the press, the Daily Post has learned from a senior public sector source that the North West Development Agency and Liverpool City Council have warned they may withhold funding if a ground share is not agreed.
Two weeks ago the Daily Post revealed the regional development agency was calling on the two clubs to share one stadium. Since then the local authority has given its support to the idea. Liverpool FC plans to build its own stadium and the ground share proposal has split opinion between both sets of fans. At stake is up to £30m of grants to help meet the £100m cost of the Stanley Park stadium. The source said: “The public sector agencies are putting pressure on the clubs. They are using their leverage to ensure the issue of a ground share is properly addressed.”
Liverpool has always wanted some public funding for auxiliary developments alongside its new stadium, such as a conference and visitor centre. Now it appears the club also wants grant support for the ground itself. The public sector source said: “If they want public money for the ground, it gives the public sector some say in how it’s used.”
Liverpool FC has spent the last three months trying to raise money from investment banks in the City. Potential investors include Bear Stearns, which raised £30m for Everton through a season ticket securitisation two years ago. The majority of that money was used to repay the club’s £20m overdraft.
Liverpool FC wants the City to lend it £75m to pay for the costs of the new stadium and the club is seeking further sums to help buy new players. A £75m loan secured against season ticket sales could cost the club around £5m a year in interest payments over 25 years.
The proposed Stanley Park stadium would be able to seat 60,000 fans, 14,000 more than the club’s current Anfield home. Liverpool hopes to persuade potential investors that the resulting extra gate revenues, worth up to £14m a year, would allow it to comfortably meet repayments.
However, one football finance expert suggested last night the Reds might be finding it difficult to raise the money it needs at an acceptable price.
James Dow, a director of Cheshire-based corporate finance firm Dow Schofield Watts, said: “It might be problematic in the current environment. There is speculation about the servicing of Leeds United’s debt, particularly if things don’t pick up on the pitch.” Mr Dow, a former partner in KPMG, has advised Everton, Barcelona and Ajax in the past.
“There is only a finite interest in this sort of deal in the City. “It’s a specialist area and it’s small change for the big firms, so it ends up being a small market place. “£75m is on the high side, but not inconceivable. Its at the top end of what they could reasonably expect to raise.
“The problem is there is no guarantee that all those extra seats will be sold. If you are lending money at 6pc interest, at that level of return, you don’t want to be taking risks. As soon as it looks risky, the rate goes up,” Mr Dow said.