JOHN W HENRY ON THE STADIUM QUESTION

THE ANFIELD WRAP was recently invited to put some questions on an email to owner John W Henry. Of course we asked the stadium question – here’s his answer:

Q: Does refurbishing and renovating Anfield remain the favoured option on the future of the stadium? When do you expect to make a final decision on the club’s future home?

JOHN W HENRY: “A long-term myth has existed about the financial impact of a new stadium for Liverpool. Maybe it became a good reason for selling the club at one point.

“Whatever the reason, a belief has grown that Liverpool FC must have a new stadium to compete with United, Arsenal and others. No one has ever addressed whether or not a new stadium is rational.

“New stadiums that are publicly financed make sense for clubs. I’ve never heard of a club turning down a publicly financed stadium.

“But privately carrying new stadiums is an enormous challenge. Arsenal is centered in a very wealthy city with a metropolitan population of approximately 14 million people.

“They did a tremendous job of carrying it off on a number of levels. But how many new football stadiums with more than 30,000 seats have been built in the UK over the past decade or so? I’m sure every club would like to move to a new facility.

“We’ve been exploring a new stadium for the past 18 months. At one point we made it clear that if a naming rights deal could be secured of sufficient size, we would make every effort to build a new facility.

“Liverpool FC has an advantage in being a global club and a naming rights deal could make a new stadium a reality. It is something we are working on. There has been interest.

“Going in the other direction, many football clubs have successfully enlarged their seating capacity. LFC has had plans to expand the main stand at Anfield. But this avenue has been very difficult for the club over the past couple of decades.

“There are homes behind the main stand. Expansion of the main stand would have to be a priority for the city, community and immediate neighborhood in order for that to occur. And there are many people who feel this expansion should be welcomed. This issue is vital to the neighborhood’s future, but we cannot and will not act unilaterally.

“While a new stadium or an expansion of Anfield is beneficial over the long-term for the club, the financial impact of adding seats and amenities should be put into perspective. That’s why I say that it is a myth that stadium issues are going to magically transform LFC’s fortunes. Here is a chart based on 10/11 match-day revenue.



“Can Liverpool as a community afford Chelsea or Arsenal prices? No.”It is often said that for Liverpool to compete in match-day revenue with United, Arsenal and Chelsea, we need a new stadium. But you can see that the £50 or £60 million differences stem as much from revenue per seat as from the number of seats. Even if Liverpool were able to get to 60,000 seats, there would have to be an increase from £900 to £1550 in revenue per seat as well to catch Arsenal.

“If Anfield yielded £1550 per seat, without adding seats, LFC match-day revenue would rise from £41M to £71M. That would be the same as building a new stadium with 60,000 seats or increasing seating at Anfield and increasing revenue per seat to £1170.

“There also is this feeling that if you add concessions and amenities such as Arsenal did at Emirates, your “per-cap” (how much is spent on concessions per person) goes way up, but the last time we checked the per-cap at Emirates was only £0.50 higher.

“The allure of a new stadium and/or refurbishment is no different at Anfield then it is anywhere in the world. New stadiums increase revenues primarily by raising ticket prices – especially premium seating.

“In America, as an example, 3 NFL (American football) clubs have moved into new stadiums over the past 3 years. The New York Jets average ticket price rose by 32% when they moved into their new stadium. The New York Giants rose by 26% and the Dallas Cowboys rose by 31%. In baseball, ticket prices rose 76% when the New York Yankees moved into their new stadium 3 years ago.

“At Emirates Stadium match-day revenues rose 96% the first year while seats had increased 57%.

“Building new or refurbishing Anfield is going to lead to an increase from £40M of match-day revenue to perhaps £60-70M if you don’t factor in debt service.

“That would certainly help, but it’s just one component of LFC long-term fortunes. Our future is based not on a stadium issue but on building a strong football club that can compete with anyone in Europe.

“This will be principally driven financially by our commercial strengths globally.”