New Kings Park Stadium

A lot of the "economics" on here are missing a point. The mental arithmetic for whether or not this is a good idea isn't just increased revenue from tickets or hospitality etc. On that basis it doesn't stack up as people have said. So we ask why Max would bother as he won't see a return on his investment via revenue.

What is missing is the asset element. The club currently doesn't own it's stadium asset. In fact rent on the thing takes away probably something like £0.5M a year (more?) in rent. The first 1,000 capacity on Dean Court is lost just to pay the rent. It comes off the bottom line profit the club makes too. The value of the club as a business proposition (asset to Max) is based on that same profit. Just by removing a rental outgoing of £0.5M off his bottom line, Max could increase his shareholding asset value by at least £5M. Probably more.

For all we know, the club doesn't host more big events because maybe the lease entitles Structadene to a revenue share (like West Ham have). Would we do that at our own stadium? There's more income increasing Max's shareholder asset value by multiples of 10, 20 etc. Increased matchday revenue of £2M? Add another £20M to the shareholding value. And so on.

Then, consider that the club has built a £20M or £30M stadium. If I built a house and rented it out, it's not just worth X years' rent. It's worth X years' rent plus the value of the house after X years. Same with the stadium. The club and therefore the shareholding asset is now worth £20M more because it has a £20M asset on the books.

When Max sells (which he will one day) he sells with a better bottom line and a valuable asset. He makes his money back one way or the other.

We assume Max needs to realise the value whilst he is here but he will possibly/probably make the real money when he sells.

edit to add: in fact he doesn't even have to build the thing. he just needs to have the approved plans in place and already he has increased the value of his shareholding. For me, there is strong financial incentive for this to go ahead, even if matchday income doesn't increase by that much.
 
Did someone a few months ago say that we had an architect working on plans? Can’t remember who or when, but I know I’ve had a call from a company working on the clubs be half asking questions about people going to games and who would go in house hold if had availability. All people are doing is guessing as the ones in the know have all disappeared,
 
NornIron said:
A lot of the "economics" on here are missing a point. The mental arithmetic for whether or not this is a good idea isn't just increased revenue from tickets or hospitality etc. On that basis it doesn't stack up as people have said. So we ask why Max would bother as he won't see a return on his investment via revenue.

What is missing is the asset element. The club currently doesn't own it's stadium asset. In fact rent on the thing takes away probably something like £0.5M a year (more?) in rent. The first 1,000 capacity on Dean Court is lost just to pay the rent. It comes off the bottom line profit the club makes too. The value of the club as a business proposition (asset to Max) is based on that same profit. Just by removing a rental outgoing of £0.5M off his bottom line, Max could increase his shareholding asset value by at least £5M. Probably more.

For all we know, the club doesn't host more big events because maybe the lease entitles Structadene to a revenue share (like West Ham have). Would we do that at our own stadium? There's more income increasing Max's shareholder asset value by multiples of 10, 20 etc. Increased matchday revenue of £2M? Add another £20M to the shareholding value. And so on.

Then, consider that the club has built a £20M or £30M stadium. If I built a house and rented it out, it's not just worth X years' rent. It's worth X years' rent plus the value of the house after X years. Same with the stadium. The club and therefore the shareholding asset is now worth £20M more because it has a £20M asset on the books.

When Max sells (which he will one day) he sells with a better bottom line and a valuable asset. He makes his money back one way or the other.

We assume Max needs to realise the value whilst he is here but he will possibly/probably make the real money when he sells.

edit to add: in fact he doesn't even have to build the thing. he just needs to have the approved plans in place and already he has increased the value of his shareholding. For me, there is strong financial incentive for this to go ahead, even if matchday income doesn't increase by that much.
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Fair enough but the asset is only worth the capitalised annual income. You can boost the income by £500k to account for the current rent but you'd need to subtract the current income to assess whether it is a viable investment. You'd also need to factor in the security of income long-term, which is risky given the tenuous nature of league status.

In short I'm fairly certain the asset is going to be worth a lot less than what it would cost to provide. I'm no accountant so maybe the increased borrowing potential may be a factor but it is still surely a leap of faith required from the owner.

Agree about non-football income though - it seems that has been key in other developments such as reading Swansea etc.
 
NornIron said:
A lot of the "economics" on here are missing a point. The mental arithmetic for whether or not this is a good idea isn't just increased revenue from tickets or hospitality etc. On that basis it doesn't stack up as people have said. So we ask why Max would bother as he won't see a return on his investment via revenue.

What is missing is the asset element. The club currently doesn't own it's stadium asset. In fact rent on the thing takes away probably something like £0.5M a year (more?) in rent. The first 1,000 capacity on Dean Court is lost just to pay the rent. It comes off the bottom line profit the club makes too. The value of the club as a business proposition (asset to Max) is based on that same profit. Just by removing a rental outgoing of £0.5M off his bottom line, Max could increase his shareholding asset value by at least £5M. Probably more.

For all we know, the club doesn't host more big events because maybe the lease entitles Structadene to a revenue share (like West Ham have). Would we do that at our own stadium? There's more income increasing Max's shareholder asset value by multiples of 10, 20 etc. Increased matchday revenue of £2M? Add another £20M to the shareholding value. And so on.

Then, consider that the club has built a £20M or £30M stadium. If I built a house and rented it out, it's not just worth X years' rent. It's worth X years' rent plus the value of the house after X years. Same with the stadium. The club and therefore the shareholding asset is now worth £20M more because it has a £20M asset on the books.

When Max sells (which he will one day) he sells with a better bottom line and a valuable asset. He makes his money back one way or the other.

We assume Max needs to realise the value whilst he is here but he will possibly/probably make the real money when he sells.

edit to add: in fact he doesn't even have to build the thing. he just needs to have the approved plans in place and already he has increased the value of his shareholding. For me, there is strong financial incentive for this to go ahead, even if matchday income doesn't increase by that much.
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The value of the shareholding at a club like us is so intrinsically linked to PL status if that's what's he's interested in then doing everything to hang onto that would be above all else.

Paying for the new stadium to be financed will cost a pretty penny and whatever that costs would impact on available transfer/wages/squad kitty potentially putting us a disadvantage to those around us. Look at Arsenal.

That doesn't mean it can't be done and that doesn't mean it shouldn't be done and that doesn't mean I don't want it to be done but if his number one priority is shareholder value then I suspect there would be little interest in the stadium due to the extra risk a reduced budget would bring.
 
I'm interested to hear the club's response, if indeed they do respond. My feeling is that there has been no statement because there has been no change to the already announced intentions. As much as I agree that the club's PR and communications are pretty poor, I do believe that they would have issued a statement about something as important as a complete falling through or changing of the announced plans. Since this statement has not been forthcoming, I would imagine that the original intent is still there but that progress is slow. Not surprising in that case then that there has been no official statement. Should they make a statement saying that there has been no change ? I sympathise with our impatience and unrest but I can also understand that maybe the club is waiting for something concrete ( and positive ! ) to say rather than appeasing fans with announcements of "everything is still ongoing" at regular intervals. The fact that various players still mention the plans and that Eddie and Jason are still committed to the club, suggests to me that everything is crawling along as planned, probably with more bumps along the way than expected, somewhere in the background.
 
The sad thing for me is we haven't temporally expanded the south end, even 2,000 extra seats would allow more people in. Even if the new stadium goes ahead it's going to be years
 
These are the important words from the club. “ “

There is currently no season ticket waiting list for AFC Bournemouth season tickets however the club are currently working on a waiting list for the “new stadium” development.
 
CherryBare said:
The sad thing for me is we haven't temporally expanded the south end, even 2,000 extra seats would allow more people in. Even if the new stadium goes ahead it's going to be years
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But as I understand it, increasing the capacity will require extra tickets to be provided to away supporters?
 
Plans have been shown to the Council for perusal and comments, about six months ago. I know of one slight issue that needs/needed to be overcome as far as my boss (who has some clout) was concerned. It was only a minor issue that I am sure can be overcome if it isn't already. Other council bosses have no doubt seen them and they might have other issues with the plans, I don't know. Not heard anything to back up Al's claim that the project is dead in the water though.
 
jalalagood said:
Plans have been shown to the Council for perusal and comments, about six months ago. I know of one slight issue that needs/needed to be overcome as far as my boss (who has some clout) was concerned. It was only a minor issue that I am sure can be overcome if it isn't already. Other council bosses have no doubt seen them and they might have other issues with the plans, I don't know. Not heard anything to back up Al's claim that the project is dead in the water though.
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Come on here spouting informed facts will you? Stay away, your kind isn't welcome around here.
 
I hate to say this but why spend £100 million on a 25,000 capacity new stadium when you could spend around a fifth of that building a 5,400 capacity South End (including both corners) taking capacity up to around 15,000.

This would be on land that we own, would take advantage of the current rent price, would probably get the council well onside and wouldn't cause that much traffic chaos in the process!

A solid short term solution IMHO!
 
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