“No man is an island, entire of itself; every man is a piece of the continent, a part of the main.” John Donne, No Man Is An Island
Liverpool’s time was the 1970s. This is not at all to diminish their achievements or the anguish that great club enjoyed and endured in the 1980s. But the foundations for becoming the club they are today were laid under Bill Shankly in the decade before.
The foundations were laid physically as much as they were in football terms. The main stand at Anfield was rebuilt in 1973, shortly before Shankly’s departure from the dugout, and it remains in place today. Now, as Liverpool are again perhaps on the threshold of a new golden era under Brendan Rodgers, the ground and its surrounding area are being prepared for a major redevelopment.
Outlines released last week suggest Liverpool are hoping to bring their physical infrastructure up to speed with the fast-paced football they play with Raheem Sterling, Luis Suarez and Daniel Sturridge in their forward line. The stadium capacity will rise to almost 59,000, the bulk of it in an imposing new grandstand that will tower over the rest of the ground.
It is clear Liverpool need to bring their stadium up to the standards of their rivals. Their match-day income in 2012-13 was a mere £44.6 million, a paltry sum when compared with rivals such as Arsenal (£92.8 million) and Manchester United (£109.1million) and it has been a considerable brake on their on-pitch performance. What hampers Liverpool most is its want of hospitality facilities. Arsenal have 9,000 executive seats and boxes, which together yield more match-day income than the old stadium at Highbury did altogether. United have Suites, Rooms and Lounges all around the centre ring of their enormous stadium.
Yet like so much of the new Anfield redevelopment plans at this stage, how it will affect Liverpool’s finances is at present far less clear than the sharp computer-generated images released last week. It is fair to assess that, naturally, by pushing the bulk of the stadium rebuild into a single stand they will reduce their construction costs. But it will also reduce the amount Liverpool will be able to raise from those lucrative executive facilities, with design images apparently showing at least two of the three other stands have no space for boxes, just general seating. Although Liverpool refuse to answer questions on the specifics of the new build until closer to the submission of their planning application, there is talk of the club creating 3,200 seats’ worth of new premium facilities. That will clearly raise the revenues the club has been earning by a considerable margin but it will not come close to the sums peers like Arsenal and United enjoy.
Then there is the question of project finance. Arsenal’s long-term borrowings peaked at £416.1million in 2007, a sum that hampered their capacity for investment until this year when the shackles were loosened with the £42.5million transfer of Real Madrid’s Germany international Mesut Ozil. It was achieved in the mid Noughties, generally a looser credit environment than today. Arsenal were at the time a highly successful club, having won two Doubles and gone an entire season unbeaten in the seven years prior to their financing arrangements being agreed. Beyond what they owed to supporters in debentures, they were also effectively debt free. In short, Arsenal were a AAA credit risk, and the capital markets marked them as such.
By contrast Liverpool were already carrying £48.2 million of bank loans even last year. By the time they return to the Champions League next season they will have spent five full years outside of it. The Premier League is appreciably more competitive than it was in 2002, when Arsenal achieved planning consent for what would become the Emirates Stadium, meaning anyone giving Liverpool a loan now will identify considerable downside risk.
With the Boston Red Sox-owning Fenway Sports Group as its owner, and standing behind that entity some very wealthy US financiers, none of these problems should be insuperable for the Reds. But even taking into account the historically low-interest-rate environment of today (another risky element for the lender, since in all likelihood rates will rise in future, not fall), it could add up to more expensive project financing than the one that cost Arsenal about £16 million a year to service. And if the returns on the investment from match-day yield are not in themselves transformative for Liverpool’s revenues, will their new-stadium dream remain just that? A dream?
Everton have made private noises to me that they would happily explore the possibility of a joint venture with Liverpool if only the bigger club would entertain it. But the opportunity to save on construction and operating costs between the two participant clubs in what is described as England’s “friendly derby” has been rejected in favour of the notion that the fans would not approve. That is a shame. For build it and they would surely come.
Liverpool and their local authority owe it to the community around the club to deliver a sound redevelopment project. The revitalisation plans for housing and public spaces detailed in the club and council’s Anfield Spatial Redevelopment Framework document are genuinely encouraging, with real consideration for how to improve the area for the local community. That would not be difficult as much of the surrounding area is currently extremely dilapidated. Once-proud Victorian homes that in smart London postcodes would sell for £500,000 each and more lie empty and boarded up. Many of those empty homes belong to Liverpool themselves, which has hardly assisted community cohesion, and even the club’s own feasibility-study literature admits the area is depressed.
“Based upon the 2010 Index of Multiple Deprivation some 9,000 residents of Anfield live in areas classified as being within the 10% most deprived in England while almost a third of the Anfield Ward is ranked in the most deprived 1% of neighbourhoods nationally,” the study explains. “Child poverty levels are high and increasing, with some 1,550 children in poverty equating to 43% of children living in Anfield ward. The average household income for Anfield is £25,900 compared with an average for Liverpool as a whole of £30,400.”
It was of course Shankly who said all that about football being more important than life and death, but some things are more important still. English football in the modern era is moving away from its community roots as the global commodification of the game grows. But, should they at some point find reading those financial numbers uncomfortable, it is to be hoped that Liverpool – who, perhaps more than any other club, can justly lay claim to their local fans being their soul – do not lose sight of what this project represents.
Journalist and broadcaster Matt Scott wrote the Digger column for The Guardian newspaper for five years and is now a columnist for Insideworldfootball. Contact him at email@example.com.