Investing in players vs the new stadium

[David Hodgson]

As some sort of take over looms nearer, we going to (thankfully) be getting back to talking about building new stadiums and investing in the squad. All the anecdotal stuff coming out at the moment hints at transfer budgets of £20-40m a season. I'm not hearing any bidder saying 'we're going to blow everybody out of the water with the strength of our recruitment drive'. It got me to thinking about what the club's priorities should be going forward. If it came down to a simple choice, what would be better, spending £300m on a new stadium, or blowing the lot on players (and a great manager) instead ?

 

Most of the approximations I've read about suggest we lose about a million pounds a home game on Man Utd and Arsenal because of our smaller ground capacity. So that's about £25-30m a season ? Simplistically speaking if the club borrowed all the money needed for a new ground, that extra revenue would only really cover the interest bill. I suppose there may be more dough to come from naming rights, but you can do that (to an extent) with an existing ground. I'm not seeing where the vast fortunes are getting made from a bigger ground, but I can certainly see how it could end up being an albatross if the team's fortunes declined and the ground was only two thirds full.

 

What I don't hear talked about enough is the price of not properly 'investing' in the success of the team. For me, if you plan to spend £25m net a season on players there are no guarantees that you will achieve anything. In fact, given LFC's current status, even with a top top manager, I don't think £25m net over each of the next 5 seasons would make CL qualification likely. Just as likely is continuing to hover around mid table.

 

Let's be stupid for a minute and imagine, that instead of spending £300m on a stadium, you blow it all on players (and a manager). You bribe Mourinho, and you outspend City for a couple of years. What happens ? You can as good as guarantee CL football, and a strong chance of particpating in the very last stages of the competition. You can also be sure you'll be up there battling for the title. No guarantees that you'll actually win either of the big two, but you will be competing for them.

 

In money terms, that 'competing' equals about £30m in CL related revenue that you won't get if you under invest in the team. On top of that you'll earn, as a consequence of your success and high profile, more in sponsorship than you would were you hovering around in Aston Villa to Blackburn territory. You'd also earn more in TV revenues, more in prize money, and you'd sell truck load more shirts all over the globe. I think the difference between having a 5th to midtable team, and having a strong CL team, could be worth in the region of £50-60m a season on a club's bottom line. That compares very favourably with the benefits accrued from a bigger capacity ground.

 

Also, in reality, if a club had and wanted to spend £300m on squad building it need only spend that over the first two years, and could then probably sustain itself with a zero net spend for the following 4 years, by simply offloading expensive surplus players. It's more or less what Chelsea have been doing. Their net spending hasn't been significant for 3 years, yet they are stronger than ever. So, with this model of using cash to give the squad a steroid boost, the spend on players is probably £300m over 6 years (but front loaded) vs the softy softly approach where you spend £25m a year, and total £150m over 6 years but achieve little.

 

I'd rather find the cash now to take the club up a quantum leap with 2 years of mega spending, and then start retaining profits in years 3-6 to put towards building/renovating a stadium. I want our new castle built on the foundations of established onfield success (and therefore revenue streams) than see money going into building a ground that by the time it's built might be a struggle to fill for a midtable team. The small extra revenues provided in the early years of that new ground will do little to improve the teams prospects.

 

Now, more than ever, Mr Henry (or whomever) the dough will only follow those who are sustainable winners. Don't penny pinch or you'll make exactly the same complacent mistake Hicks and Gillete made.

[Bailo]

Stadium has to be the first move the new owners make. Has to be. Get that done and we set ourselves up for the next 50 years. Investing the team guarantees nothing, particularly as there are questions marks over the manager.

[Raj]

Stadium first and not just for the long term financial security of the club, but for the commitment the club has made to aiding the regeneration of the local area

[Falconhoof]

I can only echo the posts made by our friends Roegahn and s***name. Stadium first for the boost to turnover in the longer term, the development of the economy of L4 and Liverpool as a whole, the knock on benefits for all sorts of businesses in the city, for all of the extra fans who will be able to get tickets, for the extra roar from an even bigger crowd on the big match days.

 

I wouldn't give Roy Hodgson a penny spend, stadium or not. He needs to go well before we get to planning January signings.

[Hassony]

Stadium first

 

and agree with TLM, Hodgson has to go asap

[Barnesy_10]

definitely let Roy get the players in that he wants...

[David Hodgson]

Stadium has to be the first move the new owners make. Has to be. Get that done and we set ourselves up for the next 50 years. Investing the team guarantees nothing, particularly as there are questions marks over the manager.

 

If you don't invest in the team, it falls further away from the Cl and the title, and the stadium is never full. How is that the right move?

[Rimbeux]

It doesn't stack up economically to blow £300m on players. It's not sustainable, there isn't enough ROI despite what emotion might bring into it. It's like that old cliche about giving a perennially starving man food or the means to grow his own.

 

In the CL, this club could net £30m a season, which is plenty. The current issue is getting back in the CL, looks a long shot from here and that may require some assistance to put right, but in general this club does not need handouts

[Ethan]

definitely let Roy get the players in that he wants...

 

Oh dear God no

[David Hodgson]

Stadium first

 

and agree with TLM, Hodgson has to go asap

 

Of course RH has to go first, but that isn't my point. I'm talking about the big strategy.

 

It doesn't stack up economically to blow £300m on players. It's not sustainable, there isn't enough ROI despite what emotion might bring into it. It's like that old cliche about giving a perennially starving man food or the means to grow his own.

 

In the CL, this club could net £30m a season, which is plenty. The current issue is getting back in the CL, looks a long shot from here and that may require some assistance to put right, but in general this club does not need handouts

 

How much do you think we need now to get back in the CL ? I'm mean definitely get back in.

[Eskimo]

How much do you think we need now to get back in the CL ? I'm mean definitely get back in.

 

Its not as simple as putting a figure on it, other factors inlcude getting in the right man for the job and that is clearly not Woy..

[meepins]

How much do you think we need now to get back in the CL ? I'm mean definitely get back in.

I'd think about four high quality 'name' players, which would probably run into 100m. It's probably not doable this season because of the manager we currently have and the kind of players available in the next window.

Edited October 13, 2010 by meepins

[Rimbeux]

Of course RH has to go first, but that isn't my point. I'm talking about the big strategy.

 

 

 

How much do you think we need now to get back in the CL ? I'm mean definitely get back in.

 

 

You cant be that definitive, but looking at it, we need maybe three top players(£40m, centre half, striker, wide midfielder) urgently and three more(£40m,left back, central midfield, wide midfield again) over the following three windows to stay there. So effectively correcting the previous four windows now and carrying on as normal.

[ajit]

definitely let Roy get the players in that he wants...

 

 

Do not tempt fate!!!!

[Billy Talbot]

spending £300m on players would be fun... while it lasted.

 

The Stadium and increased revenues and turnover will allow us to fund the odd splurge on players though. Unless we do what Uncle Arsene does does and spend it all on kiddies.

[David Hodgson]

I'd think about four high quality 'name' players, which would probably run into 100m. It's probably not doable this season because of the manager we currently have and the kind of players available in the next window.

 

Forget the manager, we're talking about investing in a good one too. Also forget January, I'm talking about a longer range strategy.

 

I think we need a minimum of £100m net within a year to be right on target for the CL, and we may need to follow that up with a further £50-60m over the 2nd year. Then we can probably not net spend for a year or two.

 

I'd like to see us do the stadium and the strengthening, but what I don't think will work is trying to put in about £30m a year, and hoping we gradually recover. We need a very big initial cash injection into the squad, and that should come ahead of everything.

 

spending £300m on players would be fun... while it lasted.

 

The Stadium and increased revenues and turnover will allow us to fund the odd splurge on players though. Unless we do what Uncle Arsene does does and spend it all on kiddies.

 

No one is looking at the figures though. How much more for players does a stadium ultimately produce ? I don't know. I do know that there is a massive revenue difference between being a top CL team and being a midtable premiership side.

[Earl Hafler]

Stadium has to be the first move the new owners make. Has to be. Get that done and we set ourselves up for the next 50 years. Investing the team guarantees nothing, particularly as there are questions marks over the manager.

 

 

Stadium has to be discussed immediately as it's fifteen years late already.

 

However, the manager has to go now. Discussing players and transfers is futile if he's still here

[David Hodgson]

Stadium has to be discussed immediately as it's fifteen years late already.

 

However, the manager has to go now. Discussing players and transfers is futile if he's still here

 

All true.

 

The manager and player recruitment would be my first order of business. I think I might just go and offer someone like Gus Hiddink some cash now to break his contract. Ask him to do a chelsea type holding job for us.

Edited October 13, 2010 by David Hodgson

[Hightown Phil]

If we continue at the level we're at on the pitch there isn't any need for a new stadium. Put us back in the top 4 and then sort the stadium out.

 

We're struggling to sell out games now and won't sell them out until the football improves. So manager, then players, then stadium.

[Eskimo]

All true.

 

The manager and player recruitment would be my first order of business. I think I might just go and offer someone like Gus Hiddink some cash now to break his contract. Ask him to do a chelsea type holding job for us.

 

a holding job isn't that why Roy was signed...

[Barnesy_10]

If we continue at the level we're at on the pitch there isn't any need for a new stadium. Put us back in the top 4 and then sort the stadium out.

 

We're struggling to sell out games now and won't sell them out until the football improves. So manager, then players, then stadium.

 

 

surely the stadium will be 3/4 years in development? It needs starting now.... there is no way we will be having these on the field issues that far down the line with new owners and management?

[sangria]

Of course RH has to go first, but that isn't my point. I'm talking about the big strategy.

 

How much do you think we need now to get back in the CL ? I'm mean definitely get back in.

£20m on top of player sales, plus however much it takes to buy out Benitez's last year in his Inter contract. Then the squad becomes self-financing from prize money.

[renzo]

After 3 years of asset stripping the squad needs at least £75m+ of initial investment to make us competitive with the CL contenders. After that I'd be wary of spending beyond our means.

 

I absolutely do not want a new stadium and hope Anfield gets redeveloped. It's home, it's where I go, where my Dad and grandad went and where my kids go. It's the platform for our history. The additional revenue to be had from a new stadium over a redeveloped Anfield doesn't seem worth it to me.

[David Hodgson]

a holding job isn't that why Roy was signed...

 

Yes, and he's failing at it, so he goes. Bit like when you sign a player who you thought could do a job, but then he can't. You cut your losses and get another one in.

[carrafan]

I think NESV should build the city a solarium first and then recall Aquilani from loan, before any other steps are taken.