Calculating risk

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Midway through the club’s second season in the top flight of English soccer, AFC Bournemouth has announced that it is exploring plans for a new stadium. It’s something of a U-turn, as earlier in the year the club had published plans to expand the south stand of its current home, the Vitality Stadium, plans which (presumably) will now be abandoned. The club’s intention to build a new stadium represents a calculated risk.

Maintaining Premier League status is key to such an outlay of capital as, despite parachute payments, top-flight competition yields significantly higher revenue than that in the lower tiers. The board’s thinking will be based around Bournemouth continuing to enjoy larger capacities (and ticket revenue), as well as the massive broadcasting payments given to Premier League teams.

But if the club is relegated – either between now and the completion of a potential new stadium, or even subsequently – then the entire financial equation tips in an alarming direction. You only have to look at some of the former ‘big’ clubs whose fortunes have changed for the worse to see that a new, larger stadium can become something of a millstone around a club’s neck.

Admittedly, for teams such as Newcastle FC and Aston Villa FC, recent relegation from the top flight promises to be a short-lived setback, and both these clubs have older stadia and have presumably already absorbed the costs of construction. But other teams that are yet to regain their top-flight status are saddled with large facilities that are tough to fill and expensive to maintain.

A recent article in The Guardian included examples of teams that have never recovered from a downturn in fortune: Coventry City FC’s (top) calamitous ground-share culminated in the team having to leave the Ricoh Arena in 2013, causing disgruntled fans to boycott home games held at an alternative stadium in Northampton.

Arsenal FC, now one of the biggest earning (and spending) clubs in the world, was forced to endure strict financial limitations during construction of the Emirates Stadium, while their North London rivals, Tottenham Hotspur, will soon face a similar predicament as the club’s purse strings feel the pinch of a brand new stadium. 

Obviously, it is not known yet how much Bournemouth is looking to spend – or where the money will come from. But the club will clearly feel the financial burden in some way. After all, not many clubs are given the chance to move to a world-class facility without much in the way of financial responsibility – and given the criticism that has followed West Ham United FC’s move to the London Stadium (above), the east London club might argue that even such lucrative opportunities come at a cost.

Bournemouth believes that their current stadium (and the nature of the club’s relationship with the venue’s owners) could be improved, and a new facility is the way to achieve that. Given that it’s tough to predict peaks and troughs in form (look at current Premier League champions Leicester City), there are bound to be a few sweaty palms if and when the board signs off on funding a new stadium.

December 14, 2016

Pic: Shutterstock.

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