Everton brace for another ‘huge’ cost with new £50million stadium development hit now feared
Everton are bracing for the “worst case scenario” that would see the cost of building their new dockside stadium increase by another £50million, according to the Daily Mail.
The paper reported via their website on 7 December that while the final price of the development won’t become clear until its completion next year there are now fears that the total cost could end up topping £700m.
The deal with Laing O’Rourke, despite originally being billed as a fixed-price contract, reportedly contained floor and ceiling clauses to allow for fluctuations.
According to the Mail that has already cost Everton an extra £100m due to the increased cost of building materials, attributed to the war in Ukraine, and the club are now budgeting for another £50m “hit”, with the “huge increase” also reportedly caused by higher fees for logistics and interest rates.
Money pit
The potential final fee of £700m is actually lower than the £760m that Farhad Moshiri appeared let slip almost a year ago [talkSPORT, 12 January], and significantly below the possible top line that was suggested by The Athletic’s Matt Slater in the summer [Results Business Podcast, 6 June], but is clearly way above the £500m original price tag he scoffed at as “complete nonsense”.
The spiralling costs of the Toffees’ new home has proven too much for the club’s majority shareholder to stomach and pushed him to seek funding from MSP Sports Capital, who provided loans towards the construction despite being blocked from minority investment in the club.
Presumably the potential extra cost would be covered by the American company’s lending, but clearly Everton are going to need to have answers for the extra expenditure if indeed it does come about.
Given the major consequences that have already resulted from spending on the stadium, with interest payments seen as central to the profit and sustainability breach which has led to a 10-point deduction, it is clearly of paramount importance that the hierarchy get on top of this situation.
All indications suggest the new ground is going to be a huge asset once it is completed, and has been tipped to be the prime goal for interested buyers going forward.
777 Partners’ takeover deal with Moshiri still hasn’t cleared so while Sean Dyche and the players continue to do the business on the pitch after a vital 3-0 victory over Newcastle on Thursday night the uncertainty off it shows no sign of slowing down.
In other Everton news, a barrister has tipped an “overlooked” factor to prove a lifeline for the club in the face of “double jeopardy” punishment.