Villa Park redevelopment

[villa89]

7 minutes ago, allani said:

 that is an extra £630,000 per match. 

630K x 19 = £12m.

£150m / £12m = 12.5 years to pay off the new stand.

Even allowing for other revenue means you are still looking at minimum 8 - 10 years for the new stand to pay for itself and actually start making money for the club. 

Like I said, the numbers don't add up. 

[allani]

15 minutes ago, villa89 said:

There's your problem, there's no money in that. General fan isn't going to pay you enough money to let you sign the new Fernando Nelson, or Tommy Johnson or Alan Thompson or even a Nii Lamptey. General fan isn't going to cover the £150m+ it costs to build a new stand. Simple numbers show you why Heck canned the project. Too bad he hadn't the balls to just tell us that.

I think there are 35,000 - 40,000 very good reasons why Heck hasn't come out and said that.  It might have been brave / more truthful - but at a time when the team are flying on the pitch it would have been madness to risk incurring the wrath of the crowd by being quite so brazen.  That said he probably should have come up with some better "spin" with the announcement - almost no-one would have believed him and everyone would have asked why not just be transparent anyway but it might have closed down the debate a bit quicker.  £50 per ticket x 10,000 x 20 home matches a season = £10 million a year.  So 15 years to break even on a £150m investment - ignoring any interest payments or over-runs and any reduction in ticket sales during the redevelopment.

And as I keep saying I do think we need to get our capacity up to 60,000+ so we can compete with the teams that have already got there.  But I can also see that there are options for getting extra revenue at lower cost / risk that actually has a much faster ROI and so it makes sense to be exploring those before committing to a huge expense that may or may not deliver.

[OutByEaster?]

1 hour ago, villa89 said:

If that was the case then Heck should have made that very clear in his statement instead of the tripe he tried to feed us. Fans aren't stupid, they understand basic economics. 

Heck, it would appear does this consistently, and I think possibly with the best intention.

He sugars the pill and ends up boxing himself into a corner and confusing people.

"We're going to review the new badge and see how it plays out before making decisions on it later in the year" meant - I don't like this badge, I'm changing it, there's a survey coming to you next week and I've started speaking to designers on a new one - there won't be a review.

"We're delaying the build of the North Stand because we don't want to spoil the atmosphere" meant - we're scrapping this project, it got more expensive and we're struggling to sell GA+ seats - this isn't a delay.

"We're really proud of our new badge, it's now out with fans to look at and decide if they want it" meant - it's finished, I like it, we copyrighted it yesterday - we're done here, there won't be more fan engagement.

"We're going to engage someone to add an additional 3,000 seats within the existing stadium bowl" - well, that might mean - we know you weren't happy we cancelled the North Stand, hopefully this will keep you quiet until it all blows over - we don't know - and therein lies the problem we currently have.

Now, it might well be that the truth is - the new badge will work better commercially and play more effectively to future partners and TV markets, the new North Stand wasn't cost effective and there are better ways to grow revenue, getting fans involved in badge design can lead to a hotch-potch, and that the best way to raise yield in the stadium is a few hundred more hospitality places not 3,000 new seats - it might well be that all of the decisions he's making are good, that they are the right thing for the club - he's not daft, he knows what he's doing, he has the numbers, he has good people and expertise, he has the backing of the owners.

But....

The halfway stuff, the softening of the truth, the sugaring of the pill...it's killing him. His reputation with supporters is poor because people aren't trusting the things he's saying - whether that's to do with him underestimating the level of obsession and the weird expertise of elements of football supporters, or whether it's just a sort of laziness in communication - it's giving the impression that nothing he says is quite the truth and more than that, that he thinks people are daft enough to buy into it.

He might just be a really good CEO in terms of the way he's going to grow our business, but in terms of his customer communication skills, in his efforts to create simple narratives that help keep people positive, he's actually bafflingly confusing in a way that makes people distrust him.

[allani]

A couple of other points that might (or might not) be relevant.  Heck is credited with significantly increasing the revenues for the 96ers whose stadium capacity is under 20,500.  He did that without needing to increase the stadium capacity there at all.  Therefore, I think it is valid to assume that he has plenty of ideas that maybe our previous CEO didn't about how to earn more revenue quickly without big expenditure projects.  It is also worth noting that the 76ers don't own their own stadium and so would have faced restrictions with regard to converting "normal" seats to "premium" seats, etc.  Obviously, the caveat is that what worked in the USA might not work here.  However, I think it is interesting to at least acknowledge that Heck has a lot of experience in raising revenues without "just" adding more seats.  I do think he is confident that he will hit the revenue increases that NSWE want without the need for more seats and the extra expense that entails.  Maybe once he has achieved that (or even if he doesn't) then the business case for adding extra seats might become attractive again.  Ultimately it is difficult to imagine how we can earn a comparable income to clubs that have 50% more seats.  

[allani]

4 minutes ago, OutByEaster? said:

Heck, it would appear does this consistently, and I think possibly with the best intention.

He sugars the pill and ends up boxing himself into a corner and confusing people.

"We're going to review the new badge and see how it plays out before making decisions on it later in the year" meant - I don't like this badge, I'm changing it, there's a survey coming to you next week and I've started speaking to designers on a new one - there won't be a review.

"We're delaying the build of the North Stand because we don't want to spoil the atmosphere" meant - we're scrapping this project, it got more expensive and we're struggling to sell GA+ seats - this isn't a delay.

"We're really proud of our new badge, it's now out with fans to look at and decide if they want it" meant - it's finished, I like it, we copyrighted it yesterday - we're done here, there won't be more fan engagement.

"We're going to engage someone to add an additional 3,000 seats within the existing stadium bowl" - well, that might mean - we know you weren't happy we cancelled the North Stand, hopefully this will keep you quiet until it all blows over - we don't know - and therein lies the problem we currently have.

Now, it might well be that the truth is - the new badge will work better commercially and play more effectively to future partners and TV markets, the new North Stand wasn't cost effective and there are better ways to grow revenue, getting fans involved in badge design can lead to a hotch-potch, and that the best way to raise yield in the stadium is a few hundred more hospitality places not 3,000 new seats - it might well be that all of the decisions he's making are good, that they are the right thing for the club - he's not daft, he knows what he's doing, he has the numbers, he has good people and expertise, he has the backing of the owners.

But....

The halfway stuff, the softening of the truth, the sugaring of the pill...it's killing him. His reputation with supporters is poor because people aren't trusting the things he's saying - whether that's to do with him underestimating the level of obsession and the weird expertise of elements of football supporters, or whether it's just a sort of laziness in communication - it's giving the impression that nothing he says is quite the truth and more than that, that he thinks people are daft enough to buy into it.

He might just be a really good CEO in terms of the way he's going to grow our business, but in terms of his customer communication skills, in his efforts to create simple narratives that help keep people positive, he's actually bafflingly confusing in a way that makes people distrust him.

But ultimately actions speak louder than words.  I would much rather have a CEO who delivers on what he has been asked to do, than have a CEO who talks a great game but under-delivers.  Heck has also repeatedly stated that he will be judged on how successful he is in improving our commercial numbers.  I think he is 100% right in that regard.  If Heck is to have a weakness then I am all for it being that his communication skills with the fans are not great.  If it becomes a problem then just hire a Fans Communication Director.  I am less fussed about whether he has communicated the decision to stop the redevelopment of the North Stand well and more interested in whether it was commercially / strategically a good decision and to be honest the only people who will and who should know whether the latter is true are the Board and the owners.  Releasing too much information about that into the public domain might have an adverse impact on the strength of our hand in other commercial negotiations.

[allani]

PS - in response to your comment above @OutByEaster? (and others) I do find that in general Americans are a bit more partial to the sugar coating "spin" and almost expect it in their comms these days.  Whereas us Brits are generally more cynical and disbelieving of anything that someone tells us.  Having worked for an American company (who were actually brilliant as a company to work for) I found some of our corporate messaging quite cringe-making.  But it seems that Americans like being told how everything is the greatest thing ever whilst us Brits are a bit more "if it sounds too good to be true then it probably is".

I would hope that maybe this is something that Heck comes to appreciate.  There are always things that he won't be able to be completely honest about (for all kinds of commercial, legal, confidentiality reasons) and in general we want the guy who is selling our club to sponsors / partners / etc to be passionately positive about the club.  So he'll always be treading a somewhat thin line with regard to balancing the messages that he is making to potential / existing commercial partners and those that he is making to the fans.  But hopefully he'll get a bit better at reading the room and adjusting some of his language.  At the same time I think we also need to recognise that there are all kinds of reasons why the club maybe can't always be as open and honest with us as they might like because it might impact on other important factors / discussions taking place.

[villa89]

1 hour ago, OutByEaster? said:

but in terms of his customer communication skills, in his efforts to create simple narratives that help keep people positive, he's actually bafflingly confusing in a way that makes people distrust him.

I think he's a classic American CEO. Full of BS, marketing nonsense, over positive, etc. In America you get away with that, not in Europe and especially not at a football club.  

[MrBlack]

Moving on from Heck...

The argument that this financially doesn't make sense is pointless.  It will never make financial sense in the short term. Whether we do it now or in 50 years.  It will always take many many years to recoup that money. 

If you're thinking you won't own it in 20 years, then you probably won't commit.

So, if that's the reason, that is never going to change.

If, as Heck alluded to, it was a sporting reason then us not making the champions league may bring it back to the table (as it then also becomes less likely that we'll make the champions league next season).

Failing that, the only reason to do it would be a safety reason, but if you wait for that then you end up with a stadium that looks like the derelict s#!thole in small heath.

The conclusion? Not a clue. But suggests to me we won't see a new stand for a good few years.

[sidcow]

2 hours ago, Caravella82 said:

The great Frederick Rinder quote came into my head when I read this. Copied with some backstory for anyone unaware of it.

He led the club with an iron will until his resignation in 1925, when he stepped down largely due to the criticism he received for the cost of the new Trinity Road Stand, which had spiralled to nearly £65,000 (at a time when the country's costliest player cost £5,000). However, Rinder's view was that nothing but the very best was good enough for Aston Villa with its stained glass, Italian mosaics and grand frontage. He said:

"Finance is important, but we should never forget that we are not talking about a mere business. This is the Aston Villa football club, and it deserves nothing short of the best".

Remember when Ellis knocked that down and everyone was absolutely horrified because of the amount it had cost to build?

[sidcow]

2 hours ago, villa89 said:

To be honest I think it's all down to cost. If you do some basic numbers then it's simply not worth the giant investment to get 10K extra punters in the door. Instead it's vastly cheaper to try to increase revenue via other means. Plus the rise in cost of construction from when this project was envisaged to now is enormous. Example, if Everton were starting their new stadium now it would probably be around £2 billion. 

I don't know how many times this needs to be repeated.  It's not about a extra bums on seats.  it's about bums on seats + extra food and drink sales (it's impossible to buy stuff in the concourses now) and it's about more non matchday revenue.  There were many wide open concourses open for conferences and banqueting which is VERY lucrative.  I wouldn't be at all surprised of actual matchday ticket sales is less than 25% of total revenue taken by the stand taken as a whole.

Edited January 25 by sidcow

[Captain_Townsend]

32 minutes ago, sidcow said:

I don't know how many times this needs to be repeated.  It's not about a extra bums on seats.  it's about bums on seats + extra food and drink sales (it's impossible to buy stuff in the concourses now) and it's about more non matchday revenue.  There were many wide open concourses open for conferences and banqueting which is VERY lucrative.  I wouldn't be at all surprised of actual matchday ticket sales is less than 25% of total revenue taken by the stand taken as a whole.

Precisely and the original villa live was to be a revenue generating operation outside match day that also aimed to keep fans at the ground for longer rather than rushing off. The current stand is not fit for purpose in this regard. Edit, what I mean is, there isn't enough to keep you there and have you spend your money.

The development would have given us the scope to catch up with others on revenue generating capacity. 

 

Edited January 25 by Captain_Townsend

[ender4]

22 minutes ago, sidcow said:

I don't know how many times this needs to be repeated.  It's not about a extra bums on seats.  it's about bums on seats + extra food and drink sales (it's impossible to buy stuff in the concourses now) and it's about more non matchday revenue.  There were many wide open concourses open for conferences and banqueting which is VERY lucrative.  I wouldn't be at all surprised of actual matchday ticket sales is less than 25% of total revenue taken by the stand taken as a whole.

Yep, we've done rough calculations on VT a few times now over the months and years and conservatively we know that just being able to serve the food and drink that normal fans would like to buy in the stadium adds up to an extra £4 million revenue per year. That's with keeping the same 42,000 attendance and no extra hospitality facilities.

[sidcow]

43 minutes ago, MrBlack said:

Moving on from Heck...

The argument that this financially doesn't make sense is pointless.  It will never make financial sense in the short term. Whether we do it now or in 50 years.  It will always take many many years to recoup that money. 

If you're thinking you won't own it in 20 years, then you probably won't commit.

That doesn't hold water.

You won't own it, but you will sell it.

Selling a modern money making machine of a stand is going to fetch a lot more money than selling a decrepit old stand that can hardly make any money and is probably in danger of being shut down by the authorities.  You will have to factor into your acquisition price that you'll need to spend money to build that stand.

I am actually surprised the authorities are not putting at least some pressure on.  If I was a senior fire officer sipping my Bovril in a packed North Stand Concourse at half time I would be having thoughts about granting the fire certificate the following year.

[MrBlack]

The Warehouse may serve the same purpose as Villa Live (glad that name wont be used) would have.

If there's someone decent to watch the late matches after an early kick off, or somewhere to have a pint with your mates before you all go your separate ways, then it will make some money,  and it will reduce the strain on the railway. 

It is right that we had expansion approval with no dependency on the railway improvements, but it's also right that getting a train after is a nightmare already. I'd happily hang around for a pint or two waiting for the queue at Aston to go down. I already get the train, but there will be those that drive because its easier, that may look at getting the train if it becomes a less time consuming option, and then they may then have a drink at the game because they don't have to drive.

There's a lot of benefits to the Warehouse proposals, which I believe are still going ahead.

Hopefully that in turn triggers a revisit of the north stand rebuild sooner rather than later.

[ender4]

1 minute ago, MrBlack said:

The Warehouse may serve the same purpose as Villa Live (glad that name wont be used) would have.

If there's someone decent to watch the late matches after an early kick off, or somewhere to have a pint with your mates before you all go your separate ways, then it will make some money,  and it will reduce the strain on the railway. 

It is right that we had expansion approval with no dependency on the railway improvements, but it's also right that getting a train after is a nightmare already. I'd happily hang around for a pint or two waiting for the queue at Aston to go down. I already get the train, but there will be those that drive because its easier, that may look at getting the train if it becomes a less time consuming option, and then they may then have a drink at the game because they don't have to drive.

There's a lot of benefits to the Warehouse proposals, which I believe are still going ahead.

Hopefully that in turn triggers a revisit of the north stand rebuild sooner rather than later.

Heck has already said that The Warehouse will be hospitality, and therefore implied it won't be freely available to the general fan (unless they are willing to pay extra). 

[Captain_Townsend]

Yes, but if it does trigger an eventual rebuild of the stand we will have dicked around for a further period of time and probably seen costs go up further. Think we should have bit the bullet and gone ahead.

[MrBlack]

1 minute ago, sidcow said:

That doesn't hold water.

You won't own it, but you will sell it.

Selling a modern money making machine of a stand is going to fetch a lot more money than selling a decrepit old stand that can hardly make any money and is probably in danger of being shut down by the authorities.  You will have to factor into your acquisition price that you'll need to spend money to build that stand.

I am actually surprised the authorities are not putting at least some pressure on.  If I was a senior fire officer sipping my Bovril in a packed North Stand Concourse at half time I would be having thoughts about granting the fire certificate the following year.

But you never recoup the construction cost of something when you come to sell it either. Financially, looking at the cost and opportunity cost, it will never make sense in a 10 year time frame. Maybe 20 was a stretch. But my point was, that the argument this was canned for a short term financial boost doesn't hold water. Or if it does, then it will forever, and we'll never improve the stand. That can't be the reason.

From a safety perspective, maybe we're not that far off being forced into something, but I've never felt unsafe in the North. Cramped, desperate for a piss, and annoyed I can't get a drink without missing the game, but never unsafe.

[sidcow]

1 minute ago, MrBlack said:

But you never recoup the construction cost of something when you come to sell it either.

If that was true there would never be any new buildings going up.  The construction industry would collapse as everyone just added wattle and daub extensions to their existing hovels.

Edited January 25 by sidcow

[cheltenham_villa]

3 hours ago, villa89 said:

That's the difference between us and Spurs/Arsenal. They can sell premium seats by the barrel load but the demand for Villa tickets is from joe punter who wants a £30 ticket, a pie and a pint. 

im not sure this is now true. i think the demand for terrace view and the other one is now growing. Ive seen some games particularly over xmas where we sold out. 

Its probably more accurate to say that Villa has typically been targeted at Joe Punter and none of us feel that comfortable with the gentrification. Ive now doubt it will be a success though like it is at every ground, it just means more families and tourists.

[MrBlack]

6 minutes ago, ender4 said:

Heck has already said that The Warehouse will be hospitality, and therefore implied it won't be freely available to the general fan (unless they are willing to pay extra). 

Did he? I missed that,  I saw it would have sports courts free to use outside it, and a fanzone with screens and microbrewery.... not seen anything suggesting it would be paywalled.

Just thinking it through though, if you have to pay to get in then it's just like the other local pubs that charge entry, so not sure I see it as a barrier to people using it.

4 minutes ago, sidcow said:

If that was true there would never be any new buildings going up.  The construction industry would collapse as everyone just added wattle and daub extensions to their existing hovels.

Was thinking more about an extension rather than a full new build. The value of Villa Park won't increase by how much it costs to rebuild the North stand.