LCFC Chairman on Ground Sharing

This latest article featuring Leicester City Chairman Andrew Taylor answering questions raised by Trust Members focuses solely on the issue of Ground Sharing with the Tigers. First the diverse views expressed through the phrasing of the questions from our members, followed by Andrew’s response.

From Jean Bradshaw
Will the new chairman pursue the ground share with Leicester Tigers?  I am very much in favour of this

From Rob Coe
Try and get the Tigers groundshare off the ground again if possible. Lobby the government if need be to put pressure on the football/rugby authorities to allow groundshares to free up space in our already overcrowded city where we have 2 sports stadiums within half a mile of each other

From Gary Lovell
Are all plans to ground share with the rugby team now ended for good?
I would much rather see the stadium used as it is at the minute with the odd rugby game, non-league cup finals, international friendlies and maybe some pop concerts for extra revenue.

From John Wright
You raised the question of a stadium share when first taken up your role. I've yet to be convinced of the longer term benefits to LCFC in this proposal as any revenue gain from none LCFC/Tigers use will need to be shared. Can you convince me that this is a good idea?….


From Gary Hurst
I'd would like him to know of the dismay it has caused me (and many, many others) by again raising this subject. Please ask him to drop it as we just don't need this short-termism at the club. I don't want to go over the old arguments again but surely, if he's the fan he claims to be, he can see this isn't a way forward for a club with ambition.

What will it be worth ?? A few million quid to fritter away on over-inflated player wages in the hope of giving us a couple of miserable seasons in the Premiership. What then ?? The club must aim to own the stadium out-right however long it takes and, I for one, will be more than content with lower league football until it's achieved.

My message to the chairman is NO GROUNDSHARE.

From John Rigby
How realistic is the possibility of reviving the ground share with the Tigers?

From Bill Phelan
I believe that sharing the stadium with the Tigers is an excellent way of reducing overhead cost and therefore providing money for building a strong first team squad. What is the Board's view on this?

AT Answer – To Jean, Rob, Gary, John, Gary, John and Bill. I have to say that your views represent the polarity of opinion that characterises the debate here. Let me try to offer a view on the Tigers groundshare.

First there is no deal and won't be one if the Tigers Board feel that they can re-develop Welford Road. However it may help if I try to address the issues.

Fundamentally, I continue to ask myself why is it an issue? What's the priority? To the Board the priority is to run a financially solid business….crudely this can be articulated as "not going bust and losing shareholders' money". It may not sound too exciting but given the events of 2002 it's vital that we remain solvent and protect the interests of all City investors.

What this means is that the Board needs to look at the business and provide contingencies where risk exists. Not owning the ground is a risk so let's explore the issues.

First, ownership of the Walkers Stadium is important but the price is likely to be beyond the reach of the club for many years to come. At the same time the Tigers Board have got decisions to make about their future….is it at a redeveloped Welford Rd, a new purpose-built facility or through a ground-share agreement at the Walkers Stadium ?

So again, the starting point is that it's the prerogative of the Tigers Board to re-activate discussions about the future and I'll be happy to talk to them. Why? Because we want the club to have a secure future.

Were we to do a groundshare and form a new company our debt would be effectively halved, we would joint-own the stadium and can start to think about a future for the club free of debt. Owning the stadium outright would be an ideal situation but we're in a far-from-ideal position.

Attendances have averaged 70% of capacity in the past 2 seasons, the company's turnover has nearly halved from the 2003/4 Premier League season high of £39m to just over £21m last season and will fall again this season with the loss of the final £7m parachute payment.

Annually the club has a 7 figure mortgage payment to make on the stadium and interest is rolling up on the total amount so we're chasing a moving target. As my former American bosses used to say "you do the math". The "math" in this case isn't pretty so we need to consider which options would help us liberate some of the debt and improve cashflow. 

The options ….? Well the club trades in an exceptionally price sensitive market. Season ticket prices, already amongst the lowest in the Championship, are keenly watched by supporters. Increases are received very badly and so in effect what with loyalty discounts and the like, my season ticket prices for 2005/6 were cheaper than the sum I paid in 2001 for the last season at Filbert St. 

As we've seen in other questions the subject of shirt sales divides opinion and some fans are loath to buy a new one for themselves and their kids every year rather than every 2 years.

The Conference and Banqueting business operates in a highly competitive market in the County and the sales team have to be careful about using price as a way of driving revenue. 

Then there's the wage bill of the squad. The one fundamental in the club where we just can't gamble is on the playing squad. There will be a statistical correlation between the investment in the playing squad/wage bill and performance…..Watford defied the odds last season but the wealth of the owners of Reading and Sheffield United underpinned their success. 

Simply put we need to invest in the squad (and have done) rather than think we can save a few quid. No-one will thank me or the Board if we have a stronger balance sheet at the end of this season, have retired a million or two of debt on the stadium but have a relegated team.

So what's left…..? Fundamentally it's the cost of running the business called Leicester City Football Club in the Walkers Stadium. We don't own it, we want to own it but can't. The groundshare provides the football club with a "get out of jail" card.

It's not the only one….winning the Championship would help, filling the stadium would help, a season (or five !) in the Premier League would help, winning a cup would help, greater elasticity in season and matchday tickets would help.

Until those happen we'll have an ever-increasing debt. I don't believe that's in the best long term interest of the club and all those associated with it so I'll keep a watching brief on this until I see a new stand going up at Welford Rd.

Look out for the next article where Andrew Taylor discusses the feasibility of pop concerts and looks at attracting more players to the Academy

Leave a Reply