Newcastle’s £1.5bn Stadium Decision – Stay or Go?

Today marks five years since PIF, the Reubens and Amanda Staveley took control of Newcastle United when they bought out Mike Ashley.

And yet, despite that time and talk of a new stadium, no decision has yet been announced and as recently as last month CEO David Hopkinson had this to say on the decision and development plans...

“We're going to need partners to help us think through that, whether that's design, construction, financing.”

The key word in this statement is "financing".

Redeveloping St James' Park or building a new stadium needs external design and construction expertise, but most fans would expect PIF to easily bankroll the cost.

Instead, it seems clear that the club and PIF, would also be looking for external investment which on a new stadium costing c£1.5B would require a major financial commitment from one or more investors who would be looking at how that investment would pay dividends.

That brings another twist to the decision on whether 'stay or go' is the best option to provide the upgrade and additional revenue that the club are looking to generate.

Stay or Go?

For many supporters, this isn't simply a financial decision.

St James' Park has been Newcastle's home since 1892, sits in the heart of the city and is one of the most recognisable football grounds in the country.

A 60,000 capacity redevelopment would preserve that history while adding more than 7,000 seats to the current capacity of just over 52,000.

And because all buses and trains lead to Newcastle and the city has ample car parking, getting to and from SJP and enjoying a pint or meal before or after the game also has huge benefits and convenience.

But, almost 50,000 supporters have joined Newcastle's new season-ticket waiting list, demonstrating just how much demand exists.

So, alternatively, a purpose-built 65,000 stadium would provide far more hospitality, restaurants, conference facilities, sponsorship opportunities and non-football events – potentially generating substantially more revenue throughout the year.

And increasing revenue is vital if Newcastle are to compete financially with the Premier League's biggest clubs.

However with an SJP redevelopment cost of c£500M, compared to a new stadium cost of £1.5B, that extra £1B would only add c5,000 seats and place a heavy burden on the additional commercial opportunities and revenue needed to justify the extra cost.

So... the decision is far more complicated than 60,000 versus 65,000 seats.

If external investment is part of the plan for a new stadium it isn't just the club's owners who have to be confident it is the right decision... they also have to persuade any companies considering investing of the commercial viability and potential ROI.

As always, what will come into consideration is how Newcastle do on the pitch and how successful the club is in regularly getting into Europe and in turn creating greater exposure and opportunities for our investment partners.

Do you think we should stay or go... and why?

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