Stadium Expansion *APPROVED* Sept ‘22 - Details / Images Released on Planning Site

[iancognito]

5 hours ago, KingsX said:

I don’t understand the “bigger is better” mentality when it comes to the KP expansion.  The competition is on the pitch, not counting seats.

 

Investment in stadium capacity reduces funds available for investment in the squad, and brings a smaller financial return.  Clubs with big, half-empty stadiums and poor (or Championship) sides look a bit ridiculous.

 

We think the club will often be able to sell out 40K, and make STs available to those who want them.  OK, good.  Now, would adding still more seats further from the action result in consistent crowds?  Or plastic warming in the sun?  The club ’s research seems to point to the latter.

 

The smaller the ground, the closer to the action the (relatively) cheap seats are.  If you’re an away fan or groundhopper, do you more enjoy watching a match at a modern megastadium or a smaller ground?

This isn't actually true. Apart from the early Eriksson days, these owners have never thrown cash at players and transfer windows from their own pockets. I think the underachievement when we were bringing in the likes of Matt £5M Mills compared to what we did under Pearson with players like Knockaert, Morgan etc coming in for relative peanuts, opened their eyes to what can be done with proper budgeting and management. Since those times we've always either gone bargain basement or re-invested cash from player sales to bring in two or three more. The money we got for winning the league and the Euro run the following season barely got touched because selling Kante, Drinkwater and eventually Mahrez covered most of the incomings for another couple of seasons. The expansion and the training ground were funded via loans so it's doubtful the two things would necessarily even clash.

[KingsX]

4 minutes ago, iancognito said:

This isn't actually true. Apart from the early Eriksson days, these owners have never thrown cash at players and transfer windows from their own pockets. I think the underachievement when we were bringing in the likes of Matt £5M Mills compared to what we did under Pearson with players like Knockaert, Morgan etc coming in for relative peanuts, opened their eyes to what can be done with proper budgeting and management. Since those times we've always either gone bargain basement or re-invested cash from player sales to bring in two or three more. The money we got for winning the league and the Euro run the following season barely got touched because selling Kante, Drinkwater and eventually Mahrez covered most of the incomings for another couple of seasons. The expansion and the training ground were funded via loans so it's doubtful the two things would necessarily even clash.

What?!

 

As you point out, we are a self-sustaining club.  Stadium debt is paid out of the same club revenues as player wages and transfer fees.

 

As loan payments come due for Seagrave and the KP, those funds will no longer be available to pay our high wage bill.  Or are you telling me we can eat the same cake twice?

 

When you look at what stadium debt service did to the transfer policy of Arsenal, and of Spurs during their recent peak, it changed the trajectory of those clubs -- much richer ones than us -- for the worse.  We have to be prudent.

[Manwell Pablo]

34 minutes ago, iancognito said:

This isn't actually true. Apart from the early Eriksson days, these owners have never thrown cash at players and transfer windows from their own pockets. I think the underachievement when we were bringing in the likes of Matt £5M Mills compared to what we did under Pearson with players like Knockaert, Morgan etc coming in for relative peanuts, opened their eyes to what can be done with proper budgeting and management. Since those times we've always either gone bargain basement or re-invested cash from player sales to bring in two or three more. The money we got for winning the league and the Euro run the following season barely got touched because selling Kante, Drinkwater and eventually Mahrez covered most of the incomings for another couple of seasons. The expansion and the training ground were funded via loans so it's doubtful the two things would necessarily even clash.

Excellent post.

[splinterdream]

7 hours ago, MarriedaLeicesterGirl said:

"Bigger is better" if the demand is there: I recognize that King Power doesn't want to not over-expand, but I am a sure they have the preliminary plans for a "full expansion" in a drawer somewhere. Currently, the club doesn't even really market going to Premier League matches, and I don't think they will need to at 40,000. Do you think if they actually advertised ticket sales, pursued schools/houses of worship/businesses, etc, they wouldn't sell 48,000 for most league matches? Maybe not cup games, but they don't aggressively market those in any event.

 

However, the expansion is certainly more than adding seats: It is adding income generating opportunities for the club, including premium seats, better food options, more opportunity to sell merchandise, etc. etc. A bigger stadium -- especially if it is a modern stadium -- is a statement about the club, and itself a draw for better players. Of course it is a risk: I think Everton hovering around the drop zone has terrified a lot of "mid major" teams, but I think (hope) we will stay a PL mainstay for the time being.

It’s the fan that wants go last minute and be confident there’s availibilty for him and his mates, this may eventually turn to them getting a season ticket, if there’s regularly no availability for fans like this, their demand will cease, it seems stupid not to have a percentage of seats available for fans anting to go last minute. 

[sacreblueits442]

3 hours ago, KingsX said:

What?!

 

As you point out, we are a self-sustaining club.  Stadium debt is paid out of the same club revenues as player wages and transfer fees.

 

As loan payments come due for Seagrave and the KP, those funds will no longer be available to pay our high wage bill.  Or are you telling me we can eat the same cake twice?

 

When you look at what stadium debt service did to the transfer policy of Arsenal, and of Spurs during their recent peak, it changed the trajectory of those clubs -- much richer ones than us -- for the worse.  We have to be prudent.

...Arsenal stadium enhancement set them back where they had to watch the pennies!!!

They stopped being competitive but when it was all paid up, they splashed £72m on Pepe, that did not turn out too well. It just goes to prove, when you have money, it is how you spend it that counts.

[Babylon]

6 hours ago, KingsX said:

What?!

 

As you point out, we are a self-sustaining club.  Stadium debt is paid out of the same club revenues as player wages and transfer fees.

 

As loan payments come due for Seagrave and the KP, those funds will no longer be available to pay our high wage bill.  Or are you telling me we can eat the same cake twice?

 

When you look at what stadium debt service did to the transfer policy of Arsenal, and of Spurs during their recent peak, it changed the trajectory of those clubs -- much richer ones than us -- for the worse.  We have to be prudent.

We also need to grow if we consistently ever want want to be more than a team that flits between 7th and 16th, flirting with relegation and eventually going down the plug hole. 
 

Not only will it eventually increase revenues, it will make is more attractive to players and help us compete with the next bracket of clubs for players.    
 

There absolutely has to be balance, which is why the long term plan is to borrow it all from KingPower so that they can pay the loans at whatever pace they want to or need to, something the others you talk about couldn’t. 

[Babylon]

7 hours ago, iancognito said:

This isn't actually true. Apart from the early Eriksson days, these owners have never thrown cash at players and transfer windows from their own pockets. I think the underachievement when we were bringing in the likes of Matt £5M Mills compared to what we did under Pearson with players like Knockaert, Morgan etc coming in for relative peanuts, opened their eyes to what can be done with proper budgeting and management. Since those times we've always either gone bargain basement or re-invested cash from player sales to bring in two or three more. The money we got for winning the league and the Euro run the following season barely got touched because selling Kante, Drinkwater and eventually Mahrez covered most of the incomings for another couple of seasons. The expansion and the training ground were funded via loans so it's doubtful the two things would necessarily even clash.

It is true, loans still need to be paid, which decreases spending power. That’s made even more true by the fact they stopped pumping money in (they have recently thought).

The beauty of a loan from Kingpower is that it’s more like borrowing from the bank of mum and dad to pay for your new kitchen extension, rather than a bank. 

[KrefelderFox666]

3 hours ago, Babylon said:

We also need to grow if we consistently ever want want to be more than a team that flits between 7th and 16th, flirting with relegation and eventually going down the plug hole. 
 

Not only will it eventually increase revenues, it will make is more attractive to players and help us compete with the next bracket of clubs for players.    
 

There absolutely has to be balance, which is why the long term plan is to borrow it all from KingPower so that they can pay the loans at whatever pace they want to or need to, something the others you talk about couldn’t. 

On top of our matchday revenue they can also attract other bigger events (e.g. EUROs, World Cup, UEFA finals, England matches and so on). Right now it's not really something we can easily achieve.

[Paninistickers]

10 hours ago, KingsX said:

What?!

 

As you point out, we are a self-sustaining club.  Stadium debt is paid out of the same club revenues as player wages and transfer fees.

 

As loan payments come due for Seagrave and the KP, those funds will no longer be available to pay our high wage bill.  Or are you telling me we can eat the same cake twice?

 

When you look at what stadium debt service did to the transfer policy of Arsenal, and of Spurs during their recent peak, it changed the trajectory of those clubs -- much richer ones than us -- for the worse.  We have to be prudent.

Has it actually been outlined how the stadium development will be financed? Same as Seagrave....is it anywhere in black & white how/where/who financed Seagrave? 

 

Not digging pit your own comment @KingsX....just curious as we all seem to be pretty confident in the source of funding for these projects, but I'm  unaware if it has ever been officially laid out

[jeffschlupp]

12 minutes ago, Paninistickers said:

Has it actually been outlined how the stadium development will be financed? Same as Seagrave....is it anywhere in black & white how/where/who financed Seagrave? 

 

Not digging pit your own comment @KingsX....just curious as we all seem to be pretty confident in the source of funding for these projects, but I'm  unaware if it has ever been officially laid out

The club accounts suggested a £91m five-year facility from King Power was mainly designated for the training ground, as I recall

 

Having said that, I'm not sure if we know whether LCFC Ltd. actually own the training ground or whether it is owned by the holding company that owns the stadium. It starts to get all a bit foggy in that case

[Raw Dykes]

9 hours ago, splinterdream said:

It’s the fan that wants go last minute and be confident there’s availibilty for him and his mates, this may eventually turn to them getting a season ticket, if there’s regularly no availability for fans like this, their demand will cease, it seems stupid not to have a percentage of seats available for fans anting to go last minute. 

Really? Doesn't it seem more stupid to turn down a sale in the hope that you might make the same sale just before the ticket becomes worthless?

[Babylon]

1 hour ago, KrefelderFox666 said:

On top of our matchday revenue they can also attract other bigger events (e.g. EUROs, World Cup, UEFA finals, England matches and so on). Right now it's not really something we can easily achieve.

Our whole profile goes up a level, we go from being looked at as a club like Norwich punching above their weight and into that next bracket of clubs. Your Evertons, Villas, Leeds, Newcastles, who despite having failed on and off the pitch for a while are still looked at as a different bracket of club. 

[MarriedaLeicesterGirl]

10 hours ago, splinterdream said:

It’s the fan that wants go last minute and be confident there’s availibilty for him and his mates, this may eventually turn to them getting a season ticket, if there’s regularly no availability for fans like this, their demand will cease, it seems stupid not to have a percentage of seats available for fans anting to go last minute. 

This is so important! It's better to have a 42,000 seat stadium that has 2000 empty seats in every match, barring Tier 1 matches, than to have a 40000 seat stadium sold out every week. This is not only for fans going "at the last minute" but also for fans wanting tickets in the same area: If my family (2 adults and two kids) wanted to go the game with our mates (two adults three kids) right now, it is literally impossible.

 

I have friends who are more than willing to use my tickets if I can't go to a match, but don't have memberships, so can't ever just get tickets for a game. Another friend went growing up but travelling meant he got out of the habit. Now with a family of five, he can't take them to a match, since work means he would only be able to go to at most 6 or 7 games, and a membership for five people isn't worth it.

[Paninistickers]

4 hours ago, jeffschlupp said:

The club accounts suggested a £91m five-year facility from King Power was mainly designated for the training ground, as I recall

 

Having said that, I'm not sure if we know whether LCFC Ltd. actually own the training ground or whether it is owned by the holding company that owns the stadium. It starts to get all a bit foggy in that case

Fascinating isn't it? 

 

So KP own the real estate for the stadium? Does the club pay rent/lease I wonder....ditto training ground. I wonder who ultimately owns Belvoir Drive then? 

 

The finance for the stadium expansion (ie Hotel, flats, arena etc)  is, I suspect, as murky and labyrinthine as it is possible to be. Far Eastern pension fund money I guess that needs to be persuaded away from investing in the likes of Stratford, London and into us. 

[jeffschlupp]

2 minutes ago, Paninistickers said:

Fascinating isn't it? 

 

So KP own the real estate for the stadium? Does the club pay rent/lease I wonder....ditto training ground. I wonder who ultimately owns Belvoir Drive then? 

 

The finance for the stadium expansion (ie Hotel, flats, arena etc)  is, I suspect, as murky and labyrinthine as it is possible to be. Far Eastern pension fund money I guess that needs to be persuaded away from investing in the likes of Stratford, London and into us. 

Yeah, it is interesting and definitely murky. As I recall from the accounts, LCFC Ltd. pay some sort of 'lease' if you can call it that to a company called K Power Estates Holdings Ltd which owns the freehold interest in the stadium. Whether that is cleaning dirty money and funnelling it through different channels as you suggest, who knows. Belvoir Drive I always heard was part owned by the club and still part owned by the city council, but not 100% on that either

[Tommy G]

Can't be bothered to quote it all but a theme of whinging throughout about a) how it will be financed or b) whether we will sell out. Our club is being run by seasoned business people backed up by trustworthy advisors. As any business grows you also have to speculate to accumulate, we may not sell out straight away, does it matter? We build the extra capacity and expand and then afterwards look at strategies to grow the fanbase (which is already happening now behind the scenes) 

 

Most people on this site haven't been around a boardroom or necessarily understand the decision process of people like this, or the appraisal process that would have been undertaken on both Seagrave or the expansion of the KP. I don't think there are many decisons the collective management team have got wrong in 10 or so years so they have my backing to get this right too.  

[Paninistickers]

34 minutes ago, Tommy G said:

Can't be bothered to quote it all but a theme of whinging throughout about a) how it will be financed or b) whether we will sell out. Our club is being run by seasoned business people backed up by trustworthy advisors. As any business grows you also have to speculate to accumulate, we may not sell out straight away, does it matter? We build the extra capacity and expand and then afterwards look at strategies to grow the fanbase (which is already happening now behind the scenes) 

 

Most people on this site haven't been around a boardroom or necessarily understand the decision process of people like this, or the appraisal process that would have been undertaken on both Seagrave or the expansion of the KP. I don't think there are many decisons the collective management team have got wrong in 10 or so years so they have my backing to get this right too.  

I guess that's aimed at the last couple of posts. Hardly whingeing. It's curiosity. A fascination of (probably) 'dirty' money (and dirty can mean a multitude of things, not always international crime syndicates)  and where/how/why it gets invested. 

[Tommy G]

1 hour ago, Paninistickers said:

I guess that's aimed at the last couple of posts. Hardly whingeing. It's curiosity. A fascination of (probably) 'dirty' money (and dirty can mean a multitude of things, not always international crime syndicates)  and where/how/why it gets invested. 

Not aimed at you and not picking on any particular members on here, I don't think we should use the term dirty, dirty suggests it is being laundered for some purpose. The last time I looked PwC did the group audit, having to sign sets of accounts off myself I know the current rules and regs that auditors now have to go through - these have expanded exponentially over the past 5 years. 

 

I think the argument about filling the stadium is just not commercially important - 1 extra corporate seat will be worth 5 match tickets, they will fill the place with commericla opportunities either within the stadia or outside - concerts, conferences - you name it, this will be the place to do it. At the moment we have an adequate stadium with a holiday inn next to it. This will be fantastic and will take the club to the next level.  

[PAPA LAZAROU]

These extra 8000 seats. Anyone know how many people are on the season ticket waiting list? If there are that amount surely it makes sense to the club to get the season ticket money than rely on the day sales?

[KingsX]

9 hours ago, Babylon said:

There absolutely has to be balance, which is why the long term plan is to borrow it all from KingPower so that they can pay the loans at whatever pace they want to or need to, something the others you talk about couldn’t. 

6 hours ago, Paninistickers said:

Has it actually been outlined how the stadium development will be financed? Same as Seagrave....is it anywhere in black & white how/where/who financed Seagrave? 

 

Not digging pit your own comment @KingsX....just curious as we all seem to be pretty confident in the source of funding for these projects, but I'm  unaware if it has ever been officially laid out

 

These are valid points.  I knew LCFC took out a nine-figure bank loan to build Seagrave, but went back to see how much we owe (and to whom) now. 

 

Bottom line, club debt is £217M (35 or 40% commercial, the rest to KPI): more than an average year’s revenues, before we lay a brick for the KP rebuild.  The KP expansion will be a nine-figure project on top of that.  From various sources:

 

Net debt at the year-end had risen to £217.1 million from £161.6 million. The club revealed that it had entered into a five-year loan facility for a total of £42.5 million with King Power International to finance working capital requirements for the next twelve months. It had also replaced its £52.5 million facility with Macquarie Bank with an £80 million four-year facility.

 

In fact, the club consolidated two previous loans. They now have a five-year loan from KPI of up to £42.5 million and an £80-million, four-year facility with Australian bank Macquarie, secured against future transfer instalments. It is the longest such loan any club has got from an external bank, which shows that Leicester’s credit is considered to be good.

KPI has also provided an emergency overdraft of £35 million. The parent company’s backing has now reached £180 million, including a £30-million personal loan from chairman Aiyawatt Srivaddhanaprabha.

As of the year-end, the group’s net debt had increased from £161.6 million to £217.1 million. Around £90 million, is due to the new Seagrave training ground. However, the club believes the debt is manageable and not unusual. It has been factored into the plans for development and, in real terms, is actually just £80 million as the debt to KPI is seen as good as equity. Leicester may be reliant on their owners, but most clubs are.

 

AFAIK, regarding such debts to ownership,

- The club pay them back out of operating revenues, with or without interest, or …

- they are forgiven and converted to equity.  (KP did this once while we were still in the Championship: £103 million to clear the club’s debt), i.e. …

- they are paid by the buyers upon sale of the club.

 

The banks, of course, will get their money back (PL and transfer revenues are already earmarked to go to Macquarie).  KP could have the club pay just the cost of capital, and never insist on principal repayments.  That is best case, and at 5% would drain maybe £10M a year.  But it’s still a sword hanging over the club.  If the family ever felt the need to access that money, they might be forced to sell up.

 

[sacreblueits442]

3 hours ago, Paninistickers said:

Fascinating isn't it? 

 

So KP own the real estate for the stadium? Does the club pay rent/lease I wonder....ditto training ground. I wonder who ultimately owns Belvoir Drive then? 

 

The finance for the stadium expansion (ie Hotel, flats, arena etc)  is, I suspect, as murky and labyrinthine as it is possible to be. Far Eastern pension fund money I guess that needs to be persuaded away from investing in the likes of Stratford, London and into us. 

...wouldn't this be in the yearly Balance Sheet!!!

[westernpark]

4 hours ago, Paninistickers said:

Fascinating isn't it? 

 

So KP own the real estate for the stadium? Does the club pay rent/lease I wonder....ditto training ground. I wonder who ultimately owns Belvoir Drive then? 

 

The finance for the stadium expansion (ie Hotel, flats, arena etc)  is, I suspect, as murky and labyrinthine as it is possible to be. Far Eastern pension fund money I guess that needs to be persuaded away from investing in the likes of Stratford, London and into us. 

I believe the YMCA partly own Belvoir Drive.

[Strokes]

1 hour ago, KingsX said:

 

These are valid points.  I knew LCFC took out a nine-figure bank loan to build Seagrave, but went back to see how much we owe (and to whom) now. 

 

Bottom line, club debt is £217M (35 or 40% commercial, the rest to KPI): more than an average year’s revenues, before we lay a brick for the KP rebuild.  The KP expansion will be a nine-figure project on top of that.  From various sources:

 

Net debt at the year-end had risen to £217.1 million from £161.6 million. The club revealed that it had entered into a five-year loan facility for a total of £42.5 million with King Power International to finance working capital requirements for the next twelve months. It had also replaced its £52.5 million facility with Macquarie Bank with an £80 million four-year facility.

 

 

In fact, the club consolidated two previous loans. They now have a five-year loan from KPI of up to £42.5 million and an £80-million, four-year facility with Australian bank Macquarie, secured against future transfer instalments. It is the longest such loan any club has got from an external bank, which shows that Leicester’s credit is considered to be good.

 

 

KPI has also provided an emergency overdraft of £35 million. The parent company’s backing has now reached £180 million, including a £30-million personal loan from chairman Aiyawatt Srivaddhanaprabha.

 

 

As of the year-end, the group’s net debt had increased from £161.6 million to £217.1 million. Around £90 million, is due to the new Seagrave training ground. However, the club believes the debt is manageable and not unusual. It has been factored into the plans for development and, in real terms, is actually just £80 million as the debt to KPI is seen as good as equity. Leicester may be reliant on their owners, but most clubs are.

 

 

AFAIK, regarding such debts to ownership,

- The club pay them back out of operating revenues, with or without interest, or …

- they are forgiven and converted to equity.  (KP did this once while we were still in the Championship: £103 million to clear the club’s debt), i.e. …

- they are paid by the buyers upon sale of the club.

 

The banks, of course, will get their money back (PL and transfer revenues are already earmarked to go to Macquarie).  KP could have the club pay just the cost of capital, and never insist on principal repayments.  That is best case, and at 5% would drain maybe £10M a year.  But it’s still a sword hanging over the club.  If the family ever felt the need to access that money, they might be forced to sell up.

 

Any idea how much money is owed to the club from player sales in instalments, to offset against that?

[Babylon]

2 hours ago, KingsX said:

 

These are valid points.  I knew LCFC took out a nine-figure bank loan to build Seagrave, but went back to see how much we owe (and to whom) now. 

 

Bottom line, club debt is £217M (35 or 40% commercial, the rest to KPI): more than an average year’s revenues, before we lay a brick for the KP rebuild.  The KP expansion will be a nine-figure project on top of that.  From various sources:

 

Net debt at the year-end had risen to £217.1 million from £161.6 million. The club revealed that it had entered into a five-year loan facility for a total of £42.5 million with King Power International to finance working capital requirements for the next twelve months. It had also replaced its £52.5 million facility with Macquarie Bank with an £80 million four-year facility.

 

 

In fact, the club consolidated two previous loans. They now have a five-year loan from KPI of up to £42.5 million and an £80-million, four-year facility with Australian bank Macquarie, secured against future transfer instalments. It is the longest such loan any club has got from an external bank, which shows that Leicester’s credit is considered to be good.

 

 

KPI has also provided an emergency overdraft of £35 million. The parent company’s backing has now reached £180 million, including a £30-million personal loan from chairman Aiyawatt Srivaddhanaprabha.

 

 

As of the year-end, the group’s net debt had increased from £161.6 million to £217.1 million. Around £90 million, is due to the new Seagrave training ground. However, the club believes the debt is manageable and not unusual. It has been factored into the plans for development and, in real terms, is actually just £80 million as the debt to KPI is seen as good as equity. Leicester may be reliant on their owners, but most clubs are.

 

 

AFAIK, regarding such debts to ownership,

- The club pay them back out of operating revenues, with or without interest, or …

- they are forgiven and converted to equity.  (KP did this once while we were still in the Championship: £103 million to clear the club’s debt), i.e. …

- they are paid by the buyers upon sale of the club.

 

The banks, of course, will get their money back (PL and transfer revenues are already earmarked to go to Macquarie).  KP could have the club pay just the cost of capital, and never insist on principal repayments.  That is best case, and at 5% would drain maybe £10M a year.  But it’s still a sword hanging over the club.  If the family ever felt the need to access that money, they might be forced to sell up.

 

There was something in one of the last two accounts that basically said the loans with the banks were short term, until a longer term facility was in place with KPI. Of course it depends what they themselves are comfortable with and we had a pandemic to deal with. 
 

But I think it’ll all shift over eventually. Makes sense for them for it to, so long as they have the cash at hand to facilitate it. 

[KingsX]

53 minutes ago, Strokes said:

Any idea how much money is owed to the club from player sales in instalments, to offset against that?

 

I don't know.  But I did read that certain installments from player sales are now due to go directly to Macquarie Bank to pay existing debt.