Now is the best time to quit SJP
As unpalatable as it may be to most fans of Newcastle United, there is no better time than now to contemplate leaving our physical and spiritual home.
We look at the options for staying at St James Park, including the possibilities and challenges of expanding our current ground, but also at why NOW is potentially the perfect time to explore the options of moving to a new home. All will be explained!
We start by looking at the landscape of English football and how it has changed over the last decade or so, and in particular what this has meant for the finances and stature of our beloved Newcastle United. We’ll then look at what a move could bring to our club and explore if this may mean a brighter future for NUFC.
English stadia and Newcastle United
Newcastle United currently have the 6th highest capacity in England. Down from 3rd even just a few seasons ago. And with development already underway for a number of clubs, and planned for others, we are set to drop to 9th in the not too distant future.
Given the plans we mentioned above, this is what the capacity of our rivals will probably look like in just a few seasons from now:
Manchester United (Old Trafford; 76,100)
Arsenal (Emirate; 60,432)
Tottenham Hotspur (White Hart Lane, 61,000)*
Chelsea (Stamford Bridge; 60,000)**
West Ham (London Stadium; 60,000)
Manchester City (Etihad Stadium; 55,097)
Liverpool (Anfield; 54,742)
Everton (Waterfront Stadium; 53,000)***
Newcastle United (St James Park; 52,405)
** In concept phase
***Land purchase commenced
Cleary Newcastle cannot compete with the pull of London for some players. And in terms of revenue the capital city brings it also adds significant further opportunities for ticket and sponsorship revenues that we will never be able to compete with.
Season ticket prices for eight clubs listed above:
Arsenal: £1,035 to £2,039
Tottenham: £765 to £1,895
Liverpool: £710 to £869
West Ham: £675 to £955
Chelsea £595 to £1,250
Everton: £544 to £719
Manchester United £532 to £950
Newcastle United: £525 to £924
Manchester City: £299 to £1,750
But of those clubs outside London there is no reason why we can’t compete, at least in terms of ticket pricing and crowd numbers. The further we fall behind in capacity and ground size, the further we fall behind them in terms of revenue and stature.
Do we need an increased capacity?
The stats would certainly suggest so. Newcastle, a team in the Championship, currently average over 50,000 fans per home game, a % fill rate of 96.6%. Only Chelsea of all the clubs listed above have a less than 96% full rate this season with theirs being 83.3% (kind of shocking for a team top of the league).
You’d think, given our catchment area, that any sort of even moderate consistency in the Premier League, keeping us around the top half of the table, would mean we’d quite easily be able to encourage even more through our doors. And with it, more revenue.
One thing we’ve always been able to say up here is we have support like no other. And in a way THAT is our USP. Something we are known for. It would be foolish for Newcastle United not to capitalise on this fact.
So what are our options?
Expanding St James Park
There are now only two sides of the ground that, at face value, could be expanded. However, and for those who don't already know, there is actually only one.
This is because the houses behind the East Stand (the one with 'Newcastle United' written on it) are listed and cannot be knocked down. It is therefore impossible to ever extend in this direction (see red lines below).
That leaves extending south, on the Gallowgate.
So let us start with the elephant in the room. Didn’t Mike Ashley sell that land - we can’t build on it anyway!?!
This certainly is an issue, but every piece of digging we’ve done, including with the club suggests that this is only part of the story. Earlier this year Mike Ashley stopped development on the land by a third party in favour of developing on the land himself. As part of the planning application for the three new buildings that will sit on the land, which is owned by Nexus but where Mike Ashley holds the lease, the council confirmed that the application was only approved on the basis that a ‘feasible extension’ could still be undertaken to St James Park.
Quite what this means in real terms we would have to wait and see, but at least this statement offers some hope that all is not lost on expanding the Gallowgate end.
However building on this end of the ground is very tricky.
As you can see from the plan to the right (credit 'Potski') any extension south would be very intrusive on the surrounding roads and indeed the Metro station below that end of the ground.
Firstly Strawberry Place would need to be built over. This s a public highway and would therefore need special permission and planning to allow this to happen. Such undertakings are rare but not without precedent. In today's terrorism conscious society the thought of traffic being allowed to drive below a stadium full of people would also be a huge cause for concern, whilst the chances of re-routing the raid also seem highly unlikely.
Next you only need to look at where the projected new edge of the structure would be to see that it overhangs the existing ventilation shafts from the Metro Station below. This also give a clue as to the work that would be required to build foundations that would be able to support the stadium. In essence these foundations would need to be built 'under' the metro station, in the form of long concrete columns stretching down to the rock well below the station. The complex nature of such a structural task, if even possible, is quite incredible. Never mind the disruption and potential risk of damage to the station below.
There are several other considerations that would have to be made such as the overhang of the stadium onto other roads and any issues with restricting light to surrounding buildings. All of which would involve months, if not years, of negotiation.
So what of the cost?
When work was completed to turn SJP from a 37,000 seater stadium to the 52,000 stadium it is now, the cost of this element of the work would end up at £40m.
To put this into context, the world record transfer fee was broken that year for a chap called Luis Figo for £37m (for the kids reading), meanwhile in Newcastle the £7m capture of Carl Cort from Wimbledon tells its own tale with Sir Bobby Robson at the helm and Alan Shearer injured for much of the season.
Newcastle’s entire turnover for the year of 1999/2000 was £45m, declaring a loss of £18m for the year.
Fast forward to now and, with a fair wind, Newcastle would be in a very different position next year with turnover likely to raise to almost £200m should they get that precious return to the Premier League.
Why is all this relevant? It’s a simple case of maths really.
Let’s assume that £25m of the £40m was the cost of increasing the Leazes and the corner between the Leazes and the Milburn stands. We think that the cost of this development may be in the region of £35m for all costs.
Even if the club was to lend all of the money to cover the cost of development (say payback of £45m for a £35m loan) this would be paid back in 12 seasons. Whilst in all likelihood the club could manage it’s investment on the field to pay for all the works over 3-5 seasons.
We think that around 8,000 additional seats would be created if the extension was made. These seats would of course be at the cheapest end of the pricing scale but could retail for around £25 each. We have also excluded revenue from any cup matches and from gigs and other events such as the rugby fun days and other such money spinning ventures which the club should at the very least be pushing as hard as they can to maximise.
This calculation also does not include revenue from any additional corporate facilities which we feel sure would be created if an expansion was made. This of course would mean even more income streams, as would the resultant sales of match day food, drinks and other merchandise which have all been excluded from our calculations.
Once paid for this additional revenue stream of £4m-£5m a season would represent an additional 3% revenue, and even in recent seasons where NUFC has made record profits of £15m or so it puts into context just how much this extra revenue would mean to the club.
For us, this would be our preferred option. I mean, just look at it....
Developing on Leazes Park
There is of course some history here.
In the mid 90’s St James Park had been transformed from a standing room heavy, concrete wasteland into a 37,000 capacity stadium. This, however, was never going to be big enough.
At this time Sir John Hall and his board could see how difficult expanding St James Park would be, and even with plans to get to the 52,000 we now have in place on the existing location they pushed ahead with an ambitious plan to relocate the ground just yards away on Leazes Park.
Complaints form local residents, those who wanted to protect the green areas of the city and from within the council itself ultimately meant the plan was doomed from the start.
All of this meant that in 1998 they pushed ahead with development of the existing ground and permission was finally granted to put the final tier onto the Milburn and Leazes stands.
Given the problems faced back then it seems unlikely that such a plan would be accepted now and any attempt would likely take several years to ever get to a spade in the ground even if it was possible.
For us this is a non starter.
Whilst it won't be popular, now is a better time than every to look at a potential move away from St James Park, more on this later.
There would be a number of suitable possible locations for a move. There is a site close to the A1 in Scotswood near the river that would make for a stunning location with relatively good access, at least from major road access.
There are also some significant areas of land near the Coast Road heading out of town to the East that would give potential access by rail, Metro and road creating easy access to town and the major routes to the south via the A1 and A19. Certainly any location would need to be north of the river.
The cost of moving would be a good question to answer. The range of development costs for new stadia here and abroad makes for interesting reading. From the cheap and not very cheerful, like that lego thing down the road where the lights go off, to Wembley Stadium. Here is a look at what could be spent:
£757m - England (Wembley Stadium)
£750m - Spurs (White Hart Lane, redevelopment)
£500m - Chelsea (Stamford Bridge, redevelopment)
£390m - Arsenal (Emirates Stadium)
£200m - Allianz Arena (Munich)
£186m - Lyon (Stade des Lumières)
£125m - Wales (Millennium Stadium)
£34m - Sunderland (Stadium of Light)
In reality building the sort of stadium that Newcastle United could be proud of would likely cost between £100m and £150m, also depending on land purchase costs.
The real benefit here of course is that Newcastle would own the land and the stadium. Something they don't now. For this reason alone it could be quite an attractive proposition for Mike Ashley and his Board. Part of the issue with the 'value' of NUFC now is that we don't own our ground.
With the price of land set to fall significantly in the UK given Brexit, now could be an ideal time to invest in land. When you couple this with the potential additional revenue coming from the Premier League, should we get there, then this all of a sudden looks like an attractive proposition.
With the continued interest from abroad in buying up English clubs the proportional investment required to buy our own piece of Newcastle should be seriously considered. However that may feel for the Newcastle United fans.
For Mike Ashley the cost of underwriting such an investment would be non existent although it would mortgage the club. The club however would be significantly more attractive for potential investors.
The development of St James Park would be a wonderful thing to see, however difficult. A ground we could fill with 60,000 fans easily. But there is more of a case than ever to look at an alternative future for our great club. One that may allow us to push back towards the elite end of European football one day. That, we think, would inspire investors and fans alike.