Crystal Palace recently welcomed a new face into the boardroom in Woody Johnson.
The American businessman has purchased the 45% stake John Textor previously held for a sum of £190m – joining Steve Parish, David Blitzer and Josh Harris as owners of the Eagles.
This development – which is still pending approval from the Premier League and Women’s Super League – has left many Crystal Palace fans wondering just how deeply Johnson will get involved.
Now, TBR Football can provide an insight in that respect – specifically regarding the planned expansion of Selhurst Park – after speaking to financial expert Adam Williams on the matter.
Crystal Palace sound better off with Woody Johnson over John Textor as “money-printing machine” claim made
The Head of Football Finance and Governance Content for TBR Football has now provided some very encouraging details for Crystal Palace fans to digest, particularly when it comes to the NFL (National Football League) in the United States and how that could impact on Selhurst Park.
Williams states: “The mood music suggests Johnson is going to be more of a passive investor, similar to Harris and Blitzer. However, I don’t think this will be like-for-like in terms of its wider implications for the club.
“The stadium expansion is going to demand resources of over £200m. It’s been known for some time that Textor was on the way out, though the Europa League issue has expedited that process. Due to the fact Textor wasn’t committed for the long term, he was likely not keen to invest in capital expenditure projects, the benefits of which he was never going to be around to reap.
“With Johnson, however, I expect he will have had to commit his share of funds for the new stand as a proviso of the deal.
New York Jets owner Woody Johnson
Photo by Thearon W. Henderson/Getty Images
“Palace will probably pay for it through a combination of debt and direct funds from the ownership structure, but either way, having Johnson in the capital base means they will have access to better debt deals. With Textor, that might have been an issue given how he’s mismanaged Eagle Football and owed about £400m to Ares, the financial services firm. He was very highly leveraged already, whereas Johnson, to the best of my knowledge, is not.
“Regardless of his reputation at the Jets, the NFL franchise is a money-printing machine. You’ve got access to his commercial contacts and so on too, which will help with the funding for the stadium.
“With the stadium expansion itself, £200m is a lot of money and you have to square the investment with the future revenues it guarantees. In this instance though, I don’t think the costs are prohibitive – it still makes commercial sense.
“Crystal Palace are thinking of raising capacity by about 10,000 and adding up to 3,000 premium covers. They earned almost £14m in matchday income last year, so you can do a crude pro-rata calculation which shows you that the expansion will give them matchday revenue of around £19m.
“Based on that figure, you’re looking at a 40-year timeline before the expansion has paid for itself, and that’s before interest payments. In reality though, the extra emphasis on hospitality and premium seating means you’re probably looking at matchday income of closer to £30m if they get everything right. That looks a lot more cost-efficient.”
UEFA Europa League involvement set to bring more cash to Crystal Palace
Crystal Palace, who just signed Walter Benitez, are still awaiting clearance from UEFA on their involvement in the UEFA Europa League next season, although the fact Textor has now departed should clear that multi-club problem up.
Should the south Londoners get the green light, then further financial benefits await.
Just a draw in the UEFA Europa League league phase next season is worth £126,400 – a win pays out £379,201 – and more cash awaits if Oliver Glasner can steer Crystal Palace deeper into the competition.
Winner: £10.95m
Runner-up: £5.90m
Semi-finalists: £3.54m
Quarter-finalists: £2.11m
Round of 16: £1.47m
Reaching knockout round play-off: £252,800
League phase wins: £379,201
League phase draws: £126,400