St James' Park and, inset, former Newcastle United owner Amanda Staveley
St James' Park and, inset, former Newcastle United owner Amanda Staveley
Stadiums do not come cheap. Spurs know that only too well after starting out with a £250m design and plan that ended up coming in at a figure nearly five times that.
£1.2bn is an eye-watering sum, but Jonathan Turner, the club's non-executive director, previously admitted it would be 'incredibly hard' to build the Tottenham Hotspur Stadium for the same amount in 2025. Why? Well, the ground was financed through internally generated cash flow and long-term debt with an 'incredible financing package that would not be available today' because inflation, construction costs and rates of interest have all since soared.
You can see why Newcastle United's objective is to select a scheme that is 'deliverable, affordable and sustainable', which delivers an investable return, whether the Magpies choose to transform St James' Park or build a new stadium not too far away. Whichever route Newcastle take, though, the black-and-whites will have considerable backing.
Chief operating officer Brad Miller has already highlighted how 'we've got the commitment and the ambition to invest from the ownership' while CEO Darren Eales said a couple of months ago that it was a 'huge investment that is going in'. "The fact that the ownership are taking that very seriously and looking to invest considerable sums shows their ambition," he added.
Just how much is still to be confirmed, but it was only yesterday that former co-owner Amanda Staveley outlined the long-term commitment of investors like the PIF while speaking more generally about sovereign wealth funds.
"Sovereign wealth funds make great partners because they're much more used to long dated assets," she said at the Qatar Economic Forum. "Sport is comfortable with partnerships that go on for 10, 15 years.
"I also think that institutional sovereign wealth fund capital has made the way we invest much more efficient in terms of we have been able to introduce regulatory rules which have attracted more private equity style capital because you have to be efficient. The more and more we get, the more sovereign wealth funds you get into this environment, you are going to grow the valuation pool and good assets will always grow.
"We need to not be complacent. We need to make sure we create the best type, whether it is football, golf or whatever our speciality is. We need to make sure when we are looking at what we are producing for the fans that we've got the right infrastructure. Infrastructure around sports venues is key. Debt is expensive, especially at this time. The cost of building a new stadium is a lot of money."
No one at Newcastle needs reminding of that, of course, but whether the Magpies stay or go, this is an investment that will help boost revenues to take the club to the next level rather than weighing them down in the years to come.