Estimating the Options, Part One

Today, we’re trying something a little bit different. Just to explain, as everyone who cares about these things knows, on Friday 2nd March 2012 Chelsea FC released a fascinating report called The Future of Stamford Bridge (FSB) which focused on the efforts the club had made over the past eight years to expand the stadium and which also explained just how difficult all the available options are. At the time, CFCTruth welcomed the statement and praised its clarity and its openness in laying out the specific difficulties of expanding the Bridge.

Amongst a wealth of other useful information, the club’s document contains a very detailed breakdown of the specific costs associated with expanding Stamford Bridge to a 55,000 stadium (through the enlargement of the Matthew Harding Stand and the Shed End). But while the FSB  referred to the costs of building a 60,000 stadium at Stamford Bridge (“in excess of £600 million” apparently)  it did not provide a similarly detailed cost breakdown for this option and certainly did not even hint at the what the comparative costs of Chelsea FC moving to a new stadium might be.

But CFCTruth is convinced that trying to understand these comparative costs is a key part of the debate over the future of Stamford Bridge. And so we have spent our time since the publication of the FSB examining the financial estimates included in the statement and have used this data, along with the best information we could find from elsewhere, to make informed estimates of the potential cost of Chelsea’s various alternative stadium options.

So this is what we have done. For this exercise, we have assumed that all the associated logistical and planning issues can be overcome (big assumptions but necessary in this case). And as these costs could vary dramatically depending on different factors, we have chosen to present the ‘best case’, ‘worst case’ and median estimates for each option. The comparison between the estimates for each different option is fascinating. Later pieces will look at what Chelsea can earn from a new stadium at SB - we must try to factor in the compressed nature of any stadium there and how many of the additional revenue drivers can be included in a redeveloped SB.

Stamford Bridge Extended to a 55,000 Capacity Stadium (using the club’s figures)
	MHS	Shed End	Total
Total Project Income	£0m	£0m	£0m
Total Project Expenditure	£177m	£98m	£275m
Net Total Expenditure	£177m	£98m	£275m

Stamford Bridge Rebuilt to a 60,000 Capacity Stadium
	Best Case	Worst Case	Median
Total Project Income	£0m	£0m	£0m
Total Project Expenditure	£561m	£877m	£719m
Net Total Expenditure	£561m	£877m	£719m

New 60,000 Capacity Stadium Built at Battersea
	Best Case	Worst Case	Median
Total Project Income	£862m	£542m	£702m
Total Project Expenditure	£864m	£1,489m	£1,177m
Net Total Expenditure	£2m	£947m	£474m

New 60,000 Capacity Stadium Built at Earls Court
	Best Case	Worst Case	Median
Total Project Income	£667m	£208m	£438m
Total Project Expenditure	£647m	£1,146m	£897m
Net Total Expenditure	£20m profit	£938m	£459m

Two things stick out for us when looking at these figures. If we take the median estimates as a rough yardstick, building a 60,000 stadium at Stamford Bridge looks to be much more expensive than building one elsewhere. Even if you take the 'Best Case' figure for the Stamford Bridge option this is £90m-£100m more expensive than even the median estimates for either Earls Court or Battersea.

What also struck us was that despite the protestations from certain quarters that the CPO offer was just a 'land grab' and a scam so that Roman could 'claw back the money that he has put into the club', selling Stamford Bridge and building elsewhere really does not make Roman or the club any significant profit at all. What it could do, however, is to greatly subsidise the cost of building a new stadium in another location by bringing down the potentially huge costs to something more manageable.

Why give these figures any credence? That is a fair question. But these are not just figures plucked out of the air. If you click on this link you will be able to examine the estimates we have come up with for yourselves with along with explanations of how and why we came up with the figures we did in the relevant comments section. However, it is important to note that we are in no way suggesting that these figures are the last word on the issue or that they have been somehow leaked to us by the club. The figures are, as we quite openly admit, estimates (albeit relatively educated ones). For that reason, we would like to invite all interested parties and especially those people with expertise in the field of quantity surveying and large-scale developments to help us improve the accuracy of the figures. The cells in the spreadsheet that are highlighted in green are the ones we feel need the most attention but you may know better...

Just to be clear, we are not trying to advance any particular agenda here - you know our position on the stadium and CPO issues but with these financial estimates our sole intention is to try to capture a reasonably accurate picture of the financial costs associated with each of the various stadium options which might be available to the club.  And by sharing these figures to try to move the debate forwards.

So please take a look at the spreadsheet, read the estimates carefully and then tell us what you think via cfctruth@gmail.com. And where we can, we will use the information you provide to improve the quality of the estimates.

Next: In Part Two of this article we will seek to analyse what the different estimates tell us about the financial viability of each of Chelsea FC’s various stadium options.