A Response to Sir Terry Leahy
Some have referred to Sir Terry Leahy's letter as a source for clarification after the initial confused statements from Everton's CEO and Tesco, specifically the statement on the £50m contribution. The letter in question has been well published in the local press, the official club site and the many unofficial sites, the complete article can be seen here:
The main paragraph on the financial issue is paragraph four which I reproduce here:
"If Everton built a new stadium alone, rather than as part of an overall development, the cost would be huge. In the case of the Kirkby proposal, if you allocated a share of the traffic, infrastructure and land costs to the stadium, a very conservative figure would be £25 million. The construction of the stadium itself would cost around £110 million. Barr Construction have an integrated design, steel manufacture and construction operation which makes huge savings on that figure. Tesco as the developer is forgoing the normal development profit on the construction of around £15 million, in addition to the contribution it is making directly. So if you went out to buy this stadium it would cost you £150 million."
Frankly, in light of the previous figures presented by Everton, if this were submitted to the plain English society they'd have had a field day. There's no specific mention of the Tesco £50m contribution that was previously part of the "Deal of the Century" scenario, now we have, in sequence, a land and infrastructure cost of £25m coupled to a waiving of a £15m cost (Tesco's margin as a developer). A revelation that the stadium cost has now increased by 10% to £110m, followed by a somewhat vague and unsupported reference to the construction company, Barr, being able to offer "huge" savings, this from a construction company who measure their profits in single million figures and operates in an industry with acknowledged tight profit margins. If the saving was specific, the £10m increase for instance, and was added to the other figures mentioned, £25m and £15m, you indeed come up with the magical £50m contribution that perhaps, embarrassingly for Mr. Wyness, is the "value derived from the project" mentioned in Tesco's clarification statement to Radio Merseyside. I'm still a bit lost on where the other £100m is coming from, save for the sale of Goodison and the prospective naming rights deal.
Conversely if the statement was written in plain English and said:
"The total cost of delivering a world class stadium is £150m. Tesco, in addition to waiving their developers' profit margin, are absorbing the land and infrastructure costs into the project as a whole. The total contribution from Tesco will therefore be £50m. By taking advantage of Tesco's immense purchasing power and contacts within the construction industry Everton will benefit from a negotiated £50m discount on the construction cost, the remaining cost, £50m, being covered by the £15m sale of their current ground, a £25m naming rights deal with a partner willing to pay the ten year fee up front and the balance being funded by some long term debt amounting to no more than £10m."
If the statement was as clear as that I'd be partially on board, save the commercial issue of a town over a major city. Whilst the above statement makes sense you're unlikely to hear it from Mr Leahy, as it's clearly ridiculous to expect a discount of that magnitude or funding from Everton at those levels. So what is the true cost? Well I don't know, plenty of fans appear not to know and it also appears that Everton / Tesco, after nine months of working on this, don't know either, if they did I'm certain they'd tell you in a crystal clear precise manner.