Alex Walmsley of Harrison Drury’s sports law team assess the merits of bid to purchase Wembley Stadium and what it might mean for the FA and the stadium’s future.
Wembley Stadium, the home of English football, has come into the spotlight again after businessman Shahid Khan tabled a bid to purchase the stadium from the Football Association (FA).
The bid is thought to be in the region of £600m to £900m.
In the proposed deal, the FA will retain all revenue generated from Club Wembley, which is the multi season membership packaged offered by the FA – currently thought to be worth between £30 million to £40 million per year.
In addition, it would also receive a percentage of gate receipts and catering revenue from England, FA Cup, Play Offs, League Cup, FA Trophy and FA Vase matches in both the male and female games.
What’s driving the current Wembley bid?
Shahid Khan, who already owns Fulham Football Club and NFL’s Jacksonville Jaguars, has said that he aspires to host world cup fixtures and a future Super Bowl at the stadium.
He has also argued that the purchase will provide the FA with much-needed liquidity to assist them in funding grass roots football, which, it is reported, has seen a steady decrease in participation over the last decade and a 19% decrease between 2011 and 2016, which may be the result of a lack of investment from the FA and local councils. The investment could potentially fund over 1,500 ‘4G’ pitches over the next 10 years.
The idea of selling what Mr Khan himself described as “the cradle of English football” to a foreign investor may not come as welcome news to football fans. This is particularly so when the FA reportedly spent just short of £1bn pounds to build Wembley Stadium.
This could be seen as the FA selling out the national stadium at the first available opportunity, with little profit to show for such a significant investment. A consideration of the latest FA financial results shows that a sum of around £113 million is still owed to various third parties, including the Department for Culture, Media and Sports, for the financial assistance provided during the construction of the stadium.
What are the other options for the FA?
It is understood that there are no terms of exclusivity surrounding the offer, which may lead to a potential bidding war in the future if other investors consider the proposition of purchasing Wembley a viable option.
A potential lucrative opportunity for the stadium is to attempt to entice Chelsea Football Club into renting the stadium for the period during which their current home, Stamford Bridge, undergoes significant redevelopment.
This may be a similar deal to the one Tottenham Hotspur have procured this season, although it is reported that Chelsea would require use of an alternative stadium for up to four years.
Will it remain the ‘Home of English Football’?
There have been expressions of scepticism from fans and the media alike of Wembley falling into private ownership, claiming it may well lose its identity and become commercialised.
However, Mr Khan has insisted Wembley will always remain the home of English football. Given its current official name is “Wembley Stadium connected by EE”, it’s evident that further commercialisation may be an inevitability in any event.
It is well worth remembering that the old Wembley Stadium was privately owned up until 1997 when it was purchased by the FA for the sole purpose of demolishing it and rebuilding it in its current guise.
Wembley does not have a history of being in public ownership yet has remained the heart of English football for its entire lifespan. With Mr Khan’s seemingly sincere intentions to promote English football from the grass roots and to maintain the stadium’s rich history, this offer will no doubt be seriously considered by the FA and is due to be discussed at the Digital, Culture, Media and Sports committee in July.
Harrison Drury solicitors has expertise in dealing with property and corporate transactions in the sporting environment and can assist with any sports-related property enquiries. Please contact Alex Walmsley or Charlotte Hurst on 01772 258 321.