FAI unveil premium seat plan
On the day six of the world's leading central banks sought to steady the chaotic international credit markets with a combined package worth some €125 billion, the FAI officially launched a premium seat sale that aims to attract around 0.15 per cent of that sum from Irish businesses and football supporters.
EMMET MALONE, Soccer correspondent, Irish Times.
Friday, September 19, 2008
On the day six of the world's leading central banks sought to steady the chaotic international credit markets with a combined package worth some €125 billion, the FAI officially launched a premium seat sale that aims to attract around 0.15 per cent of that sum from Irish businesses and football supporters. Along with its agents for the scheme, ISG, the organisation confirmed at a function held close to the partially built new Lansdowne Road stadium that it will look to sell around 10,000 premier 10-year seats over the next couple of years at prices ranging from €12,000 for ones behind the goal line to €32,000 for those overlooking the halfway line.
If the entire offering is sold it would yield a gross figure of around €190 million. In the event that ISG is taking 15 per cent commission - the figure one of its parent companies, IMG, agreed to when it was marketing the ill-fated Eircom Park scheme, the enterprise would net the association more than €160 million or more than double the amount it is due to pay as its share of the Lansdowne Road redevelopment costs. The prices for the more expensive seats are hugely above what was achieved by the IRFU and GAA with those organisations charging €15,000 and €11,600 respectively for their premium seats all of which were marketed at a single price.
The timing of the FAI's arrival on the market also looks, to say the least, a little unfortunate but both the FAI and their advisers were adamant yesterday that the vast majority of the tickets being offered will have been sold by the time the stadium opens its doors for business in the autumn of 2010. "I think we'll sell 100 percent but officially our forecast to the FAI remains 80 percent," said ISG chief executive, Andrew Hampel, at yesterday's launch. A 20 year veteran of IMG's international operation, the Englishman conceded that current market conditions might have been better but insisted that there would still be enough people out there with money to make the project a success over the course of the coming years.
"I see it is a grim financial situation," he said, "but I am confident because we have done our home work. There are 33,000 millionaires in Ireland and they have not all ceased to be millionaires as a result of the recession.
"They benefited from 15 years of boom and they still have disposable income and still want to be seen at the front of the aeroplane. These seats are the front of the aeroplane."
Hampel accepted that the current crisis in banking and the resulting financial difficulties in the economy as a whole might make the larger corporate boxes less attractive propositions. There are three 50-seat, 20 24-seat and 10 12-seat boxes to be sold in the new stadium but he expressed absolute confidence that a mixture of business and individual clients will stump up for the seats themselves. "We believe there will be 3,000 buyers and the average buy is three and a half to four seats per person," he said. "That is borne out by other projects and by the soft launch. The split of the 15,200 corporate seats at Wembley is about 50-50 between corporate and individuals. I expect to see that mirrored in the seats here."
His confidence, he says, is based in part, on ISG's record of successfully achieving or exceeding its targets in the 19 similar projects it has been involved with internationally. The best known here is the new Wembley stadium where, he claims, ISG sold premium and corporate packages worth some €734 million, far in excess of the what the English FA had hoped for, he says, when they planned to carry out the sale themselves. It is also the result of four months of market research carried out by ISG in Ireland last summer. At that stage some 270 firms which had previously expressed interest in premium seats were approached and their interest in actually purchasing gauged. The results, he claims, were hugely positive.
Given the downturn in economic the exercise was repeated on a smaller scale last month when 97 firms were contacted. This was the "soft launch" Hampel talks about and he says that it yielded commitments worth around €15 million. No contracts have been signed, though, and no deposits paid.
The FAI's chief executive John Delaney was repeatedly critical of the optimistic forecasts put out by the association's then leadership nearly a decade ago when IMG was marketing Eircom Park. His scepticism was justified when the project fell apart and the claimed sales turned out to have been significantly inflated. Still, when the scheme was being wound up the association still ended up having to spay a significant sum to IMG for its efforts. Last night however Delaney was emphatic that ISG, a joint venture between IMG and another major international industry player, Bastion, are the perfect partners for the association and that the sale will be successful despite criticisms of the levels at which prices have been set.
"It (the scheme) is good," he said. It's based on the evidence and we are using top partners to build this. Some people said it wouldn't get planning, that it wouldn't get built, that we didn't have the money to pay for it. Some people will probably say we won't sell the seats. Let me tell you, we'll do it."
If he is right then the association will reap huge benefits, avoiding the cost of having to borrow to pay its share of the construction costs and then taking in what are by its standards enormous amounts of revenue. "It makes us easily able to afford our capital commitment into the project," he said of the scheme.
"Then, from 2016 onwards, we get to see the real dividends from it, the way we have done our financial business model around the stadium plan. I think the real net worth will arise in 2020 when we resell these seats, though, because then they become a pension for the FAI."
© 2008 The Irish Times
Article published by kind permission of Irish Times