Tuesday, 21 October 2008

Question 16

Club's deadline over new stadium

Cardiff City FC has three months to produce a business plan for its proposed 30,000-seat stadium.

A meeting of Cardiff council's executive on Thursday imposed a 90-day deadline from 31 December for the club to prove the project is viable.

The club, which last season faced a financial crisis and is also losing income due to low crowds, had asked for six months to satisfy the council.

Cardiff City has said it remains confident the stadium will go ahead.

The council's executive agreed with its economic scrutiny committee who last week said the stadium project was not viable as it stands. The club asked for another six months to produce new plans, but the council's executive said the Bluebirds should receive 90 days from New Year's Eve to prove the viability of the project.

The club plans a 30,000-seat stadium, which could rise to a 60,000 capacity, on land at Leckwith, near the club's current Ninian Park ground.

Integral to the scheme is securing retail development. American discount store group CostCo earlier this year signed a contract to become a tenant but other stores are needed to join the project.

He added: "There's instances where people go on a match day to the Bob Bank (stand) - a father and son is £36 for the two of them, that's disgraceful.

"It should be under £20 for a father and son to sit at a football match at this level."

In a statement on the club's website, Cardiff City said that due to average attendances running 2,000 lower than their break-even point of 13,000, they expected to suffer "a reduction of income of £600,000 over a whole season".

Source: BBC News 1st December 2005 (adapted)

Questions

1. What is likely to be in Cardiff’s business plan?

2. If a club is losing income owing to low crowds, should they reduce ticket prices?

3. if the crowds are low, does it make sense to increase the stadium’s capacity/

4. Given the information in the final paragraph, what is the average ticket price?

5. Outline ways in which the break-even point can be reduced.

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