Co-IJSF blogger Brad Humphreys should have more to say on this than me, having written on the topic (e.g. here), but my team Oldham Athletic is following the trend in British soccer for developing new stadia. In the last 20 years about a quarter of England’s professional soccer clubs have moved to new, purpose-built stadia, with at least another ten, including Oldham’s, planned.
Oldham’s owners, three US-based British businessmen, see this stadium as the only way forward for the club; in their words: “At the end of the day this is about survival and this is the only way we can do it. It’s not an exaggeration to say that without new facilities the very existence of the club would be in jeopardy.”
It would appear to be that serious; Oldham has long been making regular losses as a business entity and the owners have regularly emphasised the lack of hospitality facilities at the stadium that would enable the club to make use of its resources throughout the week and be profitable.
Furthermore, folklore in England tells that clubs moving to new stadia do well, and research in the Journal of Sports Economics by Christopher M. Clapp and John K. Hakes suggests that for baseball in the US attendances do rise after the team moves to a new stadium, although there is no effect on team performance. Brad Humphreys has also written with Dennis Coates on this, suggesting that subsidies from local authorities for stadium development are an inefficient method for encouraging local sporting enterprises.
In Oldham’s case it would certainly seem that off-field, midweek activities are primary reason for moving; the capacity of the new venture will be just 12,000, smaller than the current stadium. At a cost of (at least) £20m to build, one wonders how quickly the owners will recoup their expense. Or will the local council help out in a socially inefficient manner?