That's really interesting, thank you. One question, I assume that this is simply revenue per seat, rather than profit per seat (must be since it's per year and cost is only a one-off)?
I.e. one also needs to remember the point which you have made before - that the average cost of building each seat is curving in the other direction, increasing as the capacity increases. So it's double whammy as you increase capacity beyond a certain point, the cost per seat going up while the revenue per seat goes down?
Correct. It is revenue per seat not 'profit' (but cost is not a one-off. It's paid annually over the lifetime of the loans - like a mortgage).
Second point also correct but would only begin to matter above about 60k since standard seats up to that point would be cheaper than premium seats. A more accurate figure is probably 58,400...
What's that based on Peter? Or is it your own opinion? Average revenue per seat may go down slightly but revenue will still rise.
It's based on the day's prices (2012) and a scheme very similar to the consented scheme up to 61k.
In theory, the overall revenue would continue to rise but only if the stadium is filled, which is not guaranteed to happen by any means. However the fall in the return on investment is guaranteed to happen. Just mathematics. Hence the 'sweet-spot'. Hence the incremental redevelopment. Hence about 60k.
I understand the point you're making, but there's 25,000 sat on the season ticket waiting list now and a fair few who'd love to get on it when it re-opens. Unless we declined to Hull/Palace level for a prolonged period of time it's difficult to imagine the attendances dropping any significant level.
It's difficult to imagine taking a £50m-£100m (say) bet on extra capacity, when it's completely unnecessary. There are less risky ways of making money for the club by a long shot.
Given the maths of it all, it's difficult to see any expansion beyond about 60,000. The only way that goes some way to beating the numbers is by adding capacity cheaply (see; safe standing)
