The changing landscape around the Anfield Road End was clear to see this week — and goes some way to explaining why Liverpool’s expensive stadium rebuild is still far from complete.
All the sights and sounds of a busy building site were present on non-matchdays as staff got to work on the remaining phases of a job that has already been delayed multiple times due to the collapse of the construction firm, Buckingham Group.
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Replacement contractor, Rayner Rowen, has since put its own stamp on the project and is working hard to deliver the project as fast as possible for Liverpool’s owners Fenway Sports Group. But it is a far from ideal situation on the back of delays described as “really complex and deeply frustrating” by Liverpool CEO Billy Hogan.
Lost revenue is racking up and with 11,000 seats unavailable and the stand’s upper tier still closed, Liverpool are finding it increasingly difficult to relocate supporters who had purchased tickets in the unfinished section of the stand all the way up until the New Year.
So what has gone wrong and what is the impact on the club?
Why is the stand opening so delayed?
In short, because of the problems faced by Buckingham Group, a once-thriving firm with 669 staff and offices across the country.
Liverpool chose the Tier 1 contractor in 2021 after extensive research into some of their other projects, which included delivering new stadiums for Brighton & Hove Albion, MK Dons and Brentford, as well as new stands at The Oval cricket ground in London.
Buckingham was buoyant earlier this year and confident the stand would be completed on time for the start of this season despite posting a pre-tax loss of almost £11million ($13.3m) in December.
But with Brexit and the war in Ukraine pushing up material prices and a labour shortage adding to problems, it fell on even tougher times in July with sections of the stand not finished.
Just two days before the start of the Premier League season, the majority of workers were pulled off-site once it emerged that Buckingham could no longer continue trading.
Rumours of workers fearful of not being paid and causing minor damage to already-completed sections of the stand quickly spread across the industry, although The Athletic has not been able to corroborate them.
A chaotic period followed, with sub-contractors confused over the state of play and unsure whether to continue planning for a return. Some lower-paid workers even considered taking tools or materials to cover their costs.
It was messy and Liverpool had no choice but to announce delays to the full opening, initially until October, and then extend the timeframe when Buckingham Group fell into administration by early September.
At the time of its collapse, the firm owed more than £108million after suffering “significant and increasing losses incurred on key sports and leisure contracts due to inflation pressures”, according to a statement of proposals document written by administrators from Grant Thornton.
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The costly troubles and lengthy delays to Fulham’s Riverside Stand at Craven Cottage — a job Buckingham Group started in 2019 but was unable to finish — was understood to be a major contributing factor.
Finding a new contractor was also time-consuming for Liverpool, as Ian Marson, a partner and head of construction in EY-Parthenon’s strategy and transaction business, explains.
“As all the tools were downed on a certain day, you can’t just pick them up the next day if they’ve stopped for a long period,” he said. “Also, for all the knowledge the new contractors have, it’s their liability and not the previous contractors’ so you almost have to restart the whole thing and it’s the ramping up that takes the time.
“If something goes wrong moving forward then it’s the new contractors’ problem, so they’ll have taken time to make sure they understand it all properly, which adds to the timeline.”
The positive news is that, with Preston-based Rayner Rowen’s cranes moving again and a site now back to full function with 80 per cent of the initial sub-contractors still in place, the next steps towards completion are underway.
The stand already accommodates some supporters and has a modern look to its exterior but there is no quick fix, with the logistical issues making it harder.
One particularly difficult aspect is the stop-start process they have to go through mid-season, especially in periods like this week when Liverpool had three games in eight days.
When Rayner Rowen — which declined to comment when contacted by The Athletic — last worked at the famous stadium in 2018 to transform the old club shop into The Kop Fan Bar, it had the entire summer to get the job done. Now the workers on site have to carefully manage their time in between games as Liverpool wait for health and safety officials to sign off the stand — which remains partially in use for both home and away supporters — before each fixture.
How much is it likely to cost the club?
With income streams at Liverpool already hit by missing out on Champions League football, this setback is painful financially as well as logistically.
Owners FSG recently agreed to sell a minority stake in the club to American sports investment firm Dynasty Equity in an attempt to pay down debts. The deal worth between $100million (£82m) and $200m (£164m) helped clean up a balance sheet hit by the new £50million AXA Training Centre and the ongoing Anfield expansion plans, which started in the Main Stand and moved onto this project, which is understood to be costing between £80million and £100million.
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It is expected the change in contractor also added to the price.
“In these situations, the new contractor will look at the remaining work, calculate the risk and then name the price,” said an industry expert familiar with the process, but who asked to remain anonymous to protect relationships.
“Inevitably, it will be more because the initial price was set with everything being completed on time. The new contractor can, therefore, drive a harder bargain because of the need to get the job finished.
“With the cost of materials continuing to rise with high inflation, it’s a double whammy for Liverpool. Very unfortunate but not unusual.”
On top of the cost, Liverpool are also losing around £750,000 of revenue per game due to the ongoing delays and capacity being 11,000 down on where it should be.
Most tickets in the Anfield Road End range between £47 and £54 but many have hospitality packages added on that bump up the price significantly.
Catering to a new trend of football supporters who like extras — such as the use of a lounge before and after games — was very much in FSG’s thinking when redesigning the new stand, partly because it brings more money into the club.
New stand developments are designed as long-term investments with low but healthy returns.
“Liverpool aren’t expecting the world’s most incredible return, but it’s a good return,” said another expert with knowledge of stadium redevelopments. “So imagine what happens if you’ve spent all the money getting going — you’re in the hole for your setup costs, your design costs, your architectural costs and, crucially, whatever progress payments had been made before Buckingham went pop. And then suddenly, when you’re expecting your revenues to come in on a certain date to start the process of paying back, there’s another delay. It starts to become expensive.”
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What’s the legal situation now with Buckingham Group?
Liverpool legally broke away from their relationship with Buckingham Group once the firm went into administration and were then in control of the site before bringing in Rayner Rowen to oversee the remainder of the work.
While Buckingham Group could sell its rail division to the Kier Group for £9.6million, it failed to find a buyer for any of its other construction divisions, including the stadiums division, which also had projects with Fulham, Birmingham City and Northampton Town ongoing.
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Administrators received more than 1,200 claims as the group owed £108million to creditors.
Some of that money will be reclaimed, but for Liverpool, who are likely to have agreed progress payments up to the point of Buckingham Group’s collapse, the main focus was limiting the time delay with the new contractors.
Rayner Rowen also had to take time to assess the work as any future liability would be its responsibility. Industry experts say that any attempt to sue Buckingham Group would have no chance of success.
Who is to blame?
It’s all rather unfortunate for Liverpool that Buckingham Group imploded at a time when their big project was the focus.
It became the largest contractor to stop trading since Carillion’s collapse in January 2018 — coincidentally, Carillion was the firm that constructed the Main Stand at Anfield.
Yet Liverpool couldn’t have done anything to prevent the subsequent damage.
The construction industry is facing testing times, with insolvencies at a 14-year high as many firms are caught cold by the rising price of materials and energy.
Buckingham Group aside, Tier 1 contractors have largely been able to ride the storm but industry experts predict another difficult 12 to 18 months ahead. It is already clear that firms are taking fewer risks when deciding which projects to undertake and moving away from fixed-price agreements, but the prestige and size of stadium jobs always bring many back.
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The sector is also very competitive, so typically there’s always a firm willing to take on the work.
The important thing for Liverpool now is that this job is completed in good time and ideally before the next round of tickets are released for the home games in 2024.
How do the fans affected feel about it and what are the club doing to help?
The bad news was delivered to Liverpool supporters before the win over Merseyside rivals, Everton, and during an international break.
Emails arrived thick and fast with each one containing the disappointing, and at times soul-destroying, news that tickets had been cancelled for forthcoming home games in the Premier League due to the ongoing delays.
For some, it meant missing the biggest game of the season as well as the encounters with Manchester United Arsenal and Newcastle United. For others, the chance to watch Liverpool live from inside Anfield for the first time, as like at so many other sporting events across the country, supporters often purchase tickets for friends and family to attend.
Liverpool were able to find alternative options for a small section, first through a desperate plea for supporters to return any unwanted tickets, and then after conversations with partners to see if any corporate tickets could be freed up.
Priority was given to those who had purchased hospitality season tickets but not everyone could be relocated, as many told The Athletic with varying stories of disappointment and in some cases, a loss of money around travel.
One said that they had ended up missing their first Merseyside derby at Anfield for nearly 20 years, while others who had paid for tickets with hospitality add-ons said they were relocated for games earlier in the season but were not so fortunate this week.
The exact numbers of those affected are not known but what is clear is that 11,000 people are missing out on attending each home game as the upper tier remains closed with no exact timeframe put on the opening.
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Liverpool were initially analysing the situation every three games in an attempt to minimise the damage. It’s why during the last announcement — the third delay to this project — it was explained that delays would stretch into the new year. There are no tickets on sale for any matches in 2024.
When is a realistic date for the stand to open?
Multiple people contacted by The Athletic suggest work is likely to continue well into 2024, meaning Liverpool will play more than half of their home games this season in a half-finished stadium.
Work could have been completed quicker by closing the entire stand but that would have increased the problems of having to relocate home and away supporters, so it was a non-starter.
In his last update at the start of October, Hogan confirmed the upper tier will remain closed at least for the remainder of this year but stopped short of adding an exact date for completion.
“This is a decision that was made to give time for ourselves… as well as for Rayner Rowen to continue with the assessment of the project and ultimately to finalise the project timeline,” he said.
Liverpool declined to provide specific answers to a list of questions sent to them by The Athletic, referring us to Hogan’s statement earlier this month.
(Top photo: Peter Byrne/PA Images via Getty Images)