Wembley Stadium made a £21.4m loss in its first year, and ran up pre-tax interest payments of £31.9m on loans, the company responsible for the stadium announced on Friday.
Wembley National Stadium is banking on a full calendar of events, including American football and Madonna concerts, to turn around its trading performance.
The company, whose parent body is the Football Association, made £65.5m in revenue over a nine-month trading period, mainly from ticket sales, debenture-based Club Wembley, sponsorship and catering.
Costs related to these sales were £34.2m, which WNSL said were “understandably high” due to the need for staff to familiarise themselves with the stadium. Other factors were the priority given to safety and deliberate over-servicing of the first few events to ensure they ran smoothly.
Overheads and other operating costs hit £21m. The period also included £21.6m in depreciation costs. The final stages of development led to non-recurring costs of £10.1m.
WNSL, which opened the revamped Wembley at last year’s FA Cup final after missing its scheduled 2006 launch, said the loss was due to the shorter trading period, the timing of the handover of the stadium from contractors and teething problems.
The company has repaid £80m of the £426.4m loan to fund the project and was on course to pay off the rest by 2018. The stadium is expected to make an operating profit in the 12 months to December 2008, WNSL said, and was generating sufficient cash flow to meet its interest and loan repayments on time.
The FA, which secured £550m of TV rights deals last year, is covering WNSL’s losses and interest payments. A full year’s trading will produce “a substantial improvement in turnover”, the company said. Club Wembley seat licences are expected to perform well as well as revenue from core football and rugby league events, one-off concerts and other sports events.
WNSL said it had identified savings, such as reductions in event day staff, and renegotiated several support contracts, but these would not compromise the event experience or visitor safety.
Alex Horne, managing director, said: “It was never envisaged that the stadium would record a profit in the first few years of operation.”
