Blue Kipper has been involved with the "Everton for Kings Dock" movement from the start.

---

There has been much written on the internet & in the press over the last few days on the Kings Dock.
Blue Kipper thought it wise to wait until we got it from the horse's mouth. So here it is! Ney! It's long, but not boring.

EfKD INTERVIEW - Paul Gregg on Thursday, 31st OCTOBER 2002.

EfKD have conducted many interviews during the course of their support for the Kings Dock project. None of them have been as open and forthcoming as the meeting with Paul Gregg.

The course and content of the interview belied his reputation as a "quiet" man who prefers to stay out of the limelight. He dodged nothing and frequently provided some remarkable insights into decision-making and use of power at Goodison Park. He speaks quietly but with great determination about his opinions and actions. He is absolutely no shrinking violet, however reserved the manner, however courteous the response. It is an unusual personality combination.

We had faxed to request the interview and eventually it took place a week later than originally intended. It occupied an hour between 12.15 pm and 1.15 pm. Afterwards, he set off for the monthly board meeting at Goodison Park and to ready himself for the Annual General Meeting the same evening.

The interview was taped with his permission and this enabled me to produce it as a Q and A report. The words are verbatim and contain only slight editing to eliminate indistinct words or phrases, or to avoid needless repetition of colloquialisms. However, some of the latter have been retained so the text shows something of his vivid use of the language. It would not do to mistake this for lack of clarity or hesitation. Anyone who doesn't understand where he is coming from is either wilfully ignorant or stupid.

If I have one regret, it is that some of the questions were not as precisely worded as they should have been. Like any other interviewee Paul Gregg is not inclined to answer questions he hasn't been asked, though occasionally he did just that.

But make up your own mind. Here it is.

1. What is the source of funding for the "reverse mortgage"? Why did it take over one year to arrange when the required amount has always been known?

PG: The answer to that question is that Everton always believed they had to find thirty million to make the scheme work. We always felt in the end that would require the sale of the stadium at some point, the sale of executive boxes (of which we have ten exclusive in the contract) and by other things that were Everton-based, traditional Everton ownership areas.

I think one of the problems that happened was that the public sector - who have been absolutely fantastic in getting the scheme to where it is - rightly so, have been concerned that Everton could actually provide the thirty million. When their auditors looked at it they felt that they couldn't satisfy Everton's ambition. To get the scheme to where it is, I said I would stand behind Everton. We've now got to this point, but I actually believe there's a real opportunity for Everton to resolve its own short term finances on a proper business footing and not have at this minute the aggravation of finding thirty million.

Did you underwrite the thirty million right at the start?

PG: Originally, I said when the scheme first went together, and we put our application in, one of the requests by the public sector was that they had a question mark on Everton's finances at that time and possibly rightly so. And they said for it to make progress would I stand behind Everton and I said I would do that.

Okay. So you DID underwrite the thirty million?

PG: What I said was I would stand behind Everton. I always wanted Everton to be in a position to fund it itself. If you remember at that time there was all that speculation about whether NTL or Granada or one of those companies would spend thirty or forty million with Everton Football Club. It wasn't anybody's fault that circumstances were such that we were there just at the end. The time that Bill had spent in negotiating purchase of the club, if that had been managed maybe a year earlier, then maybe at that point it might have been far easier to get a company to write out a big cheque then. By the time we were in a position to negotiate it we had two unfortunate situations. I had negotiated one with United Newspapers and Bill had progressed enormously well with NTL, and United Newspapers sold to Granada and because of their relationship with Liverpool they were unable to go ahead with the deal and that was within seven days of a contract being signed. Likewise, NTL…………simply ran out of money.

2. Are any directors of Everton Football Club providing funds for the mortgage? If yes, who and for what amounts? If yes, are you happy there are no conflicts of interests - legal or moral?

PG: I believe the funding that has to be paid needs people who believe in Everton to support it as well. I believe that Bill Kenwright and myself would support it and that Everton Football Club in some limited way should invest in the consortium.

So, are there some directors who are putting some money into that side of it, into Houston Securities?

Only Bill Kenwright and myself will do that.

Okay. Is that what we're saying, Paul, that you and Bill are putting money into Houston Securities?

Well, I've asked Bill to put in because I want Bill to be satisfied that the ambitions of Everton Football Club aren't lost in what we're doing. Look, we're in a dreadful situation where Everton can't afford it and we don't want to lose it. And at the moment what has happened over the last six-eight weeks is that Bill has been speaking energetically to existing funders like Bear-Sterns, bankers, property developers, we've met with them, we've supported Bill in that. But quite frankly, well, we just can't do the kind of deal we need to do.

3. What is the total amount of the mortgage? What are its terms of repayment?

PG: I think there's a debate, the final details haven't been resolved. But it's public knowledge that the Bear-Sterns deal that Everton paid, borrowed thirty million, they pay something like £2.8 million a year for it, so when they move to the new stadium they will start to pay the same two point eight. They'll have an option over twenty five years to buy back the stadium. But you know the most important thing about this is it doesn't work for anyone if Everton don't buy the stadium, so it's absolutely critical that Everton are committed to support buying the stadium back.

4. It is my understanding the club awaits a "financial risk assessment report" from a team of consultants. If the recommendation is to abandon the proposed mortgage and five years business plan, will you accept the recommendation and withdraw the scheme?

PG: Well, you know, I think we're on the edge of withdrawing the scheme now. I mean, what we have to support where we're going is we have three public sector partners: English Partnerships, Liverpool City Council and the North West Development Board. They, individually and collectively, have looked at the scheme, evaluated the scheme, spent hundreds of thousands of pounds doing so, assessing the value, can it deliver, can it work, should it be done. That's where we've been going. And they've all said Yes. Now, all the information requested for that report is already available to the Everton board and they've had that information throughout the summer and in more detailed summary less than a month ago.

Okay. So, you haven't seen that report?

Well, you won't see the report for maybe twelve-sixteen weeks and part of it can't be achieved until such time as the planning application goes in………….

February?

……….Yes. And if we don't move on they can't give that assessment.

5. Given the delay of over a year, why has the club not sought financial input from the fans to give them a financial interest in the scheme? For example, it would surely be a straightforward matter to seek £1,000 each from 10,000 fans, thus providing a total of £10 million. This could be arranged very quickly.

PG: I think at this point, if you look at Everton's previous history, of going to the fan base, you could almost say it wasn't very prudent to spend. ………………I think it would be incredibly difficult to raise that kind of money from the fan base.

What, ten thousand at a thousand pounds each?

PG: I think Evertonians are fantastic, but whether we could achieve that or not I don't know.

But plainly you doubt it, or you would have tried it by now, presumably.

PG:……… I think it would be a tremendous responsibility on Evertonians who support the club, year in and year out. And you know, I just think…………look, it would be wonderful if that was possible but I'm not sure if it is possible. You asked me honestly if it were possible and I'm telling you honestly.

6. The local press claim Everton will be tenants at Kings Dock. Is this true? If yes, what is the "rent" and what security of tenure will the club have?

PG: Well, the club have a right to play at the stadium for a hundred and twenty five years on terms that are designed to make the business plan work and also to give Everton the maximum terms in the stadium.

So we're saying it's a leasehold of a hundred and twenty five years?

No…………..well, yes, effectively yes. I mean their right to play for hundred and twenty five years.

And that's secure?

And that's secure, yes.

Okay. The reason I ask that is because when I first spoke to Joe Dwyer (Liverpool Vision) about twelve months ago on this, his statement was that the tenure would be secure in perpetuity.

Well, I think the point is, I think in reality that is the case. If you have a lease for fifty years these days it's considered secure. So the answer is……………….hopefully, the future stewards of Everton Football Club will manage that on a proper basis. I don't think I'll be here to see that.

7. The local press also claim Everton will receive £10 million per annum in revenues. Is this true? If yes, what do these revenues consist of? Will all of this amount be made available to David Moyes for strengthening the team - if not, how much WILL be available?

PG: We at Everton have effectively worked on a five year business plan. What we have tried to do is prudently protect the club's position in the league, which wouldn't reflect any Evertonian's ambition but let's say that's how we've projected our figures. And what we've done is we've prudently suggested that over the next four years Everton will secure a higher place in the premier league, that's our ambition………… In the first year at the stadium we estimate we would increase our current crowd from our average of thirty-four thousand to thirty-nine and a half thousand. We know that in that capacity stadium without any serious price increases because, you know, one of the things the Everton board have always sought to do, maybe against their own financial interests, is keep the price right for the fans.

So what we've done is we've prudently looked at where the ticket prices will be in five years. We hope and believe that we'll generate an extra five to six thousand fans, not necessarily all Evertonians, but we actually believe there will be great facilities for away supporters and we think that the stadium will effectively be a place to go to. So we actually think that when Arsenal fans, Man. United fans, Leeds fans think, "Where are we going to watch our team away?" Liverpool will be first choice because the Evertonian game will be the new stadium, its waterfront, a place to visit………we actually think that we can hopefully grow our three thousand away (visitor) supporters to five or six thousand. So collectively we think we can increase the average to thirty-nine and a half thousand.

You know in our heart of hearts, you ask Bill and I honestly, we'd say we could play to capacity……………it could make a tremendous difference. But actually on the figures and projections we've done we actually think that after paying contributions to the stadium that Everton could generate between nine and ten million a year.

What do the revenues consist of?

Seat money, catering, hospitality…………..

So it's gates?

Extra gate money…………and maybe a little bit of extra television money. And what we've also done here is we've taken the view, from all the information we have, is that the TV money supporting the premier deal will continue at a similar level. We haven't said it will get better or worse, we actually think it will continue at a similar level.

Okay. So the revenue calculation of ten million doesn't include anything else other than football-generated income?

Correct.

8. If the scheme proceeds as proposed by yourself, as a director and co-owner of Everton Football Club, what do you project as the earliest date the club could completely own its share of the development?

Well, I think what I should say is that my proposal to the board is that we look after Everton Football Club as the club, the professional side of the club. I mean I suppose you have to say, "What is the ambition for the club?" The first ambition is that we hope and want to compete at the top of the premier league, actually running neck-to-neck with Arsenal, Man. United…………that has to be our ambition.

What do we need to do to achieve that? First of all the first thing we needed to do was recognise that the previous management wasn't what Everton needed. So, having taken a very long time to make that decision the board agreed to change and sign David Moyes. And in David Moyes I believe the board have found potentially the best young coach in the country.

Did you take the initiative in that?

I'm not having that conversation.

Okay. Go on.

But the point is we found David Moyes, and here's a guy who wants to see the nine year olds win like the first team. And he goes to see all of them to achieve it. So his commitment seems to me to be New Everton Long Term Strategy……………Now, we have certain assets. We have Bellfield, we have the stadium, which is assigned to Bear-Sterns………………we have found a fantastic site for a training youth academy. What we look to do is maximise the value of Bellfield and invest that money in the training academy, so effectively we can support David with training facilities, an incredible youth programme, and let him maximise our on-field side, that's what we want him to do, that's our ambition. Obviously we need money to support him with the acquisition of players. I mean obviously we can't have all home grown players. We hope like hell that we've got ten Rooneys in the youth academy. Whether we have or not we don't know, but we will have to support him. So we need money for that. So my sort of view of the moment of the Everton assets, current assets, should support the professional side of the club so we maximise the support for David. We don't have to defend stadium investment against player investment but we can actually manage the professional side and get us where we want to be - higher up the premier league for sure.

Okay. One of the things everybody's asking is this question of revenues, as I mentioned earlier. Now the expectation was, and certainly the publicity surrounding it was, that extra revenue would mean extra transfer funds available for David Moyes. However, if I've understood you correctly, Paul, what you've just said is that that money is from gates. So there will be no extra money from development receipts and no extra money from non-football events. Have I understood you correctly?

Well, I think what you're saying there…………………I believe there will be around ten million a year which Everton will have each year as the bottom line. But the board will prudently decide whether they want to spend ten million on players or ten million on the stadium, and they'll make that judgement year by year because hopefully the higher up the premier league, the higher the other revenues will add to that ten million. I mean this is ambition and hope. Whether we will or not, I don't know. If we get in the Champions' League there's a massive revenue.

But just to nail it, just to be quite clear: there will be no revenue from non-football events?

Not initially, not until they actually acquire the full stake.

Okay. That brings us neatly back to that question; what would you say, as a director and co-owner of Everton Football Club, what do you project as the earliest date the club could completely own its share of the development?

I think you could own it in ten years if the board were prudent. And you see I think what you also have to put into these calculations, which nobody has, is that football, premier league football, and football generally, there's a greater realisation that fees and the money being paid to playing staff has got to come down, because not just Everton………….

…..I think everyone accepts that…….

………but every club has got to re-look at that. So we actually hope dramatically that our wages bill and transfer costs will come down. Now, we'll never believe that when we want to sell a player!……………but, seriously, at this point in time in reverse we take the view that playing costs have got to come down.

9. Have Houston Securities obtained a private-sector partner to fund and build non-stadium elements? If yes, who is it?

Those negotiations continue, but we believe it will be Neptune.

10. Are you aware of very strong opposition from many fans to the proposal for the club to rent the stadium after they voted for it on the basis of shared ownership? Many of them feel the proposed scheme is a betrayal. What are your words for them? Are you prepared to ask them to vote again on the current proposals?

Well, I think first of all, the fans wanted to go to the new stadium. There was a massive argument about ownership. Some people believed we should own it. Some people said what's the point? Some people passionately believed the club should own it. My belief is that in the long term if we had borrowed thirty-odd million from another bank, the bank would own it 'till we paid them back because they would have a charge over the stadium. This is still going to be Everton's stadium. Ultimately they'll own it. They'll own it when they've paid for it. The same way as you'll own your house when you've paid your mortgage.

I don't have a mortgage.

Well, you're one of the lucky ones!

In your estimate you're saying that you feel ten years will be a realistic estimate……

I think that, you know, if by these proposals, we're hoping that they'll then have the asset of Goodison Park to sell which could reduce their other borrowings, so a prudent board could buy the stadium back over ten years.

What damage do you think that would do to transfer dealings?

I don't think it would do any damage to the playing side. I just said "a prudent board."

Gordon Brown uses that word a lot as well.

Well, you know, the reality is………………look, you and I both know that if we were successful enough to enter the Champions' League reality tells us that we need a bigger squad than what we have now. The question is, do we believe in the manager? I am a great believer that if you have a manager, let him manage. If you don't have the right manager, then change the manager. Now we've changed the manager, and I think every Evertonian after the last couple of weeks would believe that we've got some guy here, and if you could transfer his enthusiasm to success on the field, then you'd win every game.

11. As of this conversation, are you aware of any opposition at all to these financial proposals on the board of directors? If yes, who is currently opposed? Did you consult fully with them during development of the proposals?

The whole scheme has been on the Everton board agenda every month. The entire board are fully aware of the schemes……………………

So in other words, to use an Americanism, there are no surprises involved here?

There are no surprises.

You know, when you're winning games………………many people say, "Why do we need to move?" I hear, "Why don't we build a stadium like Liverpool?" or "Go to another site." You'll never build fifty-five thousand seats for thirty million pounds…………………..if every premier league club had this opportunity they would be queuing up. And you know something, I believe that if the board of Everton Football Club get to grips with where they're going forward, then Everton Football Club in five or six years time could be one of the most powerfully managed football clubs in the country. And I think their long term asset value, their long term finances, they will be so comfortable compared to lots of premier league clubs that it's not true.

And I think that coming from a dreadful mess…………………you know, and I'd accept even since Bill and True Blue took over the club we've made mistakes, mistakes which have cost us a lot of money. Maybe we weren't decisive enough. But the point is what we are decisive about is having a long term agenda for the club to be there at the forefront of English football. That's what we want to do.

12. Do you seek major administrative changes at Goodison Park in exchange for arranging this scheme? If yes, can you describe them? Do you accept there is a mixture of good and average individual talents at executive level and will you actively seek to retain the good as well as replace the average with better?

Well, I think in the evolution of going forward you have changes. You want the best players and manager, or coach. ……………………what you also want is the best administration, the most creative, because Everton's got a massive agenda…………………say you get the professional side right, that's one thing, then you've got the King's Waterfront, that's another thing. We have a fantastic opportunity.

My ambition is that if we really develop the China relationship that we could have a series of Kejian-Everton youth academies in China, with every kid in China wearing an Everton shirt when he's learning to play football. That's what we have the possibility to achieve, which is fantastic.

We want to build our fan base. We'd be thrilled to have fifty-five thousand every week in the new stadium. We're thrilled when we get thirty-nine thousand at Goodison Park. You know, the best thing our fans do for us now is to fill Goodison Park. The more they fill it, the better the feeling and the better the resolve, the better the everything! So, you know, one of my ambitions is to maximise Everton…………..it has fantastic fans, a fantastic history……………but not just here. We have a massive Everton club in North America where we get an enormous amount of enquiries on the internet…………………

We want to build up a practical relationship in China because every week you read in the Chinese papers, and I can only say this because we have a girl in England and America working with my wife on a development project there, and she reads about Everton and Li Tie and other players and there's a massive interest. We have to maximise that interest because if we can get a million people in five years time tuning in on the TV to watch Everton play and we get a dollar for each of them………………then we've got a fantastic opportunity.

13. If the board fail to ratify the mortgage scheme will you attempt to seek out non-Everton partners for a stadium-arena on the same site? Will you seek to sell your interest in Everton Football Club as a result?

For me certainly, the stadium is fundamental to Everton's long term security. I have a massive investment in Everton Football Club. I want to see it top of the premier league and competing in Europe. I can see no way in which the Everton board should not support me. If they do, then the long term future of Everton Football Club is at the top of the premiership, no question……………

If they don't, where will that leave you?

Well, regrettably, it still leaves me wanting to do the best for Everton Football Club. Sometimes you get one chance and vision in life, and this is Everton's chance.

If they don't take up this opportunity will you leave Everton Football Club?

I haven't thought about that.

Not at all? Paul, that's difficult to believe, a man like yourself……..

Yes, well, you know something, it's like…………………if not the Kings Dock, where are you going to go? And for the last two years there's been no choice but the Kings Dock. There is no option, Goodison Park isn't an option…………………..this is the best site. You know, it's like……………………

Look, many of us are sold on Kings Dock, me included. This question is: how will YOU react if the board say "No"?

I don't know. I mean what can you do? I have a lot of money in the club. Look, people say to me, "You don't understand football," and they're absolutely right. I don't understand football. But the things I've learned in the last two years……………the passion, the enthusiasm………………the incredible support when we were dying on our backside, that Evertonians still gave. And you look at that and you look at those fans who travel away and watch the Blues. You know, it's fantastic. So, my view is the board have got to look for every opportunity. And every Evertonian in their heart of hearts wants to be playing…………………they want to be the best. And I just feel the board have an obligation to do their best but they also have to run the club as a business, because, you know, there's a bit in the paper this morning about who makes a profit out of it.

Well, from my money in Everton, and my family's money, nobody's made a profit, made a penny yet. Now, Bill might put his money in because he believes in Everton, he loves it all, and it's his life, and he might never want to see a penny out of it. For my part, I've always believed that we can bring professional management to a club like Everton…………and there should be money for everybody out of it. Whether it goes back to the fans in the prices or the merchandise or the drinks are cheaper. But at the same time the shareholders are entitled to a return on their investment, otherwise where's the responsibility of the directors? If everything isn't run properly and prudently as a business, and it's not like rocket science to run a business, you know you have to generate more income than your expenses.

14. Under what circumstances would you irrevocably abandon interest in the Kings Dock site?

Well, at the point when Everton said they didn't want to go. Or the public sector couldn't deliver their responsibilities or we couldn't deliver commercial responsibilities.

Well, for what it's worth, the public sector partners have all told me by e-mail that all they are now waiting for is a planning application and supporting details.

Absolutely. This is now in the hands of Everton. It's never been NOT in the hands of Everton. I mean, you know, people can knock. It's very easy to criticise and it's very easy to knock. And I think this group of people in the public sector recognise the importance of trying to get this built…………………you know something, they all need to have………………maybe I fooled myself in the early days that it would be easier for Everton to raise the money than it would be. But then again Everton can't delay for another year. For example the previous management and what it cost us in that year to make that change. I mean, I SUPPORTED it………………

………Well, the accounts say two point two million…………

Yes, but it's not two point two million. It's whatever we spent on players…………

………Sorry, I was talking about just the management change………….

Well, it was that and other things.

15. Have you held meetings with Rick Parry, CEO of Liverpool Football Club, in relationship to future relocation proposals by Everton Football Club? What were the subjects under discussion and what decisions were reached? Have Liverpool expressed an interest in obtaining part or all of the Goodison Park site?

The answer to that is No they haven't expressed an interest in acquiring any or part of the Goodison Park site. I think that if we can make the Kings Waterfront work there is a massive opportunity for redevelopment, of which Goodison Park is the centre piece. The Everton board, and I support it entirely, are very keen to see memories of a hundred and odd years of Goodison Park there. And reflect the history of that site as part of any redevelopment. And at the same time the board don't want to do anything to that site unless they receive maximum value for it.

So the point is, it's a two-pronged situation. Or three-pronged even. What's good for north Liverpool? Ignore Everton, Goodison Park - what is good for north Liverpool and what makes north Liverpool work……………because, you know, it's part of the city's ambition to make it a very special city. So it's not just about being on the Kings Dock. Everybody's thinking is what do we make and what do we achieve in north Liverpool? It's all interlocked………………

……..Which is why I ask this question about Parry. Have you met him?

I have met with Rick Parry on several occasions. I mean, we haven't discussed in detail his plans or thoughts. We have never discussed the fact that he was going to have Goodison at all. So that's…………and quite frankly nor would we. But you know something, if you involve a plan that works for them because everybody's helped us make Kings Dock work then, you know, we shouldn't be unreasonable about it. Look, from every Evertonian's point of view they don't actually want to think that Liverpudlians would park at Goodison. We all know and understand that and we all recognise we don't want to do that.

But you know something, the first day the ball is kicked in the stadium and everyone knows where they are, where the giant TV screens are, feels the atmosphere inside………………..Who owns it? Are we here every week?

It will be interesting to see how the emotions play out. I wouldn't like to estimate it…………

No, I agree.

16. You have openly acknowledged in the past that your knowledge and interest in football is minimal. That being so, what drew you to invest in Everton Football Club in the first place? Was it the prospect of non-football financial gains at Kings Dock?

Well, the very good answer to that is when I invested in Everton Football Club Kings Dock wasn't even in anybody's mind, thoughts or had even been discussed. It wasn't even discussed until nine months to a year after we actually bought the club.

It's a very simple situation. We had sold our old company to an American corporation and made a considerable amount of money out of it. Then I'd watched Bill's interest in buying Everton Football Club. Then it was a simple conversation on approximately the day after I rang him and said well done, sounds like what you want, done a good deal there. Then with that I said, "Just remember tomorrow someone's going to ask you for the twenty-odd million quid." Then he said, "Yeah, yeah, I think that's alright," which was fine. So I said, "Well if you need any, give us a ring and I might have a pump with you." So four days later he rang me back and said, "Well, do you want to?" So I said, "Yes." So I said, "Whatever you're doing, I'll do if you want." So I spoke to my family and then we said, yes, that's what we'll do.

Where did Lord Grantchester figure in this? There are all kinds of rumours about a split with Grantchester, that you asked him and he said No and so on and so forth.

……………I think he was invited to join True Blue, and he didn't…………I mean I don't know so I can't really make a judgement on that.

17. In terms of the construction cost of the stadium, what happens if there are cost overruns on the construction? Who stands liable to pay out?

The contract to build the stadium will be let as a fixed price contract.

So unless there's force majeur there's no question of paying extra over?

No.

Okay, Paul. Thank you very much.

OUR CITY - OUR FUTURE - OUR CLUB
EVERTON FOR THE KINGS DOCK