Two days before Liverpool were due to play their first home game of the Premier League season came the abrupt news that all major construction work at Anfield would cease.
The £60million ($76m) project to transform the Anfield Road end of the stadium had slowly been nearing its completion, but the majority of workers were pulled off site once it emerged that the Buckingham Group, the construction firm overseeing the build, could no longer continue trading last Thursday.
Attempts to find new investment had failed, meaning an already delayed redevelopment plan was pushed further behind schedule. As with the visit of Bournemouth last Saturday, the home game against Aston Villa on September 3 will now have an attendance 11,000 lower than what had initially been planned for this season.
The Buckingham Group’s intention to file for administration has cast doubt over Liverpool’s hopes of seeing the new Anfield Road stand fully operational by the end of October and, with that, comes inevitable financial repercussions.
And they are not the only football club to feel the ripples. The Buckingham Group has also been involved with significant and ongoing projects involving Fulham, Birmingham City and Northampton Town. The Athletic assesses the implications.
What is the Buckingham Group and how did it end up in trouble?
Until last week, it was considered to be one of the leading building contractors in the UK, employing more than 500 people and posting an annual turnover of £665million in their most recent accounts. A big hitter.
Major building projects have included rail lines and roads but also sporting venues. Buckingham Group was behind the construction of new stadiums for Brighton & Hove Albion, MK Dons and Brentford, as well as new stands at the Oval cricket ground.
History tells us that building football stadiums – or even just stands – can bring risk. Laing, once an industry giant, was sold for £1 within two years of the firm taking a huge hit on their construction of the Millennium Stadium in Cardiff. That project was considered a “financial disaster”, with losses of £26million incurred.
Multiplex had its own regrets when rebuilding Wembley. A project that was initially forecast to cost £326million wound up costing £798million and finishing a year behind schedule. A fixed price for the build left Multiplex booking much of the bill.
The prestige and size of projects keep bringing major construction firms back, but the Buckingham Group made no secret of the losses made on sporting projects as the cause of its downfall.
“A very strong delivery and commercial performance across most of the business has been outweighed by deep losses and interim cash deficits incurred on the three major stadium and arena contracts,” it said.
The warning signs were there in December when the Buckingham Group posted a pre-tax loss of almost £11million and an increasingly testing period for the construction industry, with the cost of steel and concrete soaring, led to it seeking administration last week.
What has been the impact on Liverpool?
It was back in 2021 that the Buckingham Group was given the contract to expand the Anfield Road stand. That was the second major development in five years after the rebuilding of the Main Stand had been undertaken by Carillion, a rival firm that would later go bust two years after exiting Anfield.
Buckingham began the work at Anfield in September 2021, with Jurgen Klopp planting the ceremonial first spade on a project that would build a new upper tier and increase capacity by 7,000.
Foundations were dug and steelworks erected directly behind the existing stand throughout last season, with Buckingham handing the site back to Liverpool 24 hours before every home game.
The original plan, repeated as recently as May, was for the stand to be fully open for the start of the season, giving Anfield an increased capacity of 61,000, but Liverpool reassessed their position over the summer when accepting it would not be until the end of October that work was complete.
News of Buckingham Group’s impending collapse last week further threw those plans up in the air.
“Timing, obviously, is incredibly fluid right now, there’s a lot of uncertainty around where we are and, in time, that will become clearer,” chief executive Billy Hogan said on Wednesday.
“If Buckingham does enter into administration, then we’ll need to address any delays that may arise from completing the new stand as a result of that.”
Liverpool’s need to complete the work on the Anfield Road end is pressing, with the increase in capacity bringing with it a sizeable boost to matchday income.
The eventual delays ensured Saturday’s Premier League game at home to Bournemouth was 49,699, down on last season’s average of 53,184.
“These football clubs will want people in the stands as soon as they possibly can,” says Rob Driscoll, director of legal and business at the Electrical Contractors’ Association (ECA). “You’re weighing up the cost of a new contractor coming in against getting bums on seats on time.
“They might have security mechanisms in place contractually. That softens the blow and gives a pot of money to use on getting in the next contractor and minimises that disruption.
“If you had a sniff that your contractor had problems, then you might have started to look around for alternatives. They might have seen this coming a month or two ago.”
A huge level of uncertainty will also surround the hundreds of subcontractors involved, those that typically deliver 80 per cent of the work on a project of this nature and are often left out of pocket.
“As a company or a subcontractor, you’re being paid in arrears for what you’ve already supplied,” adds Driscoll. “That puts you in quite a precarious position as a business.
“This almost hurts the clubs twice. You’re not getting the stand open on time and all those workers below the Buckingham Group are probably local subcontractors and quite possibly supporters.”
What comes next for Liverpool?
They have little choice but to wait. Buckingham has given a 10-day period of notice to appoint administrators, a move it hopes will see it salvage part of the business. Failure to find a buyer would see Buckingham enter administration next week but, until then, it legally still owns and operates the site.
“Before it gets into administration, there is the option for the client, like Liverpool, to offer more funds to complete the work,” explains Ian Marson, a partner and head of construction in EY-Parthenon’s strategy and transaction business.
“There’s that financial option to help the contractor out, but it’ll cost more. On the assumption they can’t solve it that way, which is likely given the point we’re at, the client has three options in reality.
“The first one is they can terminate the work and it won’t get finished. The second is that they look for someone else to come in and take on the role as the main contractor.
“That tends to cost a lot of money for two reasons: no one likes to step in and take on someone else’s work halfway through because you’re never quite sure what’s been done, and you take on the risk that the previous company has done it all properly and in some cases, they haven’t.
“The last choice you’ve got is to try to run the project yourself. You take the risk and try to manage the subcontractors directly. A club like Liverpool is not a construction firm, so they would find that challenging in a lot of areas. Ultimately it’s going to cost more money to get this finished.”
Liverpool aren’t the only Premier League club to partner with the Buckingham Group, though…
If Liverpool are feeling the effects, then it is perhaps Fulham that will eventually go down as the cause.
The Buckingham Group was given the contract to demolish and rebuild the Riverside Stand at Craven Cottage in 2019 and, four and a half years later, it remains incomplete.
The ambitious and complex project is already two years past schedule and, although not by name, was cited as the reason for a £14.1m deficit being carried in the Buckingham Group’s last set of accounts. The rebuild had been “priced and planned pre-pandemic” and also suffered badly from the collapse of a major subcontractor in February 2022.
Supporters have sat in the lower tier of the Riverside Stand since the start of last season but Fulham confirmed that further delays ensure the project will not be fully complete until at least the summer of 2024. No details have yet come on the opening of a proposed riverside walkway, hotel, health club and rooftop pool.
A build that Fulham have called a “game changer” is now considered to be in the “fit-out” stage and less reliant on the Buckingham Group.
“Both the club and fans have been anticipating the full opening of the stand, which we had hoped would be by now and we understand supporter frustrations,” said a statement from Fulham last week.
The cost of the project, delayed badly by COVID-19, has been forecast to be in the region of £120million and inadvertently hurt the Buckingham Group. It is not the first contractor, nor will it be the last, to be stung by stadium projects.
“Stadiums have a couple of factors where you have to price them very carefully,” adds Marson, who says about 30 construction firms a month are going insolvent in the UK.
“It’s often a big area which involves a lot of groundworks and that carries a lot of unknowns. There’s always risk there.
“The second factor is that they tend to involve a lot of steel and right now that carries a very volatile price. It’s not getting better, it’s getting worse. The pricing of the steel is what can bring the risk.”
What about the issues facing EFL clubs?
Birmingham City, like Liverpool, have a sense of urgency with the building work ongoing at St Andrew’s. Capacity is capped at 21,000 as work is carried out to bring the lower tiers of the Kop and the Tilton back into use after their enforced closure owing to structural issues in 2020.
The hope had been for the lower tier of the Tilton, where rail seating has already been installed, to be opened at the end of September before then reopening the Kop before the end of November. That would restore St Andrew’s capacity to 30,000.
The likely delays that will follow Buckingham’s intention to enter administration would leave Birmingham’s attempts to increase matchday revenues facing problems.
“The club has and continues to hold emergency meetings with a range of experts to understand and assess the potential impact of Buckingham Group’s disappointing news,” a club statement said last week.
League One Northampton Town are also facing complications, albeit not as time-sensitive.
The building of the East Stand at the Sixfields Stadium was abandoned as far back as 2014 and resulted in a long-running legal battle that sees the structure in use but incomplete.
A High Court ruling in March had paved the way for work to finally resume and it was the Buckingham Group that had been due to complete the project. Northampton had been “awaiting an updated quotation this month” but are now expected to explore other contractors.
“These situations are always stressful for all those affected directly and we fully appreciate this must be a worrying time for all the staff and people at Buckingham and associated companies. Buckingham have been good to the football club and we hope they can work through this,” said chairman Kelvin Thomas.
“As a club, we have no financial risk or commitments and as you would expect, we have had conversations with other contractors to make sure that we had some comparative figures and back-up plans, so we are well placed to react to whatever happens.”
(Top photo: Simon Stacpoole/Offside/Offside via Getty Images)