11.3. Risk Log
11.4. Risk Matrix
Introduction
This is a report for a new stadium for Arsenal Football Club. It highlights the business benefits to the club given by the increase in the spectator capacity. After this, a brief statement outline of the stakeholders will be carried out based on the Stakeholders Influence Matrix. Subsequently, the market research will analyse the condition for the new stadium and its competitor’s situation. And then according to the financial appraisal in the appendix, general estimate financial information for the duration of the project. Next, project resources will explain the skills which should required for the project manager and the project team. Eventually, the report will discuss about the risks and opportunities which exist in the project.
Business benefits
In time, building of a new stadium will bring lots of benefits to the Arsenal Football Club and its supporters.
Moving away from Highbury to the new stadium will be a new chapter in the history of Arsenal Football Club, a chapter likely to be filled with great success, as the construction of a new stadium will prove to be the right move.
It will allow more supporters to attend and enjoy Arsenal's home games. Moreover, this development project could help generate the kind of revenue needed for Arsenal to remain competitive for years to come and solidify their status in new home stadium. And the new stadium will attract many more club fans to visit and which in turn will develop local tourism.
The reputation of the club will be bigger all over the world and will allow them to compete with the world's most famous clubs, for example Manchester Utd, AC Milan, Real Madrid and Barcelona. Consequently, bigger sponsorship deals may be negotiated.
Stakeholders
Business’s stakeholders are the people who are affected by the actions of the business. There are two types of stakeholders involved in this project: internal and external. Stakeholders are very important in today's modern society, as they can hold the key to the company's success. They take care of the financial issues, and decisions made by and for the club.
According to the Stakeholders Influence Matrix, the internal and external stakeholders are clearly identified in this project.
Market Research
Market research is finding out about what consumers want and need, and what makes them buy. Furthermore, market research is the process of gaining information about customers, competitors and market trends through collecting primary and secondary data.
In this case, the new stadium will enable Arsenal to improve its marketing reach, get to know its fans better, and how are the competitors doing. The 60,000-capacity new stadium, a short distance from the present 38,500-seat home at Highbury in north London, will allow Arsenal to compete on a more equal financial footing with the Manchester United and Real Madrid.
Old Trafford- Manchester United stadium has recently seen huge development with an extra tier added to the West and East stands increasing the capacity from 55, 000 to 67,000 as it continued to be the biggest club stadium in England.
Nevertheless, Ashburton Grove, where the new stadium is to be built, covers 27 acres. Compared with, the 100-acre Manchester United site, this may seem small, but the vast majority of Manchester United supporters arrive by car. The Arsenal situation is entirely different with almost 70% of supporters arriving by public transport.
Project Finance
According to cash flow statements, it can be seen that the cash flow for both 2002 and 2003 have negative figures, and start to make profits from 2004 which is £83,495,000. Because at that time, the business just begin to generate revenue from sponsorship and also has income from the waste and recycling centre. In addition, Payback Period Method identifies how long it would take to recover an investment from the returns attributable to that investment. In this case, the payback period is 4 years, and the club will has positive cumulative cash flow until 2006. Furthermore, the net present value is £42, 972, 945 which makes the project more acceptable, and the internal rate of return is 15%.
Based on the financial appraisal, the feasibility of this project is very high, although it will make loss in the early years, but the potential for earning profits is big.
Project Resources
Based on the project, the project managers are faced with the difficult task of motivating others in challenging circumstances. Sometime, the project goals conflict with the goals of the workers on the project team. Project managers are plagued with expectations regarding project timelines, budgets, and customer satisfaction. Project team members may be overworked, frustrated, and overwhelmed by the stream of relentless deadlines and the many projects competing for their time. Good project managers need to communicate with the project team in a meaningful way, motivate project team’s members, identify and harnessing project team’s strengths and manage conflict to negotiate acceptable solutions.
On the other hand, the basic skills required for the project team will be initiative, communication, team vision, work allocation and strengthen the weaknesses of team members.
Project Risks and Opportunities
Building the new stadium will bring lots of opportunities for the club. An improved stadium, providing a range of additional facilities will make spectators' visits more pleasurable and encourage wider involvement. In addition, the new stadium will have improved access for disabled supporters and enhanced sight lines for all spectators. It is more convenience for all kind of visitors who come to the stadium. In the overall proposal there are a number of community projects. These include community healthcare facilities and children’s nurseries at both Highbury Stadium and Lough Road. There will also be office space within the Ashburton Grove scheme to be offered to the health authorities, to enable the existing former neighbourhood office (currently social services offices) on Drayton Park to be converted to a primary healthcare centre.
There is uncertainty in all projects, and risk can be identified as the possibility of meeting danger or suffering the harm or loss ' (Oxford Reference Dictionary). This is the general definition of risk.
The faulty perception of meeting danger or suffering harm or loss would lead to misjudged actions to be taken. When these actions are taken for large scale projects, for instance concerning the future of a big company or public protection, it could have devastating effects.
Risks always existed when building the new stadium. It can be seen in the risk log, there is a high probability that workers get sick, absence and tired or lost the passion for work over the project time, but it has lower impact, because the staff manager can replace the people who sick or absence by other one, and also can persuade or communicate with the worker who feels bored about work. What is more, the weather in London is not really good, very often it rains, and therefore the probability for is very high. It is also has a big influence, the whole project will be delayed, time wasted. This circumstance is impossible to control by the construction manager, once it happen, it will bring large impacts. It has the same situation as construction delays. It usually occurs in a large project. The only thing the construction manager can do it to mitigate this happen, otherwise, time cost will be a big problem and the risk here is if the project can be finished on time or not. In addition, delay in delivery material will happen some time, but not always, because the delivery team pays lots of attention on this. It is their responsibility to delivery on time, except for traffic jam (depends on season) or accident. Furthermore, there is a risk that local residents will contest the project in the High Court and delay the building phase of the project, and the start of the build to be delayed. The project manager needs to solve this problem as quick as possible, because the probability for this is high and local authorities will be involved as well. The club has to pay legal fees to them.
Timeline
2002
Project expected to begin with a purchasing of the Ashburton Grove site for the stadium. Following that, the architect fees will be paid and, retain for the project life time. In addition, the legal fees may occur during this period until 2003, those fees are because the local residents and authorities may contest the project in the High Court. What is more, the payment for full-time employed administrative staff, and the salaries for the project team will be paid from this year and on.
2004
The building work actually commences. Therefore, the building materials fee, security payment and the cost for marketing & public relations will be paid from this year until 2006. Furthermore, the waste and recycling centre will be built.
The income from waste and recycling centre need to be take into account from this year till end of the project. The other income will be the money from sponsorship.
2005
Fixtures and fitting will be installed, and the payment will be occurred for the coming 2 years.
The income from selling advertising space will generate profit.
2006
The payment for subcontractors will occur in this year and the amount of costs for the waste and recycling centre (2005, 2006) need to be paid.
Start to sell tickets, lease executive boxes and corporate entertaining and catering will generate revenues.
Conclusion and Recommendations
The new stadium will have a world class sports facility, high quality architecture, a comprehensive Environmental Traffic Management system, and large capacity of ground to the supporters. All of these advantages will attract world wide visitors to the area, and generate substantial additional income, which is sustainable develop the Club's football success.
This report outlines the huge benefits, and opportunities for the Arsenal Football Club, and the potential risks existed in the project. Furthermore, it also identifies the stakeholders and market competitive advantages of the project. Displaying the skills and resources required for the proposal and the time schemes. The financial appraisal gives clear ideas about the project is acceptable and has good prospect.
References
Young, T.L. (2003), The Handbook of Project Management: a practical guide to effective policies & procedures, 2nd ed., Kogan Page, London.
Internet resources
http://www.arsenal.com/thestadium/?qs=dynamic&nav=emirates%20stadium
Appendices
Stakeholder Influence Matrix
Financial Appraisal
Cashflow Statement
Payback Period
Net Present Value
Internal Rate of Return
Risk Log
Risk Matrix
