Newcastle United is set to abandon plans to build a 55,000-seat stadium. It admitted yesterday it had submitted alternative plans to Newcastle City Council to upgrade and extend St James' Park, its existing ground.
Newcastle had hoped to spend pounds 90m on constructing a stadium at Castle Leazes Moor and converting St James' Park into a huge leisure complex including an indoor arena and running track. However it failed to count on huge local opposition to the scheme which would have meant the loss of acres of parkland in the heart of the city. Several pressure groups, which included Friends of the Earth, and local campaigners such as No Business on the Moor and Friends of Leazes Park, collected a petition of 18,000 signatories opposing the scheme. Faced with the prospect of a lengthy public inquiry, Newcastle was forced to reconsider its plans.
The news met with a mixed reaction in the financial community. Newcastle's shares have performed poorly since it floated at 135p last April, falling to 99.5p. Some analysts said the alternative plans removed fears that Newcastle would struggle to fund the stadium which would not have started producing extra revenues until the turn of the century.
Vinay Bedi, a football analyst with brokers Wise Speke, said yesterday: "This removes one big question mark hanging over the shares. The move should be treated with optimism."
However another analyst said: "There has been one U-turn after another since the flotation including the resignation of Mark Corbidge [former joint chief executive]. It hardly inspires faith in the club's future and management."
Sir John Hall, the club's former chairman and main financial backer, dreamed of creating a stadium that would be the envy of the football world. Dubbed the "San Siro of the North", the three-tier, bowl-shaped stadium would have initially held 55,000 supporters and mirrored the San Siro stadium in Milan.
Newcastle now proposes to increase the capacity at St James' from just over 37,000 to more than 50,000.