http://observer.guardian.co.uk/business/story/0,,1838080,00.html
Multiplex to escape Wembley penalties
Denis Campbell and Nick Mathiason
Sunday August 6, 2006
The Observer
Multiplex, the Australian firm building the new Wembley Stadium, will escape financial penalties of up to £40m payable to the Football Association for the late delivery of the project.
The FA climbdown is part of a deal with the venue's owners to avoid a lengthy court battle. The FA, whose subsidiary Wembley National Stadium Limited owns the stadium, will agree not to pursue a claim so that the ground can open and start earning money.
The news comes as the FA renegotiates its £426m loan with a consortium of banks led by WestLB. The FA was due to pay £40m to the banks next month but has been forced to delay payment until March because of the failure to build the new ground. Wembley should have held May's FA Cup but it might not be completed until next June. The FA has already lost millions of pounds as dozens of football matches and pop concerts have been cancelled or held elsewhere.
FA bosses are frustrated with the Australian company, whom they hold responsible for the delays, and privately accuse of using 'blackmail' by constantly pushing back the reopening date. But they also recognise that only a settlement will let them turn Wembley into a lucrative revenue stream in the forseeable future, and that Multiplex will not settle unless the FA abandoned all or most of its claims for damages.
Multiplex upped the stakes last week warning that the £757m new arena would not be ready to host the 2007 FA Cup Final. Despite its tough stance, Multiplex is thought also to favour avoiding an expensive legal dispute. It will already lose up to £183m on a stadium it promised to build for a fixed price of £352m. Both sides are threatening to sue each other over the many setbacks.
An FA source said: 'There'll be a settlement, probably this autumn.'
MXG
multiplex group
