NEC For Sale

Most estimates say the leasehold on the complex – basically the National Exhibition Centre, International Convention Centre, LG Arena, National Indoor Arena and ticketing firm Ticket Factory – is worth around £300 million.

For more than six months there have been rumours the council would need to put NEC on the block. The Birmingham Post last summer reckoned the possibility.

BBC News reported two months ago that selling the complex could be the way to settling some equal pay claims amounting to some  £1 billion.

The council has agreed to equal pay settlements with thousands of women who were paid less than men doing equivalent jobs.

The BBC said one law firm was believed to be dealing with 4,000 outstanding cases.

The council already settled cases costing it around £500 million, borrowing the money from the Department of Communities and Local Government.

The DCLG has drawn the line there and the Birmingham authority still has a £550 million shortfall.

Council leader Sir Albert Bore said in January no decision had been taken on selling the NEC Group, but admitted it was “a possibility.”

The possibility became reality when a strategic review concluded that bringing NEC Group under private ownership “will enable the business to take full advantage of its growth opportunities and reach the next stage of its development.”

The council appears left with little choice, given that it’s also backed various – and seemingly ongoing – refurbishment programmes.

Work on a £26 million redevelopment of the NIA began last summer and is due for completion in January.

NEC Group managing director of arenas Phil Mead is bullish about the complex attracting interest from private investors.

“Partnership deals with LG and Barclaycard have already shown the NEC Group’s ability to secure third-party funding to help fund investment in its venues and demonstrate their attractiveness and iconic status,” he told Pollstar.

“The announcement will allow us to take the risks associated with developing a dynamic, privately-owned business and we welcome the new opportunities that private investment will bring.”

A year-long survey by accountancy specialist KPMG said in 2008 the NEC complex benefited the West Midlands economy by £2 billion per year.

Mead says in the next financial year the complex expects revenues of around £123 million and operating profit before depreciation, amortisation, interest and long-term maintenance costs of around £29 million.