Maximising usage

The target – using stadiums 365 days of the year

A few decades ago, sports stadiums were built for one purpose – sport. Whether it was football, rugby, tennis or athletics, stadiums were built specifically to allow the maximum number of spectators to see an event. Little thought was given to the safety or comfort of fans. Strangely, stadium owners gave little time to considering how they could maximise profits. People paid to watch a football or rugby match and that allowed clubs to cover their costs. The 1990s brought a revolutionary change.

With 26,000 sq m of event space, Denver's Invesco Field can
accommodate groups of any size, from 20 t0 75,000

Business professionals, such as News International’s Rupert Murdoch, realised that sport could be used to improve brand awareness: in his case, Sky TV. Across Europe, hundreds of millions of pounds were paid for the exclusive rights to broadcast the best football leagues, starting with the UK’s Premiership and moving on to Italy’s Serie A and Spain’s La Liga.

With more money coming into sport, clubs realised they had to be operated on sound business principles. In parallel, all-seater stadiums became obligatory as sporting authorities reacted to hooliganism and to tragic events such as the Heysel and Hillsborough disasters, where many supporters died.

Some stadiums were funded by private enterprise and others by national and local governments. But they all had to have a sound business plan and that involved increasing the number of revenue streams. So although sport remains the core activity of each stadium, income from off-the-field activities has become almost as important.

Today, if you go to a Rolling Stones or Madonna concert, you are likely to be going to a sports stadium. If your company wants to hold a conference, then many stadiums have state-of-the-art facilities. Exhibitions, weddings, birthday parties, corporate functions – no problem. Many stadiums now have fitness centres – for the public – and you’ll even find hotels built into a stadium’s infrastructure.

Allianz Arena hosts conferences using its multimedia
audio and video facilities

UK Premiership club Middlesbrough FC’s head of commercial operations, Graham Fordy, is adamant that success on the field is all-important. "We host conferences, banquets, trade fairs – and the better the team is doing, then the greater is the use of those facilities." But Fordy believes in the long-term. That’s why Middlesbrough runs a lottery where all profits are re-invested in the club’s academy to develop the stars of the future. Fordy also notes that people want to be associated with success. That’s especially important for regional clubs like Middlesbrough and FC Schalke 04 in the Bundesliga.

FC Schalke 04's home is in Gelsenkirchen, once a major coal and steel region, and now an area focusing on new technologies and the services sector. Its new stadium was completely funded by private means. It has become the stadium against which all others are measured. Known as the Veltins Arena, it has a retractable roof, electronic admission controls, removable playing surface and a giant video cube – for TV replays on all sides of the ground. With pop concerts (Robbie Williams and U2), opera, and even stock-car racing, the venue is 100 per cent multipurpose.

Another 2006 World Cup venue, Munich’s Allianz Arena, was completed in 2005 following a referendum in which voters actually agreed to pay more tax to help with its financing. However, the majority of the construction costs were divided between Bundesliga clubs Bayern Munich and TSV 1860 Munich. The stadium can be rented for meetings and private events, and it hosts conferences using its multimedia audio and video facilities. It even has its own TV studios. Finally, the third level of the stadium is a shopping mall with 4,000 sq m of retail space.

In North America, the idea of maximising revenues has been in vogue for many years. The Invesco Field at Mile High Stadium is home to both the Denver Broncos American football team and the Colorado Rapids football team. The stadium’s proprietor is the Metropolitan Football Stadium District, a subdivision of the State of Colorado - so it is owned by the taxpayers. Andy Gorchov, director of stadium operations, says that the stadium is used for all types of events – private weddings, trade shows, concerts and conferences. Built in 2001, it has housed concerts for Bruce Springsteen, the Eagles and Metallica. Gorchov advises anyone considering building a stadium to make it “event friendly” with maximum flexibility for lighting, sound and storage facilities.

Invesco Field is also available for company picnics, client appreciation receptions, employee recognition events, new product launches, sales team kick-offs, corporate teambuilding, fund raising events and social celebrations. With its 26,000 sq m of event space, it can accommodate groups of any size, from 20 to 75,000. That’s multipurpose.

Back in the UK, when Middlesbrough FC built its stadium in 1995 it qualified for some government funding as it was in a regional development area. That is not the case in 99 per cent of UK stadiums. Arsenal recently opened its new Emirates Stadium, in North London, at an estimated cost of GBP 340 m.

Arsenal director Ken Friar gets back to the core principles mentioned by Middlesbrough’s Fordy: “If we are to compete on an even basis (with clubs like Manchester United), we must increase our income which can only be achieved by an increase in attendances”. Hence the construction of the new Emirates Stadium, funded initially by the Royal Bank of Scotland, but the loan is currently being re-financed.

It has been estimated that Arsenal will produce an increase in annual revenues, via increased attendances, sponsorship, corporate deals and concerts, of GBP 35m. A phenomenal amount, but if the team slips up on the football pitch, the whole house of cards could fold. So if you want to have a profitable stadium, don’t forget to make successes on the playing field a priority.