BIHUB PATH

23 April, 2021

Different Market, Different Model

Smart Facilities

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When choosing among the four most relevant business models in the market in order to manage a stadium, clubs are mainly influenced by two factors: Live sport, Corporate/Business, Event/Shows, and Business/Leisure (explained in the past article). The first factor is identity, which includes their profile as a club, their fans and potential clients, the characteristics of the stadium, its location, and its competitive environment. Indirectly, the second factor is the league to which it belongs, which is motivated by developments, habits, and practices in the region or country. We are going to highlight some examples.

England – Premier League

It is characterised by stadiums which its designs are very closed, intimate, with a great tradition, and usually urban. Due to their permanence, cities have grown until enclosing them, as is the case of Old Trafford, Anfield, or Stamford Bridge. Both factors facilitate the implementation of the live sport model and corporate/business, with special focus on the official shop, museum, and tour on non-match day. In spite of their antiqueness, they keep an appropriate level of investment in the modernisation of their facilities. And with the recently opened Tottenham Hotspur Stadium, a global step forward has been taken towards the US investment model.

Germany – Bundesliga

One of its main characteristics is that most stadiums are away from the city centre. However, they have great acceptance by fans due to the transport infrastructure, some with a train station in the stadium. In the 2006 World Cup, we could see the transformation of the model from the 1974 World Cup, where 90% of the athletic tracks were taken out from stadiums, bringing the stands closer to the grass, and providing a great atmosphere on match-day (Veltins Arena or Allianz Arena). That is why the live sport model is used, with not only a great atmosphere but also a great experience including comfort and a wide variety of food and beverage for the fans.

USA – Major League Soccer (MLS)

One of the most interesting models that is also in full swing. From it, we will be able to trace a path that will surely mark a trend in the future. MLS has merged the European and American stadium models, two separate successful proposals, generating a great atmosphere during the game, and, on the other hand, encouraging the commercial and business development, both on match day and on non-match day. They are covered, closed, with stands near the pitch, spaces for the standing public in the background, and different experiences with a great offer of food and beverage. The premium option includes wide segmentation and corporate spaces for mixed use. Excellent examples are Providence Park in Portland, Audi Field in Washington, or Allianz Field in Minnesota.

Italy – Serie A

Traditionally city-owned and usually shared by two teams. This handicap’s clubs as they will only have 50% of the year to generate income from the stadium with the non-match day. Decisions to define their business model are also difficult as it does not belong to them. This also motivates the low investment, not to mention that it is probably the European market with the most outdated premises. This trend is changing due to the need for more competitiveness (Allianz Stadium) and the Italian government’s support it, to encourage its modernisation. Therefore, Italy is a market to watch as it has a  degraded situation but great clubs with enormous potential. Their pending tasks include to eliminate athletic tracks, adjust capacities, give clubs ownership so that they can make investments profitable, and establish modern business models.

Spain – LaLiga

The generation of income thanks to the centralisation of content broadcasting rights and the financial control established by LaLiga has allowed clubs to allocate more investment to their stadiums, mostly urban ones as they are quite old. Until a few years ago, they had a low standard similar to that of the Italian case above mentioned. In spite of that, investment in aesthetics and image is prioritised in most cases but not so much in the definition of the business model, which allows maximising income in order to make it financially sustainable in the long term. There are exceptions such as the Wanda Metropolitano, with two very defined profiles in the model (corporate and events). Everyone is looking forward to seeing the projects of the “new” Camp Nou and Santiago Bernabéu.

 France – Ligue 1

There is a lack of a homogeneous trend after the renovation of its stadiums in the Euro’16, which had different results. Those who chose to implement a business model appropriate to the characteristics of post-tournament use stand out positively, such as Groupama Stadium (Lyon), responsible for a new business development in the area and with an excellent design for the match day. Also Pierre Mauory Stade (Lille), with an events profile and which has become a reference in the sector. But we find other formats with difficulties to generate resources, such as the Matmut Atlantique in Bordeaux, whose aesthetic design impacts but hinders the commercial functionality of the venue.

Russia and Qatar

Special mention for two markets whose development responds to the celebration of the World Cup in their countries.

In the case of Russia, a step back in terms of stadiums with a defined business model allowing a sustainable legacy. Large capacity stadiums for 40/50,000 spectators in cities with smaller teams and far from the routes of large events. Potential white elephants, if the situation doesn’t change.

In Qatar, same execution with a different purpose. All the investment is included in a country master plan to change its business model, turning it into a tourist destination in the long term. It is difficult to achieve a return-on-investment stadium by stadium, but, as a whole, a legacy that impacts globally is intended. The characteristics of the country make it possible.

In both cases, it is worth highlighting the special emphasis on achieving an environmentally sustainable certificate in each of the stadiums, which should already be a mandatory requirement for any venue on the planet.

 

Javier Doña

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