This is the second in a series of 4 blog posts in which we explore what football clubs and other sporting organisations should consider in relation to maximising the commercial value of their facilities. In our first post last week we discussed how to seek to achieve a competitive advantage through crystallising and implementing a sustainable estates strategy for sports facilities expansion or redevelopment. Over the coming weeks we will consider factors to consider as part of your master planning. This week, we consider the utilisation of stadium capacity.
At the forefront of a stadium capacity discussion will be whether a club can fill the seats it builds on match day. Stadium size impacts not just on pure build cost but also staff, policing costs and maintenance cost and as well as atmosphere and engagement. A sold out event generates a buzz, and a full stadium creates the best atmosphere but this needs to be balanced against potential additional lost revenue and lost opportunity of building relationships with new fans. Where possible, the capacity of a stadium needs to be flexible allowing for future expansion as well as the ability to shut down areas with minimal impact on atmosphere and experience.
A club needs to consider whether it can attract more fans by creating a more comfortable environment and presenting an enhanced match day experience both in terms of physical real estate and in technological advances such as Wi-Fi connectivity (already an award winning feature at Celtic Park). Value can be generated in terms of improving the experience for fans and staff as well as the wider community living and working around the club in turn generating better brand engagement and advertising revenues. Small gestures such as providing clap banners for fans can dramatically transform a stadium’s atmosphere and if similar gestures can be built in to the design of a new facility this can create a sustainable advantage over competitor venues.
Celtic’s investment in Wi-Fi has allowed it to enhance the matchday experience for its fans. Taking this a step further, the Golden 1 Center in Sacramento has been designed to be the “most technologically innovative stadium in the world” with more than 650 miles of fiber optic cabling opening up the potential for customer to upgrade tickets on the go, get real time information on parking and order food and merchandise to their seats all through an app that allows the owners to drive content and advertising to their supporters.
Whilst a supporter is unlikely to change their colours over the comfort at the venue this could be a deciding factor in introducing friends of family to the club or considering the use of the stadium away from matchdays. Non-matchday revenue can be equally important and a club should consider whether it can create a destination venue for concerts, conferencing or can share its stadium taking advantage of the off season with academies or sharing gym facilities, reducing costs and sharing revenues.
It’s worth noting that the most profitable stadium in the world, The Staples Center in Los Angeles, has only 19,067 seats. Closer to home, Tottenham’s collaboration with the NFL is a prominent example of how partnering to share facilities can help to fund the development of additional features with the proposed retractable artificial surface opening up further potential revenue streams and allowing increased stadium use.
If you are embarking on a major development project, we know how important it is for you to think ahead, anticipate pitfalls and find practical solutions. Mills & Reeve have a team of more than 114 real estate lawyers all around the UK with a wealth of experience in major real estate development, finance, construction and planning. Please see our Sports Facilities flyer for more details of our experience and project highlights. If you require any assistance in this area, please do not hesitate to contact Chris Pike or Mark Hovell.