As Cardiff City opened its new stadium with a 4-0 victory against Scunthorpe United, research from the Sports Business Group at Deloitte has revealed that 50% of all the new stadia built for professional sports clubs in the UK since 2003 have benefited from funds generated by retail developments.
Mark Roberts, senior consultant in the Sports Business Group at Deloitte, said: “The contribution of retailers to stadia development in the UK has been evident for some time. From Bolton Wanderers’ Reebok Stadium and Reading’s Madejski Stadium in the mid nineties through to recent openings such as Coventry City’s Ricoh Arena, the retail industry has a history of investment in sporting arenas.
However, this type of funding has become increasingly common and, since 2003, seven out of 14 new stadium developments have benefited, either directly or indirectly, from retail investment.”
“Across all sports, investment in stadium facilities since the Taylor Report in 1990 is approaching £4 billion. With over 30 new stadia developed for professional sports clubs since the early nineties, the investment made by clubs redeveloping their traditional home stadia, and the development of national stadia, it is easy to see why the UK is acknowledged as having a strong portfolio of world class facilities.”
The stadia opened since 2003 that have benefited from funds generated by retail developments are shown in the table below.
“New stadium construction projects can face a number of intertwining challenges – selecting a suitable site, obtaining planning permission, managing construction cost, and securing funding – which can make stadium strategy and execution a time consuming process.”
“In the current economic environment the ability to secure enough funding to enable construction is seen as the biggest barrier and delay to new projects. Clubs who have been able to engage a variety of stakeholders who have been willing and able to contribute to the construction of a new stadium, have seen their plans come to fruition.”
The influence of the retail industry on future planned developments shows no sign of abating as the table right illustrates.
Richard Hyman, strategic retail adviser to Deloitte, said: “After decades of relentless physical growth, many of the more conventional retail development locations have already gone. The growth of new stadia has offered retail opportunities that didn’t exist before and with new sites at a premium, this successful partnership between sport and retail is set to grow further.”
Roberts adds: “It is interesting to note that the clubs in both tables are, in general, not looking to add vast amounts of additional capacity – the average capacity of the stadia featured is around 20,000. Other factors may be the driving force behind these new stadium projects such as improving the standard and comfort of facilities, the ability to generate diversified revenues or the provision of community focused facilities.
“New stadiums can also provide a catalyst to induce economic and social benefits in the local area and instil positive momentum in the club.
Roberts concludes: “New stadium developments remain high on a number of sports clubs’ agendas. In order to engage with, and secure funding from, potential stakeholders in these challenging times the requirement for a well-researched strategy and business plan are higher than ever. Without this, a project may not get much beyond the drawing board.”
For more information, please visit www.deloitte.co.uk.