What Lagardère thinks about the next stadium generation

The sport business is on a constant roll as new major events are scheduled by FIFA or the IOC on a regular basis. From a European perspective, new stadium projects for the 2016 Euro in France and the 2018 World Cup in Russia draw the most attention, but within ten years more Asian countries will be more than just candidates to host major events. In a very personal and communicative manner Ulrik Ruhnau, CEO of Lagardère Unlimited Stadium Solutions (LUSS) described to students of the Macromedia Hochschulein Hamburg the past, present and future of sport stadiums.

Mono- or multifunctional?

Ruhnau, having experience in stadium development for over ten years now, pointed out that multifunctional stadiums (Sports, Events, Concerts + more than just one home host) are very hard to refinance. Compared to monofunctional grounds (only one main leaser) the costs are roughly twice as much (164 Mio. € for multi / 80 Mio € for mono; Lagardère 2012 Data). The refunding of such ambitious projects is hard work for LUSS and its competitors. The Frankfurt Commerzbank Arena, administered by LUSS and HSG Zander, for instance made a profit of 1,8 Mio. € on events like congresses or other 3^rd party events. On the other hand, the tenant’s performance in monofunctional grounds becomes very importan, as Aachen shows (their new stadium was developed during their flight in the first league, now playing in the 3 league stadium marketing revenues are down between 70-90%).

Qatar and Co.

Ruhnau, being no fan of the 2022 bid by Qatar, described that only 10% of the funds there are designed for the World Cup stadiums, another 9/10s for other sport investment projects. The officials are currently running tests for the air conditioning system in a 10.000 capacity model stadium, but having visited the area last September Ruhnau said “the heat was unbearable on the streets”. Nevertheless, LUSS hopes to win an advisory mandate with the sheiks and might talk some sense into the whole idea. But Qatar is also interesting from an entirely other point of view. Like for the 2012 World Cup in South Africa, the officials invest a lot of money for architectural stunning stadiums, which will mostly turn out to be “white elephants”, like Wembley in London or Johannesburg.

Gaining revenues

Sport marketeers like LUSS have to look for numerous opportunities to gain revenue for the clubs and themselves. Over the last decade, competition has become fierce and most clubs and associations aim to market themselves in the near future. Drawing data from the engine room of the German Football Bundesliga, Ruhnau showed that huge investments in architecture do not necessarily lead to a bigger revenue. For instance, the clubs gain between two and six million € for the stadium naming right, but the spread for shirt sponsoring (two to 25 Mio €) is far more attractive. The hopes are high, that new digital offers for fans plus stadium visitors lead to more revenue for  clubs and marketers. Being asked by the Medienlotse, Ruhnau estimated the costs for a stadium-wide WLAN implementation between 300,000 and 3 Mio € – an astonishing gap. Leverkusen’s BayArena will be the first ground to receive a digital upgrade.

Social Media Week 2013

As mentioned on Twitter, the Medienlotse has already prepared a session for the upcoming 2013 Social Media Week in Hamburg. Experts from across the world will join a Google-Hangout and talk about “Apps v Browsers – The next best thing for sport fans?”.  If you have questions or want to join the discussion, I’d be very delighted to get in touch with you. More details (speaker, date etc.) are expected to be announced in January 2013 here in the blog. For the first time in history fans have the opportunity to voice their wishes (Social Media) and come up with own examples (Startups).