Changing venues: Football clubs upgrading their stadium
Changing venues. Sooner or later sports organisations change their home base. Sometimes they invest in infrastructure, either by renovating or starting brand new projects, expecting future financial returns. At times relocation is the only option, with the current location no longer adequate or available. While new markets combined with opportunity also tempt organisations to take the jump to change their venue.
In this second instalment of three articles we take a look at football clubs investing in stadium infrastructure. In 2019 Premier League club Tottenham Hotspur started playing in their new multi-purpose stadium, but not before facing some challenges and delays. And Tottenham is not the only football club investing in stadium infrastructure. Barcelona, Real Madrid, AS Roma and Everton all have plans for their stadiums.
Investment for future financial returns
Whether it is a whole new stadium or upgrades to an existing one, in both cases clubs and investors hope that investments lead to future financial returns.
A higher capacity should lead to more spectators. A different seating plan could justify higher priced tickets ands packages. New and extra restaurants and businesses within a stadium could increase match day and non-match day revenue. Changes to the infrastructure can make a stadium suitable for different events, beyond just football.
Yet, all of them have the goal to increase the efficiency, or rather output of the stadium. Which in turn has to result in more income.
Tottenham Hotspur’s new stadium
Tottenham Hotspur demolished their old stadium, White Hart Lane, at the end of the 2016/2017 season to build a new stadium in its place. The new stadium has several of the above-mentioned features that have to result in higher returns in the future.
The Spurs’ new home venue has a capacity of 62,062. A 70% increase compared to White Hart Lane. It now ranks third in the Premier League, only behind Manchester United (Old Trafford) and West Ham United (former Olympic Stadium).
The stadium is a multi-purpose stadium. Due to the retractable football pitch with a synthetic turf pitch underneath, many other events can take place at the venue. Some of the events already planned:
- A minimum of two American Football (NFL London) matches per year for 10 years
- Rugby club Saracens’ annual ‘Big Game’ Gallagher Premiership Rugby fixture for five years from 2020 onwards
- European Rugby Champions Cup and Challenge Cup finals in 2021
- International Sports Convention 2020 (one of the largest sports business conferences)
- Sky Walk lets visitors walk up the side of the stadium and abseil down.
Restaurants and businesses
The stadium also has around 65 drink and food outlets, a museum and a club fanshop. Here are some standout businesses within the stadium:
- Goal Line Bar, which at 65m is the longest in Europe
- In-house bakery
- World’s first microbrewery in a stadium
According to Spurs chairman Daniel Levy it all leads to “increased revenue streams, not just from our core football club but also the activities that will take place on non-match days.”
For an investment of around one billion pound it is no surprise that there is no shortage of latest technology incorporated into the stadium. Several examples:
- Bottoms-up technology
- Two large video screens
- Wireless paying: first cashless stadium in the country
- Stadium-wide connectivity: more Wi-Fi access points and Bluetooth beacons
- Greater bandwidth than any other stadium
Yet, for all the great features and fantastic future opportunities the process was not without its challenges.
The Spurs played their first official match in the stadium on April 3rd, 2019. However, the match was scheduled at the beginning of the 2018/2019 season. Safety concerns led to delays. This meant that Tottenham had to keep playing their home matches at Wembley, like they did during the 2017/2018 season. It also meant that scheduled NFL matches were relocated to Wembley. Tottenham had to play at Wembley on a rather poor pitch for several weeks, because NFL matches were held at the venue.
All these delays will have increased spending considerably.
The investments were “all financed by the club, a combination of club revenues and supportive banks,” according to Levy. Yet to stay financially healthy as a club remains a challenge. Investing here often means constraints somewhere else. Spurs, for example, have limited their spending on player transfers in recent transfer windows.
Spurs not alone in investing in stadium infrastructure
Atletic Bilbao (2013), Atlético Madrid (2017), Olympique Lyon (2016) and West Ham (2017) are just a few of the football clubs who changed venues and/or invested in their stadium infrastructure in recent years. And many other clubs want to follow suit, so they can compete at the highest level on the pitch and financially.
Here are a few other football clubs that have revealed their stadium plans:
FC Barcelona: A multi-year renovation of Camp Nou will, among others, increase capacity to 105,000. Learn more.
Real Madrid: Renovating Santiago Bernabéu, including the addition of a retractable roof. Learn more.
AS Roma: A new state-of-the-art, world-class 52,500- (expandable to 60,000) seat venue. Learn more.
Everton: A new stadium at Bramley-Moore Dock with a capacity of 52,000, which could potentially rise to 62,000. Learn more.
Long term game
These are just a handful of stadium renovation and building plans. All of them bet on the long term. They require high investments upfront and will certainly be accompanied by delays and even more challenges. However, in the long run the risk and investments are necessary to keep competing financially and fan experience wise. Like Daniel Levy said: “In terms of the pay back, it’s over the long term.”