Smooth operators

Monday and Tuesday: an international agricultural machinery fair. Wednesday: a football match. Thursday: an athletics meeting. Friday: an operatic performance. Saturday: a  U2 concert. Will this be a typical week at the  National Stadium in five or ten years’ time?

Emil Górecki

The need to build large stadiums in Poland was, for many years, something that had only been talked about. Now, however, they are springing up all over the country. In Ukraine two of them are even finished. The owners of these facilities agree that having invested so much public money, the stadiums cannot simply be handed over to football clubs. The clubs will of course be (somewhat privileged) tenants – but that’s all. Non-supporters also deserve a stadium, and the support of football fans on their own would not provide enough revenue for the stadium anyway. However, in order to make the facility serve as a football ground one day, an exhibition hall the next and a concert hall the day after, a good administrator is needed, who not only knows the stadium like the back of his hand, but also knows how to attract stars for events to be broadcast on TV. “Local or national government currently tend to be the owners of stadiums, because it is these bodies that have been financing their construction. The operator will probably be a company run by a team of people delegated from the council or from the SPV company that is currently building the stadium. Executives from professional firms involved in the administration of stadiums will constitute the second pillar of the operating team, dealing with the organization of events, the marketing and the management, according to an agreed division of responsibilities, risks and tasks. So it is in fact a partnership, and not – as it is often perceived – giving the stadium away to an operator,” explains Wojciech Rokicki, national coordinator for the stadiums for PL.2012.

The sooner, the better

International professional companies will be employed to manage the four Polish venues: the National Stadium and the arenas in Wrocław, Poznań and Gdańsk. Negotiations are currently in progress to choose these firms, although they are at different stages for each project. “Choosing the partner for the operating company at the design stage of the facility is indeed usually the preferred solution around the world, but in Poland there was no time for this. Our SPV companies are being supported by international experts in the area of stadium administration, instead of by operating companies. This has allowed them to take into consideration the design solutions that are important from the point of view of the functioning of the stadiums and minimizing the number of possible corrections that the administrators might want to implement while the construction is in progress or just after finishing it,” relates Wojciech Rokicki.

Bertrand Scholler is the director of international business development for Consortium Stade de France, which manages the most well-known French stadium and is currently trying to win the administration contract for the Warsaw arena. According to him it would have been much better if the operator of the National Stadium had been chosen earlier and could have contributed to the design process. If one entity is responsible for the design, another for the construction work and yet another for its administration, the danger arises that each of the participants in the process will simply concern themselves with maximizing their own profits, which might not necessarily benefit the whole project. But because Poland had little time for preparing the project, it could not have chosen the operator earlier. “The procedure according to which the National Stadium is being built is the best considering the circumstances. However, the operator selection process should be completed as soon as possible so that the administrator can get involved in the stadium’s creation process. The administration of the stadium should not pose many difficulties. Some very good and experienced architects have been chosen for this project, so I think that only app. 10-20 pct of the stadium will need changes in terms of design. One such example is the roofing: in winter, when it is most needed, it will not be a good solution because of the snow, which creates an enormous load and it will be in danger of collapsing. You will need to send people onto the roof to clear the snow. The second factor in the future success of the stadium is that it is in a perfect location, and that there is a lack of competition for this facility,” believes Bertrand Scholler, whose company intends to enter the tender to choose the operator of the Warsaw arena.

Market without competition

Stadium operators are a complete novelty in our part of Europe. We do not have enough experienced people or companies that would be able to provide European-standard services. This is why we need to utilize the experience of foreign companies. They are looking to enter the Polish market and we want to start such cooperation with them that will allow us to promote the Polish market and maintain the profitability of stadiums. There are only a few serious companies in the world that provide such services, but nearly all of them are interested in Poland. “The National Sports Centre, which is in charge of the construction of the National Stadium in cooperation with the Central Sports Centre and the Ministry of Sport and Tourism, has set up a team responsible for the selection of the operator. The team has assessed whether Poland falls within the scope of interest of these global operators. More than five companies have confirmed a willingness to participate in the tender,” adds Wojciech Rokicki.

Modern stadiums, both purely sporting and multi-functional ones, are also being built in host cities for Euro 2012 in Ukraine. Two of these, Donbass Arena in Donetsk and Metalist Stadium in Kharkiv, are already finished. Apart from 50,000 places for spectators, the Donbass Arena features 53 fast-food bars, several cafés, 3 restaurants and accommodation for visitors. “The facility is managed by LCC – Donbass Arena’s own company. We do not need an external company. We believe in the abilities of our specialists,” asserts Julia Kolosovskaya, press spokesperson for the Donbass Arena. The Metalist Stadium is also managed independently, without the involvement of any international operators.

No entry without an invitation

International operating companies are prepared to help the Ukrainians, even though the latter have yet to announce such a need on their part. “We are prepared to enter the market as soon as we receive a signal from the Ukrainian authorities. It is a similar story for the whole of the region. Contracts with stadium operators are signed for 20 years or longer. I believe that stadium administration will be as successful a business as it is in Western countries. It does not matter whether this happens in five or ten years – we still want to be part of this market by then,” declares Bertrand Scholler.

Brian Kabatznick, vice-president of Anschutz Entertainment Group (AEG) Facilities Europe, also claims that his company is constantly monitoring the CEE region and wants to move into these markets, provided there is the demand for this type of service. AEG Facilities Europe is one of the biggest companies administrating entertainment-related facilities in the world. Mr Kabatznick believes that Poland is one of the most interesting markets at the moment, with many possibilities. “The risk of stadiums built in this country being unsuccessful is very low. They are unrivalled, both with regard to their design and modernity. AEG is continually monitoring this market and is planning to fight for a few of the management contracts. It is important for us to be present here,” claims Mr Kabatznick.

Only a few months ago AEG was involved in the building design of the new Polonia Stadium in Warsaw. This is the company that commissioned architect Marek Boretti to come up with a precise concept for the 30,000-seater arena. However: “AEG is not participating in the design of Polonia Stadium any more,” says Brian Kabatznick.

Mission rather than profit

According to my interviewees, stadiums are not the best source of income. They are investments of course, but profitability is not their main function. This is rather an investment in development of the society and the city. It does not mean that you cannot make any money out of them. The owners of the new arenas in Poland want them to generate their own revenues. This is also in the interest of the operating company, which will be motivated by the commission from such profits. “The main function of facilities such as Stade de France or the National Stadium is to host sports events. They are not multi-functional facilities which function as stadiums, but rather stadiums with additional possibilities. And we are stadium operators. Our task is not to attempt to squeeze as much money as possible from the facility, but to manage it in such a way that it provides for itself. It is a property managers’ job to make lots of money,” argues Bertrand Scholler of Consortium Stade de France.

One of the immeasurable benefits of effective stadium administration is the development of the area around it. Stade de France was built on virtually empty post-industrial land in Saint-Dennis in the suburbs of Paris. Largely thanks to this project, it is now one of the most popular business locations in the Ile-de-France region, second only to La Défense. New office buildings have been developed here, as well as restaurants and shops; but it was only when the first two suburban commuter railway stations were built that Stade de France became a recognized address. Bertrand Scholler admits that the success of the stadium has exceeded all expectations. “It was built 15 years ago and was not designed to fulfil many other functions apart from that of being a stadium. It is only now that we are trying to organize more all-day traffic, open the stadium to the public and include it in the everyday life of the district. Now that we are involved in new stadium projects, we are trying to make sure that they are attractive for people every day, not just when big matches are on. The National Stadium is designed in a much more modern way than Stade de France,” he asserts.