European stadia diversifying revenue

Article posted by Coliseum, January 30^th, 2024

Image: FC Barcelona

Football stadiums across Europe are seeking to boost commercial revenue by hosting other live events and transforming into entertainment destinations.

The Financial Times said that Real Madrid’s iconic Santiago Bernabéu stadium is the latest stadium following the trend.

Santiago Bernabéu Stadium is a football stadium in Madrid, Spain. With a current seating capacity of 83,168, it has the second-largest seat capacity in Spain, and it has been the home stadium of Real Madrid since its completion in 1947.

The club’s €1.2bn renovation project includes restaurants that can serve thousands of people, a skywalk with views across Madrid and a newly expanded museum that is expected to increase visitors from 1.5 million a year to 2 million.

As a result of a deal agreed by the club last year with a US investment fund, the venue will also host music and other live events.

Other top clubs across European football are also raising billions in cash to renovate their stadia and attract more diverse revenue streams.

The FT further stated that several top European clubs including Inter Milan, AC Milan, Roma, Paris Saint-Germain, Chelsea and Manchester United are at some stage of upgrading or replacing their stadiums in an effort to keep up.

Leading the way in European football grounds is Tottenham Hotspur Stadium in north London, a £1 billion construction project completed in 2019.

Its impact on the club’s finances has become increasingly clear. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, according to the FT.

The stadium hosted Beyoncé last May as part of her Renaissance world tour, two NFL matches, as well as rugby games and heavyweight boxing bouts.

Football match day income is up from €85 million in 2018 to €125 million last season, according to Deloitte, partially due to the addition of premium hospitality.

Tottenham Hotspur Stadium is also about to launch a new F1 Karting experience under the South Stand.

The FT said much inspiration for the current trend of investment has come from the US, where sports stadiums are often part of a much bigger entertainment complex designed to generate returns seven days a week.

Owners have spent billions of dollars on new facilities for their baseball, basketball and NFL teams, although the model in the US is distinct because franchises can uproot themselves and find new homes. Cities and states then compete to attract teams by offering to finance or underwrite the costs of new stadiums, with taxpayers often footing the bill.

Although the American funding set-up is hard to replicate, the broader idea of creating diversified real estate businesses with a sports team at the centre is increasingly taking hold.

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