Govt may cede Stade de France ownership

Article posted by Coliseum, August 19^th, 2019

Image: Stade de France

A Senate report has recommended the French government to cede ownership in Paris landmark Stade de France to a private entity. The current lease will run out in six years but it is still not clear if and when the government will pull out.

Late last year, Prime Minister Édouard Philippe had said that the government would preferably like to drop out as owner of the iconic stadium without making it clear what would happen to it subsequently.

The new 48-page report prepared for the Senate Finance Committee by senator rapporteur Eric Jeansannetas stated that the government might find it difficult to avoid big financial commitment in Stade de France. This is essentially due to the two mega events – 2023 Rugby World Cup and the 2023 Olympics – which will be hosted in France before the current lease runs out in 2025.

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Both the events demand investment in facilities. While authorities are aware of the challenges, they are yet to decide on how the investment should be divided between government and the managing consortium.

It is worth noting that in 2018 the Stade de France Consortium, ran by Vinci and Bouygues, suggested a massive overhaul, at a cost of €450 million, which is more than the initial construction of the stadium in 1998.

According to reports, the government is unlikely to give its nod to such a project but some upgrades will have to be implemented before the 2023 mega events. In such a scenario the recommended revamp, crucial for extending the venue’s lifespan, will be transferred to the new management.

Jeansannetas foresees two situations for Stade de France post-2025. The first option, and the most desired one, for the authorities could be to retain ownership and award the management concession to a new consortium. The formula would see both major sports tenants – the French Football Federation (FFF) and the French Rugby Federation (FRF) – as stakeholders in the consortium, among other companies.

The second option will also involve a consortium with FFF and FFR but in addition includes a private investor as well. This would allow the authorities to cede ownership and no longer be worried about Stade de France’s financial burden.

Between 1998 and 2013 the government had to pay over €200 million to the current consortium to compensate for lack of tenant club.

But what if no deal is reached until 2025? If any of the incumbent tenant leaves the venue in the long run that would leave €25-30 million hole in the stadium’s finances. With minimum amount for upgrades estimated to cost at least €200 million, the French government will be left to pay that bill on its own.

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