INTRODUCTION What does this report include In the report that follows, we will first
Next, we will look at the report on
provide an overview as to the state of
the economic and social impact of the
French stadiums prior to the UEFA European
Championships, which was also executed by
Championships 2016 (UEFA EURO 2016).
CDES.
This will be followed by discussion on the economic impact the tournament had on the
Finally, we will link all of the above to the
French economy. Finally, we will look at how
ESSMA Summit 2017 panel discussion on
the event functioned as an accelerator in the
stadium development in France, which
development of French stadiums.
featured
the
following
industry
expert
panellists: This report is based on multiple sources in order to offer a nuanced view on the topic. The ‘Rapport Grand Stades Euro 2016’, written by the EURO 2016 commission, was one of the consulted sources. The commission’s report explains why French stadiums were not on a par with their competitors and why this formed a threat to France’s sportive competitiveness.
• Xavier Pierrot - Stadium Manager Parc Olympique Lyonnais • Cédric Dufoix - French Pro. Football League Representative • Richard Cacioppo - Transfunctional projects LNR • Guillaume Gouze - Administrative Director and stadium operations F.C. Grenoble Rugby
As a second source, we will consider the exante assessment of the economic impact of UEFA EURO 2016 in which the Centre de Droits et d’Economie du Sport (CDES) makes some predictions about the effect of the event.
MATMUT ATLANTIQUE
Why is this issue relevant It is believed that investments in the renovation or construction of sport stadiums prior to and in conjunction with major sport events can be beneficial, not only for the improvement of the fan experience inside the venues but also for the sportive competitiveness of the clubs that reside in these stadiums, and even for the economy of the host country. When public goods are used to make these investments, a long list of conditions should be met to ensure this investment is successful. The report on the economic and social impact of UEFA EURO 2016 by CDES, which we will discuss in more detail in this report, elaborates on these prerequisites. Next, this study provides a short overview of the investments in sport stadiums that were made in anticipation of the UEFA European Championship 2016 (EURO 2016) being awarded to France. Finally, the study analyses how these investments translate into improved facilities and other relevant aspects.
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Capacity, Hospitality and Multifunctionality In ‘Le Rapport Grand Stades EURO 2016’ by the EURO 2016 commission presided by Philippe Séguin, attention is paid to the uncompetitive state of French stadiums. The commission addressed three different aspects of their sport infrastructure, in which France was a low performer compared to neighbouring countries, these being: capacity; hospitality and multifunctionality.
PARC OLYMPIQUE LYONNAIS
Capacity The first aspect of comparison is capacity.
significantly higher numbers compared to the
In the 2007/08 soccer season, the average
yearly attendances at Ligue 1 games, where
number of seats in French stadiums was
the figure was just 5.5M. This difference was
29,155. Compared to the average number
especially remarkable considering Ligue 1
of seats in Germany (45,000), Italy (40,000),
has twenty clubs and the Bundesliga only 18.
England (35,000) and Spain (30,000), France had the lowest average number of seats
Although the attendance of both leagues has
available.
grown a lot, the difference between them still exists. Ligue 1’s yearly attendance for
Only two French stadiums offered the 50,000-
the 2015/16 season was 7.9M, while that of
plus seat capacity, which is the minimum
the Bundesliga was 13.3M. The chart below
requirement, but neither were of sufficient
shows the evolution in yearly attendances
quality to receive UEFA’s 5-star accreditation,
of the above competitions starting from the
which is necessary to host an international
2007/08 season. From 2012 onwards, we
tournament.
observe an increase in attendance at Ligue 1 matches.
This difference in capacity did not come without consequences. The impact on the
This increase in attendance could be linked
number of spectators drawn to weekend
to the opening of new stadiums like Stade
competitions was remarkable. With a yearly
Pierre-Mauroy in Lille which opened in 2012.
attendance figure of 6.4M spectators for the 2007/08 season, the Bundesliga attracted
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Hospitality As a second aspect of comparison, the EURO 2016 commission analysed the quality of hospitality. The differences observed in terms of the quality of hospitality are often a simple reflection of the times in which the stadiums
On average, 1,178 VIP seats were
were designed and built. Most French
available in French stadiums prior to
stadiums were built when the only
EURO 2016, which amounted for 4% of
function of a stadium was to host a
the total area. This is far from European
weekly sport competition. Whereas, in
standards, which ranges between 8%
modern times, as we all know, stadiums
and 12%.
fulfil a multifunctional role, including hosting sport events, shows, congresses or conventions, and many other events. Compared to the English or German
“On average, only 1 178 VIP seats were available in French stadiums”
stadiums, the French stadiums didn’t offer the same range of hospitality
As a result, there would have been a loss
services and contemporary design. The
of profit when the demand for these VIP
ticketing economy – which is based
seats exceeded the available capacity.
in particular on the profitability of VIP
In France, this loss in profit was shown
seats – was a clear example of this.
in the average revenue per spectator, where the average was €16, compared to €22, €24 and €33 respectively in Italy, Germany and Spain (Le Rapport Grands Stades, EURO 2016 commission).
© ORANGE VÉLODROME
Multifunctionality Lastly, the EURO 2016 commission evaluated
the
multifunctionality
of
French stadiums. The general verdict was that they scored rather low on this aspect, although there were some exceptions. This was not in line with the trend of stadiums fulfilling many roles.
“The issues of the large stadiums formed a threat to France’s sportive competitiveness” A
benchmark
when
it
comes
to
multifunctional stadia is the AFG Arena of
St.
Gallen
(Switzerland),
which
includes a stadium, shopping centre, leisure centre and a large furniture retail area. The report claimed that the above issues of the large stadiums were a threat to France’s sportive competitiveness, because these issues formed an obstacle in attracting major sport events and these events generate resources to help fund the development of French clubs. 7
Expected investments in sport stadiums The ex-ante study on the economic and social impact of UEFA EURO 2016 by CDES reports a total investment worth €1.7bn in nine French stadiums. €775m is directly attributable to the hosting of the Championships. With the total investment worth €1.7bn, four new stadiums were constructed located in: Bordeaux, Lille, Lyon and Nice, and five stadiums were renovated in: Lens, Marseille, Paris, Saint-Étienne and Toulouse.
“In total, € 1.7 billion was invested in 9 French stadiums”
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The ESSMA case study on French stadium infrastructure: ‘Update on infrastructure and the impact of EURO 2016’, offers an in-depth view on these investments, including details on how they were financed and the current state of the projects.
Stade Vélodrome
Stade de Bordeaux
Stade Allianz-Riviera
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Economic impact of EURO 2016
The economic impact of major sporting events
In this context, CDES was assigned to
is historically a topic in which predictions and
compute the short term economic impact of
results don’t always match. Despite these
UEFA EURO 2016. In their study, economic
unpredictable results, France had to invest in
impact was split up into two parts:
a large part of its stadiums to meet European
1) The economic impact of the expenses made
standards, so that it would be eligible to host
to organise the event and 2) the economic
the UEFA European Championships for the
impact of the expenses made by tourists.
third time in the country’s history (after the 1960 and 1984 editions).
“76% of the net cash injection induced by the organization of the event, was linked directly to the operational expenses of the event”
CDES calculated that the impact of the organization of the event in the form of a net cash injection was € 476.8 M, which is about the same as the € 478 M net cash injection CDES predicted in its 2014 ex-ante study in 2014. € 360.5 M of the net cash injection (76%) was linked directly to the operational expenses of the event. These expenses included all costs that had been made in the operational delivery of the Championships.
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Aside from the operational costs, the
€24m of
organisation also had to pay the premiums
solidarity expenses and diverse donations
the federations receive for participating in
(5%).
the competition. A budget of €34.9m (7.3%)
compensations
was spent on these premiums. 7% and the
received for putting their players at the
third biggest part of the net cash influx
disposal of the national federations. €22.6m
(€34.8m) originated from the expenses made
and the smallest part net cash influx (4.7%)
by accredited personnel.
originated from the activation of commercial
The
the net cash influx came from solidarity the
expenses
included
professional
clubs
partners.
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The second part of the total economic impact
However, to give a complete and veracious
of the UEFA European Championship 2016, is
picture of the economic impact, we must
the economic impact of the expenses made
subtract the loss of revenue caused by the
by tourists. In total, CDES calculated this
crowding-out effect. This effect is caused by
part to cause a net cash injection of €500.6m.
the fact that the event, the tourism, and the
This sum was made up of two parts and was
hassle that comes with it, dissuaded regular
decreased by a third part, which is known as
non-interested tourists from visiting the
the crowding-out effect.
country during the Championships. CDES valued the crowding-out effect at €165m,
In total, 613,000 public visitors and 34,000
so this gives us a total net cash injection of
hospitality visitors were welcomed during
€500.6m from the expenses made by tourists.
EURO 2016. The public visitors’ expenses caused a net cash injection of €623.4m, while the expenses made by hospitality visitors caused a net cash injection of €42.2m. In total, this gives a net cash injection of €665.6m.
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“In total 613,000 public visitors and 34,000 hospitality visitors were welcomed during the EURO 2016 “ Adding up the net cash injection caused by
have risen will spend more, which leads to
both the organisation of the event and by
higher incomes of other people, and so
tourism, gives a net injection of €977.4m
on. The CDES study applied a Keynesian
before taking into account the multiplier
multiplier coefficient of 1.25. When this is
effect. Economic impact studies apply the
taken into account, the total economic impact
multiplier effect to take into account that the
of EURO 2016 is €1,221.7m, not considering
net cash injection causes some incomes to
the VAT receipts (€70m).
rise. As a result, the people whose income
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Development of French stadiums Results and Roles
PARC DES PRINCES
© PSG
Results The enormous
estimated
investment in
The number of VIP seats in Parc OL increased
French sport infrastructure of €1.7bn had
to 6,000 – a significant increase when
multiple consequences. The first being an
compared to the 1,500 seats at the old Stade
increase in the number of stadiums with a
de Gerland. These VIP seats are paying their
capacity of over 50,000 seats. In 2007/08,
dues too; 70% occupancy rates making
prior to the Championships, a mere two
them a great investment. In this regard,
stadiums – Stade de France, located in
Xavier Pierrot, Stadium Manager of Parc OL,
Saint-Denis, and Stade Vélodrome, located
remarked during the ESSMA Summit panel
in Marseille – surpassed the 50,000-seat
discussion on French stadium development
capacity.
that before the investments, a lot of people
“The number of stadiums with a capacity of over 50 000 seats doubled”
were having their meals near the stadium. Whereas nowadays, most have their meals inside the stadium. It is because of these improvements
that
new
fan
segments,
including families, women, elderly and youth, After EURO 2016 and the investments made
are drawn to the stadiums.
in preparation of hosting the tournament, the number of stadiums with a capacity of over
The second prime example is the Stade
50,000 increased to four, with the addition of
Vélodrome, where the number of VIP seats
two newly-constructed stadiums in Lille and
increased from 2,000 to 6,500. These VIP
Lyon.
seats have an average occupancy rate of 54% based on data derived from the ESSMA
There have also been marked improvements
Stadium Tour Marseille 2015 report.
in the field of hospitality. Prime examples of this being Lyon’s Parc Olympique Lyonnais
A third example is Parc des Princes, where
(Parc OL), Marseille’s Stade Vélodrome and
a rise in the revenue per seat of 380% has
Parc des Princes in Paris.
been realised in a six year period (Source: Top 6 Deloitte football money league, 2015) by carrying out an overhaul of the VIP areas. During lounges
18
this were
redevelopment, created
with
additional multiple
configurations and layouts, and since this,
One of the most multifunctional stadiums
new amenities and services are offered. The
however has to be the Stade Pierre-Mauroy.
enhancement resulted in a total of 4,378
Thanks to its multi-layered floor plan, the
business/VIP seats, which amounts for almost
stadium can be transformed into the ideal
11% of the total number of seats.
venue for football, basketball, concerts, tennis matches and other smaller indoor
A
third
field
of
improvement
is
the
multifunctionality of the stadiums. Before the investments made in anticipation of UEFA EURO 2016, most of the host stadiums did not allow multifunctional use. Whereas today, there are various examples of these
sports.
“Parc Olympique Lyonnais even served as the venue for a outdoor League Magnus ice hockey game”
stadiums hosting not only multiple sporting codes, including football and rugby, but also
These improvements have also made it
music events, like at Parc OL and Stade de
possible for France to host major sporting
Bordeaux.
and other events. For example, in November 2014, Stade Pierre-Mauroy hosted the Davis
Out of the ten stadiums that hosted UEFA
Cup finals between France and Switzerland,
EURO 2016, five are being used for only
where an attendance record was broken
football and rugby events, whereas the
for the highest ever officially-sanctioned
others are hosting football, rugby and
competition tennis match. Then, in March
music events. Parc OL even served as the
2015, FIFA awarded France the rights to host
venue for the outdoor League Magnus ice
the 2019 FIFA Women’s World Cup, with both
hockey game between Lyon and Grenoble
the opening and final matches to be played at
on the December 30, 2016, and the rugby
Parc OL. The fact that Parc OL is also the host
Champion’s Cup between the Saracens and
for Céline Dion and Coldplay concerts further
Racing 92 on May 14, 2016.
confirms the stadium’s multifunctionality.
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What roles do the new EURO 2016 stadiums play? The
four
newly-constructed
stadiums
and five renovated stadiums can now be seen as a benchmark for the construction and renovation for future French stadium developments.
New
projects
around
the world can draw inspiration from the
“The renovated and newly constructed stadiums can now be seen as a benchmark for the construction and renovation of stadiums for future French stadium developments”
approaches and results of these stadiums. The nine stadiums can also give us a picture On
this
topic,
French
of how attendances at football matches
Professional Football League Representative,
are influenced by renovating or replacing
remarked during the ESSMA panel discussion
stadiums with a new one, thus increasing
on
that,
capacity, hospitality and multifunctionality.
thanks to EURO 2016, France’s sporting
To achieve this, we looked at the attendance
infrastructure had improved enormously, but
rates of the French football clubs that
that there is still room for improvement. He
renovated their stadium or built a new one.
also emphasised the importance of further
In light of EURO 2016, we reveiwed the
improvement of this infrastructure.
attendance rates one and two years before
French
Cédrix
stadium
Dufoix,
development
entering the new or renovated stadium, and Aside from their role as benchmarks, the
one and two years after entering the new
actual status of the French stadiums caused
or renovated venue. We should remark that
an improvement in the fan experience and
these charts do not exclude other factors
thus an increase in fan satisfaction during and
that influence attendance, like sports results,
after UEFA EURO 2016. A prime example
the threat of terrorism, etc. In general, we
of an investment that has paid off with an
notice a difference in the impact of stadium
increase in fan experience and satisfaction is
renovations and the impact of stadium
Parc OL, where the global satisfaction criteria
construction.
went up by 15%, with a VIP satisfaction rate of 90% being achieved and 99.5% of spectators said they would recommend their friends to come to the stadium. 20
In this modest sample, we
impact of stadium renovation
see a trend in which the
on attendances. These findings
construction of new stadiums
are in line with research on this
yields a better improvement in
topic.
attendances compared to the
Source : http://www.european-football-statistics.co.uk/ 21
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To effectively meet fan expectations,
A second challenge is ensuring the
you need to be aware of what the
stadium fulfils many different roles in
fans’ expectations are. Therefore, it
order to use the infrastructure to the
is important to get to know your fans.
fullest and minimise the time the venue
On this topic, Xavier Pierrot, Stadium
is not in use. Consequently, non-football
Manager at Parc OL, explained during
related events attract other spectator
the ESSMA Summit panel discussion
segments to the stadium, resulting in
that the three main aspects fans find
mutual benefits.
important are: atmosphere, cleanliness and security. When one of these aspects
Finally, preserving the pre-renovation
is suboptimal, there is a risk of a decrease
or pre-construction atmosphere is an
in attendances.
important challenge because this will
“the three main aspects fans find important are atmosphere, cleanliness and security”
prevent attendances decreasing once the stadium development project has been carried out. The old stadium is often a place of history and memories for the fans, so the transfer from the old to the new stadium can’t be neglected.
Thanks to technological advancements, safety can be guaranteed with less physical presence and by adapting the infrastructure, a cleaner stadium can be achieved. At Parc OL, a survey is conducted after every game in which the fan experience is gauged to make sure they meet fan expectations.
23
PARC DES PRINCES
© PSG
Results
Stadium development
According to a study executed by CDES,
In
UEFA EURO 2016 caused a net cash injection
significant investments were made in French
of €1,221.7m to France’s economy. This net
sport infrastructure, resulting in an increase
cash injection originated from two sources.
in: average stadium capacity, number of
“EURO 2016 caused a net cash injection of € 1221.7 M in France’s economy”
anticipation
of
UEFA
EURO
2016,
stadiums with a capacity above 50,000, hospitality seats and multifunctionality. The number of French stadiums with a capacity of over 50,000 increased from two to four.
The first was caused by the expenses made
The number of hospitality seats in numerous
in the operational delivery of the event and
stadiums increased significantly too, with
was calculated to be around €476.8m. The
examples being Parc OL, Stade Vélodrome
second originated from tourists’ expenses
and Parc des Princes.
and was calculated to be around €500.6m. Both sources add up to a net cash influx of
On the last aspect, multifunctionality, major
€977.4m, which should be multiplied by
improvements were realised. Nowadays,
a factor of 1.25 to take into account the
there are various examples of stadiums that
Keynesian multiplier. This results in a total
host football, rugby and even music events,
net cash injection of €1,221.7m.
like Parc OL and Stade de Bordeaux.
FOLLOW US
essmastadium 26
ESSMA_Stadium
ESSMA
Challenges and opportunities Whereas French stadiums previously scored
benchmarks for future stadium constructions
below the European average on aspects like
and renovations. They also show us that these
capacity, hospitality and multifunctionality,
kinds of investments provide an opportunity
they can now happily compete with the sport
to
stadiums of neighbouring countries.
improving fan experience. Consequently,
increase
fan
satisfaction
through
increased fan satisfaction can potentially lead Despite these major improvements, it is still
to higher attendances. Moreover, thanks to
necessary to invest in projects to improve
the investments and the extra hospitality
the remaining substandard French stadiums.
that comes with it, new fan segments can be
The four new stadiums that were constructed
attracted.
and the five stadiums that were renovated now play an important role in serving as
ESSMA
Sources
13/03/2017
La commission EURO 2016. (2016). Le Rapport Grands Stades EURO 2016. CDES. (2014). Impact économique et social: économie, héritage social, sportif et territorial. Etude ex ante. CDES. (2016). Etude sur l’impact économique de l’EURO 2016.
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