Document Ref: CG/1
Proof of Evidence
of
Chris Green BSc MA MRTPI
Town & Country Planning Act 1990, Section 78
Appeal by Arsenal Football Club
Emirates Stadium – Music Concerts
Appeal Reference: APP/V5570/A/13/2202521
LPA Reference: P2013/0392/S73RC
October 2013
Document Ref: CG/1
Contents
1 Name and Qualifications ...... 1 2 Context ...... 2 3 Impact of concerts ...... 4 4 Economic impact assessment approach...... 7 5 On-site impact ...... 11 6 Off-site impact ...... 17 7 Overall economic impact ...... 23 8 Wider impact ...... 27 9 Summary of findings ...... 34
Document Ref: CG/1
1 Name and Qualifications
1.1. My name is Christopher Charles Green. I hold the degrees of Bachelor of Social Sciences, University of Bristol, and Master of Town and Regional Planning, University of Sheffield. I have been a Member of the Royal Town Planning Institute (RTPI) since 1978.
1.2. I am Chief Executive of SQW Group Limited, which is the parent company of SQW Limited, Oxford Innovation Limited and Oxford Innovation Services Limited. The Group has approximately 240 employees. In addition to my role as Chief Executive, I work part of my time as a director with SQW, an economic consultancy, leading projects in a variety of areas concerned with economic development. SQW employs approximately 40 consultants, and works throughout the UK and internationally from offices in London, Manchester and Edinburgh.
1.3. I have worked at the interface between economic development and planning for the last 35 years, including 10 years in local government in England and Australia, and 25 years in private consultancy. As an economic consultant with an understanding of planning, I have advised a wide range of clients, including developers, land owners, central and local government, local enterprise partnerships, universities and international agencies such as World Bank.
1.4. I have undertaken economic impact assessments of projects, programmes and events throughout the UK. I am based at SQW’s London office and have worked extensively on projects in and around the capital throughout my career.
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2 Context
2.1 In September 2013, SQW was commissioned by Arsenal Football Club to undertake research on the economic impact of concerts held at the Emirates Stadium, to inform an appeal against a decision by Islington Council to refuse permission to increase the number of concerts from three to six per year. In 2013, three concerts were hosted at the Emirates Stadium, two Muse concerts in late May and one by Green Day at the start of June. These three events attracted over 140,000 people.
2.2 This proof of evidence assesses economic impact at three geographic levels: the local area (Islington), Greater London and the UK. Calculations are based on estimates of expenditure provided by the concert organisers, estimates of off-site expenditure using secondary data and feedback from local businesses on the scale of off-site impact at the local level.
2.3 The research has involved: a desk-based review of other relevant research on the impact of music events and other cultural/ sporting events; consultations and data gathering with the event organisers, SJM Concerts, and Arsenal F.C.; consultations with key local suppliers; a survey of local businesses and a survey of pop-up businesses.
About SQW
2.4 SQW is a leading independent UK consultancy specialising in economic and social development. Economic impact assessment is one of our core areas of expertise. The firm has over 25 years’ experience of undertaking ex-post and ex-ante economic impact assessments working with a diverse set of clients including central government departments, local authorities, universities and property developers. Our approach to economic impact is informed by HM Treasury guidance.
2.5 Assessing the impact of sporting, cultural and other events and facilities is a particular strength. Our experience includes assessing the economic impact of the proposed Magnet Centre in Oxford (a national science based visitor attraction), the Edinburgh Festivals, the G8 Summit, the cycling Tour of Britain, the Glasgow Commonwealth Games, the Birmingham Festival and the new V&A Gallery in Dundee. We have also assessed the impact of horse-racing at Newmarket, the Formula One Grand Prix at Silverstone and valued the impact of golf tourism to Scotland.
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2.6 In terms of infrastructure projects, our experience includes an economic impact assessment of Glasgow Prestwick Airport, an economic appraisal of Lancaster Science Park and impacts of new university research facilities in Manchester, Warwick, Edinburgh and Glasgow. In addition, we have assessed the impact of broadband infrastructure for local and central government and the socio-economic impacts of offshore wind-farm developments for the large energy firms. These types of studies all involve considering the additional economic activity that is being generated by a project, event or new facility in different geographic areas.
2.7 SQW was supported on this project by Qa Research, who undertook the survey of local businesses using a questionnaire designed by SQW. Qa Research is an experienced independent market research company, established in 1989 (www. qaresearch.co.uk). SQW has a long term working relationship with Qa Research and uses them frequently for business and other surveys.
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3 Impact of concerts – published research
Headline figures
3.1 UK Music which represents the UK music industry published research in October 2013 which underlines the importance of music concerts and festivals to the economy. The ‘Wish You Were Here’ research1 estimates that £1.3 billion is spent directly by 6.5 million music tourists annually in the UK. Taking into account the wider supply chain impact or indirect expenditure, the total rises to £2.2 billion. The study defines ‘music tourists’ by the distance travelled to the event, and estimates that 41% of audiences are music tourists. If someone travelled three times the average commuting distance to go to a concert they were considered a music tourist.
3.2 The research provides a breakdown of figures for different parts of the country and the headline statistics relating to London are provided in the table below. With 1.8 million music tourists, London receives 28% of all music tourists in the UK total. These tourists spend £322 million on concerts and festivals which is a quarter of the total expenditure. A relatively high proportion of music tourists in London are from overseas: 11%, compared to the UK average of 6%.
Table 3-1: Economic impact of music tourism in London Number % of London total Spending Total number of music tourists 1,797,000 100% £322m
Overseas music tourists 194,000 11% £123m
Domestic music tourists 1,603,000 89% £199m
Concert tourists 1,622,000 90% £242m
Festival tourists 176,000 10% £80m Source: UK Music/ Oxford Economics (2013) 3.3 The Mayor of London, Boris Johnson, responded to the publication of the report by stating:
“the music industry is hugely important to our economy, but also to how visitors perceive our country. London is right at the heart of this dynamic sector……... As this excellent report shows, a rocking £322 million was spent by music tourists in the capital last year, proving that London remains a mecca for music lovers the world over.”2
1 UK Music/ Oxford Economics (2013), Wish You Were Here – Music Tourism’s Contribution to the UK Economy 2 http://www.standard.co.uk/news/london/gigs-bring-300m-boost-to-london-8874191.html?origin=internalSearch
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Breakdown of expenditure
3.4 The UK Music research provides figures on different elements of music tourism spending. This is set out in the table below including the relevant percentages. These figures are based on a range of sources including the AIF (Association of Independent Festivals) Survey. As a result the average spend figure of around £220 is quite high as it takes into account the spending of festival attendees who can spend up to four days at events. The important aspect in relation to our subsequent calculations is the breakdown of expenditure in percentage terms.
3.5 Just under half (47%) of spectator expenditure is made on-site. The off-site expenditure is then split in terms of accommodation, travel, ‘off-site’ spend (which we assume to be food and drink) and other. This breakdown of off-site expenditure is used in our calculations of economic impact of concerts at the Emirates Stadium.
Table 3-2: Breakdown of music tourism expenditure Domestic tourist Local spectator Foreign tourist Weighted average Value % Value % Value % Value %
Accommodation £36.7 16% £12.9 10% £129.5 27% £35.8 16%
Travel £45.0 19% £13.1 10% £191.9 40% £44.8 20%
Onsite spend £112.1 48% £75.7 59% £113 23% £104.3 47%
Offsite spend £26.9 11% £12.2 10% £26.0 5% £23.7 11%
Other £13.8 6% £13.8 11% £21.7 5% £14.2 6%
Total £234.5 100% £127.7 100% £482.1 100% £222.8 100% Source: SQW analysis of UK Music/ Oxford Economics data Other concerts – breakdown of spectator spend
3.6 There are very few impact assessments of comparable events for which figures on the breakdown of expenditure are available. We identified three impact studies which provided such information: a Bruce Springsteen concert in Melbourne Australia; an Usher concert in South Africa; and the MTV Awards in Scotland. Although the categorisation of expenditure varied somewhat (see Annex, bound separately), the proportions spent on different things did not differ substantially from the breakdown in Table 2-2. One interesting fact about these other studies is that some other categories of spend were identified which were not explicitly covered in our assessment of concerts at the Emirates. These included ‘other entertainment’, and ‘souvenirs’. These formed a small proportion of the total, therefore we are confident
5 Document Ref: CG/1 that our analysis has captured most spend, but it is likely, if anything, to under- estimate total spend.
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4 Economic impact assessment approach
4.1 The purpose of an economic impact assessment is to assess the scale of additional economic activity. It can be measured in terms of additional sales or output, employment or Gross Value Added (GVA)3. This type of assessment is usually undertaken to measure the impact of a facility, attraction or sporting or cultural event. In this case, we are considering the impact of music concerts at the Emirates Stadium.
4.2 The starting point is to quantify the total amount of spectator expenditure associated with the event. We also need to consider the expenditure incurred in organising the event. In order to track this expenditure through to assess the net economic impact there are a number of factors to take into account.
Displacement
4.3 Displacement relates to the spending by spectators at the concert and off-site before and after the event. Displacement measures ‘the extent to which the benefits of a project (in this case, a concert) are offset by reductions of output or employment elsewhere’4. In the context of measuring the impact of a tourism attraction or event, this relates to simply moving economic activity from one place to another. The traditional assumption in economic impact assessments is to discount the spending of local residents. However, in the case of concerts there is an argument that not all of the spending is displacement. Arguably, if local residents did not spend their money going to a concert at the Emirates they would not spend the same amount on other things locally. They may, for example, spend some of it going to a concert elsewhere in London, or elsewhere in the UK. In our calculations we have assumed that displacement accounts for 50% of Islington residents’ spend and 75% of London residents’ spend.
4.4 In order to assess displacement we need to know where people attending the concert are coming from. A previous analysis of the economic benefits of concerts at the Emirates included a breakdown of where tickets for the three 2013 concerts were purchased5. Taking an average across the three events, nearly half (47%) were purchased in the Greater London area with a further 13% from the South East. Around 5% of tickets were purchased from outside the UK.
3 GVA is essentially the difference between input costs and output prices 4 HM Treasury (2003), The Green Book - Appraisal and Evaluation in Central Government 5 Savills (2013), Emirates Concert Application – Benefits of Music Concerts
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Table 4-1: Location of ticket purchase for Emirates concerts Location of purchase Muse - 25/5/13 Muse - 26/5/13 Green Day - 1/6/13 Average Greater London 51% 52% 39% 47%
Scotland 1% 1% 2% 1%
North East 1% 1% 2% 1%
Yorkshire 1% 1% 5% 2%
East and surrounding 8% 7% 9% 8%
South East 14% 13% 12% 13%
North West 1% 2% 5% 3%
Midlands and surrounding 3% 3% 7% 4%
Wales and Borders 3% 2% 4% 3%
South West 12% 11% 11% 11%
Other 5% 7% 4% 5%
Total 100% 100% 100% 100% Source: SJM Concerts 4.5 Using Table 4-1, we know roughly the proportion from the London area, but it does not provide an estimate of Islington residents. In the absence of any actual data, we have looked at the population of Islington as a proportion of Greater London which is 3%. However, since the event is actually taking place in the area, it is assumed that a slightly higher than average proportion of residents will be attending. We have therefore assumed 5% of the audience is from the local area.
Table 4-2: Estimating proportion of Islington residents at Emirates concerts Number and % Population of Islington 211,047
Population for Greater London 8,308,369
Islington as % of Greater London 3%
Assumed proportion of Emirates audience 5% Source: Office for National Statistics, SQW analysis 4.6 Using the figures above, it is therefore assumed that 5% of the audience are from the local area, just under half (47%) are from Greater London as a whole, and 95% are from the UK. When taking account of displacement, the impact at the Islington level discounts half of the spending by local residents. Similarly, the London level impact does not include 75% of the spending by London residents.
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Table 4-3: Geographic breakdown used to assess displacement Geography Proportion of Emirates Stadium concert audience Islington 10%
Greater London (incl. Islington) 47%
UK (incl. London) 95%
Overseas 5% Source: SQW analysis Additionality / deadweight
4.7 Another key consideration is additionality (the opposite of deadweight i.e. what would happen anyway). At the local level, the Emirates Stadium is the only possible venue for large scale concerts; such concerts could not take place elsewhere in Islington. At this geographic level, the additionality is 100%.
4.8 As already discussed, London has a global reputation in the music industry and has a number of venues capable of hosting large concerts (in addition to the Emirates, this includes Wembley Stadium, Twickenham Stadium, and the Olympic Park). Therefore if the concert did not take place at the Emirates it could take place at another venue in London (subject to availability). As a result, concerts at the Emirates are deemed to be 50% additional to London.
4.9 At the UK level, it is likely that even if concerts did not take place at the Emirates they would still take place somewhere in the UK. The event organiser highlighted a recent example where one of their acts wanted to play in the London area but since none of the city-based venues were available, they decided to play at the National Bowl at Milton Keynes. The additionality factors used in the analysis are set out below and are based on feedback from SJM Concerts.
Table 4-4: Additionality assessment Geography Additionality Explanation If the concert did not take place at the Emirates, it would not take place elsewhere in Islington. The event is therefore 100% additional Islington 100% to Islington.
If the concert did not take place at the Emirates, there is an equal chance of it taking place elsewhere in London or outside London. London 50% Additionality is therefore assumed to be 50%
If the concert did not take place at the Emirates, it is highly likely that it would still take place somewhere in the UK. Additionality is UK 0% estimated to be 0% Source: SQW, based on discussions with SJM Concerts
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Supply chain impact
4.10 Economic impact assessments also need to factor in the supply chain impact in terms of indirect and induced effects. An increase in demand for local goods and services results in increased demand for their suppliers and further down the supply chain. This is the indirect effect. The increase in direct and indirect output helps to create employment which in turn increases household income and a proportion of this will be spent in the local economy. This is known as the induced effect. The scale of the multiplier impact is lower for smaller geographic areas.
4.11 There is no readily available examples of London based multipliers and so we draw on national government (English Partnerships) guidance which suggests that local multipliers tend to range from 1.05 to 1.15, with regional multipliers ranging between 1.3 and 1.76. For the local level we have decided to use a slightly higher value of 1.2. This decision has been informed by the fact that one of the main suppliers, Arsenal FC, spends over 20% on goods and services in the local economy. Due to the scale of Greater London, we think it is appropriate to use a relatively high multiplier of 1.7.
Table 4-5: Local and regional multipliers Geography Multiplier range Local/ neighbourhood level 1.05 – 1.15
Regional 1.3 – 1.7 Source: English Partnerships
6 English Partnerships (2008), Additionality Guide – A standard approach to assessing the additional impact of interventions
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5 On-site impact
Emirates concert ticket sales
5.1 The first and most obvious area of on-site impact is through ticket sales. Three concerts have taken place at the Emirates Stadium in 2013. The combined attendance at the two Muse concerts on the 25th and 26th May was just under 86,000. The Green Day concert had an audience of around 58,000. The average was therefore around 48,000. Ticket sales across the three concerts generated £7.7 million meaning the average ticket sales was £2.6 million per concert. The average ticket price was £53.
Table 5-1: Number and value of ticket sales Concert Attendance Value of ticket sales Muse x 2 (26/5 and 27/5) 85,577 £4.6m
Green Day 58,386 £3.1m
Average per concert 47,988 £2.6m Source: SJM Concerts Event expenditure
5.2 The next area of on-site impact comes from the expenditure of the event organiser. Data provided by SJM Concerts shows the average spend across the three events was just over £1 million. Table 5-2 provides a summary of the main categories of expenditure and an estimation of how much was spent in the different geographies. The largest areas of event expenditure relate to venue rental and staging/site construction.
5.3 It is estimated that around 40% of the event expenditure was made locally in Islington. The main categories of local expenditure are venue rental, catering, police and medical costs and hotels. SJM highlighted that they spent around £15,000 on accommodation at Hilton Islington and Jury’s Inn Islington. A further 30% was spent in other parts of London and the remaining 26% spent in other parts of the UK.
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Table 5-2: Concert promoter expenditure
Expenditure in other Expenditure in local parts of Greater Expenditure in Overseas area (Islington) London rest of UK expenditure Category of Total value expenditure £ % Value £ % Value £ % Value £ % Value £ Catering 70,000 60 42,000 40 28,000 0 0 0 0
Stewarding/ security 85,000 10 8,500 80 68,000 10 8,500 0 0
Staging/ site construction 150,600 0 600 22 33,400 77 116,600 0 0
Crew and site staff 103,000 0 0 100 103,000 0 0 0 0
Hotels 15,000 100 15,000 0 0 0 0 0 0
Hire of field covering, barriers and cabins 90,500 0 0 12 11,000 88 79,500 0 0
Venue rental 350,000 100 350,000 0 0 0 0 0 0
Power 40,000 20 8,000 0 0 80 32,000 0 0
Police and medical costs 35,000 86 30,000 0 0 14 5,000 0 0
Professional services 12,000 17 2,000 0 0 83 10,000 0 0
Marketing/ publicity 83,000 0 0 85 70,550 15 12,450 0 0
Other/ miscellaneous 8,300 60 5,000 0 0 40 3,300 0 0
Total expenditure 1,042,400 44% 461,100 30% 313,950 26% 267,350 0 0 Source: SJM Concerts 5.4 One of the main suppliers to SJM Concerts in organising the music concerts is Arsenal FC. For each of the three events, the club spent around £270,000 on a range of items including stewarding, cleaning, field coverings, police and ambulance costs and Council costs. A summary of the average costs is shown in Table 5-3. Overall, it was estimated by the club that around a quarter (24%) of these purchases were made locally, with a further 25% made elsewhere in London.
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Table 5-3: Arsenal FC concert expenditure
Expenditure in Expenditure in local area other parts of Expenditure in Overseas (Islington) Greater London rest of UK expenditure Category of Total value expenditure £ % Value £ % Value £ % Value £ % Value £
Stewarding/ security 94,000 0 0 50 47,000 50 47,000 0 0
Catering 2,000 100 2,000 0 0 0 0 0 0
Field covering, barriers and cabins 17,000 0 0 50 9,000 50 9,000 0 0
Police and medical costs 35,000 100 35,000 0 0 0 0 0 0
Professional services 12,000 0 0 50 6,000 50 6,000 0 0
Marketing/ publicity 5,000 0 0 50 3,000 50 3,000 0 0
Other/ miscellaneous 5,000 0 0 50 2,000 50 2,000 0 0
Cleaning 21,000 100 21,000 0 0 0 0 0 0
Council costs 7,000 100 7,000 0 0 0 0 0 0
Hospitality 3,000 0 0 50 1,000 50 1,000 0 0
Promoter commission 70,000 0 0 0 0 100 70,000 0 0
Total expenditure 271,000 24% 64,000 25% 68,000 51% 138,000 0 0 Source: Arsenal FC
Examples of suppliers generating impact in the local economy
5.5 As part of the study we spoke to some of the key London-based suppliers involved in the Emirates Stadium concerts held in 2013. The mini case studies below illustrate how these suppliers generated impact on the local economy. The information provided below is based on short consultations with each of the companies.
Catering firm
This company is based in central London and provides on-site catering for film, TV and music productions. It also helps organise and manage back-stage hospitality. It has a core workforce of around 100. For each of the three concerts at the Emirates in 2013, the company was awarded a contract worth around £100k. Around £70k was spent on the purchase of food and drink produce, of which £20k was estimated to have been spent in Islington. The company particularly likes doing concerts at the Emirates because of the wide range of food and drink shops, delis and markets nearby which is not the case with other major venues, the O2 Arena and Wembley Stadium. For the Emirates concerts the firm had around 20 staff working for the whole week of the concert. Whilst all of these staff are based in London the company was unable to say how many are actually local to Islington. Any additional hospitality staff that may be required are sourced directly through the Stadium. This could amount to around 10 staff working solely on show night.
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Local crew company
Based in East London, this company employs 100 people with around 25 based in the Islington area. It provides crew for a range of activities including spotlight operators, stage builders and plant operators. For the Muse concerts the company was awarded a contract worth £50k. Around 30 crew worked for five days (12 hours a day) and this included the 25 locally based staff. It was highlighted that these staff are likely to have spent some of their wages in local shops and pubs after work.
Stewarding company
This company is based in the Greater London area and worked on all of the 2013 Emirates concerts. The first contract for the Muse concerts was worth around £90k and the Green Day contract was £50k. The company supplied stagehands, riggers, plant operators, runners, caterers, drivers, wardrobe assistants, site crew and a Health and Safety Officer. Staffing in the week of the concerts varies with 2 people on the first day up to over 150 staff on the day of the concert. Each staff member works a 12 hour day. Around 90% of the crew are from London, of which 10% come from the Islington area. As well as employing local people, there is additional spend in the local economy. Each day, around 15 ‘runners’ spend money on behalf of the artists in local supermarkets, green grocers, off-licences, launderettes and dry cleaners.
On-site catering
5.6 Another area of on-site impact is generated through spectators spending money on food and drink inside the stadium. All the catering services at the Emirates Stadium are provided by DNC (Delaware North Companies). This represents 250 points of service including the hot dog/ burger kiosks, restaurants and the Diamond Club facilities.
5.7 Based on discussions with DNC we understand that the three concerts in 2013 generated sales of around £1.3 million, meaning an average of around £430,000 for each concert. Based on an average attendance of 48,000 this represents average on-site spending on food and drink of £9 per person.
5.8 On the day of the concerts DNC employ around 1,000 staff. In the week leading up to and following the event, there tends to be around 100 catering staff working at the stadium. It is estimated that around 10-20% of these employees are locally based with all coming from the Greater London area.
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Net additional on-site expenditure
5.9 Table 5-4 sets out three sets of figures relating to on-site impact: ticket sales, event organiser spend and on-site food and drink expenditure. The gross direct expenditure on all three amounts to over £4 million.
5.10 We then discount to take account of displacement (how much would be spent in the areas anyway) and deadweight (the extent to which the concert would go ahead at another venue). This gives us the net additional expenditure figures of £884,000 in Islington and £527,000 in London. As highlighted previously it is assumed that the concert would take place somewhere else in the UK and so there is no additionality at this geographic level.
5.11 Finally, we apply the relevant multipliers (combining the indirect and induced effects) which increases the Islington figure to £1.1 million with London increasing to £896,000.
Table 5-4: Calculating net additional on-site expenditure Islington London UK Gross direct expenditure
Onsite ticket expenditure 2,568,284 2,568,284 2,568,284
Event organiser expenditure 1,042,400 1,042,400 1,042,400
Onsite food & drink expenditure 433,333 433,333 433,333
Sub-total 4,044,018 4,044,018 4,044,018
Net additional expenditure
Onsite ticket expenditure 0 0 0
Event organiser expenditure 461,100 387,525 0
Onsite food & drink expenditure 422,500 139,750 0
Sub-total 883,600 527,275 0
Net direct + indirect expenditure
Onsite ticket expenditure 0 0 0
Event organiser expenditure 553,320 658,793 0
Onsite food & drink expenditure 507,000 237,575 0
Sub-total 1,060,320 896,368 0 Source: SQW analysis
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Employment based approach to ‘on-site’ impact
5.12 An alternative approach to assessing on-site impact is to consider the number of staff and hours required to deliver the event. Through undertaking consultations with the organiser, club and some key suppliers, we can produce some estimates of employment in the week of the event and the concert day itself.
5.13 However, suppliers found it difficult to be certain about how many staff were employed on-site for each event. In order to provide a more complete picture of impact we have therefore focused our analysis on expenditure generated in the economy. For information, the main areas of on-site employment are provided below. Most of these staff worked 12 hours a day.
Table 5-5: Examples of on-site employment from supplier consultations Concert day Other days before and after the event 750 stewards employed by AFC 100 backstage catering staff working for a week 250 cleaning staff employed by AFC average of 30-50 staging crew over the week of 1000 stadium catering staff each concert (but gradually increasing around the time of the event) 100 backstage catering staff average of 20-30 stewards over the week of the 200 staging crew concert 200 additional stewards/ security Source: SQW consultations with suppliers
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6 Off-site impact
Top down approach
6.1 There are two ways to quantify the off-site impact. This is the additional expenditure spent in the local economy as a result of the concert which generates demand for local businesses and helps to sustain or create employment. The first approach involves using secondary data on the proportion of off-site spend relative to the on- site spend.
6.2 As already discussed we already know the average on-site spend from concerts at the Emirates from ticket sales (average of £53 per person) and catering revenue at the stadium (average of £9 per person). The recent UK Music research estimates the average music tourist spends 47% at the site. The research provides estimates of how much of that off-site spend goes on accommodation, travel, food and drink and other. We have therefore used the on-site spend for Emirates concerts to generate estimates of off-site expenditure in these different categories.
6.3 In order to assess economic impact, we then need to assess how much of this off- site spend will be made in the local area, in London and in the UK overall. Without a spectator survey we do not know this level of detail. However, Table 6-1 includes some assumptions. For example, whilst it is fair to assume 100% of accommodation spend will be in London, perhaps only 10% is spent in Islington. Similarly, it is likely that all food and drink spend will be made in London with around 20% spent in Islington (the good public transport connections will make it easier for people to spend in other parts of the city and then come directly to the concert).
Gross direct off-site expenditure
6.4 On the basis of these assumptions, out of total off-site expenditure of nearly £3.4 million for Emirates concerts, it is estimated that around £450,000 is spent in Islington and £2.8 million is spent in London as a whole. These figures are gross expenditure before accounting for displacement or deadweight.
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Table 6-1: Breakdown of off-site expenditure by category and geography
% in % of off- Islington London London UK site % in spend (incl spend spend Area of spend spend Value £m Islington £m Islington) £m % in UK £m Accommodation 30% 1.022 10% 0.102 100% 1.022 100% 1.022
Travel 38% 1.277 10% 0.128 60% 0.766 100% 1.277
Food and drink 21% 0.703 20% 0.141 100% 0.703 100% 0.703
Other 11% 0.383 20% 0.077 100% 0.383 100% 0.383
Total off-site spend 3.385 0.447 2.874 3.385 Source: SQW analysis using UK Music research
Net additional off-site expenditure
6.5 Table 6-1 sets out three sets of figures relating to off-site impact generated by spectators spending in the local economy on transport, accommodation, retail, food and drink and other items. The gross direct expenditure amounts to nearly £3.4 million.
6.6 We then discount to take account of displacement (how much would be spent in the areas anyway) and deadweight (the extent to which the concert would go ahead at another venue). This gives us the net additional expenditure figures of £436,000 in Islington and £927,000 in London. Since it is assumed that the concert would take place somewhere else in the UK there is no additionality at this geographic level.
6.7 Finally, we apply the relevant multipliers (combining the indirect and induced effects) which increases the Islington figure to £523,000 with London increasing to nearly £1.6 million.
Table 6-2: Calculating net additional off-site expenditure Islington London UK Gross direct expenditure 447,049 2,873,889 3,384,803
Net additional expenditure 435,873 926,829 0
Net direct + indirect expenditure 523,048 1,575,610 0 Source: SQW analysis
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Bottom-up approach
6.8 The alternative approach to assessing the off-site impact at the local level involves speaking to the businesses themselves about the difference in their performance when concerts are hosted at the Emirates. SQW sub-contracted Qa Research7 to undertake a telephone survey of local businesses.
Business survey methodology
6.9 Qa Research purchased contact details for all businesses located within 1.5 miles of the stadium in the following sectors: retail; hotels and restaurants; transport; and recreational. These are the sectors most likely to be affected by off-site expenditure. A total of 744 contacts were provided and interviews were completed with 187 local businesses, a response rate of 25%. This level of survey feedback makes the results suitably robust and reliable. The confidence interval for this level of response is +/- 6%, with a confidence level of 95%. The number of businesses in the sample broken down by sector is provided below.
Table 6-3: Sample for business survey
Population Survey sample % Retail 368 97 26%
Hotel and Restaurants 235 49 21%
Transport 30 12 40%
Recreational 111 29 26%
TOTAL 744 187 25% Source: SQW/Qa Research Business Survey
Business impact
6.10 Based on the sample of 187 local businesses, 28% of businesses stated that concerts at the Emirates stadium had a positive impact on their business compared to 10% who stated it had a negative impact. The remaining 62% stated that the concerts made no difference to their business.
7 Qa Research is an experience independent market research company (www. qaresearch.co.uk)
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Figure 6-1: Impact of concerts at the Emirates on local businesses
Extremely positive 12%
Marginally positive 16%
No difference 62%
Marginally negative 7%
Extremely negative 3%
0% 10% 20% 30% 40% 50% 60% 70% Source: SQW/Qa Research Business Survey 6.11 As shown below, most of the 52 businesses that stated positive impact were in the sectors of restaurants and cafes and retail (accounting for 31 businesses). Nearly all of the 19 businesses that stated negative impact were retail businesses.
Table 6-4: Business impact by sector (no. businesses) Positive Impact Negative Impact Accommodation 3 0 Entertainment 2 1 Pubs 7 1 Restaurants and cafes 15 0 Retail 16 17 Transport 8 0 Other 1 0 Total 52 19 Source: SQW/Qa Research Business Survey 6.12 In the survey, business were asked to quantify in terms of sales the difference between a typical summer weekend and a weekend when a concert is hosted at the Emirates. If businesses were unable to recall the concerts which took place in May and June 2013, they were asked about the impact of Arsenal matches at the Emirates on their business and this feedback was used as a proxy.
6.13 Although 52 businesses (28%) stated that there was a positive impact on their business, only 27 were able to quantify the impact. This amounted to around £61,000 (an average of nearly £2,300 per business). There were also 8 businesses that quantified the negative impact, which totalled £8,000. Business were asked to what extent this difference was attributable to the concert and this has been included in the
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calculations. For the sample the economic impact (positive less negative) was around £53,000. Extrapolating this figure to the population of 744 businesses within 1.5 miles of the stadium (within the relevant sectors), suggests off-site expenditure of around £213,000.
Table 6-5: Economic impact data from business survey Number/ value £ Sample 187
Population 744
Number quantifying positive impact on sales 27
Additional sales 61,376
Number quantifying negative impact on sales 8
Reduction in sales -7,900
Net impact on sales for sample 53,476
Net impact on sales for population 212,760 Source: SQW/Qa Research Business Survey 6.14 In addition, Qa Research also interviewed four hotels based in Islington but beyond the 1.5 mile radius. This included Hilton Islington, Jury’s Inn Islington and Premier Inn Islington. All four hotels reported positive impact and combined they estimated additional sales of £30,000 as a result of a concert at the Emirates.
Survey of pop-up businesses
6.15 Another area of potential off-site impact to be considered is the sales generated by pop-up businesses. These are the stalls and vans which set up around the stadium selling food and drink and concert merchandise. Islington Council issues licences to such vendors for Arsenal football matches, but has refused to do so for concerts. There is therefore no income from this source relating to concerts. However, we wanted to assess what the income could be if licences were granted as for football matches. We therefore undertook a small survey of operators at the Arsenal home match against Norwich City on 19th October.
6.16 In the area around the stadium (concentrating on Drayton Park and the main routes to and from the railway/ tube stations), there were around 25 pop-up businesses. Short interviews were carried out with 10 of these businesses and four were willing and able to quantify the sales generated on match day. The takings ranged from £200 up to £600. Assuming these figures are representative of the 25 overall, this would mean overall income of £10,000. This figure has been excluded from the overall impact calculations, because of the situation regarding licences for concerts.
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Table 6-6: Economic impact data from survey of pop-up businesses Number/ value £ Sample 10
Population 25
Number quantifying positive impact on sales 4
Additional sales £ 1,600
Additional sales for population 10,000 Source: SQW/Qa Research Business Survey
Net additional off-site expenditure
6.17 Combining the impact from the business survey and from the hotels generates gross direct expenditure of over £240,000 in Islington. After taking into account displacement, deadweight and supply chain impacts, the net additional off-site expenditure in Islington is estimated to be around £261,000. This is shown in Table 6-7 along with the off-site estimates for London and the UK which have not changed as they are not affected by the local business survey feedback. For the overall assessment of economic impact we have decided to use the expenditure data generated by the business survey, as the lower of the two sets of figures generated by the top down and bottom up approaches.
Table 6-7: Calculating net additional off-site expenditure Islington London UK Gross direct expenditure 242,760 2,873,889 3,384,803
Net additional expenditure 236,691 926,829 0
Net direct + indirect 260,629 2,573,089 361,046 expenditure Source: SQW analysis
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7 Overall economic impact
7.1 We now pull together the estimates of economic impact for on-site and off-site. These are estimates of impact for one concert at the Emirates Stadium. For three concerts, the impact would not necessarily be three times as much: that would depend on various factors, such as timing, the band, and the weather. For example, if two concerts are held on successive days then some set up costs are shared, therefore total spend per concert would be less than if concerts are held on separate weekends. We have therefore focused on the impact of one, standalone concert, rather than try to second guess what would be the impact of multiple concerts, with different timings or differences in other factors.
Summary of economic impact
7.2 Table 7-1 provides the gross direct expenditure figures for each of the areas of spend.
Table 7-1: Gross direct expenditure Islington London UK Onsite ticket expenditure 2,568,284 2,568,284 2,568,284
Event organiser expenditure 1,042,400 1,042,400 1,042,400
Onsite food & drink expenditure 433,333 433,333 433,333
Offsite business expenditure 242,760 2,873,889 3,384,803
Total event-related expenditure 4,286,777 6,917,906 7,428,820 Source: SQW analysis
7.3 Table 7-2 sets out the spend figures after accounting for displacement and deadweight.
Table 7-2: Net additional expenditure Islington London UK Onsite ticket expenditure 0 0 0
Event organiser expenditure 461,100 387,525 0
Onsite food & drink expenditure 422,500 139,750 0
Offsite business expenditure 236,691 926,829 0
Total event-related expenditure 1,120,291 1,454,104 0 Source: SQW analysis 7.4 The final set of figures in Table 7-3 provide estimates of the net additional expenditure including the multiplier effects. The impact in terms of net additional
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expenditure and therefore business output is estimated to be around £1.3 million in Islington and around £2.5 million for London as a whole.
Table 7-3: Net direct + indirect expenditure Islington London UK Onsite ticket expenditure 0 0 0
Event organiser expenditure 553,320 658,793 0
Onsite food & drink expenditure 507,000 237,575 0
Offsite business expenditure 284,029 1,575,610 0
Total event-related expenditure 1,344,349 2,471,977 0 Source: SQW analysis Net additional GVA
7.5 Using the above figures it is possible to calculate the amount of net additional GVA and employment which is being generated by this additional economic output. Using Annual Business Survey data from the Office for National Statistics we can look at the value of turnover and GVA for the sectors most relevant to the categories of expenditure or output. The ratios are presented in the table below.
Table 7-4: Turnover to GVA ratios for London Approx. gross value Total added at basic prices Turnover to turnover £m (GVA) £m GVA ratio Electricity, gas, steam and air conditioning 14,489 3,699 26%
Construction of buildings 14,627 5,575 38%
Retail trade, except of motor vehicles and motorcycles 61,648 11,914 19%
Land transport and transport via pipelines 10,623 4,304 41%
Accommodation 4,452 2,523 57%
Food and beverage service activities 13,109 6,759 52%
Professional, scientific and technical activities 81,660 45,372 56%
Advertising and market research 21,874 8,060 37%
Rental and leasing activities 4,708 3,334 71%
Security and investigation activities 2,349 1,762 75%
Human health 2,924 1,694 58%
Sports activities and amusement and recreation activities 4,503 1,801 40%
Other personal service activities 3,452 1,704 49% Source: Office for National Statistics, Annual Business Survey – 2011 data
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7.6 These turnover to GVA ratios can then be used to estimate the GVA generated by the different categories of on-site and off-site expenditure for one concert. At the Islington level, this is estimated to be around £665,000. For London the figure is nearly £1.2 million.
Table 7-5: Net additional GVA Islington London Net additional expenditure (including multipliers) 1,344,349 2,471,977
Net additional GVA 665,486 1,163,985 Source: SQW analysis Net additional employment
7.7 Using the same set of turnover data from the Annual Business Survey and employment data from BRES (Business Register and Employment Survey), it is possible to calculate average turnover per employee figures which can then be used to translate the net additional expenditure into jobs. The turnover per employee data for relevant sectors is provided below.
Table 7-6: Turnover per employee estimates for London
Sector Turnover per employee £ Electricity, gas, steam and air conditioning 1,976,941
Construction of buildings 308,710
Retail trade, except of motor vehicles and motorcycles 166,675
Land transport and transport via pipelines 127,159
Accommodation 70,709
Food and beverage service activities 53,308
Professional, scientific and technical activities 153,625
Advertising and market research 149,465
Rental and leasing activities 288,852
Security and investigation activities 41,193
Human health 11,543
Sports activities and amusement and recreation activities 83,382
Other personal service activities 85,405 Source: Office for National Statistics, Annual Business Survey – 2011 data 7.8 It is estimated that the net additional expenditure in Islington for one concert generates the equivalent of nearly 21 jobs in the local economy. In London as a whole the net impact generates the equivalent of 32 jobs.
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Table 7-7: Net additional employment Number of jobs generated by net additional expenditure Islington 20.8
London 32.5 Source: SQW Analysis
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8 Wider impact
8.1 In this section we consider the wider, more qualitative impact of concerts hosted at the Emirates Stadium. This is informed by feedback from the business survey along with discussions with the promoter and the local Chamber of Commerce.
Business survey feedback
Business impact
8.2 As highlighted previously, the survey of local business showed that over a quarter (28%) stated the concerts had a positive impact on their business, 10% stated a negative impact and the remaining 62% said that the concerts made no difference. The location of those businesses that stated either positive or negative impact is shown in Figure 8-1. As would perhaps be expected there is a pattern of businesses located along Upper Street and Holloway Road which stated there was a positive impact.
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Figure 8-1: Location of businesses reporting impact from concerts at the Emirates8
Source: SQW analysis of Qa Research Business 8.3 In the survey, businesses were asked to explain the reasons for their response. Those which provided a positive response generally focused on the additional footfall generated by the concerts. Some of the comments included:
“… the area becomes very busy and there are lots of people visiting the restaurant and the area generally”
“there's extra trade in the area - we get 35% more on days of concerts”
“we have more customers come for a meal before the event”
“when we know an event is on, we open up especially as we are normally closed on weekends - extra business!”
8 Note: some businesses share the same post-code
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“we’re not as busy as we would be if there was a game - still busier than a regular day, but not as busy as match day”
whenever there are events at the Emirates it keeps Upper Street busy, which means we get busier”
8.4 Those who provided a negative response focused on the disruption caused by extra traffic and lack of parking, which led to fewer customers. Some of the negative comments included:
“whenever there is anything going on at Arsenal, there are parking restrictions which put people off from going into the area”
“they shut the tube station nearest to our store an hour before and after, and the place is dead. People don't walk to the tube near to our store when they know an event's on”
“a lot of people stay away if they know there is something on, due to the parking restrictions. This leads to a lower footfall for this business”
Community impact 8.5 Businesses were also asked to assess the impact of concerts at the Emirates stadium on the local community (as opposed to just their business). The response was more positive with over half of businesses (51%) stating they believed the concerts had a positive impact on the local community compared to 13% who thought it had a negative impact. Just over a third (36%) believed it made no difference.
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Figure 8-2: Impact on local community – view of businesses
Extremely positive 22%
Marginally positive 28%
No difference 36%
Marginally negative 9%
Extremely negative 4%
0% 5% 10% 15% 20% 25% 30% 35% 40% Source: SQW/Qa Research Business Survey 8.6 Similar to the views on business impact, most of the positive responses on community impact came from businesses in the retail and restaurants and cafes sectors. Comparing the two sets of results, more retail businesses consider that the concerts are positive for the community than those that consider it is positive for their own business.
Table 8-1: Community impact – business sector (no. businesses) Positive Impact Negative Impact Accommodation 3 1 Entertainment 12 4 Pubs 6 2 Restaurants and cafes 19 2 Retail 44 12 Transport 6 3 Other 5 0 Total 95 24 Source: SQW/Qa Research Business Survey 8.7 Once again, businesses were asked for comments to explain their response. Some of the positive comments included:
“for all the businesses that provide drink, food, transport and anything else relevant to fans, this is a very good thing and therefore benefits the entire community”
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“it’s good to see more people around – the people going to concerts are more polite and respectful than football fans. People also spend more with local businesses”
“anything that brings a buzz to the area is good for the community”
8.8 Examples of comments from those who stated a negative impact on the community included:
“it's not so good for residents because the area gets packed with extra traffic, the station get closed so it's hard to get anywhere and hard for people to get back home if they live locally”
“it disrupts the entire area - there's nowhere to park and no locals leave the house.”
“there tends to be a lot more people drinking and hanging around which is bad for security.”
Suggested improvements to generate more local benefits 8.9 At the end of the survey, businesses were asked for suggested improvements to ensure the concerts generate more local benefits. Most of the feedback concerned better promotion for local businesses and trying to resolve the parking issues which are inconveniencing local residents and businesses. A selection of the comments are provided below:
“just put on more concerts as they will generate more revenue for local businesses”
“better promotion for local businesses at stadium”
“make sure there's enough policing so it feels safe”
“businesses could liaise more with the stadium, offer deals through the concert (e.g. discount or special deals when showing a concert ticket)”
“the parking is a problem - when there's a concert on, the council class it as a match day which restricts parking in the immediate area which is unnecessary, concerts aren't the same as football matches, they don't effect or make the same traffic problems as football matches do. The council have
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to treat them differently, otherwise it does affect our trade as locals can't come into the area with their cars”
“stations need better access to them to stop overcrowding, this is so people know that it won't take them long to jump on the tube therefore they could check the area out and maybe go for a meal instead of rushing to get the tube”
“use local businesses to supply services to the events”
“could provide licences to allow local businesses to trade on the street, to create more of a buzz”
“let everybody know when something's happening - I had no idea when there was an event on, and especially for food and drink retailers, it would be useful to know”
Chamber of Commerce view
8.10 As part of the study, we consulted with the President of the Islington Chamber of Commerce. His view was that hosting concerts at the Emirates Stadium is likely to generate benefits for local businesses through increased footfall for restaurants, hotels and bars. It was suggested the main areas likely to benefit most are along Holloway Road and Upper Street.
8.11 Although he had not attended any of this year’s concerts he does regularly attend football matches and can see local businesses thriving. He sees the Emirates Stadium as one of the main attractions in terms of bringing people and spending into the area and believes an increase in the number of concerts would be beneficial for Islington. Although he recognises the concerns of local residents and businesses about disruption caused by major events at the stadium, he believes the economic benefits far outweigh the inconvenience that is caused.
Wider importance to London as music city
8.12 The focus of this study has been on the quantitative impact of hosting concerts at the Emirates Stadium. However, it could be argued that there is wider importance for London as a whole of having more capacity to host large scale concerts. The UK Music research emphasised the value of music tourism to London and the strengths
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of the industry globally. In order for London to grow as a global music city, it needs to have sufficient venues of scale which can continue to attract the biggest acts.
8.13 This point was reinforced in discussions with SJM Concerts which highlighted the importance of being able to offer music acts a range of venues. It was stated that generally artists prefer to play different venues when they come back for a new tour. For example, if on one tour a band played Wembley Stadium, next time round it is likely that they will prefer to play another venue for their London dates.
8.14 For London to be able to continue attracting these acts, there needs to be sufficient capacity at the venues such as the Emirates, Wembley Stadium and Twickenham Stadium. Indeed, for many acts, the Emirates is viewed favourably compared to the other stadia because of its central location with particularly good public transport connections by tube and mainline rail into London.
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9 Summary of findings
9.1 The headline findings from our study are set out below.
Key results from economic impact assessment
9.2 It is estimated that one concert held at the Emirates Stadium generates gross expenditure of £7.4 million taking into account ticket sales, event expenditure, on-site food and drink expenditure and off-site expenditure.
9.3 The net additional expenditure including multipliers at the local level in Islington is estimated to be around £1.3 million. At the London level, it is estimated to be around £2.5 million. There is no impact at the UK level since the concert would probably go ahead somewhere else anyway.
9.4 The net additional GVA impact of one concert in Islington is £665,000 and in London this figure increases to £1.2 million. The number of jobs generated by this additional economic activity in Islington is judged to be around 21. In London as a whole, the impact is estimated to be 32 jobs.
Key findings from the local business survey
9.5 A survey was undertaken of businesses in relevant sectors located within 1.5 miles of the Emirates Stadium. Out of 744 contacts the survey covered 144 businesses, a response rate of 25%.
9.6 28% of businesses stated that there was a positive impact on their business and 19% were able to quantify the impact. This amounted to around £61,000 (an average of nearly £2,300 per business). One in 10 businesses stated that the concerts had a negative impact on their performance with 5% quantifying the impact which totalled £8,000.
9.7 Businesses were more positive in terms of perceived community impact. Over half of businesses (51%) believed the concerts had a positive impact on the local community compared to 13% who thought it had a negative impact. Just over a third (36%) believed it made no difference.
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