Planning for a Sustainable Future

SPORT ADVISORY SERVICES Planning for a Sustainable Future

The legacy of sporting venues following major events

kpmg.com Cover photo: Péter Szalmás Planning for a Sustainable Future 3

Contents

1. Introduction ...... 6

2. Appraising recent events...... 8

3. The growing importance of legacy for the International Olympic Committee ��11

4. Formulating the most appropriate venue legacy plan – factors and challenges at play...... 12

5. Creative solutions at London 2012 ...... 16

6. The International Swimming Federation (FINA) is taking the initiative �� 17

7. The case for temporary venues – technical and financial considerations �� 18

8. Emerging themes and conclusion ��22

© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 4 Planning for a Sustainable Future

Dear Reader,

When properly planned and executed, a major sporting event provides a host country or city with the opportunity to promote themselves on a global stage, enhance their economic profile and transform their urban and sporting infrastructure. It is undeniable that the complexities surrounding the hosting of a sport event have increased exponentially in recent years. The sheer volume and needs of the athletes, the demands of the media, the expectations of the spectators, and the technical guidelines and criteria set out by the international federations, governing bodies and rights holders have all contributed to placing a greater burden on the host, be that an individual city or country. Andrea Sartori Global Head of Sport The increased size and scale of sporting events has also inevitably had a direct E: [email protected] effect on the amount of preparation and the monetary investment required in order to stage an event that meets the requirements of all the parties involved. With the level of investment that is needed to stage major sports events, questions regarding the return on investment and the cost-benefit of hosting the event are increasing. Whilst the impact can be seen during the event, the actual length of the event is relatively small, with the focus quickly shifting to the long term return. All events will leave an impact on a host city or country, but all too often this has been negative with the event becoming a burden on the host due to a lack of foresight and planning. There is growing evidence that the learning points from previous major sporting events, both positive and negative, are being embraced by event bidders and organisers. To prove that hosting an event can have a positive lasting long-term net benefit, the term legacy is often used when James Stewart referring to the rationale for hosting a sports event. Chairman of Global Infrastructure E: [email protected] Legacy can take many forms and have numerous types of impact across many areas of society in a host city or country such as social, economic and cultural legacies. Whereas the topic of legacy is wide ranging and complex, the focus of this document is on the most tangible aspects of legacy – the long term impact that major events have on the venues used during the event. © 2015 KPMG2015 International© Cooperative (“KPMG International”), Swissentity.a Member the KPMGfirms of network independent of firms are affiliated with International.KPMG InternationalKPMG providesno client services. No member authority firm any has obligate to bind KPMGor International other memberany or firm vis-à-vis third parties, doesnor KPMG International such authority any have obligate to member any bind or firm. All rights reserved.

Photo: Marcus Bredt Planning for a Sustainable Future 5 No reserved. services. rights client All no firm. provides member any International bind

Due to their tangible nature, and the fact that a sports event cannot take place or without them, the legacy from venues is one of the most heavily debated topics KPMG obligate when discussing the pros and cons of hosting major sporting events. to

In an era of intense scrutiny of the investments made by public bodies, International. authority challenging economic and fiscal environments, and unprecedented media visibility KPMG such any and connectivity, bidding for and hosting a major sporting event requiring the with

construction of a stadium, arena, velodrome, aquatic centre or race track can have often be hard to justify. This is especially true when the possibility of attracting affiliated private sector investment is limited. In such a context, a clear legacy strategy for are International sporting venues, based on an understanding of post event market trends and firms thorough design and planning briefs, is of paramount importance to ensure the KPMG does

long term positive impact of hosting a major sporting event. independent nor of After having studied recent sporting events, both successful and less so, KPMG’s parties, Sports Advisory practice publishes this thought leadership which aims to offer network third

insight into the venue legacy planning associated with major sporting events. KPMG the vis-à-vis We hope you find this document informative and that our insights prove valuable of firm to all stakeholders involved in the bidding, and hosting processes of major sports firms events. member Member

We would like to thank all parties who contributed to this document by providing other entity. any

opinions and insights, based on their previous experience. or Swiss If you would like to discuss the findings of this study or better understand our a

competencies in the sports industry, please contact us. International International”), Yours sincerely, KPMG bind or

Andrea Sartori and James Stewart (“KPMG obligate to Cooperative authority any International has firm KPMG 2015 © member 6 Planning for a Sustainable Future have International KPMG KPMG

does 1. Introduction International. nor KPMG parties, with third 1.1 Placing legacy at the forefront of the sporting venue planning process affiliated vis-à-vis are

firm Whilst the development of any sports Numerous parties are involved in the venue post-event, are crucial steps to firms venue – be that a football stadium, multi- development of a project as intricate understanding the long term economic

member purpose arena or aquatic centre – is a as newly-built or reconstructed sustainability of a project. Quality other independent complex process, key project phases, sporting infrastructure. Due to the high work done in the preliminary stage of any

or from initial vision to the grand opening complexity and the breadth of technical should maximise the chances of a

network of the facility and subsequent operation, skills required, it is of paramount concept being successfully developed can be identified. Progressing from one importance to engage specialist and and transferred into the design, KPMG International phase to another may only be possible experienced personnel and consultants construction and operation phases. the of

KPMG if previous phases have concluded during the various phases of a One interesting element that is firms bind with positive results, and commitment project. This will support the timely or unique to major event related sports on behalf of all stakeholders has been implementation of the process phases

Member infrastructure is the timing aspect.

obligate made to go forward. within budget and according to set to The start date for a major sports event entity. standards and project objectives. Depending on the complexity of the is fixed and usually non-negotiable. Swiss authority a reserved. project, its size, and the legal and In the context of the development This may impact on the speed at which any

rights administrative framework within which process of new venues for major the development process moves and has All

firm the project is taking place, the entire sports events, the planning, feasibility the decisions that need to be made. firm. International”), development process can span several and the legacy strategy phase is It may also necessitate the shortening

member years. Strict planning of the interlinked crucial to guarantee the long term of the development process which member No (“KPMG

any activities is required in order to make sustainability and success of the highlights the importance of doing as

bind the development efficient and effective, proposed project. much research and analysis up-front as services. or

Cooperative and to ensure maximisation of the possible to ensure risk is minimised in client Research to understand the market in no

obligate opportunities is achieved. This process the subsequent phases.

to which the venue will operate and the depends on the efficiency of the International

provides expected demand and supply trends, planning phase, project management authority financial analysis and assessment of KPMG capabilities, continuous flow of financing such the legacy strategy of the proposed 2015 International © any and complexity of the construction.

Photo: Mike Schmuker Planning for a Sustainable Future 7

Understanding the process: Key phases, milestones, timings and the main professionals involved

5a. Operation with same conﬁguration (Ongoing)

1. Project 2. Planning, 3. Permitting 4. Construction 5b. Rescaling & vision feasibility, & design (12-30 Phases of operation (Ongoing) legacy (8-24 months) the project strategy months) 5c. Operation for (3-6 months) different use (Ongoing) 5d. Demounting

Stakeholder analysis

Legacy framework development

Feasibility assessment • Market • Financial • Technical t • Legal en

Activities ev involved Project ting conceptualization Spor Permitting

Design

Financing

Construction

Stadium management

Project management

Market & Financial advisors

Legal advisors Main professionals Architect, urban planner & engineer involved Other professionals*

Contractor

Operator

*Other professionals include: landscape consultants, security/ﬁre safety consultants, access consultants, pitch consultants, computational ﬂuid dynamics consultants, lighting and acoustic consultants, waste management consultants, marketing & PR specialists, etc. Source: KPMG Sports Advisory analysis, 2015 © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 8 Planning for a Sustainable Future

2. Appraising recent events

2.1 Venue legacy and the introduction of temporary facilities into the venue mix Although there are some historical event capacity better suited the While the organisers of the Sydney examples of efforts to create and demand for the New South Wales and Athens Olympic Games made execute a venue legacy plan from Waratahs and New South Wales some efforts to try to utilise some of major sports events – most notably Arrows, the co-tenants of the facility; the venues after the event, assembling reconfiguring the Olympic Stadium used a robust, credible and viable legacy 3. Converting a sporting venue into in the 1996 Atlanta Olympic Games into plan for the usage of all venues after another use that better suits the the home venue for the city’s baseball a major sporting event is not always local market conditions. For example team – until around the turn of the new a straight forward task. Sometimes at the 2004 Athens Olympic Games, millennium the most appropriate options it is just not possible to identify a to better serve local demand, the for venue legacy following major sports usage plan that will satisfy the key Goudi Olympic Hall – which hosted events consisted of three methods: stakeholders involved. In such a the badminton competition and was context, one solution is the use of 1. Keeping the venue as it is and built specially for the Games – was temporary facilities. expecting the demand to be converted into a multi-use facility sufficient to sustain the facility. featuring an auditorium that can In terms of the Olympic Games, a The Beijing Olympic Stadium was host medium-large scale events. more prominent use of temporary kept intact after the event and will To commemorate its original use, facilities was introduced into the venue serve as the main stadium of the the facility was renamed The mix by the organisers of the 2008 2022 Winter Olympic Games too; Badminton Theatre in January 2007. Beijing Summer Olympic Games. A total of seven sports utilised 2. Scaling back the capacity of the Despite these efforts, the consensus temporary facilities - beach volleyball, venue to better meet the local view about Athens is that the event BMX cycling, archery, field hockey, demand. For example at the delivered limited results in terms of baseball, triathlon and road cycling. 2000 Sydney Olympic Games the venue legacy. Images from redundant Out of these, five venues were organisers added 7,000 temporary permanent venues post-Games in complete stadiums, while two seats to the existing capacity of Athens are an epitome of the term temporary facilities were assembled on 8,000 of the Sydney Olympic Park ‘white elephant’ and are a reminder public land. Hockey Centre. These were removed of the importance of legacy planning. after the event to ensure the post-

Amount of existing and completely temporary sporting venues used at recent Summer Olympic Games

London 2012 22

Athens 2004 8 Beijing 2008 14

Rio de Janeiro 2016 22

Sydney 2000 9

Source: KPMG Sports Advisory analysis, 2015 *Projected ﬁgures from the bid dossier

The two largest venues in this category nevertheless the use of existing happen overnight. With suppliers were the field hockey and baseball sporting, as well as non-sporting, becoming more innovative and able venues. The former, the Olympic Green venues and the incorporation to replicate permanent stadiums and Hockey Field, had a capacity of 17,000 of temporary and part-temporary arenas with comparable levels of safety seats and was completely demounted facilities into their venue strategy has and comfort, organisers have started after the Games. The Wukesong Sports resulted in the organisers of the London considering the viability of using Centre baseball venue had approximately event being lauded by the event temporary/demountable structures for 15,000 seats and a reported industry. Our analysis of London 2012 major events. We also believe that the development cost of USD 29 million. resulted in the identification of eight lack of financial support from national After the event it was demounted to different types of venue – for more and international public authorities make way for a new shopping mall details see the case study on page 16. for temporary venues also played a development that was deemed more role in the slow acceptance process At Olympic Games level, the shift suitable for the local demand. of these type of facilities. However, towards utilising temporary facilities is with technology advancement, having The temporary facilities trend went expected to continue. At least seven temporary venues as part of the mix further in London 2012 as the number temporary venues will be utilised is now viewed as a sound and well of temporary venues increased to 13, during the 2016 Summer Olympic managed strategy for event legacy. including three completely demountable Games in Rio de Janeiro – of which temporary stadiums/arenas. four will be complete stadiums/arenas. Compared to a permanent solution, a Tokyo is expected to build the same temporary venue, which can be easily London has been congratulated for its number of permanent venues as disassembled once it has served diverse range of venues and putting completely demountable facilities for its purpose, can offer a number of legacy at the top of its agenda. the 2020 Summer Olympic Games. advantages – greater flexibility, reduced Whilst not totally without its challenges, lifecycle costs, shorter construction particularly the elongated period to As can be seen from the timeline timespan and recyclability. definitively decide on the post-Games presented below, the shift towards usage of the Olympic Stadium, using temporary facilities did not

2000 2001 Fukuoka World Aquatics Championship The competition swimming pool was set up on a temporary basis in an exhibition hall and was later disassembled. 2002 2004 Athens Olympic Games No temporary venues were used. The event became a prime example of negative sport venue legacy. 2004 2008 Beijing Olympic Games 2006 The ﬁrst completely demountable venues were utilised at the Olympics Games as nine facilities were demolished after the event. 2008 Announcement of Qatar as the host of the 2022 FIFA (Federation Internationale de Football Association) World Cup The bidders commit in their bid dossier to utilise modular elements and to use those after the event to 2010 develop 22 new stadiums in developing countries. 2012 London Olympic Games 2012 A wide variety of temporary and permanent solutions were used. The event is considered a prime example for well-managed sport venue legacy 2014 2022 Winter Olympic Games bidding phase Several cities pulled out of competition after initially expressing their intention to bid, largely due to the 2016 increasing associated costs, including the unnecessary lifecycle costs of sporting venues

2018 2020 Tokyo Olympic Games The ﬁrst Olympic Games where, expectedly, the same amount of new permanent and completely 2020 demountable venues will be used

Source: KPMG Sports Advisory analysis, 2015

2.2 Why is venue legacy currently in focus? Whilst temporary venues may help South Africa (2010) and Brazil (2014) These actions are claimed to be a potential hosts avoid the pitfalls of are suffering from the limited local reaction to the sizeable and, in some the past, scrutiny of recent high post-event demand. The newly-built views, increasing cost of staging profile events has highlighted the stadiums in Port Elizabeth, South Africa a major sports event, with bidders other challenges surrounding major (46,000) and Manaus, Brazil (41,000) and organisers, and particularly sporting events. are good examples of this. governments, concerned that such large spending could create long term burdens Despite making use of temporary As a result, in these challenging on their cities and countries without a venues, there was intense media market conditions, various host cities robust and viable long-term legacy. focus on the Olympic Games in are facing difficulties in achieving Beijing (2008) and Sochi (2014) acceptable utilisation when operating Given the effect on bidding for the on the multiple billions each city these permanent venues and covering Summer and Winter Olympic Games, spent in order to stage their event. the associated operating costs, which the International Olympic Committee are often a major burden on local public has been the first major federation From a legacy perspective, the institutions. and rights holder to publicly and consequences of the two most recent proactively seek a solution to the FIFA World Cups have called into The knock-on effect of these instances challenges facing cities and countries question the robustness of legacy has seen a negative impact on the who are contemplating staging a planning. After developing large, willingness of cities/countries to bid for major sporting event. state-of-the-art, permanent football major sporting events. Examples on stadiums, certain host cities in this page illustrate this point.

3. The growing importance of legacy for the International Olympic Committee

The International Olympic Committee Legacy plays a key part in Agenda to actively promote the use of existing (IOC) has been increasingly highlighting 2020 with one of the working groups and temporary infrastructure to the importance of legacy since it specifically focused on ‘Sustainability contribute to more sustainable and cost organised a conference on the topic in and Legacy’ and the use of the effective solutions. Furthermore the 2002. term legacy appears in five of the IOC wishes to develop the awareness recommendations, including: regarding temporary infrastructure In 2003 the IOC amended its mission and to promote an earlier engagement statement within the Olympic Charter • At the bidding stage the IOC will with the suppliers market. I would also to state that part of the IOC’s role is ‘consider as positive aspects for a encourage the industry to develop “to promote a positive legacy from bid: the maximum use of existing innovative solutions, and to think about the Olympic Games to the host cities facilities and the use of temporary new reusable large facilities to provide and host countries.” That statement and demountable venues where no more flexibility for organisers.” remains in place. long-term venue legacy need exists or can be justified.’ Although this statement covers legacy in all its guises, the importance of • The IOC will assist in the ‘post- venue legacy was emphasised in the Games monitoring of the Games IOC’s March 2013 publication entitled legacy with the support of the Olympic Legacy: “Permanent venues, National Olympic Committee and built or refurbished for the Games, can external organisations such as the be used extensively for sport once World Union of Olympic Cities.’ the Games have finished, delivering The IOC plans to use the Host City a lasting sporting legacy. Organisers Contract to obligate the organisers to do, however, need to ensure that the inform the IOC of the organisations venues are functional, sustainable and that will monitor post-Games legacy. adequately scoped for legacy use.” • The IOC recommend closer co- However, responding to more recent operation with other sports event concerns, including the withdrawal organisers and highlight that ‘hosting of potential hosts for its showpiece the Masters Games in an Olympic events, the IOC has started taking city could be a very positive legacy measures to try to make bidding for activity, with the reuse of Olympic major events attractive again. The key venues and infrastructure.’ points of the campaign emphasise a • The IOC will ‘encourage and support decrease in the costs of such events National Olympic Committees in which, together with a positive legacy their advocacy efforts to deliver a plan, can demonstrate benefits for a positive legacy of the Games.’ city, without overburdening it when hosting an event that lasts for less than • The IOC state that they will further a month. strengthen the blending of sport and culture between Olympic Games and The most notable recent action by study how to engage and interact the IOC has been the preparation and with ‘global cultural players to build a release of the Olympic Agenda 2020, dynamic legacy.’ which was accepted at the 127th IOC Session in Monaco in December Xavier Becker, the Head of Venues, 2014. The 40 recommendations within Infrastructure & Services at the IOC Olympic Agenda 2020 were promoted further emphasised the importance as the strategic roadmap for the future of temporary infrastructure at a of the Olympic Movement. conference in 2015: “The IOC wants

4. Formulating the most appropriate venue legacy plan – factors and challenges at play

Formulating a venue legacy plan for a major sports Bidding event is rarely a completely competitors straightforward task. There are Event Alternative characteristics site use several factors and challenges, many of which are not Venue Public ownership mutually exclusive, that need sector and intervention to be considered and will likely operation influence the ultimate outcome. We discuss a selection of the Venue issues at play here. Market Rights holder assessment legacy requirements plan

Source: KPMG Sports Advisory analysis, 2015

4.1 Market assessment The cornerstone of a well-thought as the Allianz Arena, for the FIFA World A lack of evidence of any post-event through legacy plan is a detailed Cup 2006. The post-event demand demand and/or extremely challenging assessment of the potential market from football fans in Munich has been market conditions should call into conditions which the venue might such that the venue has been further question whether any of the venues operate in after the event. expanded in terms of capacity. should be permanent and should support the plan to utilise a completely Whilst clearly satisfying the However, if the market analysis demountable facility for the event itself. requirements for staging the particular indicates that the post-event demand event are important, in our opinion, may be weak, and does not justify By way of example, given their time from the outset, event bidders and the existence of the sporting venue’s again, it may be that organisers of the organisers should give high priority to configuration, then a part-temporary most recent FIFA World Cups in South the post-event opportunities for the venue could be the most legacy- Africa and Brazil may have incorporated facility. friendly solution for the event bidders/ a greater use of temporary facilities organisers to adopt. A good example at some of the venues utilised in the The results of this assessment should here is the Aquatics Centre for the competition, due to the lack of post- ultimately be the key driver of the 2012 London Summer Olympic event local demand. configuration of the venue in event Games which removed approx. 15,000 mode. Where the projected long- We recognise that the post-event seats following the Games due to term market demand appears to be market characteristics will not the infrequency of large swimming strong, then a permanent venue would necessarily be the same as they were events requiring such a high spectator appear to be the most appropriate at the time of planning; consequently, capacity. The level of demand for consideration. A good example in this assessment of the post-event market utilisation of the pools meant that regard was the construction of the conditions needs to be regularly these core facilities were retained. Football Arena Munich, better known monitored.

Photo: Populous

4.2 Rights holder requirements The awarding rights for sports events Most importantly, rights holders require Theoretically any legacy requirements are held by a range of organisations minimum spectator capacity. of rights holders should be expressed broadly covering: at bidding stage so that all bidders are It is a view generally held that, over the competing on an equal basis. However, • National governing bodies for a past few years, the requirements set it may be that rights holders downplay single sport, e.g. UK Athletics, out by rights holders have escalated the legacy aspects of a bid, if their Hungarian Swimming Federation; and this has had a direct impact on the objective is to see a permanent venue financial cost of staging an event. • International federations for a single developed. This may put pressure on sport, e.g. International Ice Hockey Whilst the focus of the technical bidders to commit to construct sports Federation (IIHF), FIFA; standards is predominantly on the facilities for an event that may well event itself, when these requirements be under-utilised after the event has • Continental federations for multi- are significantly in conflict with post- finished. sport events, e.g. Commonwealth event market demand, the issue of the Games Federation, Asian Games The rights holders of the major football long term economic sustainability of Federation; and events have yet to formally make a a sport venue often emerges. Hence, statement about the use of temporary • Global federations for multi-sport more attention has to be paid to the facilities for the main stadiums hosting events, e.g. International Olympic venue legacy strategy. the matches of their event. However, Committee. The venue legacy plan will also be there are embryonic signs that these For each major sports event rights influenced by whether, and how, the rights holders are introducing flexibility holders have rigorous requirements rights holder wishes the event to be into their venue requirements. Indeed, concerning the technical standards the remembered. Any preference that the Union of European Football intended venues have to meet in order the rights holder expresses for the Associations’ (UEFA) director of to stage sanctioned events, and to construction of a permanent venue operations division, Martin Kallen, has which the hosts commit. – that either acts as a reminder of stated that whilst demand for venue the event (as in the case of an iconic infrastructure such as media, security, These requirements will impact building) and/or as a potential catalyst logistics, hospitality and fan zones various design aspects of a venue to increase participation in that is increasing from event to event, including, amongst many others, particular sport – should be assessed in temporary infrastructure is crucial for telecommunication standards, venue the context of the development of the the operation of large events. roof solution, facilities for athletes, legacy plan. media and hospitality including VIPs.

4.3 Venue ownership and operation The increasing complexities of bidding venue, the land on which the event venue may be challenging to achieve for and, in particular, the organisation took place, needs to be a consideration without favourable market conditions of major sports events has led to within the venue legacy plan. and without an opportunity to make a corresponding increase in the an appropriate return on investment, Any on-going public sector establishment of specialist teams relative to the risks involved. involvement, be that a state containing specific experts who can government department, local Incentives, for instance through add knowledge and experience to the municipality or quasi-governmental assisting with meeting operating set up and delivery of the event itself. body, in the ownership and operation costs or guaranteeing a certain However, the existence of these teams – of the venue needs to factor in the volume of events, may be required to often referred to by the term “organising market conditions assessment. The attract a private sector organisation. committee” – is limited by the timeline implications of an underutilised venue, The implications of providing these surrounding the event itself, with in terms of a requirement for on-going incentives, and of identifying the dissolution of the organising committee support, might put pressure on the provider, need to be factored into a common once the event is over. public sector organisation itself as well venue legacy plan. as the public taxpayer. This situation If dissolution is the proposed final Conversely, a legacy plan should also might add weight to the case for a part- aspect of the organising committee’s outline how the successful post-event temporary or fully demountable venue. existence, then the post-event transfer operation of a venue should meet the of assets, in this instance the venues Involvement of the private sector in expectations of the venue’s owner themselves or, in case of a demountable terms of ownership or operation of the and/or the public.

4.4 Event characteristics Whilst a single-sport event can be Within a multi-sport event context, the venue legacy plan. In the case of staged within one or two venues, different sports can have similar a city-based multi-sport event the city for example the World Aquatics requirements in relation to the venue itself may be left with several similar Championships and World Athletics that they are staged in, for example the venues located close to each other Championships, the size of the event indoor sports of basketball, handball, and which are more than likely to just itself, particularly the number of teams/ and volleyball. However, due to the compete against each other without an competitors involved or the wear and scheduling conflicts within a time- overarching multi-venue strategy. tear on the playing surfaces could constrained multi-sport event, it may Without evidence that all venues necessitate a larger portfolio of venues. be difficult to host these competitions would be highly utilised, the use of For example, 12 and 13 match venues individually without providing multiple temporary solutions – such as the were utilised for the 2014 FIFA World venues with similar facilities. conversion of existing facilities or Cup in Brazil and 2015 Rugby World In situations where the staging of demountable structures – may be the Cup in England, respectively. sports events requires a number of most appropriate legacy-friendly plan venues with similar characteristics, for the event. this requires careful consideration in

4.5 Public sector intervention Whilst the findings from the market will be asked to share the burden if the facility is limited, the local authorities conditions assessment may support a revenue generating ability of the venue wanted the swimming complex to be certain venue legacy solution, it may is weak. used by both the local community as be decided by the public sector – local, well as to act as a training base for An example of this type of intervention regional or national government – that Azerbaijan’s national teams in the years is the swimming complex used for the an alternative solution might be more following the event. first European Games in Baku in 2015. appropriate to achieve other objectives, Whilst there had been no 50-metre Intangible and broader social benefits for instance in satisfying social and/ swimming pool in Baku before the and considerations may also lead to or community objectives. However, event, the local authorities decided to bidders and organisers developing whilst these objectives are laudable, sanction the building of a permanent permanent venues despite the fact that the financial consequences of such a venue. Whilst the lack of supply may there may appear to be unfavourable choice may be that the local taxpayer suggest that demand for this type of market conditions.

4.6 Bidding competitors or Another factor to consider when permanent sporting venues, compared needs to fit into the long term legacy obligate International developing an appropriate venue legacy to their counterparts, may give them plan in order to be justified. to

plan is the intensity of the bidding an advantage with rights holders. KPMG

Understandably, contemplating this authority competition to win the right to host

Although this may lead to the design type of strategy can lead to debates such the event itself. any

of iconic and state-of-the-art sporting regarding the winning of the rights to International.

The natural reaction of bidders is infrastructures, the decision makers host an event and finding the most have to believe that promising the involved in the bid should not lose sight appropriate legacy-friendly solution. KPMG development of bigger, better and of the fact that choosing this strategy with International affiliated KPMG are does

4.7 Alternative use of the selected sites firms nor The detailed assessment of the market This may promote the use of a an interest in the site. Bidders and parties,

conditions may reveal that on the site demountable structure for the organisers may seek assistance from independent of where the sports venue is planned, there sports event itself. these interested parties with the third is potentially stronger post-event demand hosting of the event in order for them network The venue legacy plan should reflect vis-à-vis

for another use or the development to gain development rights to the site firm

this and the findings may encourage KPMG of a different type of real estate. after the event has been completed. different stakeholders to express the of member firms other any or

4.8 Timing Member

The venue legacy plan needs to be elements is less efficient compared to consequently authorities decided entity. considered at the very beginning of planning the facility in a way that it can to convert the stadium into a multi- International Swiss a

a major sports event initiative and operate in a sustainable manner from purpose venue with a primary sporting KPMG

has to be taken into account at every the outset. focus on football rather than one with bind significant phase leading up to the just track and field capabilities. The or

For example, whilst London has many International”),

actual delivery of the event. stadium’s anchor tenant will be West obligate

plaudits for the 2012 Summer Olympic to

Ham United, a football club located (“KPMG To derive a venue legacy plan during Games, the Olympic Stadium is one in the same London borough as the the project and to try to integrate venue where most critics still focus. authority

stadium. Although, the final solution any

that solution into the concept can The stadium is an example where the Cooperative could be considered as a legacy- has exponentially increase costs and make final solution was settled upon once friendly use for the venue, the decision firm design plans extremely difficult. the development was underway and

was time consuming and the additional International As a consequence, retrofitting existing the venue has had to be retrofitted. member

cost to convert the stadium has No venues or altering developments The original long-term legacy of the KPMG become significant. under construction with legacy-friendly facility was not deemed viable and 2015 © services. All rights reserved.

Photo: Populous 16 Planning for a Sustainable Future

5. Creative solutions at London 2012

In order to decrease the • The second largest category was • Two locations, including the ExCeL temporary facilities located in various Conference and Exhibition centre, number of new sporting public spaces (many providing an were non-sporting venues and were venues to be built for the iconic setting) throughout London, used to host events using temporary Games, the London organisers such as Hyde Park, Greenwich Park stands. Additionally, two temporary and Horse Guards Parade; venues – for basketball and water used various solutions. polo – were built and entirely • Seven venues, including the Olympic According to our analysis, eight dismantled after the Games; Stadium, were built new for the different categories of venue Games, of which three have now • Finally, the aquatics centre was a were used at the 2012 Summer been reconfigured; newly-built venue with additional temporary stands to host the Games; Games. As shown in the chart • The organisers used three existing these stands were removed after sporting venues that did not have below, the London organising the event. Overall, excluding football sufficient capacity to host events stadiums, 13 out of 24 London committee opted to use ten and extended them with temporary Olympic locations were temporary in already existing sporting stands; nature. venues (for six different sports). Six of these ten venues were football stadiums in different parts of Great Britain which hosted the football tournament.

London 2012 Olympic venues by type

Wembley Stadium, The O2 Arena, Existing sports venues 4 +6 Football stadiums All-England Tennis and Croquet Club, Weymouth and Portland Horse Guards Parade, Hadleigh Farm, Temporary facilities at 6 Greenwich Park, Hyde Park, Marathon public locations course, Road cycling course

London VeloPark, Lee Valley White 3 New sports venues Water Centre, Copper Box

Olympic Stadium, London VeloPark New sports venues with 3 different post-event use (BMX), Riverbank Arena

Lord’s Cricket Ground, Dorney Lake, Existing sports venues 3 with temporary stands Royal Artillery Barracks

ExCeL Exhibition Centre, Existing non-sport venues 2 with temporary stands Earls Court Exhibition Centre

Temporary venues 2 Basketball Arena, Water Polo Arena

New sports venues expanded 1 Aquatics Centre with temporary seating 0246810

Source: KPMG Sports Advisory analysis, 2015

6. The International Swimming Federation (FINA) is taking the initiative

One sport that has clearly taken Type of venues used at eight FINA World Aquatics Championships (2001-2015) the initiative in terms of finding 4 legacy-friendly solutions for its 3 major events is swimming. 2 3 Our research found that several 1 22 major swimming events have utilised 1 0 temporary pools and facilities inside Multi-use arenas Other sport venues Existing Purpose built existing sporting and non-sporting swimming pools swimming pools venues. This not only demonstrates that strong emphasis was placed Source: KPMG Sports Advisory analysis, 2015 on the legacy aspects but that technological advancements had been made to such an extent that The venue used for swimming and on the football pitch for the duration a temporary pool could be installed synchronised swimming at both of the competition. Whilst the overall within an existing building and then the 2003 and 2013 World Aquatics capacity of the football stadium is dismantled and potentially reused Championships in Barcelona was the 45,000, the capacity for the event was elsewhere. Palau Sant Jordi, which is a multi- set at 15,000. To meet the international Temporary facilities were used in: sport arena. The venue was built for federation’s staging requirements, a the 1992 Summer Olympic Games temporary roof was also erected for the • 2001 – Fukuoka – Exhibition Hall – where it hosted the artistic gymnastics event. World Aquatics Championships and the finals of the handball and Also the 2014 European Aquatics volleyball competitions. The venue’s • 2003 – Barcelona – Indoor Arena – Championships was held in a overall capacity for sporting events is World Aquatics Championships temporary pool in Berlin, set within the approximately 17,000. • 2007 – Melbourne – Indoor Arena – city’s velodrome. The capacity of the World Aquatics Championships At the 2007 World Aquatics venue is approximately 12,000. Championships in Melbourne the To further underline its intentions in this • 2008 – Manchester – Exhibition Hall organisers used the Rod Laver Arena area, in 2014 FINA, the international – World Short-Course Swimming as the main venue of the event. The federation, announced a four-year Championships arena has a capacity of 15,000 people agreement with Nüssli, a leading and hosts the annual Australian Open • 2013 - Barcelona – Indoor Arena – supplier of temporary structures for tennis competition. World Aquatics Championships events. The agreement made the • 2014 – Berlin – Velodrome – The 2015 World Aquatics company an exclusive Official FINA European Swimming Championships Championships was held in the city of Supplier. FINA president Dr. Julio C. Kazan’s main football stadium, which Maglione said the cooperation was • 2015 – Kazan – Football Stadium – opened in 2012 and is due to host six due to Nüssli being “well-known for World Aquatics Championships matches of the 2018 FIFA World Cup. its technical expertise and substantial Two 50m pools (i.e. a competition experience in planning and building pool and a training pool) were set up temporary sports structures worldwide.”

7. The case for temporary venues – technical and financial considerations

If the venue legacy plan indicates there is limited opportunity for a permanent venue to be sustainable after the event has finished, then the option of utilising a temporary solution, or a hybrid combination of temporary and permanent facilities, should receive serious consideration.

7.1 Technical considerations The use of temporary structures Industry stakeholders have identified • Creative design allowing a greater has been evident at major sports a number of technical factors at range of unique settings, including events for a few decades, as can be play which are boosting the case for iconic landmarks, to be considered demonstrated by the installation of temporary venues to be an integral part as locations for temporary venues; spectator stands for events such as golf of a sporting event’s venue portfolio. • An increase in the maximum tournaments, major cycling races, etc. These factors include: capacity that a temporary venue can This type of relatively simple structure, • Greater investment in the form of safely accommodate; with capacities of a few thousand time, research and development, spectators, will continue to play a role • Advancement in construction made by the manufacturers of the at a range of international, national, techniques and building procedures component products from which a regional and local sports events. positively impacting the amount of temporary venue is constructed; time required to construct temporary However, it has been the more • An increase in the range of solutions venues; and recent progression towards providing such that temporary venues can temporary venues, for example • A growing knowledge base within replicate permanent facilities in the open air Chaoyang Park Beach the industry utilising the learning an increasing number of ways, for Volleyball Ground (2008 Beijing points and experiences from other instance the improvements in roofing Summer Olympic Games) and the events, as well as the expertise that solutions allowing cantilevered fully enclosed Basketball Arena (2012 industry professionals, for example roofs to become viable options for London Summer Olympic Games) architects, can bring to uncovering temporary venues; which have been viewed by industry appropriate solutions. stakeholders as taking temporary • An improvement in the quality, Whilst there is a recognition that venues to the next level in terms of reliability and flexibility of the there remain numerous areas where quality, safety and the user experience components, fit-out and finishes of a further improvements can be made, they provide. temporary venue; there is clear evidence that a number • The assembly and disassembly of the of technical advances are having a component parts, as well as the ability positive impact on the ability to deliver to subdivide elements of a temporary the appropriate quality of experience to venue, has been made easier; the various user groups (e.g. athletes, media, spectators, rights holders) • Greater appreciation of sustainability through the provision of a temporary and resulting increase in the ability venue. to reuse or recycle more materials and component parts of a temporary venue;

7.2 Financial considerations KPMG third

When major event bidders and with organisers examine the various Site Core building vis-à-vis affiliated firm

development options surrounding the The land on which the The mandatory elements are member event’s venue portfolio and legacy venue will be constructed. required to construct the firms plan, then, the cost implications of building itself consisting of: other

choosing a specific scenario (e.g. superstructure, playing surface, any or independent

fully demountable, permanent or roof, seating, mechanical and of hybrid solutions) should be carefully electrical installation etc. network examined. Both capital expenditure and International

operating expenditure during a project’s KPMG KPMG the

lifecycle should be considered. bind of or reserved. Capital expenditure firms obligate An assumption many bidders/ rights to All organisers might make is that opting Member firm.

Infrastructure Overlay entity. for a temporary solution should lead to authority

A range of infrastructure is The non-permanent elements of any

development cost savings being made, Swiss member a required to support a venue a venue ensure it complies with has but is that always the case? any firm

and ensure it operates as the technical requirements of an bind It would be wrong to think of the cost efﬁciently as possible. This international federation/rights or member implications of a sports venue just in International”), No

can incorporate elements holder in order to be able to obligate terms of the actual construction cost of such as ensuring the stage an event. This can to (“KPMG the core building itself, and assuming appropriate utilities are incorporate venue-speciﬁc services. authority that a temporary venue regularly available at the site, elements (e.g. media facilities), client such no requires less capital expenditure than Cooperative

transport solutions in order sport-speciﬁc elements (e.g. any a traditional permanent one. As the

to get spectators to the ofﬁcials/judges accommodation), provides have chart illustrates there are four capital venue etc. and other temporary or enabling International cost drivers that contribute to the infrastructure (e.g. security KPMG consideration of the overall development zones). International International cost of a particular venue solution. 2015 KPMG KPMG © In the following pages we give high level consideration to the impact that the choice of a temporary versus a permanent solution can have on each one of the four contributors to a sporting venue’s capital costs.

Photo: Bruce Southerland 20 Planning for a Sustainable Future

Site y Depending on the characteristics, location and condition of the site, securing Temporar n the freehold may be expensive. Temporarily renting a site for the development solutio of a temporary venue and for a fixed period of time could be a more cost t Permanen effective solution. e venu

Site

Core building Whilst there are cost differences between the components of a temporary Permanent Temporary and permanent venue, the difference is less significant as the size of the venue solution core building increases and the more sophisticated the venue fit out is. Larger venues have increased structural needs, as well as the supporting infrastructure required to service higher spectator numbers, for example more vertical transport, bigger roof, back-of-house/service areas. In addition, the Core building safety and security level of demountable sports facilities are also on the same level as permanent venues.

Infrastructure The amount of spending required on infrastructure should not be Permanent Temporary underestimated and can be significant, particularly for new, unencumbered venue solution sites without adequate access and egress from a transport perspective. The expenditure required to provide temporary infrastructure to support a temporary venue in this instance may reduce or totally negate any benefits from choosing this option. Consequently, arguably the same amount of Infrastructure infrastructure is required irrespective of what venue type is chosen if the venues’ location is the same. However should a temporary venue be located within a dedicated precinct adjacent to other sports venues then some infrastructure costs (e.g. parking provision, public transport access) are likely to be shared on a pro rata basis.

Overlay In the case of overlay, satisfying rights holders requirements does not Permanent Temporary diminish by virtue of choosing the temporary option. In fact, services, venue solution accommodation needs and space requirements, are still significant cost drivers no matter what option is chosen. However, a permanent venue with identified post-event demand may install a proportion of overlay up-front as permanent facilities, the cost of which is Overlay likely to be in the fit-out cost within the core building category. If the legacy case for the venue is not proven then providing these elements through temporary overlay would appear to be the most appropriate solution.

Based on the above analysis, a temporary solution can offer potential cost savings, particularly with regards to site costs (mainly due to saving in the acquisition of a site) and the construction of the core building. However, the capital cost difference between a temporary and a permanent structure will be smaller the greater the capacity of the structure and the more sophisticated the venue fit-out is.

Operating expenditure during a project’s life cycle An often ignored aspect of the overall cost assessment when trying to choose between a permanent and temporary solution is the development of an understanding of the post-event operational costs – often referred to as lifecycle costs. With a permanent venue, lifecycle costs, such as operation, repairs, building maintenance and replacement of capital investment can be sizeable and force a permanent venue, without strong post-event demand, into a loss- making situation. By contrast, whilst there will be some costs incurred related to removal of a temporary venue after the event, the key advantage of a temporary solution is the fact that significant savings can be achieved from the lack of operating expenditure in completely demountable facilities.

Photo: Péter Szalmás

8. Emerging themes and conclusion

A number of key themes have emerged as a result of the research undertaken to produce this document.

Learning from experience of venues is important for the long-term There is growing evidence that the learning sustainability of sports infrastructure. points from previous major sporting events, However, it will be interesting to observe both positive and negative, are being whether rights holders and international embraced by event bidders and organisers. federations are willing to go further, perhaps With a growing number of experts, who showing greater flexibility with their have demonstrable major sporting event technical requirements, becoming more knowledge and experience, officials have involved in the decision making process access to a wide range of consultants who regarding which type of venue is built, or can help them to maximise the impact of potentially greater involvement in the post- their particular event. event strategy of venues.

Legacy will not go away Temporary solutions are The result of the emergence of legacy is a sustainable alternative that it should be a constant and prominent, Temporary solutions are increasingly topic on the agendas of all major sporting being considered as a realistic alternative event bidders and organisers. In terms of to building unwanted permanent venues. venues, it is incumbent on stakeholders Advancements in technical aspects are at to set out a clear strategy, based on an such a level that experiencing the event understanding of the market conditions in within a temporary structure can no longer which the venue is likely to operate when be considered inferior to that of a permanent the event ends and with a legacy solution venue. Industry experts believe that modular put at the forefront of the planning phase of and temporary building components will a sporting infrastructure. play an increasing role in the make-up of the venue portfolio at major sporting events, Rights holders’ requirements and bringing a range of significant advantages post-event market conditions including the ability for them to be reused The mandatory event requirements that and/or recycled after the event. rights holders place on hosts, particularly minimum seating capacity and the technical Capital costs vs lifecycle costs standards at the venues staging the event, Whilst it can be proven that there are up- may, in some instances, be unsuitable for front capital cost advantages from building the post-event market conditions. Too often a temporary venue, these benefits can start in the past, the venue solution employed to erode as spectator capacity grows. In in these instances would have favoured terms of complete venues, industry experts the requirements of the event itself, to believe that a totally temporary solution the detriment of the post-event needs. would appear to start to lose its advantages However, whilst there are now robust at a spectator capacity in excess of 20,000. options to explore – through the use of fully However, when undertaking a full financial demountable or hybrid structures – this appraisal of different venue options the does necessitate the need for detailed and lifecycle costs should not be ignored. Thus, on-going discussions which allows the when considering a permanent venue, objectives of all stakeholders to be met. its operational lifecycle costs should be compared against the temporary alternative, A shift in stance from rights holders? which may involve some removal and site Initiatives, such as the IOC’s Olympic rehabilitation costs. Whilst the revenue Agenda 2020, are undoubtedly encouraging foregone from a temporary solution should and making clear the rising importance of also play a part, the operational cost legacy to influential sporting bodies. Other calculation should be part of the decision rights holders are also demonstrating an making process. appreciation that post-event utilisation

Contact

Andrea Sartori Global Head of Sport T: +36 1 887 7215 E: [email protected]

James Stewart Chairman of Global Infrastructure T: +44 20 7694 59 40 E: [email protected] kpmg.com

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