Major sports events – Utilizing the venues after the party is over Harry Arne Solberg Trondheim Business School at Sør-Trøndelag University College Jens Alm Play the Game / Malmø University Rasmus Storm Play the Game / University of Southern Denmark A welfare economic perspective • Correct demand predictions necessary to make correct investments • If not – resources will be ineffectively allocated: – Venues will be constructed that that not should have been constructed, or – Too large capacity Data collection / methods • Data from 56 venues build for major event from 1996 to 2010 • Only «main venues» from Atlanta Olympics to 2010 FIFA World Cup • Stadium Utilization Index (SUI) • SUI = Total annual attendance / Capacity – 75% sold out / 20 matches => SUI = 15 – 25% sold out / 20 matches => SUI = 5 Top-10 Name/Event Capacity Events Owner Average Demand SUI 2510119 50,62 Turner Field, Atlanta, 1996 Olympics 49,586 85 Priv 29,532 1965944 46,45 Sapporo Dome, Sapporo 2002 WC 42,328 83 Pub 23,686 2326000 33,28 Allianz Arena, Munich 2006 WC 69,901 44 Priv 52,864 1132000 22,20 RheinEnergi Stadion, 2006 WC 50,997 N/A Priv N/A 527000 20,27 Stadion Letzigrund, 2008 UEFA 26,000 44 Pub 11,977 943000 19,73 Etihad Stadium, 2002 Comonwealth. 47,805 31 Pub 30,419 1268988 19,33 Estádio da Luz, 2004 UEFA 65,647 27 Priv 47,000 985146 19,13 CommerzBank Arena, 2006 WC 51,500 32 Pub 30,786 1064579 19,05 Mercedes-Benz Arena, 2006 WC 55,896 N/A Pub N/A 1000000 18,41 BC Place, 2010 Winter Olympics 54,320 200 Pub 5,000 Bottom - 10 Name/Event Capacity Number of Owner Average Demand SUI events Estádio Municipal de Aveiro, 2004 UEFA Euro 30,127 19 Pub 3,106 59007 1,96 Moses Mabhida, Durban, 2010 WC 54,000 N/A Pub N/A 97500 1,81 Khalifa Int. Stadium, 2006 Asian Games 50,000 10 Pub 9,000 90000 1,80 Gwangju World Cup Stadium, 2002 WC 38,269 N/A Pub N/A 63258 1,65 Busan Asiad Stadium, 2002 WC 53,769 N/A Pub N/A 88925 1,65 Nelson Mandela Bay, 2010 WC 45,940 N/A Pub N/A 73500 1,60 Mbombela Stadium, 2010 WC 46,000 N/A Pub N/A 70540 1,53 Miyagi Stadium, Rifu (JPN), 2002 WC 49,133 79 Pub 934 73767 1,50 Nagano Olympic Stadium, 1998 Win. Olymp 30,000 11 Pub 1,621 17828 ,59 Incheon Munhak Stadium, 2002 WC 47,384 N/A Pub N/A 7303 ,15 Some findings • Multisport and multi-club venues effective • Regular tenants successful in a popular sport also help • Most effective: – Atlanta 1996 – Bayern Münich/TSV 1860 – Sapporo Dome 2002 WC – Athen Olympic stadium (different from mid-size venues) • Less effective: – 2010 FIFA World Cup South Africa – 2004 UEFA Euro Portugal – 2002 FIFA World Cup Korea / Japan Regression analysis Dependent variable: SUI Unstandardized Coefficients t-value Sig. B Std. Error (Constant) -53,640 16,157 -3,320 ,002 Public-owned (dummy) -7,334 3,154 -2,326 ,025 Ln GNI 4,564 2,137 2,136 ,038 Ln Corruption index 14,100 4,576 3,081 ,004 Ln Cost venues 5,818 1,897 3,068 ,004 Dependent variable: Ln SUI Unstandardized Coefficients t-value Sig. B Std. Error (Constant) −13,588 4,617 −2,943 .005 Public-owned (dummy) −.734 .283 −2,590 .013 Ln GNI .605 .272 2,226 .031 Ln Corruption index 1,804 .471 3,829 .000 Ln Capacity 1,001 .395 2,532 .015 Explanations: • Corruption (Transparency International’s CPI): – The more corruption, the lower the utilization • Ownership: – Private owned venues highest utilization • Capacity of venue / Venue cost – The higher the capacity of the venue (or the more costly it was), the higher the utilization • Gross national income: – The lower GNI in the nation, the lower the utilization Some reflections on these results? Starting point: Stakeholders involved in the events Juridical owner of event Federal Media government Local public Sponsors LOC sector Other local Consultants stakeholders National/ regional sport governing bodies Reflections - Conclusions Typical pattern: • Stakeholders operating as free-riders with federal governments paying the bill: – Local tourism, entrepreneurs, sport governing bodies, media, consultants…. – Collaboration towards the government • Distribution of power between the sport governing bodies and the stakeholders – FIFA’s stadium requirements • Corruption – the easier to influence decisions • Private owners have more cost discipline • Naive expectations on future demand • UEFA’s 2020 Euro the future model??? Thank you for your attention .