New stadium openings continue to grow in popularity.  25 new club football stadia have been built in England since 1990 and eight clubs in this season’s Premier League play in stadia built since the Premiership began. At least half of all Premiership clubs have plans for further investment in new stadia or redevelopment of their existing ground.  New figures from the Sports Business Group at Deloitte show that clubs with new stadia are reaping the benefits of their investments.  In the first season at a new stadium, football club turnover (excluding broadcast income) increases on average by 66%. 

Increases in turnover were largely driven by a 51% increase in average attendances in the first season at the club’s new venue compared to the last season in their old home.

Mark Roberts, senior consultant in the Sports Business Group at Deloitte said: “Total stadia investment by English clubs since 1992/93 is now well into its third billion - with £2.2 billion spent up to the end of the 2005/06 season.”

“While the Taylor Report provided the initial catalyst for this expenditure, these impressive amounts illustrate the fact that stadium investment can deliver a significant element of a successful club business strategy.”

“The investment is not unique to the Premier League. Whilst clubs in the top division account for over three-quarters of the total invested over the period, Football League clubs’ cumulative investment is in excess of £500 million.”

So what impact have these record levels of investment had on revenues and attendances for those clubs that have undertaken the developments?

On average, clubs increased turnover (excluding broadcast income) by 66% in the first year playing in a new stadium.  Individual clubs saw increases ranging from 19% for Stoke City to 146% for Middlesbrough.  Factors contributing to this increase include:

• Increased stadium capacity
• Enhanced live experience – a new stadium offers fans a better match experience through improved comfort, safety and sightlines
• An increase in the provision of corporate hospitality
• Changes in seat mix and configuration – typically new stadia will provide areas which can be segmented to target different fan categories
• Enhanced supply of amenities to grow ancillary revenues – new stadia will usually improve the volume and quality in areas such as catering and retail outlets
• Dedicated space for revenue diversification – new stadia tend to have dedicated space to grow non-matchday revenue streams from areas such as restaurants and bars, conferences and exhibitions, health and fitness, and, in several stadium cases, hotels
• Imparting a positive momentum to the club – new stadia enhance the feel good factor associated with a club and give it a renewed sense of pride.

Whilst on average playing in a new stadium drove an immediate first year 51% increase in attendance, the “new stadium effect” is not the permanent panacea. The club’s performance on the pitch has to measure up to the quality of the new facilities to maintain attendance at the new, higher, levels particularly among the recent ‘converts’ to following the club live.  Some clubs have seen the “new stadium effect” quickly eroded even in the second year of relocation.

Roberts adds: “Stadium development remains a hot topic for many clubs but it is important they have a well-researched business plan that proves there is a genuine need for, and return on, investment in the stadium.”

“Unfortunately, we have seen some clubs press ahead with stadium development plans without the evidence to substantiate the proposed development.  In these cases development plans often tend to come unstuck when funding for the plans is sought, or, worse still, a white elephant is born.”

Ends

Note to editors
Turnover and attendance figures from those Premiership and Championship clubs playing in new stadia built since 1990 was used to produce the data in this release.  Those clubs are Arsenal, Bolton Wanderers, Derby County, Hull City, Manchester City, Middlesbrough, Reading, Southampton, Stoke City, Sunderland and Wigan Athletic.

Figures for Leicester City and Coventry City were not available.

About the Sports Business Group at Deloitte
Over the last 15 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.

For further information on our services you can access our website at www.deloitte.co.uk/sportsbusinessgroup

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP, which is among the country's leading professional services firms.  Deloitte & Touche is the United Kingdom member firm of Deloitte Touche Tohmatsu ("DTT"), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other's acts or omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. 

The information contained in this press release is correct at the time of going to press.