The Impact of UEFA EURO 2016 On French Stadium Development

INTRODUCTION What does this report include In the report that follows, we will first

Next, we will look at the report on

provide an overview as to the state of

the economic and social impact of the

French stadiums prior to the UEFA European

Championships, which was also executed by

Championships 2016 (UEFA EURO 2016).

CDES.

This will be followed by discussion on the economic impact the tournament had on the

Finally, we will link all of the above to the

French economy. Finally, we will look at how

ESSMA Summit 2017 panel discussion on

the event functioned as an accelerator in the

stadium development in France, which

development of French stadiums.

featured

the

following

industry

expert

panellists: This report is based on multiple sources in order to offer a nuanced view on the topic. The ‘Rapport Grand Stades Euro 2016’, written by the EURO 2016 commission, was one of the consulted sources. The commission’s report explains why French stadiums were not on a par with their competitors and why this formed a threat to France’s sportive competitiveness.

• Xavier Pierrot - Stadium Manager Parc Olympique Lyonnais • Cédric Dufoix - French Pro. Football League Representative • Richard Cacioppo - Transfunctional projects LNR • Guillaume Gouze - Administrative Director and stadium operations F.C. Grenoble Rugby

As a second source, we will consider the exante assessment of the economic impact of UEFA EURO 2016 in which the Centre de Droits et d’Economie du Sport (CDES) makes some predictions about the effect of the event.

MATMUT ATLANTIQUE

Why is this issue relevant It is believed that investments in the renovation or construction of sport stadiums prior to and in conjunction with major sport events can be beneficial, not only for the improvement of the fan experience inside the venues but also for the sportive competitiveness of the clubs that reside in these stadiums, and even for the economy of the host country. When public goods are used to make these investments, a long list of conditions should be met to ensure this investment is successful. The report on the economic and social impact of UEFA EURO 2016 by CDES, which we will discuss in more detail in this report, elaborates on these prerequisites.

Next, this study provides a short overview of the investments in sport stadiums that were made in anticipation of the UEFA European Championship 2016 (EURO 2016) being awarded to France.

Finally, the study analyses how these investments translate into improved facilities and other relevant aspects.

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Capacity, Hospitality and Multifunctionality In ‘Le Rapport Grand Stades EURO 2016’ by the EURO 2016 commission presided

by Philippe Séguin, attention is paid to the uncompetitive state of French stadiums. The commission addressed three different aspects of their sport infrastructure, in which France was a low performer compared to neighbouring countries, these being: capacity; hospitality and multifunctionality.

PARC OLYMPIQUE LYONNAIS

Capacity The first aspect of comparison is capacity.

significantly higher numbers compared to the

In the 2007/08 soccer season, the average

yearly attendances at Ligue 1 games, where

number of seats in French stadiums was

the figure was just 5.5M. This difference was

29,155. Compared to the average number

especially remarkable considering Ligue 1

of seats in Germany (45,000), Italy (40,000),

has twenty clubs and the Bundesliga only 18.

England (35,000) and Spain (30,000), France had the lowest average number of seats

Although the attendance of both leagues has

available.

grown a lot, the difference between them still exists. Ligue 1’s yearly attendance for

Only two French stadiums offered the 50,000-

the 2015/16 season was 7.9M, while that of

plus seat capacity, which is the minimum

the Bundesliga was 13.3M. The chart below

requirement, but neither were of sufficient

shows the evolution in yearly attendances

quality to receive UEFA’s 5-star accreditation,

of the above competitions starting from the

which is necessary to host an international

2007/08 season. From 2012 onwards, we

tournament.

observe an increase in attendance at Ligue 1 matches.

This difference in capacity did not come without consequences. The impact on the

This increase in attendance could be linked

number of spectators drawn to weekend

to the opening of new stadiums like Stade

competitions was remarkable. With a yearly

Pierre-Mauroy in Lille which opened in 2012.

attendance figure of 6.4M spectators for the 2007/08 season, the Bundesliga attracted

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Hospitality As a second aspect of comparison, the EURO 2016 commission analysed the quality of hospitality. The differences observed in terms of the quality of hospitality are often a simple reflection of the times in which the stadiums

On average, 1,178 VIP seats were

were designed and built. Most French

available in French stadiums prior to

stadiums were built when the only

EURO 2016, which amounted for 4% of

function of a stadium was to host a

the total area. This is far from European

weekly sport competition. Whereas, in

standards, which ranges between 8%

modern times, as we all know, stadiums

and 12%.

fulfil a multifunctional role, including hosting sport events, shows, congresses or conventions, and many other events.

Compared to the English or German

“On average, only 1 178 VIP seats were available in French stadiums”

stadiums, the French stadiums didn’t offer the same range of hospitality

As a result, there would have been a loss

services and contemporary design. The

of profit when the demand for these VIP

ticketing economy – which is based

seats exceeded the available capacity.

in particular on the profitability of VIP

In France, this loss in profit was shown

seats – was a clear example of this.

in the average revenue per spectator, where the average was €16, compared to €22, €24 and €33 respectively in Italy, Germany and Spain (Le Rapport Grands Stades, EURO 2016 commission).

© ORANGE VÉLODROME

Multifunctionality Lastly, the EURO 2016 commission evaluated

the

multifunctionality

of

French stadiums. The general verdict was that they scored rather low on this aspect, although there were some exceptions. This was not in line with the trend of stadiums fulfilling many roles.

“The issues of the large stadiums formed a threat to France’s sportive competitiveness” A

benchmark

when

it

comes

to

multifunctional stadia is the AFG Arena of

St.

Gallen

(Switzerland),

which

includes a stadium, shopping centre, leisure centre and a large furniture retail area.

The report claimed that the above issues of the large stadiums were a threat to France’s sportive competitiveness, because these issues formed an obstacle in attracting major sport events and these events generate resources to help fund the development of French clubs.

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Expected investments in sport stadiums The ex-ante study on the economic and social impact of UEFA EURO 2016 by CDES reports a total investment worth €1.7bn in nine French stadiums. €775m is directly attributable to the hosting of the Championships. With the total investment worth €1.7bn, four new stadiums were constructed located in: Bordeaux, Lille, Lyon and Nice, and five stadiums were renovated in: Lens, Marseille, Paris, Saint-Étienne and Toulouse.

“In total, € 1.7 billion was invested in 9 French stadiums”

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The ESSMA case study on French stadium infrastructure: ‘Update on infrastructure and the impact of EURO 2016’, offers an in-depth view on these investments, including details on how they were financed and the current state of the projects.

Stade Vélodrome

Stade de Bordeaux

Stade Allianz-Riviera

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Economic impact of EURO 2016

The economic impact of major sporting events

In this context, CDES was assigned to

is historically a topic in which predictions and

compute the short term economic impact of

results don’t always match. Despite these

UEFA EURO 2016. In their study, economic

unpredictable results, France had to invest in

impact was split up into two parts:

a large part of its stadiums to meet European

1) The economic impact of the expenses made

standards, so that it would be eligible to host

to organise the event and 2) the economic

the UEFA European Championships for the

impact of the expenses made by tourists.

third time in the country’s history (after the 1960 and 1984 editions).

“76% of the net cash injection induced by the organization of the event, was linked directly to the operational expenses of the event”

CDES calculated that the impact of the organization of the event in the form of a net cash injection was € 476.8 M, which is about the same as the € 478 M net cash injection CDES predicted in its 2014 ex-ante study in 2014. € 360.5 M of the net cash injection (76%) was linked directly to the operational expenses of the event. These expenses included all costs that had been made in the operational delivery of the Championships.

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Aside from the operational costs, the

€24m of

organisation also had to pay the premiums

solidarity expenses and diverse donations

the federations receive for participating in

(5%).

the competition. A budget of €34.9m (7.3%)

compensations

was spent on these premiums. 7% and the

received for putting their players at the

third biggest part of the net cash influx

disposal of the national federations. €22.6m

(€34.8m) originated from the expenses made

and the smallest part net cash influx (4.7%)

by accredited personnel.

originated from the activation of commercial

The

the net cash influx came from solidarity the

expenses

included

professional

clubs

partners.

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The second part of the total economic impact

However, to give a complete and veracious

of the UEFA European Championship 2016, is

picture of the economic impact, we must

the economic impact of the expenses made

subtract the loss of revenue caused by the

by tourists. In total, CDES calculated this

crowding-out effect. This effect is caused by

part to cause a net cash injection of €500.6m.

the fact that the event, the tourism, and the

This sum was made up of two parts and was

hassle that comes with it, dissuaded regular

decreased by a third part, which is known as

non-interested tourists from visiting the

the crowding-out effect.

country during the Championships. CDES valued the crowding-out effect at €165m,

In total, 613,000 public visitors and 34,000

so this gives us a total net cash injection of

hospitality visitors were welcomed during

€500.6m from the expenses made by tourists.

EURO 2016. The public visitors’ expenses caused a net cash injection of €623.4m, while the expenses made by hospitality visitors caused a net cash injection of €42.2m. In total, this gives a net cash injection of €665.6m.

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“In total 613,000 public visitors and 34,000 hospitality visitors were welcomed during the EURO 2016 “ Adding up the net cash injection caused by

have risen will spend more, which leads to

both the organisation of the event and by

higher incomes of other people, and so

tourism, gives a net injection of €977.4m

on. The CDES study applied a Keynesian

before taking into account the multiplier

multiplier coefficient of 1.25. When this is

effect. Economic impact studies apply the

taken into account, the total economic impact

multiplier effect to take into account that the

of EURO 2016 is €1,221.7m, not considering

net cash injection causes some incomes to

the VAT receipts (€70m).

rise. As a result, the people whose income

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Development of French stadiums Results and Roles

PARC DES PRINCES

© PSG

Results The enormous

estimated

investment in

The number of VIP seats in Parc OL increased

French sport infrastructure of €1.7bn had

to 6,000 – a significant increase when

multiple consequences. The first being an

compared to the 1,500 seats at the old Stade

increase in the number of stadiums with a

de Gerland. These VIP seats are paying their

capacity of over 50,000 seats. In 2007/08,

dues too; 70% occupancy rates making

prior to the Championships, a mere two

them a great investment. In this regard,

stadiums – Stade de France, located in

Xavier Pierrot, Stadium Manager of Parc OL,

Saint-Denis, and Stade Vélodrome, located

remarked during the ESSMA Summit panel

in Marseille – surpassed the 50,000-seat

discussion on French stadium development

capacity.

that before the investments, a lot of people

“The number of stadiums with a capacity of over 50 000 seats doubled”

were having their meals near the stadium.

Whereas nowadays, most have their meals inside the stadium. It is because of these improvements

that

new

fan

segments,

including families, women, elderly and youth, After EURO 2016 and the investments made

are drawn to the stadiums.

in preparation of hosting the tournament, the number of stadiums with a capacity of over

The second prime example is the Stade

50,000 increased to four, with the addition of

Vélodrome, where the number of VIP seats

two newly-constructed stadiums in Lille and

increased from 2,000 to 6,500. These VIP

Lyon.

seats have an average occupancy rate of 54% based on data derived from the ESSMA

There have also been marked improvements

Stadium Tour Marseille 2015 report.

in the field of hospitality. Prime examples of this being Lyon’s Parc Olympique Lyonnais

A third example is Parc des Princes, where

(Parc OL), Marseille’s Stade Vélodrome and

a rise in the revenue per seat of 380% has

Parc des Princes in Paris.

been realised in a six year period (Source: Top 6 Deloitte football money league, 2015) by carrying out an overhaul of the VIP areas.

During lounges

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this were

redevelopment, created

with

additional multiple

configurations and layouts, and since this,

One of the most multifunctional stadiums

new amenities and services are offered. The

however has to be the Stade Pierre-Mauroy.

enhancement resulted in a total of 4,378

Thanks to its multi-layered floor plan, the

business/VIP seats, which amounts for almost

stadium can be transformed into the ideal

11% of the total number of seats.

venue for football, basketball, concerts, tennis matches and other smaller indoor

A

third

field

of

improvement

is

the

multifunctionality of the stadiums. Before the investments made in anticipation of UEFA EURO 2016, most of the host stadiums did not allow multifunctional use. Whereas today, there are various examples of these

sports.

“Parc Olympique Lyonnais even served as the venue for a outdoor League Magnus ice hockey game”

stadiums hosting not only multiple sporting codes, including football and rugby, but also

These improvements have also made it

music events, like at Parc OL and Stade de

possible for France to host major sporting

Bordeaux.

and other events. For example, in November 2014, Stade Pierre-Mauroy hosted the Davis

Out of the ten stadiums that hosted UEFA

Cup finals between France and Switzerland,

EURO 2016, five are being used for only

where an attendance record was broken

football and rugby events, whereas the

for the highest ever officially-sanctioned

others are hosting football, rugby and

competition tennis match. Then, in March

music events. Parc OL even served as the

2015, FIFA awarded France the rights to host

venue for the outdoor League Magnus ice

the 2019 FIFA Women’s World Cup, with both

hockey game between Lyon and Grenoble

the opening and final matches to be played at

on the December 30, 2016, and the rugby

Parc OL. The fact that Parc OL is also the host

Champion’s Cup between the Saracens and

for Céline Dion and Coldplay concerts further

Racing 92 on May 14, 2016.

confirms the stadium’s multifunctionality.

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What roles do the new EURO 2016 stadiums play?

The

four

newly-constructed

stadiums

and five renovated stadiums can now be seen as a benchmark for the construction and renovation for future French stadium developments.

New

projects

around

the world can draw inspiration from the

“The renovated and newly constructed stadiums can now be seen as a benchmark for the construction and renovation of stadiums for future French stadium developments”

approaches and results of these stadiums.

The nine stadiums can also give us a picture On

this

topic,

French

of how attendances at football matches

Professional Football League Representative,

are influenced by renovating or replacing

remarked during the ESSMA panel discussion

stadiums with a new one, thus increasing

on

that,

capacity, hospitality and multifunctionality.

thanks to EURO 2016, France’s sporting

To achieve this, we looked at the attendance

infrastructure had improved enormously, but

rates of the French football clubs that

that there is still room for improvement. He

renovated their stadium or built a new one.

also emphasised the importance of further

In light of EURO 2016, we reveiwed the

improvement of this infrastructure.

attendance rates one and two years before

French

Cédrix

stadium

Dufoix,

development

entering the new or renovated stadium, and Aside from their role as benchmarks, the

one and two years after entering the new

actual status of the French stadiums caused

or renovated venue. We should remark that

an improvement in the fan experience and

these charts do not exclude other factors

thus an increase in fan satisfaction during and

that influence attendance, like sports results,

after UEFA EURO 2016. A prime example

the threat of terrorism, etc. In general, we

of an investment that has paid off with an

notice a difference in the impact of stadium

increase in fan experience and satisfaction is

renovations and the impact of stadium

Parc OL, where the global satisfaction criteria

construction.

went up by 15%, with a VIP satisfaction rate of 90% being achieved and 99.5% of spectators said they would recommend their friends to come to the stadium.

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In this modest sample, we

impact of stadium renovation

see a trend in which the

on attendances. These findings

construction of new stadiums

are in line with research on this

yields a better improvement in

topic.

attendances compared to the

Source : http://www.european-football-statistics.co.uk/ 21

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To effectively meet fan expectations,

A second challenge is ensuring the

you need to be aware of what the

stadium fulfils many different roles in

fans’ expectations are. Therefore, it

order to use the infrastructure to the

is important to get to know your fans.

fullest and minimise the time the venue

On this topic, Xavier Pierrot, Stadium

is not in use. Consequently, non-football

Manager at Parc OL, explained during

related events attract other spectator

the ESSMA Summit panel discussion

segments to the stadium, resulting in

that the three main aspects fans find

mutual benefits.

important are: atmosphere, cleanliness and security. When one of these aspects

Finally, preserving the pre-renovation

is suboptimal, there is a risk of a decrease

or pre-construction atmosphere is an

in attendances.

important challenge because this will

“the three main aspects fans find important are atmosphere, cleanliness and security”

prevent attendances decreasing once the stadium development project has been carried out. The old stadium is often a place of history and memories for the fans, so the transfer from the old to the new stadium can’t be neglected.

Thanks to technological advancements, safety can be guaranteed with less physical presence and by adapting the infrastructure, a cleaner stadium can be achieved.

At Parc OL, a survey is conducted after every game in which the fan experience is gauged to make sure they meet fan expectations.

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PARC DES PRINCES

© PSG

Results

Stadium development

According to a study executed by CDES,

In

UEFA EURO 2016 caused a net cash injection

significant investments were made in French

of €1,221.7m to France’s economy. This net

sport infrastructure, resulting in an increase

cash injection originated from two sources.

in: average stadium capacity, number of

“EURO 2016 caused a net cash injection of € 1221.7 M in France’s economy”

anticipation

of

UEFA

EURO

2016,

stadiums with a capacity above 50,000, hospitality seats and multifunctionality. The number of French stadiums with a capacity of over 50,000 increased from two to four.

The first was caused by the expenses made

The number of hospitality seats in numerous

in the operational delivery of the event and

stadiums increased significantly too, with

was calculated to be around €476.8m. The

examples being Parc OL, Stade Vélodrome

second originated from tourists’ expenses

and Parc des Princes.

and was calculated to be around €500.6m.

Both sources add up to a net cash influx of

On the last aspect, multifunctionality, major

€977.4m, which should be multiplied by

improvements were realised. Nowadays,

a factor of 1.25 to take into account the

there are various examples of stadiums that

Keynesian multiplier. This results in a total

host football, rugby and even music events,

net cash injection of €1,221.7m.

like Parc OL and Stade de Bordeaux.

FOLLOW US

essmastadium 26

ESSMA_Stadium

ESSMA

Challenges and opportunities Whereas French stadiums previously scored

benchmarks for future stadium constructions

below the European average on aspects like

and renovations. They also show us that these

capacity, hospitality and multifunctionality,

kinds of investments provide an opportunity

they can now happily compete with the sport

to

stadiums of neighbouring countries.

improving fan experience. Consequently,

increase

fan

satisfaction

through

increased fan satisfaction can potentially lead Despite these major improvements, it is still

to higher attendances. Moreover, thanks to

necessary to invest in projects to improve

the investments and the extra hospitality

the remaining substandard French stadiums.

that comes with it, new fan segments can be

The four new stadiums that were constructed

attracted.

and the five stadiums that were renovated now play an important role in serving as

ESSMA

Sources

13/03/2017

La commission EURO 2016. (2016). Le Rapport Grands Stades EURO 2016.

CDES. (2014). Impact économique et social: économie, héritage social, sportif et territorial.

Etude ex ante.

CDES. (2016). Etude sur l’impact économique de l’EURO 2016.

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