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Issue 40 LIVE MUSIC INTELLIGENCE An ILMC Publication. March 2012









IQ’s European Arena Report is now in its fourth year and looking back to that first report, it has been interesting to track some of the predictions that various venue managers made about how they perceived the business would be in 2012. What nobody saw coming was the global recession that has affected nearly all walks of life. But live entertainment appears to be one of the sectors that flourish in times of economic trouble and arena-sized shows in particular seem to be thriving as the public looks for the kind of big-name events to help them forget their troubles – at least for a few hours. That anecdotal evidence is backed up by the findings of this year’s European Arena Report, which, as you will discover on the following pages, reveals some intriguing trends such as non-music shows growing both in terms of attendance and ticket prices. Our report this 76-100% year polled 46 arenas in 16 countries throughout Europe, giving us a similar data field to that which 0-10% 17% we’ve used to compile the numbers in previous years. As usual, we have steered away from publishing figures on individual 25% venues so that we can concentrate on more widespread trends across the business, but we have spoken to a number of key executives to gauge their feelings on the arenas sector, while the comments of some venues provide invaluable insight into what is happening in certain markets. For the first time, we have also spoken to a number of non-European venues to compare the experience of international venues to our report’s findings, with some surprising market differences in certain countries... 51-75% Gordon Masson, Editor




Attendance and Capacity

in total capacity. In 2010, our survey respondents had total 26-50% Last year we reported that total attendance across the capacities of 609,634 but in 2011 that total increased by 29% arenas business had fallen by nearly 7%, with live music 1% to 617,030. While that growth was marginal, in a Proportion ticket sales recession it is nonetheless heartening to learn that arenas taking the brunt of the pain with a 16%of decline on the in-house office year before. But this year’svia stats point to abox recovery in are adding new space for fans – a fact that is borne out by 2011 across the arenas business with venues collectively the number of arenas who reported that they are planning revealing an 11% bounce-back in total attendance. further upgrades. But more on that later. In NorthAmerica, results were slightly different with Pollstar “That’s pleasantly surprising,” says Geoff Huckstep, chairman of the UK’s National Arenas Association. reporting overall falls in concert attendance, but increased box “Because of the general state of the economy across Europe, Comedy I would not have been surprised to hear that attendances 9.4% had fallen, so to learn that arenas have maintained and even improved their business is a great result.” Interestingly, while attendance at music events nudged Other up by 2.6%, customers visiting non-music events increased 13.9% by 6.7%, allowing Europe’s arenas to successfully increase Music footfall in their premises. “It looks like the overall increase 35.3% in attendance has come from non-music events,” says European Arenas Association managing director Linda Family Bull. “The results are rather surprising, given the economic 16.8% market everyone is operating in. But there’s an old adage that if people are depressed, they want to laugh, and that’s maybe what the increase in attendance is telling us.” Sport 24.6% Another key indicator of optimism that emerged through the data from our participating arenas was a slight increase

50 | IQ Magazine March 2012 Full time

The O2 Peninsula Square © Colin Philip

office receipts as ticket prices again crept skyward. Attendance declined by 8.7% among the top 50 global tours and by 2.6% for the top 100 tours in North America as promoters, led by Live Nation, staged fewer shows. The more robust returns in Europe, however, point to a number of strong touring shows which performed well on the continent, but didn’t necessarily work as well Stateside, if they actually crossed the Atlantic at all. The fact that European Arenas count for 14 of the top 50 arenas in terms of ticket sales (and 26 of the top 100) globally, speaks volumes for prudent venue management and the unrelenting demand for live entertainment throughout Europe. That assumption is underlined by the three most popular arenas worldwide now being located in Europe – The O2 arena again retained its crown as the top ticketseller, followed by Manchester Evening News Arena and the Sportspaleis Antwerpen. “We had a great 2011 – not as good as the year before, but a lot better than a lot of our colleagues elsewhere so we can’t complain,” says Sportpaleis chairman Jan Van Esbroeck. He explains that Belgium enjoys a thriving local music scene, allowing the arena to take international shows, but also fill seats for home-grown talent mostly unknown outside of the country. When it comes to capacity, Van Esbroeck’s arena is also making significant inroads. Each summer when the venue closes, refurbishment projects are carried out in an effort to maximise floor space. Last summer, Sportpaleis remodelled a balcony to add 1,000 seats inside the auditorium – which was built in 1933 – while in 2012 it will boost numbers by 1,700 and next year a further 2,000

Attendance 2010/11 Total attendance (all shows) 2011: 32,047,819 Total attendance (all shows) 2010: 28,829,277


Total attendance (music) 2011: 12,676,725 Total attendance (music) 2010: 12,358,300


seats will be fitted to take its total capacity to 23,000. The ambitious year-on-year expansion plan for the Sportpaleis is by no means an isolated case. Despite grim financial circumstances prevailing throughout Europe, half of all the arenas that took part in this year’s survey indicated that they are investing to upgrade their premises, suggesting collective long-term optimism across the sector. Among those planning building projects are the Amsterdam Arena (complete modernisation and an expansion of the main building); Palais Omnisports de Paris Bercy (year-long refurbishment project beginning in 2014); Royal Albert Hall in London (major building project at present); Arena Beograd (new curtaining system and refurbishment of the small hall); and the NIA in Birmingham (UK), which this year will start a £21million (€25.4m) redevelopment scheme. International economic turmoil is doubtless affecting the arenas sector, but with customer comfort now firmly established as a key factor in attracting the ticket buying public, there’s a steely determination among venue operators to press ahead with upgrade projects. “I anticipate there will be less arena new builds over the next five years as it will be difficult to attract funding, [so] venues may focus on refurbishing facilities to untap potential and develop new opportunities,” comments Guy Dunstan, general manager arenas at the NEC Group, which has a portfolio that includes the NIA and LG Arena. EAA figurehead Bull observes, “You have to remember with a lot of arenas that are due for refurbishment, those plans have been in the pipeline for a long, long time. It’s like the analogy of the tanker being slow to turn once its course is plotted. So arenas tend to be very bullish, knowing that by the time the investment is paid back, things will be ok.” She adds, “There has been a lot of municipal investment rather than private money flooding in to arena construction and refurbishment programmes and I don’t think local government gets enough plaudits for that sometimes.” Although times are uncertain globally when it comes to job security, the general health of the live entertainment industry appears to be bucking the trend when it comes to employment statistics. Factors such as investment in staff training might explain the move to more full-time employees, but whatever the reasons, a shift from 23% of staff being in that category in 2010 to 29% last year, suggests that a career in the arena sector is one of the safest ways to avoid the unemployment lines. “The arenas business went through a lot of pain a few years ago when it came to employment and perhaps people were more cautious,” says Bull. “The numbers might suggest that arenas have cut back on their part-time staff, as new employment laws don’t make it as attractive to have part-timers these days because you have to give them holiday pay, etc. Also, training for the likes of health and safety is expensive and that can also make it more attractive to have full-time staff.”

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Ticketing One of the most fascinating results to emerge from this year’s survey is the apparent strategy that many arenas are now adopting toward the ticketing business. Often referred to as the Holy Grail of live music – because tickets are ultimately where the majority of revenues are generated – it appears that increasing numbers of venues are determined to control their own destinies by developing their in-house box offices. When it comes to prices, the average stub for music events visiting European arenas increased marginally (1.2%) to €43.85 in 2011, compared to the previous year’s €43.33. While price hikes for concert tickets are a concern for the cash-strapped public, that minor climb is significantly below the rate of inflation across the continent and could just be a sign that prices have peaked and are set to plateau. However, while gig prices may be stagnating, nonmusic events seem to be catching up. In 2010, the average non-music ticket was priced at €32.41. Last year, the average price soared by 13.7% to €36.86 according to our survey respondents, prompting the question of whether promoters are now looking to bring family shows and the likes more in-line with concert ticket prices? “The fact that concert ticket prices have not increased reflects the economic climate,” says Huckstep. “There thankfully seems to have been a reality check within the business and people understand that times are hard.” And he believes that the rise in non-music tickets is not out of line. “13% is a relatively big step up, but previous pricing was probably at less than market rate for these shows. The likes of [comedians] Michael McIntyre and Lee Evans sold out straight away and were possibly undervalued. But even with the higher prices, these shows still represent very good value for money and I think that’s where people are drawing the line. Customers’ budgets are tight, but they are still treating themselves to what they want to see: if a couple can have a good night out for £100 (€120), including a show, meal and drinks, that’s perceived as good value. However, if an individual is being asked to spend £60-65 (€73-79) on a ticket before they’ve even stepped out of the door, that’s when we’re finding they will think twice.” Another emerging trend in the ticketing sector is the willingness of arenas to drive sales through in-house box office systems. More than 70% of the surveyed venues have their own in-house set-up and those arenas are funnelling more and more seat sales through those operations. The number of arenas selling more than 50% of all tickets inhouse has doubled in just one year: while 2010 saw 19% of venues selling such volume, last year that number was a whopping 38%. Indeed, the venues in our survey that said they sold less than 10% of their tickets through in-house box offices were down to 25% in 2011, compared to 41% just 12 months earlier. Underlining those tactics, almost one in five arenas (18%) told IQ they were looking to change their ticketing

Pavilhão Atlântico, Lisbon

arrangements going forward, suggesting that there could be some major battles heating up in the stubs business over the coming months and years. The reasons behind such moves are widespread. A spokesperson for the Salzburgarena in Austria reveals its ticketing strategy is changing so that it can try to take advantage of cross-border business. “We will work with a second ticket arrangement in Munich to better [develop] the German market and sell more tickets in Germany, because it is a very important market for Salzburg.” Elsewhere, London’s historic Royal Albert Hall is pressing ahead with plans to offer punters print-at-home ticketing services; Serbia’s Arena Beograd reports it is putting its ticketing business out to tender; and the Amsterdam Arena states it is planning to expand its ticketing arrangement “because of modernisation and expansion to the main building.” Bull believes at least some of these developments could be promoter-driven. She notes, “It’s a lot cheaper to set up an in-house box office now than it used to be, thanks to all the leaps forward in technology. It can also be a key element for smaller promoters – and certainly for the likes of sports and comedy, in particular – because a lot of them will insist on the arenas they use having in-house box offices.” NAA chairman Huckstep’s venue, the Capital FM Arena Nottingham in the UK, is another case in point. It will bring its ticketing wholly in-house this July, using Audience View’s system. “Our contract with See Tickets was coming to an end, so we took the opportunity to look

Ticket Prices 2010/11 Average ticket price (music) 2011: €43.85 Average ticket price (music) 2010: €43.33


Average ticket price (non-music) 2011: €36.86 Average ticket price (non-music) 2010: €32.41


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Green Day at o2 World Hamburg

at what was happening elsewhere and the idea of taking more control of the marketing of our tickets was why we decided to go with Audience View,” says Huckstep, who forecasts that 75% of its tickets will be sold online within the next two years. “CRM is certainly a buzzword, but for us it is more about developing a customer intelligence database that we can use to form our strategy for bars, catering, etc, as those revenue streams will become increasingly important for arenas,” continues Huckstep. “Also we have found when promoters release holds for shows, we are able to sell those in-house very quickly through social networking. The convenience factor of offering tickets to your customers 24/7 is crucial and that’s why we’re investing so much money – a minimum of £250,000 (€302,000) in the hardware alone – for our new ticketing services.” Although the growing dominance of in-house sales operations stands out, it shouldn’t be forgotten that powerhouses such as Ticketmaster often provide venues with those systems. But with so many punters now choosing to buy their tickets via the arena itself, the price of exclusivity deals could be set to climb as competitors try to carve out market share in the arenas business.











Proportion of ticket sales via in-house box office

Venue Usage At first glance, the split between different entertainment types might suggest 2011 was a relatively poor year when it comes to the number of arena tours out on the road in Europe. Music made up just 35.3% of events in European arenas last year and although that’s still by far the most dominant part of the business, it’s nothing short of a downward helical compared to 2010, when music accounted for 43.3% of all arena business. The cyclical nature of the live music business could lead observers to the conclusion that the big name acts just were not performing last year, but cross referencing these numbers with sales returns actually points to other entertainment forms gaining in popularity while the concerts business stagnated. Sport remains the second-biggest arena customer, taking up a 24.6% chunk of the calendar last year (2010, 24.2%), while family shows grew in numbers from a 15.7% share of event days in 2010 to 16.8% in 2011. But it was the comedy promoters who were laughing all the way to the bank. A few short years ago the prospect of standup comedians performing to arena-sized audiences would have been, well, comical. In 2011, comedy shows accounted for 9.4% of all events at European arenas – almost one in ten of everything throughout the year. Put in context, in IQ’s European Arena Report 2009, comedy accounted for just 3% of events during 2008. The fact those tours have tripled in terms of overall share in just four years speaks volumes. “The arena is almost exclusively used for music, but we introduced comedy for the first time in 2011 and it was a huge hit,” reveals Van Esbroeke at Sportpaleis Antwerpen. “We had one local comedian brave enough to try with one show, but he sold-out five nights and another did four, so we’ve definitely broken the ice with that and we’ll be programming a lot more comedy in the future, probably not this year, but definitely in 2013.” Others are also hoping that stand-up will continue to develop, as pressure on the traditional concert scene leaves venues scrambling to fill dates with alternative forms of entertainment. “It will always be a struggle if the big arena acts just aren’t out on tour,” comments Dan Roberts of the Motorpoint Arena Cardiff. “Hopefully, the increase in comedy runs will hold the figures together.”


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9.4% Other



What are the first and second most important factors affecting the festival industry currently? First most important


Second most important 10 5

Licen g regulatisin on

In consoliddustry ation

Competi tio artist tonufor rs

Producti on costs

Com other vepetition from nues/are nas

State economof y Artist fe ticket pries/ ce

A lack o f suit headlinaeble rs


Business Factors One of the most telling segments in our annual arenas’ health check is our question to venue managers regarding the issues that keep them awake at night. Unsurprisingly, one of the biggest worries among our survey participants remains artists fees/ticket prices – the number one

concern since we started the survey four years ago. But leapfrogging that category this year among European venues is the economy, which didn’t even feature in our first report, way back when governments were still solvent and the term ‘banker’ was not an insult. Remember that? “We are budgeting and predicting to do better in 2012 than in 2011, however the state of the economy will affect bar-spend and ticket-sales; but overall we will have more events,” says Laura Yeats of the 8,500-capacity Press & Journal Arena in Aberdeen, Scotland. “We are a small venue and there are larger, newer venues coming on stream, so people will be looking for a higher quality experience.” Looking back to 2011, the move to host more nonmusic productions is perhaps a result of the next major factor identified by those who completed our poll. ‘A lack of suitable headliners’ once again figured strongly, notably in the most established live music markets of the UK, Germany and the Netherlands. Kai Müller, senior event manager at o2 World Hamburg, believes that 2012 will see less international acts playing arenas, but more domestic acts stepping up to arena-level. Looking to the future, Müller thinks such market shifts will result in venues introducing more flexible seating variants. “Arenas will create more events [within the event], like after-show parties and pre-concert parties to offer more value to the customer,” he adds.

VIP and Sponsorship

Although a global tightening of purse strings has resulted in sponsorship opportunities and corporate deals becoming less prevalent, some venue managers are relishing the challenge of devising new strategies to maximise revenue streams. “The industry must consolidate different aspects [that are] complementary to the show,” says Jorge Vinha da Silva, general manager at the Pavilhão Atlântico in Portugal, who cites naming rights deals and “new forms of commitments with brands” as ways to bolster revenues. He is banking on getting punters to stay longer in the proximity of the venue to help increase spending on merchandising and food and beverages – a feat he thinks is achievable through, “value-added services such as VIP seats, clubs, brand experiences inside the venue [and integrating] social media as a vehicle to [forge closer] bonds with consumers.” Those sentiments are echoed further north in the continent, where Edgars Buncis at the Arena Riga in Latvia states, “Arenas will be forced to create leisure and food court possibilities to try to get more income, as there is less and less margin on regular operations.” Buncis reveals Arena Riga is even considering reducing capacity to devote more space to the higher margin VIP sector: “We are evaluating possibilities to potentially kill seats and create ‘skyboxes’.” Away from the headline-grabbing naming rights deals, the temptation of premium-priced packages lured more and more venues to develop their high-end facilities during 2011, while others report similar moves in the months

ahead. Müller at o2 World is typical. “[We are] opening a new VIP entrance and building with hospitality areas in spring 2012,” he says. Others exploiting opportunities among corporate and well-heeled fans are Helsinki’s Hartwall Areena (construction of a new kitchen and restaurant in the VIP area); Salzburgarena (new lounges offering catering and VIP packages); Frankfurt’s Kultur und Kongresszentrum Jahrhunderthalle (new VIP lounge); Gran Teatro Geox in Padova, Italy (VIP areas and backstage access); the Royal Albert Hall in London (additional VIP facilities); and Arena Leipzig (VIP ticketing and packages for its new Backstage Club). Dunstan underlines the heightened focus on VIP facilities, as margins squeezed elsewhere in the business put arena management under pressure. “Growing our hospitality business, Amplify, is a key strategic initiative,” says Dunstan. “This will include developing more value-added packages as well as premium packages, membership options and new facilities through our redevelopment of the NIA.” He discloses that more non-show-related revenue activity in terms of sponsorship, partnerships and hospitality/club-seat activity is also being reviewed by NEC Group. While the growth of VIP boxes and hospitality was a continuing trend in 2011, naming rights deals were few and far between, and sponsorship of secondary arena areas became a trickier proposition as corporate marketing budgets were slashed not just in Europe, but globally. However, the opportunity to exploit the positive

International Arenas Optimism amongst arena management appears to be global. The 19,000-capacity Coca-Cola dome in Johannesburg expects to stage up to 45 events this year (39 in 2011) as the market recovers and more live music tours visit South Africa. “We are slowly coming out of the recession and companies can see there is a market to launch new and entertaining events,” reports the venue’s commercial manager Warren Green. Live entertainment accounted for 36% of events last year and Green anticipates that will increase to about 42% in 2012, but like his compatriots in Europe, the arena is hoping to cast its net wider to attract more clients. “The perception is that the Coca-Cola dome is a venue that hosts exhibitions and concerts. [So we] need to educate companies that we can do,” adds Green, citing additional challenges such as a lack of reputable concert promoters, changes in the exchange rate and belt tightening amongst corporate sponsors. Further south, Stuart Clumpas, co-owner of Auckland’s Vector Arena, hones in on the flourishing demand for comedy in Europe as an alien concept. “Pop here is very strong, but there aren’t any Kiwi acts at arena level, so it’s all international acts we host – music accounts for about 70% of all shows at the arena.” Certain family shows

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perform extraordinarily well, mind you: Vector co-owner Bruce McTaggart was involved in the creation of Walking With Dinosaurs which sold 90,000 tickets in Auckland, making it the show’s biggest market globally. Enviously looking at European artist fees, Clumpas adds, “The biggest problem we face is exorbitant ticket prices: Dolly Parton is the equivalent of £200 (€240) – it was £60 (€72) in Glasgow. We always had to pay a premium to get acts to visit, but New Zealand is no farther away from Los Angeles as London, so those days should be over.” Paul Sergeant, general manager of Allphones Arena in Sydney, enjoyed a strong 2011, although attendance probably fell short of the 11% growth in Europe. “The economic climate is the same no matter what side of the planet you’re on at the moment,” says Sergeant. “Music ticket prices held their own here and family shows were similarly cautious, so prices may have increased a little, but nothing like the 13% you’ve seen in Europe.” Similar to New Zealand, Sergeant says comedy shows are not at arena-level yet, but monitoring what is happening with stand-up in Europe, he adds, “There is potential opportunity with comedy in the future.”

Sport palais Antwerpen

vibes associated with a shiny new arena did tempt a number of big deals. In Scotland, a new £125million (€151m) arena under construction alongside the SECC will be called the Scottish Hydro Arena after the energy supplier agreed a ten-year deal worth £15m (€18m). The 12,000-seater building is due to open next year. Also in the UK, automobile supermarket Motorpoint invested a “seven-figure sum” to secure a five-year deal for the 7,500-capacity Cardiff International Arena. Now known as the Motorpoint Arena Cardiff, the contract followed the same brand inking a similar deal for Sheffield Arena (Motorpoint Arena Sheffield) in August 2010. In the Netherlands, the new 17,000-capacity Ziggo Dome will open in June 2012 and takes its name from the country’s largest cable TV and broadband supplier. EAA head Bull admits sponsorship has become vitally important to the venues sector in recent years and points to clever deals such as the LG Arena and the state-of-theart technological support it gets from its partnership with the electronics giant as an additional benefit to finding the right benefactor. “Sponsors have seen some huge deals like O2 securing naming rights and how they have leveraged that and gone forward. But in these cash-strapped times, I definitely think there are some bargains to be had at the moment for sponsors in the arenas market.” Despite the vast strides forward made across the arenas sector, new buildings are not welcomed by all, as competition from other venues and the scramble for artist tours were also prominent business factors flagged up across the continent in our survey. Martin Ingham at the Capital FM Arena Nottingham notes, “Leeds Arena will add a new dynamic to the UK Arena market, the result of which may affect most of the other larger venues, with the exception of The O2 [arena].” But slightly further north at the SECC, head of concerts and events sales Allan Snedden sums up the bullish nature of the arenas business. “Our confidence is underlined by the fact that we are building a new arena,” says Snedden. “Providing that the quality of product is maintained and all areas of pricing remain sensible and in tune with market forces, the sector can sustain the growth of recent years. There is no doubt that margins will be under pressure and ancillary spend will be harder to achieve, but nobody said it was going to be easy.”

Conclusion All in all, Europe’s arenas enjoyed a solid year despite a challenging financial environment during 2011, and it could be argued that, given the economic black hole in which many countries find themselves, governments could do well to follow the lead of the venues market – invest when the chips are down to ensure the future health of the business when normality returns. The emergence of live music during the last decade as the primary source for artists’ income has also seen managers, lawyers and accountants trying to squeeze every last penny out of promoters and venues, with 80/20 deals becoming commonplace and 90/10 splits being cautiously whispered about. Despite such pressures, the arenas business continues to thrive and with a slew of new stateof-the-art halls raising the bar for both performers and their audience, existing venues across Europe have initiated ambitious refurbishment plans and invested millions of Euros to deliver comfortable, high-spec spaces for punters to enjoy their fill of live entertainment. That ongoing commitment to improving buildings has undoubtedly helped the European arenas market become the envy of the world – and a must-visit circuit for international artists looking to take their talent on the road. The achievement of increasing total attendance by 11% cannot be understated. Unemployment figures are rising throughout the continent and there are very few households that are not cutting back on luxuries during this prolonged recession. But, if anything, the public desire for live entertainment has increased and that is attributable in no small part to the foresight of arena management collectively putting its money where its mouth is. The fact that venues are now ramping up their VIP offers, improving food and beverage facilities and taking more control of ticketing is another indication of the savvy, longterm strategic thinking prevalent throughout the business, which should keep the sector buoyant for years to come.

Participating Arenas Ahoy Rotterdam (NL), Amsterdam Arena (NL), Ancienne Belgique (BE), Antwerps Sportpaleis (BE), Arena Beograd (RS), Arena Leipzig (DE), Arena Riga (LV), Capital FM Arena Nottingham (UK), CEZ ARENA (CZ), Earls Court & Olympia (UK), Echo Arena Liverpool (UK), Gran Teatro GEOX (IT), Hallenstadion Zürich (CH), Hanns-Martin-Schleyer-Halle (DE), Hartwall-Areena (FI), Kultur-und Kongresszentrum Jahrhunderthalle (DE), LG Arena (UK), Lotto Arena (BE), Malmö Arena (SE), Mediolanum Forum (IT), Metro Radio Arena (UK), Motorpoint Arena Cardiff (UK),

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Motorpoint Arena Sheffield (UK), O2 arena Prague (CZ), o2 World Hamburg (DE), Odyssey Arena (UK), Olympic Hall Munich (DE), Palais Omnisports de Paris Bercy (FR), Palalottomatica (IT), Palau Sant Jordi (ES), Pavilhão Atlântico (PT), Porsche-Arena (DE), Press & Journal Arena (UK), Rittal Arena Wetzlar (DE), Royal Albert Hall (UK), Salzburgarena (AT), SAP Arena (DE), SECC (UK), Stechert Arena (DE), The NIA (UK), The O2 arena (UK), The O2 Dublin (IE), Tipsport arena (CZ), Wembley Arena (UK), Westfalenhallen Dortmund (DE), Westpoint Arena (UK).

European Arena Report 2012  

IQ's annual examination of the European Arenas business