Are we spending too much on stadiums?

The_Wookie Roar Guru

By The_Wookie, The_Wookie is a Roar Guru

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    As a sports fan, I love a good stadium. As an AFL fan, we’ve enjoyed the ovals and upgrades to facilities that are announced on a regular basis. However, as an Australian taxpayer, I have to ask whether it’s all a bit too much.

    In recent times, more than 1.8 billion dollars has been allocated to stadium builds – and yes, much of that comes from the Adelaide and Perth developments. $100 million of it will come from the AFL and various crickeet trusts.

    The $1.8 billion rises to $2.5 billion if you factor in the last eight years (which includes a $464 million MCG Northern Stand Redevelopment, though admittedly only $77 million came from the Victorian government). The question we should all be asking is just how State Governments will find the $1.7 billion to build stadiums.

    You have to remember that these are the same states complaining they don’t have enough funds, in particular South Australia and Western Australia, who complain about funding shortfalls every time the budget is due.

    Apparently, though, they think nothing of spending an easy half billion dollars on professional sports infrastucture.

    In Perth, NIB stadium has received approval for an $82 million stadium upgrade, while at the same time the government intends to spend another $700 million on a stadium that will be used maybe 25 times a year for AFL matches.

    From a pure economic standpoint, wouldnt that extra $85 million best have been invested in the 60,000 seat stadium that will sell out perhaps twice a year, if only to justify the return on investment over time?

    Instead, you have union, A-League, and potentially rugby league playing out of the little 25,000 seat rectangular stadium, cricket playing out of the WACA, and AFL having this massive tailored stadium more or less to itself.

    In Adelaide, the economics border on ridiculous. The A-League club will play out of the 15,000 seat Hindmarsh stadium, while two AFL clubs will play out of the new, shiny Adelaide Oval they will share with cricket. Cricket barely utilises the ground to its current capacity, let alone requires the new one.

    In Sydney, the SCG has approved a 186 million dollar upgrade – whole stadiums have been built for this recently – in a stadium that is almost never full, while the government is upgrading the showgrounds despite there being an 80,000-seat oval stadium right next door, and an underutilised 36,000 seat stadium across the city.

    In Queensland the government has recently built Carrara, which aside from Commonwealth Games use will only be used for 11 AFL matches a year, while across the coast is a rectangular stadium that is also underused by its tenants.

    Yes, I get that soccer, league and union are vastly better to watch in rectangular stadia. I just can’t justify it in the face of hospital closures and extensive waiting lists for critical procedures. I can’t justify it when funding for life saving medical treatments is being cut or is non-existent. I known where I’d rather our taxpayer funds go.

    People won’t die if they have to watch Australian football at ANZ Stadium, people won’t die if they have to watch football at the new Perth stadium. Then there are other issues. There are 180,000 homeless people in Australia that need help – they won’t be able to sleep on the bright red Carrara terraces. Tens of thousands of people live below the poverty line – they wont be able to afford the food at ANZ stadium anyway. Thousands more are out of work and will not benefit from these stadiums one iota. The refugee issue gets no closer to being solved by building the stadium at Burswood, unless it will house the boat arrivals when they get here.

    Where have our governments’ priorities gone when giant edifices which primarily benefit professional sporting organisations that rake in millions per year in profit are put ahead of public health and safety? Surely if we must build stadiums – and I get that sport is an essential part of Australian culture – then the public have a right to expect more bang for their dollar?

    It’s not like the average community player will benefit. Most will never set foot on the turf, or do anything other than sit in one of the brightly coloured seats for which they have had to mortgage thir house, and sell their cars in order to buy a pie and a beer in a plastic cup.

    Cricket and the AFL share grounds across the country, while rugby league, union and football have all been played on the MCG and Etihad. Not to mention the Gabba, Carrara and the SCG. It can be done, it should be done. Theroetically the more use you get out of a stadium, the cheaper it should be for patrons to enter. Compare AFL entry prices at the MCG with anywhere else in the country for most sports.

    Stadiums should be for the consideration of all.

    Major Stadium Grants in 2011-12
    Skoda Stadium (Sydney Showgrounds) – $20 million
    Metricon Stadium (Gold Coast) – $144 million
    Sydney Cricket Ground – $186 million
    Melbourne Cricket Ground (Southern Stand) – $55 million
    Simonds Stadium (Geelong) – $29 million
    Adelaide Oval – $570 million
    Burswood Stadium (Perth) – $700 million
    NIB Stadium (Perth) – $82.5 million
    Bellerive OVal (Tas) – $21 million (applied for)
    WIN Stadium (NSW) – $29.8 million
    Penrith Stadium (NSW) – $5 million
    ———————————————-
    Total: 1.8 billion
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    The Crowd Says (67)

    • January 7th 2012 @ 8:05am
      Maximus said | January 7th 2012 @ 8:05am | ! Report

      Some is new infrastructure, some replacement – all will generate income so this discussion about spending it on schools, hospitals, homeless is mere “heartstring stuff”. They are structured investments – The GC Suns stadium had Qld Govt backing not only for the Comm Games but also the attraction of Victorian tourists coming to the GC in winter. Should we not build toll roads either??

      • Roar Guru

        January 7th 2012 @ 9:18am
        The_Wookie said | January 7th 2012 @ 9:18am | ! Report

        Not that toll roads are relevant to the discussion at hand – and no we shouldnt build them. Its why we pay taxes.

        I do however have massive issues with taxpayers funding massive stadiums for the benefit of professional sport when there are many other things that require the attention of the public purse. Hell ANZ PAYS clubs to play at the stadium – governments shouldnt be paying clubs to do anything. In Sydney alone, you’ve got the SCG – never full – and the SFS – again rarely if ever full since 1999, because they were superseded by a larger stadium that is full maybe twice a year.

        In Adelaide, the state government is effectively building a new stadium while not asking for a cent from the SANFL despite it being the main user of the place – and having a 50% share in the stadium management, while it sits on an empty relic that will be worth 200 million – just in LAND sales after the move to the city.

        in Melbourne, governments spend millions on “community projects” which are effectively donations to AFL clubs so they can set up state of the art facilities which they otherwise couldnt afford.

        • January 7th 2012 @ 10:25am
          Maximus said | January 7th 2012 @ 10:25am | ! Report

          Melbourne wouldnt have the road system it has now if it wasnt for private toll roads and this takes pressure off other roads. The NSW Govt would have never built the M5 or M2 without private money but its true there should be a mix of funding

      • January 7th 2012 @ 10:22am
        Timmuh said | January 7th 2012 @ 10:22am | ! Report

        “All will generate income” – yes, they will.
        How many will generate income back to the taxpayer equal to, or in excess of, the funding the taxpayer puts in? State governments often go on about the amount of “economic activity” generated by an event. That’s fine, but very little of that economic activity is returned to the taxpayer at state level; some goes to wages, some to corporate bottom lines and some of that to income, consumption and company taxes at the federal level. The state’s bottom line, however, is usually a very big hit.
        Not everything governments do is supposed to have a financially positive return on investment (which is one reason ahy toll roads should not be built – transport, roads and public are vital infrastructure where losses must be incurred for other parts of the economy, and peopel’s lifestyles, to work), but how big a loss is acceptable on discretionary spending when state and territory governments are closing schools and hospitals, and thanks to decades of neglect need billions in transport infrastructure spending, billions more in energy infrastructure spending etc. Under those circumstances, with some states running budget deficits for the forseeable future, how much spending on professional sport is appropriate?

    • January 7th 2012 @ 9:13am
      Fake ex-AFL fan said | January 7th 2012 @ 9:13am | ! Report

      The tricky thing about public funding of sports stadia is that it can be challenging to quantify the benefits. Personally I’d prefer it if all sporting bodies built and maintained their own without recourse to the public purse, however from another perspective sports fans are tax payers and deserve to have some government largesse thrown their way, particularly when they’ve been historically neglected (e.g. fans of league, union and soccer in Melbourne).

      It’s also worth mentioning that it’s not as if these stadia are then provided free of charge – teams have to pay rent to play at them and the government remains the landlord. I assume that the finances are structured so that the anticipated earnings over the lifetime of the facility (let’s say 25 years for a modern stadium) fund both its maintenance and eventual replacement. So if the WA govt throws half a billion at an AFL ground in Perth (which will still be used for big soccer and rugby matches), it’s the fans of the Weagles and Dockers who’ll pay it off anyway – it’s not like they get in for free.

      • Roar Guru

        January 7th 2012 @ 9:21am
        The_Wookie said | January 7th 2012 @ 9:21am | ! Report

        and yet the dockers and the eagles fans have the highest entry prices and membership costs of any AFL club by quite a fair margin as well.

        The MCC does fund most of its works, thats true, and even the SCG trust can put up some funding. Adelaide Oval is going to cost 570 million about 12 months after the government spent 85 million at the ground. The SACA havent paid for the damn thing – probably ever.

    • January 7th 2012 @ 9:24am
      Kasey said | January 7th 2012 @ 9:24am | ! Report

      I’m not sure I understand your point. Are you saying that stadia should be rationalized and only oval shaped grounds should be built? therefore every sport should play on Oval grounds? Because that’s the impression I get.

      • Roar Guru

        January 7th 2012 @ 9:27am
        The_Wookie said | January 7th 2012 @ 9:27am | ! Report

        the article does give that impression its true. And there are a plenty of soccer clubs around the world – it is after a world game right – that play inside of atheltic tracks and otherwise. However if you are going to build a new stadium, the systems used at Docklands/Stadium Australia where they have retractable grandstands are probably the most cost effective for australian sport in general.

        • January 7th 2012 @ 9:31am
          Titus said | January 7th 2012 @ 9:31am | ! Report

          But the retractable seating at docklands rarely gets used, whats the point building it if you don’t use it?

          Its the same with ANZ, it is universally despised by Football fans for its poor atmosphere and poor viewing, I would imagine it is the same for League fans. Now they have built a new stadium next door for AFL and Cricket because the stadium didn’t suit them.

          My problem, if anything, is that so little planning goes into getting the stadiums right so that they become used and loved by the sporting public.

          • January 7th 2012 @ 9:35am
            Kasey said | January 7th 2012 @ 9:35am | ! Report

            exactly Titus.
            live sport is losing out all over the world to TV. Even the behemoth NFL is investigating new ways to get fans off the couch and into the stadia. Why should fans give up their perfect seat on the couch in front of the plasma for second rate viewing? watching football at Docklands with the seats in Oval mode is terrible? No wonder Heart’s fanbase is growing with their commitment to play all games at AAMI Pk.
            Using Italian stadia as a reference is fraught with danger. Their stadia are owned by the municipalities not the clubs as in England. However one of the biggest clubs in the world, Juventus have built their own rectangular 40k stadium to provide a better experience and revenue streams for the club.

            • January 7th 2012 @ 9:48am
              Kasey said | January 7th 2012 @ 9:48am | ! Report

              I should also add that the Italian League ‘used’ to be the undisputed number 1 football league in the world, but these days is in serious decline. Why is that? It could be the cyclical nature of football, but one of the reasons that is being explored is that other leagues like England and Germany give their spectators a much better fan experience.

              • Roar Guru

                January 7th 2012 @ 10:27am
                The Cattery said | January 7th 2012 @ 10:27am | ! Report

                The Italian disease is simply a case of ultras taking control of whole stadiums, or very large chunks of it, and basically holding clubs to ransom, to an extent where gang leaders effectively extort revenue from ticket sales that rightfully belong to the club.

                It is basicallly a domain for young males – and the pretty low attendances reflect this -which is why I always argue strongly against the A-League falling into the same trap.

                It reminds me of Dugald’s recent article of the Turkish experience, where males over the age of 12 were excluded from a club’s games, and the stadium was full of women and young children, who normally would not attend a game.

    • January 7th 2012 @ 9:30am
      Fairy said | January 7th 2012 @ 9:30am | ! Report

      I see this as “reinventing the wheel”. We the stadiums are there but not being used to capacity, so how do they justify the upgrade? Spend more money with the same number of attendees means longer to pay off.

      The real issue I have is that prices to attend are at ridiculous levels and keep rising; they have to pay off the stadium and upgrades!

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    • Roar Guru

      January 7th 2012 @ 10:32am
      The Cattery said | January 7th 2012 @ 10:32am | ! Report

      At this point, it’s worth reminding everyone that Docklands was built with zero government contribution, fully funded by private debt, with the AFL contributing the proceeds of the sale of Waverley which it owned outright, and taking on full ownership in 2025.

      Similarly, the people’s ground, the MCG, has been completely rebuilt with Government contributing only 15% of the total cost, the remainder funded by private debt, which has to be paid off over a 30 year period.

    • January 7th 2012 @ 10:34am
      Paul said | January 7th 2012 @ 10:34am | ! Report

      Your argument is flawed. I live in Columbus, Ohio. In the late 90’s, voters here rejected a plan to spend roughly $180 million to build an arena for the (then) recently ranted NHL expansion team, the Columbus Blue Jackets. Exactly on the arguments you present. Nationwide Insurance Company went ahead and built the arena instead. Since it’s opening in 2000, the area around the arena has exploded with restaurants, bars, office buildings and one hotel (Then, recently, a publicly financed baseball park for our minor league team, the Clippers.). This building/business “explosion” has generated nearly $1 billion dollars in tax revenue for the city of Columbus. To me, that sounds like a very good return on the $180 million that would have been spent. Now, an arrangement has been made for the city of Columbus and Franklin County to buy the arena, based on the Blue Jackets signing a 30 year lease. Now, if nearly $1 billion in tax revenues was raised in 11 years, you do the math and figure out how much will raised in 30 years.
      Arenas and stadia can not be judged in comparison to any other building. If your so worried about how much money state governments don’t have, why not ask why those governments have such large bureaucracies and bureaucrats with such high salaries.

      • September 25th 2013 @ 8:17am
        Adrian said | September 25th 2013 @ 8:17am | ! Report

        You have hit the nail on the Head! Brilliant point!

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