By Professor David Bamford, PhD
Most sports stadiums are not financially independent. Just consider the value of the ground and the associated running costs - the venue only uses a very small percentage of the available capacity and time for its main purpose, i.e. getting people to pay to watch an event. A typical football club will only have around 23 home games in a season and even if the venue has multiple ‘home’ teams in residence (football and perhaps a rugby team), it will still only have 46 days of ‘events’ in a year, which leaves plenty of empty seats for over 300 days!
So how do they survive from a business perspective? Well, some do not. Those that do either have large injections of external cash or have recognised that sport stadium do not have to be just about sport. They can host many other events, such as concerts and conventions, to help pay the bills for the facility. For example, the Seoul Olympic Stadium, built in 1984, has previously hosted the likes of Lady Ga Ga, Sir Paul McCartney, and even Coldplay. Likewise, the Gwangju World Cup Stadium, home of Gwangju FC has been the venue for the third Asia Song Festival, in 2006, organised by the Korea Foundation for International Culture Exchange, and in 2006 it was also the main venue for the 2015 Summer Universiade.
An interesting recent development in England has seen the Wasps Rugby Union Club in Coventry launch a £35m bond to create a sustainable business model. The club has been actively increasing attendance not just at matches but also at a whole host of non-sporting events. They see an opportunity to inject much needed funding and tie-in multiple stakeholders. The bond is open to investors and is intended to provide them with a potentially lucrative financial return. Through this the club gets access to cash and some measure of independent financial security.
But should others follow suit? There are certainly risks involved, but from an operational perspective the increased confidence that the financial security brings can allow clubs to really use their core asset – the stadium – to the full. Opportunities to enhance and expand business-to-business (B2B) relationships and networking events should create a positive, virtuous circle.
Coventry has approved Scunthorpe United's plans for a new 12,000-seater football stadium. The new ground will replace the current 9,000-capacity ground, which opened in 1980s, and will include a bar, gym, hotel and offices. The challenge they face will be to make it financially sustainable – this will no doubt be helped through B2B activities.
The ability to operate in an agile and possibly opportunistic manner so as to be able to respond to market needs is key in business, and increasingly in the business of sport. Accordingly, flexible mechanisms are necessary to respond to sports environment dynamics. Sophisticated software is starting to turn Big Data into useful information - making inroads into the scheduling of fixtures and officials (and possibly other things such as training facilities) not only for professionals but also at amateur level.
Biography
Professor David Bamford is an experienced industrialist/academic with multiple publications to his name, including two co-authored books: Managing Quality; Essential Guide to Operations Management.
Knowledge transfer is at the core of David’s career strategy. It provides a focus and direction for his research, grant applications, publications, teaching, and major administrative roles. Through it he has a significant involvement in knowledge creation and transfer in conjunction with various partner organisations, such as the NHS, First Train Group, Deloitte, PwC, TATA, SITA, and BP.
David’s research interests are focused towards operations improvement strategies, specifically in: the application of Operations Management theories in the service sector; strategic organisational change; leadership and quality management; and most recently sports operations management - E.g. His work at the London 2012 Paralympics, assessing athletes perceptions of the operational resources design and delivery, influenced design aspects of the Rio 2016 Games. He has recently researched levels of 'fan satisfaction' with a UK based Rugby Club.
