Off the Wall

There are ominous signs for fans, and NRL clubs, in a study of the financial status of the major stadiums published in the "Australian Financial Review" today.

The financial health of major stadiums is Sydney, Brisbane and Melbourne deteriorated last year with an overall drop in patronage combining with lower advertising and corporate box hire revenues to send the major stadiums into the red.

The group running ANZ Stadium in Sydney lost around $4 million. Stadiums Queensland which runs Suncorp, the Gabba, Skilled Park and Dairy Farmers lost $23 million...despite massive government funding grants. And Etihad Stadium in Melbourne made an operating loss of $17 million last year.

A significant number of NRL clubs have reduced admission costs, and introduced more family packages, to lift attendances. The results have been mixed - some clubs have done better attendance wise, while some have actually gone backwards.

The reasons why relate to more than just admission costs - how teams perform is obviously a major factor - and live television broadcasts have an impact.

But there is another factor which the clubs cannot control at the major stadiums - the cost of food and drink.

I believe the cost at the major venues is way over the top - and not comparable at all with what we have to pay in shopping centres etc.

There is one main reason why - the catering rights at major venues are generally held by one major catering company, which had to pay a substantial fee to the stadium owner or operator to gain the catering rights. Now overtime etc are a factor - but the fee paid to the stadium is clearly a major one.

But these are monopoly arrangements - and many stadiums won't allow fans to take food and drink in with them, or have limits on what can be taken in.

The ominous sign is that as state governments, and private owners (such as the owners of Etihad and ANZ Stadiums) seek to recoup losses they are going to extract even more from advertisers, corporate box users and food and liquor vendors.

And, as economic conditions improve they are going to want more from NRL clubs in ground rental charges and other costs, such as security (already excessive).

But they are also going to demand more because cash strapped state governments are wanting to reduce their subsidy to stadiums. That is especially as issue in Queensland where all major stadiums are owned by the state government, and are carrying massive debt as a result of Suncorp, the Gabba and Skilled Park either being new stadiums or totally redeveloped ones.

There may be some relief on the horizon for suburban and regional stadiums - including those owned by clubs - if Soccer Australia succeeds in its bid to host the World Cup in either 2018 or 2022.

Clearly there will need to be major upgrades to stadiums to meet the requirements of soccer's world body - and any number of NRL venues could benefit from what will have to be government funded upgrades and redevelopments.

But when you look at the financial state of the owners of major stadiums, you have to fear the worst when it comes to the cost of going to the football in the future!

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