Whilst Germany has fully capitalised on the stadium development opportunity offered through the hosting of the 2006 FIFA World Cup, it is commonly accepted that a number of the difficulties encountered by Italian Serie A clubs in the past several years are linked to the missed opportunity of developing state of the art venues for the 1990 FIFA World Cup. Can the stadium development plans associated with the UEFA EURO 2016 take French clubs to the next level?
In June 2016 France will host the 15th edition of the UEFA EURO for the third time since its inception in 1960. This will be the first time since the 2006 FIFA World Cup that a ‘big five’ country will host a major football event.
The competition will take place in ten venues spread around the country, with Stade de France, the French national stadium, hosting both the opening game and the final. Investment in the stadia that are staging the tournament has included the development of four new venues in Bordeaux, Lyon, Lille and Nice along with the renovation of six others.
What impact could the significant investment made have on the performance of French clubs both domestically and in relation to its peer group around Europe?
From a supply perspective the investment will result in an increase in the aggregate capacity of Ligue 1 stadia of approximately 86,0001, bringing the average capacity to approximately 32,000. In addition, the further redevelopment of Parc des Princes, the home of Paris Saint-Germain, which is planned to occur after EURO 2016, will also increase the capacity of French venues. This increased capacity potentially offers an additional revenue generation opportunity for several clubs. However, compared to its peers, this average capacity level is still below that of all the other ‘big five’ European leagues, based on the teams that are in these leagues in 2015/16.
What will also be important for French clubs is that the investment is not all about increasing capacity but also the quality of the venues, enhancing the matchday experience for spectators. As such there are improvements in the hospitality offer, technology standards, food and beverage outlets, retail facilities, conference and exhibition space and, in some cases, even museums. These amenities should boost revenue during games and also provide commercial opportunities for their respective clubs all year round.
From a demand perspective, the most recent performance indicator shows positive signs for Ligue 1. In the 2014/15 season the average attendance at league matches increased by almost 6% from 21,155 to 22,362.
Some of these gains are as a result of the so-called ‘new stadium effect’ being felt by OCG Nice and Lille OSC. Compared to the last season in their old stadium, OCG Nice have an average attendance 78% higher whilst Lille OSC’s average attendance is 128% higher. Further new stadium related gains could be made by Girondins de Bordeaux, now that the Nouveau Stade de Bordeaux is operational, and Olympique Lyonnais when their new venue opens.
Our analysis suggests that Ligue 1’s average attendance in 2014/15 overtook that of Serie A and is currently fourth among the ‘big five’ leagues, with the next highest league being Spain (average attendance in 2014/15 equating to c25,700). Assuming a static performance in La Liga, a compound annual growth rate of slightly more than 7% over the next two seasons is required in the average attendance of Ligue 1 in order to overtake Spain.
Obviously, the increased number of attendees could also lead to a growth in matchday revenue for French clubs. According to available data, during the 2013/14 season the average revenue per attendee (REVPA) of Ligue 1 teams was almost EUR17. Whilst this was considerably below the REVPA in Germany and England our research suggests that both the Italian Serie A (EUR19) and the Spanish La Liga (EUR27) were also achieving higher yields.
The increase in the commercialisation of the stadia should provide opportunities to enhance the yield achieved from matchday spectators, not only because of the increase in attendance levels. All venues appear to be championing the investment in technology with wi-fi networks and other technological solutions not only enhancing the matchday experience, but also opening up essential tools in the promotion of other services and products.
Undoubtedly there will be opportunities for the French Ligue 1 clubs to utilise UEFA EURO 2016 as a catalyst to compete with Italy and Spain across a number of key performance indicators as well as close the gap on the German and English leagues. However, it would still appear that a longer-term sustained uplift in both attendance and the spending of spectators at the stadium is required before Ligue 1 could seriously challenge the top two matchday performers in terms of attendance, matchday revenues and stadium utilisation.
 This calculation includes the new stadium of Olympique Lyonnais, which has not opened yet, but excludes the increase in the capacity of Stade Bollaert-Delelis, which is the home of Ligue 2 club RC Lens.