Economics
“Worldwide research has shown that cities are the economic drivers for their regions and a successful Belfast will result in a booming Northern Ireland. We need the Government and others in the public and private sector to ensure their policies and investment plans enable Belfast to continue to grow for the benefit of all. ”(1)
Wallace Brown, Lord Mayor of Belfast

According to the SIB, the new stadium will cost £85million. Additional road infrastructure will cost at least £30million. Cleansing the Maze site will cost £3.75million. When the cost of staff, employment of consultants, general expenses and the tendering process is totaled, the new stadium could double from the original £55million proposal. Such a huge investment of public money needs to pay for itself.

One of three main considerations in the terms of reference(2) was:
Economic Benefits to Northern Ireland (e.g. image, profile, local spend, spin-off investment, potential for commercial revenue support)

Critically, however, when it came to the site selection exercise, this criterion was altered to include only a “key element” (i.e. “enabling development”), thus ruling out a consideration of the wider economic benefits to Northern Ireland(3).

 Unsurprisingly, with this criterion effectively removed, the SIB concluded that the economy of Northern Ireland is best served by locating the stadium at the Maze. As the Maze is an out-of-town site, this is clearly contrary to the Government’s own RDS, BMAP and expert opinion. The RDS seeks to ‘invest in the urban hubs’ such as Belfast and seeks “a stronger role for Belfast as an international city”.

Does it matter where the stadium is sited?
Actually, it does. Modern stadiums need associated development to pay for their large initial capital cost. Whilst conference facilities may be located in any new stadium, other revenue streams are needed. “Stadiums need museums, cafes, restaurants etc as grounds are not used for approx 320+ days of the year”.(4)

Most of these are dependent on ‘passing trade’ which is not available at an out-of-town site.

In the late sixties and early seventies, stadiums in the USA were mostly relocated outside urban areas. A study into stadium development in the 1960s and 1970s conducted by the Florida State University supports this. “A prime example was the construction of The Meadowlands in New Jersey to house the New York City football teams. The sports complex was literally put in the middle of a large empty field, adjacent to an Interstate, so that fans could have easy access to and easy departure from the stadium. On the down side, the stadium is in many ways inaccessible other than through cars and buses. Further, the economic benefits resulting from the crowds attending games are minimized."

Sounding similar to the Maze proposal, this view does not offer hope for much economic benefit to Northern Ireland. This is supported further in an influential article by Baade and Dye in 1988. When describing Comiskey Park in Chicago they noted, "Fans stream to the game in their cars, park in large decks, go directly back to those decks after the game and depart directly for home. This suburban model will tend to minimize the economic benefits".(5)

Do ‘urban’ stadiums really bring many more economic benefits?
The Cardiff Research Centre estimated that the construction of the Millennium Stadium brought in 2,250 jobs, generated an additional £180million spend in the city centre and “has acted as a further catalyst in breathing life into central infrastructure”. Rapid development included two 5-star hotels and an increase in restaurants and licensed premises. The city centre now has capacity for 66,000 within its licensed premises. The Henley Centre for Economic Forecasting described Cardiff as “an embryonic super-city on the cusp of global stardom”. Moreover, it estimated that visitors spend £268million in the city centre of Cardiff.

This is borne out in other British cities. It is believed that the 2005 Rugby European Cup Final in Edinburgh netted the Scottish economy £12million, some £9.5million of which was spent in the capital alone. Research by ‘Sports Marketing Surveys’ found that 24% of fans took time to shop in Edinburgh spending an average of £114 per person; and 16% visited tourist sites.

A study by Durham University Business School found 3,000 jobs were a direct result of football in Liverpool. When Liverpool played at home, 78% of local businesses reported an increase in trade of between 10-25%.(6)

Meeting with us in November 2005, Tony Whitehead listed the KC Stadium in Hull as an example of a stadium which boosted attendance. Since he was at pains to point this out to us, he may be interested in the views of John Topliss, project manager for the stadium: “There are huge advantages to having the stadium where it is instead of at some out-of-town site”.(7)

UK examples that enhanced property values include the Millennium Stadium and the City of Manchester Stadium.(8) Sir Stuart Lipton (Chairman, Commission for Architecture and the Built Environment [CABE]) stated in 2001: "investing in high-quality new landmark buildings and public spaces around them will boost the local economy, crime rates will fall, and businesses and residents will start to move into the area "(9) .

Citing ‘the new’ Wembley as a perfect example as a catalyst of regeneration (Brent was one of the 20 most deprived boroughs in England), he also said that "while CABE strongly supports regeneration in all regions the obvious location for a national stadium is our capital city"

Business Eye, the leading business magazine in Northern Ireland, in an editorial in 2004, supported the call for any stadium to be built in the capital: “A stadium isn’t just a place to host showpiece matches… A stadium should also be gainfully employed as a magnet for economic growth and for inward tourism. What is effectively a rural site to the west of Belfast is definitely not the right place to build a stadium”.(10)

David Carson , Professor of Marketing at the University of Ulster, added “An isolated business never does as well as one in close proximity to other businesses. It is best located in a major city centre that naturally attracts large concentrations of population”.

Attending the Hospitality Exchange Forum – a major tourist industry conference – he commented that “a distinguished panel of leading hospitality and tourism industry leaders” voiced opinion on the subject: “It was interesting to note huge agreement for the location of such a concept as being in the city centre”.

Worryingly, he concludes “It was clear from the discussions at this meeting that few if any of these industry leaders had been consulted for their expertise”. (11)

But what will benefit the IFA?
A museum can be a great attraction. The National Football Museum in Preston welcomed 100,000 visitors this year. It had beaten its 80,000 visitor target for 2004-05 as set out by the Department for Culture, Media and Sport (DCMS).(12)

In Scotland, the museum at Hampden attracts 50,000 visitors and can also offer a tour of the stadium. It recently won a major award from the Scottish Tourist Board to match one awarded by UEFA.(13) A showcase for the British Championship trophy; a George Best collection; video footage and testimonies from the ’58, ’82 and ’86 squads; and modern exploits like Healy’s goal versus England could attract a large audience.

Situated in the city centre, this could benefit from the growing tourism in the city. Situated at the Maze, this will not be as accessible to a wider audience.

Merchandising has also become an increasing revenue stream. With a city centre stadium, a shop located here becomes more available to the public.

Paired with the museum it creates a central resource for the IFA lowering costs but maximising potential. An out-of-town location will not provide this.

What about ownership?
That is another key concern. At present, the SIB proposal would allow the stadium operator to retain the majority of associated profit. Concessions within grounds generate huge sums of money through food and drinks sales.

With an effective monopoly due to its rural location, any concession operator at the Maze will definitely generate significant income. The IFA must have a cut of this in any proposal.

There is also the worry that, since – unlike football - GAA and rugby – are not being asked to commit exclusively to the Maze (i.e. they will continue to retain alternative stadiums), they will always have the option of returning to their own stadiums, leaving football as the sole tenant in the future.

Whilst this may not be apparent in the first operating contract, it may be a facet in the next. In such a scenario, the stadium operator will be obliged to recoup the lost revenue from the other sports through increased rental charges to the IFA. With no stadium to return to, the IFA would find itself in a very weak negotiating position.

Where does this leave the IFA?
With no ancillary revenue streams (concessions, shop, etc.), the IFA’s only revenue generation will come from ticket sales. Having to pay a flat rate of £500,000 per annum, this may force ticket prices up with little resulting benefit to the IFA. As we do not forecast a permanent long-term vast increase in attendance, and coupled with falling prices in TV rights contracts, it is hard to see any wisdom in accepting this situation.

There is also the factor of the contract with Linfield. If there is no means to get out of the contract without large amounts of compensation, will the Maze proposal cover these losses?

Economically, it is hard to see how the present proposal benefits the IFA. It is essential that any proposal must have football’s needs at its core. With a need to recoup a large capital investment by having a private contractor run the stadium, we do not see how the present proposal allows major revenue generation for football outside those currently available.

The examples shown above have shown that city centre stadiums can attract greater economic returns. In line with regional development policy, a Belfast site offers the additional benefits of ‘passing trade’ to the IFA. Whilst only the ‘hardcore’ may travel to the Maze, a central Belfast location allows those with a lesser interest an easier opportunity to visit the IFA.

(1) Hanson Announces The Way Forward For Regenerating Belfast City Centre: http://www.nics.gov.uk/press/sd/050804e-sd.htm 4th August 2005

(2) Terms Of Reference For The Provision Of Consultancy Services For An Outline Business Case (Including Economic Appraisal) Of The Multi-Sports Stadium Project; SIB; 19/01/05

(3) Davis Langdon, Site Selection Technical Report (obtained under Freedom of Information Act 2000)

(4) Sport and Local Economic Development: The Experience of English Football; Professor Roger Penn, Lancaster University; October 2002

(5) http://garnet.acns.fsu.edu/~tchapin/stadia/why-stad.html#Dev

(6) Sports Stadiums and Area Development: A Critical Review; Economic Development Quarterly, 1988

(7) Guardian, October 2001

(8) Hull In Print, December 2002

(9) Sports Stadia and the Property Market, Dr. Larissa Davies, Area Vol. 37, No. 3, 2005

(10) Guardian, May 4 th 2001

(11) www.businesseye.co.uk/editor_comment/?issueid=11

(12) ‘Field of Dreams’ stadium could become a nightmare; Newsletter, 11 th October 2005

(13) The Independent 20th August 2006