The stadium arms race
The stadium arms race
The battle to secure major events and new commercial revenue streams
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Introduction
There’s a stadium arms race taking place in Australia and across the globe.
Governments, owners and private equity are building new stadiums and upgrading existing ones to improve the fan experience, generate more matchday revenue & new commercial revenue streams, attract & retain major events, and stimulate economic growth.
Stadiums are no longer being built with the singular intention of maximising capacity. Instead, architects and engineers are pushing the boundaries with their designs and owners, governments and private organisations are stuck in a game of one-upmanship as they compete to secure major events and for their share of commercial revenue.
Below are some of the major stadium projects that have been proposed, recently-constructed or are current under construction around the world, along with their reported costs.
($AUD)
$8.7b - SoFi Stadium
$3.4b - Sphere
$3b – Intuit Dome
$2.7b – Gabba upgrade
$2.6b – Allegiant Stadium
$2.5b – Brisbane Arena
$2.3b - Santiago Bernabeu upgrade
$2b – Wyndham City Stadium
$2b – Camp Nou upgrade
$1.9b – Tottenham Hotspur Stadium
$1.6b - Optus Stadium
$1.2b – Lusail Stadium
$828m – Allianz Stadium upgrade
$715m - Hobart Stadium
$565m – Etihad Stadium upgrade
Why are new stadium projects taking place?
Stadiums impact the fan experience
A modern stadium can improve the fan experience in so many ways, and they’re increasingly becoming as much of a spectacle as the events they host.
Optus Stadium is one of Australia’s most modern stadiums and since opening it’s doors in 2018, it’s been voted Austadiums’ “best stadium of the year” every year, including in 2023. This has been thanks to its “fans-first” design, that has been praised for its functionality, technological advancement and urban planning.
Not only is this new stadium great for the fan, the broader precinct benefits the wider community thanks to surrounding features such as a well-landscaped public park, BBQ areas, playgrounds, fitness areas, art expositions and an amphitheater for 1,000 people.
Initially the Optus Stadium precinct was projected to cost $700 million, but like many other Australian projects it blew out substantially and became one of the most expensive projects ever built in WA, with a total cost of $1.6 billion - equating to roughly $1,500 per West Australian household or $600 per resident.
Not all Australian stadiums are striving for world-class status using the new-build approach though, others are applying upgrades to their existing ones.
Adelaide Oval redevelopment & ongoing reinvestment
The Adelaide Oval underwent a major $535 million redevelopment that delivered a state of the art stadium in 2014. Since opening, it has delivered Adelaide sports fans with a spectacular fan experience, and earned a reputation as a world-class events and entertainment destination.
Ongoing reinvestment is required to maintain this standing though, so recently, to further upgrade the fan experience, the Adelaide Oval recently announced a new $5 million LED upgrade to its tower lighting system, making it the only major stadium in Australia with tower lights equipped with both immaculate white sports lighting and full colour ‘light show’ capabilities.
Internationally, there are many extravagant stadium projects currently under construction, or that have recently finished, and not many of these are bigger than Los Angeles’ new Intuit Dome.
The LA Clippers’ Intuit Dome is set to take the NBA fan experience to the next level
The LA Clippers have always shared a stadium with the LA Lakers, and the Crypto.com arena has never felt like home for them. Stadiums provide such a key opportunity for both passionate fans and players to create an electric home-advantage atmosphere, but this has always been diluted for the Clippers.
Things are about to change for the them though, because starting next season they’ll enter their new $3 billion ($2b USD) home, that will feature a range of remarkable features.
Among them will be a dedicated seating area called “The Wall” - a Clippers-fan-only section where fans cannot:
Cheer for the opposition
Wear opposition gear
Check out the view from the top, and watch below:
The Intuit Dome is the baby of former Microsoft CEO Steve Ballmer, who privately financed it, paying a similar amount to what he purchased the team for years ago.
Not far away from the Intuit Dome is SoFi Stadium, another relatively new US stadium with startling features such as a Halo video board some label the “Eighth wonder of the world” and that:
Stretches 120 yards
Weighs 2.2 million pounds
Contains 70,000 square feet of digital LED
Houses 268 speakers
Requires 80 staff to create content for their videoboard on game day (producers, directors, camera operators etc.)
The fan experience that teams provide doesn’t have to be purely limited to in-stadium and match days though
Many US sports teams who own the land and outlets located around their stadiums have developed their spaces accordingly.
For example, The Battery in Atlanta (home of the Atlanta Braves) offers “an unprecedented entertainment experience” and features bars, restaurants, live music & entertainment, shopping and accommodation 365 days a year… not just on gamedays.
Not long ago, Detroit was named the best city for visiting NFL fans because of its 129 bars and 25+ sports bars within a one-mile radius of its stadium.
Experiences like these are good for all - the Detroit Lions’ recent NFL Divisional Playoff game was expected to net the city over $50 million in economic impacts, benefiting the broader business community.
Stadiums help attract major sports events and teams
Australia is a small country, but thanks to our sophisticated sports infrastructure we’ve been able to secure hosting rights to a number of major global sporting events such as the Australian Open, Formula 1 Grand Prix, FIFA Women’s World Cup and 2032 Brisbane Olympic Games to name a few.
Domestically, states vie to host major Australian-centric sporting tournaments & events, and lobby to enter new teams (representing their cities) into national competitions. Having the best stadium (or being committed to building it) and/or having a stadium that can be adapted for multipurpose use is key to a successful bid.
Perth’s new Optus stadium is a great example of how a premium stadium can attract major sport & entertainment events.
Given the upside, governments (across all levels) have been pouring big money into new stadium development projects.
In 2018, The AFL and Victorian Government announced a $500m mega deal
Among other things, part of this agreement included:
A $225m commitment to Marvel Stadium's recent revamp which aims to ensure it remains a world-class sport & entertainment venue, and attracts more events
The rights to host the AFL Grand Final at the Melbourne Cricket Ground until 2057
The NRL’s stadium development demands
Speaking of grand finals, the NRL has previously threated to move the NRL Grand Final to Brisbane if the NSW doesn’t commit to its stadium spending demands, including $800 million of funding for the development of suburban grounds such as Brookvale Oval, Leichhardt Oval and Shark Park.
The ARL Chairman, Peter V’landys, has shown that he’s open to change and to awarding the NRL’s major events to the highest bidder, or the destination that offers the best fan experience - The State of Origin Series will return to Optus Stadium for both the 2025 and 2028 series.
The Victorian Government has invested almost $1 billion into Melbourne Park since 2010
Melbourne Park has been home of the Australian Open since 1988 and thanks largely to the nearly $1 billion funding from the Victorian Government that enables it to provide the best facilities and amenities for players and fans (including 3 x operable roof and air-conditioned arenas), it will remain the home of the Australian Open until at least 2046.
Although the investment from the Victorian Government has been substantial to date, Tennis Australia CEO, Craig Tiley believes that ongoing government support is required to maintain the precinct’s global relevance and to counter the threat of private-equity (from Saudi Arabia).
Brisbane 2032 Olympic Games funding injection for new sports infrastructure
The destination’s that have recently hosted the Olympics have been burdened with huge costs:
Tokyo 2020 - $20 billion
Beijing 2022 - $58.5 billion
So a key element to Brisbane winning the rights to host the Brisbane 2032 Olympic Games was that they wouldn’t have to encounter these exorbitant costs because 84% of venues already exist or will only require temporary builds.
Brisbane is setting itself to become a “global powerhouse” according to Prime Minister Anthony Albanese and the State and Federal governments are injecting $7 billion worth of funding into new and upgraded stadiums and infrastructure to achieve this ahead of the games.
At the heart of Brisbane’s 2032 Olympic Games strategy is a $2.7 billion plan to rebuild the Gabba into an Olympic Stadium - a controversial project which is now under review from the State’s new Premier.
A new $2.5 billion Brisbane Arena development (also known as Brisbane Live) has also been proposed, along with 16 new or upgraded venues that will receive close to $1.87 billion.
New Hobart stadium proposal lures the AFL’s 19th team
As part of an agreement with the AFL that grants Tasmania a license to enter a new team into the competition in 2028, the construction of a brand new 23,000-seat roofed stadium is due to be built on the waterfront.
The project has been strongly backed by the Liberal State Government and even though a recent cost-benefit analysis has found it could add $2.26 billion in its first 10 years to the state’s economy, it’s attracted lots of opposition as it has been proposed at a time where many Australian’s are encountering cost of living pressures.
The cost of the $715m project has also been questioned, and many believe that it is has been underestimated. Either way, it’s currently due to be funded by the State Government ($375m), Federal Government ($240m), AFL ($15m) and borrowings or leases ($85m).
To help justify such exorbitant stadium project expenditure, stadiums are constantly looking to maximise their use to help deliver the best possible return on investment - see below the proposed use for Hobart’s new stadium.
Hobart aren’t the only ones trying to lure sports and entertainment events to their stadiums. Marvel Stadium has been trying to maximise its use and commercial revenue streams by hosting year-round sports events (AFL & BBL), music concerts, and even obscure events like Stadium Golf.
The same themes are taking place across the world - Building new stadiums to attract events is a global phenomenon.
Qatar spent $6.5 billion to build 7 new stadiums for the 2022 FIFA World Cup
This included Lusail Stadium, the destination of the final, and the first ever temporary world cup stadium made of shipping containers.
This cost was among the $200 billion that the country reportedly spent on hotels, roads, public spaces and transport.
In the US, the most modern stadiums are successfully attracting the biggest sports events:
NBA All Star Weekend 2026 - Intuit Dome
Super Bowl LVII - Allegiant Stadium
FIFA World Cup Final 2026 - AT&T Stadium (reportedly)
ICC T20 Cricket World Cup 2024 - New modular stadium is being built in New York
Las Vegas is increasingly cementing itself as the sports & entertainment capital of the world, with the help of its new stadium infrastructure
Over recent years, Las Vegas has successfully attracted major sports franchises such as:
Raiders (NFL)
Athletics (MLB)
Golden Knights (NHL)
…and events such as:
Formula 1 Grand Prix
NFL Super Bowl
NFL Draft
NBA In-season tournament
The ability to attract such large events has been due to 1) Sports betting becoming legalised 2) The city’s suite of world-class stadiums which include, Allegiant Stadium, T-Mobile Arena and the Sphere.
Las Vegas is set to host a staggering 39 significant annual sporting events or tournaments through 2024, including the NRL’s historic double-header season launch in March which which will cost the NRL about $1.2 million a year in stadium rental fee’s.
Everyone is lining up to enter Las Vegas - UFC President Dana White has previously revealed that he wants to host a UFC fight at the Sphere, and Las Vegas-based Top Rank Boxing is also interested in the same thing.
Around the world, there are many noteworthy projects that have also taken place, or that are currently under construction.
Real Madrid is constructing “The best stadium in the world”
The Santiago Bernabéu have spent 4 years constructing their high-profile stadium which includes an epic retractable turf and roof.
Thanks to these unique features, Real Madrid are expecting to bring in more revenue by hosting other sporting events and concerts - Taylor Swift is set to perform at the stadium in May.
Tottenham Hotspur’s new stadium in London is the gold standard of soccer stadiums
Their new stadium that costed $1.9b (£1bn) and was completed in 2019, set the standard for multipurpose use - like the Santiago Bernabéu, Tottenham’s innovative stadium design enables a pitch transformation to take pace which has opened the door to a broad range of other events such as NFL matches (see video below) as well as rugby games and heavyweight boxing bouts. These additional new events contributed to the club almost doubling commercial revenues between 2018 and 2022.
Barcelona are the other Spanish giant undergoing an epic redevelopment project on their stadium, Cam Nou.
The economic returns of stadium developments
Stadium developments provide an opportunity for teams and league’s to generate non-traditional revenue streams. They also offer a new and diverse investment option for private equity - For example, Camp Nou’s recent redevelopment was funded by 20 different investors which includes several notable financial institutions such as Goldman Sachs and JP Morgan. Lastly, they offer government’s a platform to stimulate economic growth.
Tottenham Hotspur’s new stadium has had a significant positive impact on its matchday revenue streams, as the average fan now spends approximately £16 inside the new stadium, as opposed to less than £2 in it’s old one. This is largely thanks to its increased capacity, improved hospitality experience and new features such as the longest bar in Europe.
Although match day revenues provide potential for new commercial revenue, there is also plenty of opportunity outside of it.
Australian Racing Clubs have been redeveloping their real-estate and ageing infrastructure over recent years
To take advantage of Australia’s rising land values and demand for housing, the Moonee Valley Racing Club teamed up with superannuation fund Hostplus to create “The Valley of Tomorrow” - a project delivering new hospitality outlets, residential housing, offices and community facilities for locals.
Elsewhere across the Australian racing industry:
The Victorian Racing Club has been selling land around the Flemington Racecourse for future development
Brisbane Racing Club is currently delivering a $1.5 billion “Master Plan” - creating new entertainment, commercial and residential offerings
Cbus Property purchased 5 hectares from Randwick City Council for $250m to construct apartments near Randwick Racecourse
The AFL is exploring a massive new waterfront development involving Marvel Stadium
In partnership with Development Victoria, the plans feature:
Two high-rise towers that incorporate AFL House and Seven Network headquarters (potential use for housing, commercial and entertainment)
A new waterfront facade (the stadium will no longer be visible from water)
A-Leagues soccer club, Western United FC are due to undertake a massive $2 billion commercial and residential property project in Melbourne's west
The project will include:
15,000-capacity stadium (first fully soccer-owned stadium in Australia)
multiple new apartment blocks
a hotel
commercial office space
indoor sports arena
training & medical facilities
shops & bars
parklands
This project is the first of its kind in Australian sport but one that is common in the US.
US Sports Precincts
Internationally, the Milwaukee Bucks have the “Deer District”, a 30-acre property surrounding the Fiserv Forum. The precinct consists of restaurants, bars, shops, luxury apartments, a supermarket and a gym.
Others include:
Dallas Cowboys - The Star (see video below)
St Louis Cardinals - Ballpark Village
Atlanta Braves - The Battery
It’s not just owners and private-equity seeing the benefits of stadium and property development…
The Australian Open delivers a great return to the economy for the government
The $1 billion (approximately) that the Victorian State Government has invested since 2010 to develop Melbourne Park has enabled Melbourne to maintain hosting rights of the Australian Open (AO) which generates around $500 million in revenue per year. The tournament is aiming to reach $750 million revenue within 5 years and wants to become a $1 billion tournament in the future.
A study by NAB shows that the AO injected $400m into the Victorian economy in 2023 through things such as accommodation, hospitality and tourism.
In addition, a study by Nielsen found that between 2010 - 2020, the Australian Open contributed $2.71 billion to the Victorian economy.
The Australian Open:
Attracts visitors from interstate and across the globe – 839,192 fans attended in 2023
Fuels local businesses & communities, and creates jobs – in 2023 the AO was delivered by a 12,000-strong workforce, and across 2021/22 it created the equivalent of more than 1650 full time jobs
The Politics
Many governments want to build new sports infrastructure and host major sports events because there are so many potential benefits.
Sydney, Melbourne and Perth are all currently bidding against each other for the chance to host the Rigby World Cup 2027.
Recently, Perth Lord Mayor Premier Basil Zempilas, and SA State Premier Peter Malinauskas got into a Twitter/X war about the hosting rights to Cricket Australia’s recent test tournament.
"We almost lost an election on the construction of this stadium"
Dominic Perrottet (the New South Wales Premier at the time) previously admitted that the decision to rebuild the Allianz Stadium (Sydney Football Stadium) almost lost him an election. This was after the cost of the project went 20% over budget, costing $828 million (against $729 million). The government's rationale for knocking it down was also labelled "a sham" after a report prepared by the SCG Trust found that an alternative could’ve taken place for $18 million.
It’s common for cost of major projects to be heavily scrutinized by tax-payers, and this is currently evident with the new stadiums proposed in Hobart and in Brisbane for the 2032 Olympic Games.
Sport is a great vehicle to political influence
Oil-rich middle-eastern countries such as Saudi Arabia and Qatar have recongised this and are using sports to their advantage.
Qatar spent billions of dollars to construct new sports infrastructure to secure the 2022 FIFA World Cup (money that most countries simply couldn’t compete with).
Now, Saudi Arabia are spending big and among many other things, have announced their new Qiddiya sport, entertainment and tourism mega-project which is due to rival Las Vegas.
As part of this, they’ve just announced plans to build a new futuristic 200m-high clifftop stadium that features:
- 45,000-seat stadium, built on 200m-high clifftop
- Retractable roof
- 100's of meters of immersive screens
- An LED wall that opens up to views of Riyadh
This new project forms part of Saudi Arabia's $700 billion public investment fund and broader plans to:
- Secure the 2034 FIFA World Cup
- Become a global tourist destination
- Exert influence on the global sports & entertainment industry
Investing in stadium infrastructure can create a positive virtuous cycle
Stadium infrastructure can be costly to build, but it can also deliver a host of positive commercial outcomes such as generating more matchday revenue & new commercial revenue streams, attracting & retaining major events, and stimulating economic growth.
With the help of the best stadium infrastructure, teams and cities increase the chances of being granted hosting rights to major events, and allocated new team licenses.
When they’re provided with these rights and their associated economic benefits, over time, the investor, government body or owner generates an increased level of economic power that they can then use to reinvest in future bidding and pitching.
On the flipside, those who don’t continuously invest and upgrade their stadium infrastructure, will be less likely to host major sports events, and as a result they’ll surrender the short and long term economic benefits that the sports economy offers.
Not yet a subscriber? Discover specialised sports marketing insights, tailored for sports industry professionals within Australia and across the globe. If you work in sports for an agency, brand or rights-holder then this is for you.