Wednesday, February 16, 2011

Sydney Olympic Stadiums and Sydney Olympic Park

The post-Olympic situation has assumed particular importance because the two major new Olympic stadiums involved signiŽ cant private sector funding which depended on substantial spectator numbers after the Olympics. The local context has threatened the viability of Olympic stadiums in two main ways. The stadiums are in competition with pre-existing State government stadiums, all newly built or extensively redeveloped in the previous decade and a half. They also face the reality of national sporting leagues which generate relatively small attendances at games in Sydney for reasons of local history and culture.

Sydney Olympic Stadiums
There are very few other major stadium events which are feasible in Sydney’s market to make up the shortfall. This situation has been in uential in causing the State government to seek proposals for major urban development around the two Olympic stadiums. A draft masterplan for Sydney Olympic Park has been prepared, and development proposals sought.

In Australia, the themes of public subsidies, inter-stadium competition and urban development have been prominent in recent stadium projects, as the Sydney case studies in this article will show. The political limits to public subsidies have also been starkly shown. The largest Australian stadium built in recent years, other than Sydney’s main Olympic stadium, is Colonial Stadium in Melbourne, with 52,000 seats. It was originally conceived as a Statefunded soccer and rugby stadium (Maiden, 2001) as the Ž rst project in the Victorian
government’s Docklands redevelopment scheme covering 220 ha. The government claimed that integrated redevelopment of the area around the stadium would be a Ž rst for Australia.

Sydney Olympic Park
An alternative stadium scheme was then developed in which a guarantee of 30 Australian Football League (AFL) matches each year allowed the project to be privately Ž nanced (Chandler, 1999). The stadium consortium of private investors, which included News Corp and the national Seven television network which held AFL telecasting rights, won the right to build the stadium and redevelop an adjacent area, principally for a television studio. The $A150 million in equity was supplemented by $A100 million from Seven for 25 year rights to ticketing, premium seating, naming rights and signs (Maiden, 2001).

The stadium opened in 2000. But the failure to secure off-season activity and lower than expected attendances meant that revenue was well below expectations. Its Ž rst full Ž nancial year generated revenue of $A22.5 million instead of the $A55 million that had been forecast (Maiden, 2001). There was a pre-tax loss of $A41.2 million, and the value of the stadium was written down by $A156 million to $A200 million (Maiden & Milovanovic, 2001). To avoid liquidation, Seven paid $A75 million plus a future annual fee to the owners to lease and manage the stadium for 23 years (Sydney Morning Herald, 26 October 2001).

Sydney Olympic Park
By contrast, Melbourne’s main stadium, the Melbourne Cricket Ground (MCG), is being redeveloped by the Victorian government at a cost of $A400 million for the 2006 Commonwealth Games, which will increase its capacity from 96,000 to just over 100,000 spectators (Australian Financial Review, 15 August 2001). This situation of private sector losses in the face of State-funded redevelopment of competing stadiums parallels the story of Sydney’s Olympic stadiums described later.

Sydney Olympic Park is a 640-hectare site located adjacent to the suburb of Homebush Bay, New South Wales, Australia. It was built for the 2000 Olympics and continues to be used for sporting and cultural events, including the Sydney Royal Easter Show, Sydney Festival, Big Day Out and a number of world class sporting fixtures. It is served by the Olympic Park railway station.


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