Amid a lot of fanfare and in the presence of three African presidents, the Akwa Ibom International Stadium was opened a few days ago.
The stadium cost a whopping $250 million to develop, a spend that seemed joyfully ignored during the opening ceremony. But as the adrenaline from the delightful melodrama continues to ease off and reality sets in, the question that hangs in air is a rather simple one. How can the stadium be monetized?
Perhaps, the best place to start is to highlight the conventional methods and avenues through which stadiums and sports arenas in general are monetized.
The main source of income for sports arenas across the world is the gate revenue. The people who come to the stadium and pay to see sporting events – in this case, mainly football matches- are its biggest source of cash flow. Given that the stadium is equipped with facilities to hold track and field meets, its earning potential is marginally increased as it can also stage athletics meets. As such, a stadium’s profitability or sustainability is based on how frequently it welcomes spectators.
Asides gate revenues, there are other opportunities such as leasing for special events. These could be hosting concerts, public events or political rallies. But as these are one-off opportunities and their regularity can hardly be predicted, they may not be relied on a major source of income.
Leasing could involve a sports entity seeking to stage its games there and in exchange pay for usage. A perfect example is seen in England where Leeds United pays £1.6 million annually in rent to use Elland Road as its home stadium.
There is also the entertainment angle to sports arenas with the addition of bars, restaurants, merchandize sales shops and even offices. All these constitute side-attractions that have double functions: attracting more people to sports arenas and ensuring that they have more things to do and, as a consequence, spend more money there as well as allow the management of sports arenas make extra revenue from shop-owners who lease the space.
At the high end of the sports industry, selling the naming rights of the stadium are another source of revenue. This practice sees a corporate sponsor pay a certain fee to have the stadium renamed with their brand involved. For example, Federal Express pays $7.6 million every year for naming rights of the FedEx field, home to Washington Redskins while American Airlines shells out $2.1 million annually for naming rights of the American Airlines Arena, home to Miami Heat.
With these various avenues highlighted, context must be applied in relation to the Akwa Ibom International Stadium.
Gate revenues will only be a reality if matches are played in the stadium. Akwa Ibom is home to two football clubs- Akwa United who play in the NPFL- the premier division, and Akwa Starlets, who play the NNL, a lower division. Given the notoriety of the local league’s failure to attract crowds, it seems unlikely that either team will sell-out the stadium’s 30, 000 seating capacity on match-days. Leasing the stadium to local clubs is also an awkward impossibility in this case as both local clubs are, like the stadium, owned, run and funded by government.
Asides, the local clubs, national team games could be hosted by the stadium. The national teams will typically attract more crowds but the downside is that national teams play an average of 7-10 home games yearly and sometimes less. All this makes grim reading as the most likely occurrence will be that the stadium will struggle to consistently fill its seats.
With its track and field facilities, the stadium – having already been certified by the IAAF according to state officials- can host international athletics championships and thus widen its pool for raking in gate revenues but Nigerians largely show apathy towards other sports asides football. Regardless, there is a potential to host a truly international sports meet which sees the world’s biggest names in athletics feature. Leveraging the tourism potential of neighboring Cross River as an added attraction, Akwa Ibom might well be able to pull off something of this magnitude.
Special events such as grand concerts could also provide a revenue stream especially during the busy festive periods. Similar tactics have been employed by the management of Wembley stadium which has hosted a fair number of global music stars. Madonna’s 2008 concert at the stadium reportedly grossed $12 million and Akwa Ibom will do well to attempt to tap into the using the stadium as a venue for major concerts and other special events. However, much like the lack of consistency with filling its seats, concerts and other special events cannot be factored into planning and revenue projections until bookings are made.
Exploring the stadium’s entertainment and recreational potential is something that can be added to the plans, if it was not factored into initial architectural designs. Adding shops, bars and restaurants on-site gives people added incentive to go to the stadium and also provides the management with space to lease thus generating extra revenue.
Finally, naming rights could be a source of revenue as it has proven to be in American sports repeatedly. However, the millions of dollars invested in naming rights of major sports arenas in the US are valued in proportion to the exposure the arena offers the corporate partners and the interest of the public in teams who play there. The huge interest in sports in the United States- basketball, baseball, ice hockey and ‘soccer’- means that this investment offers corporate partners significant media mileage and brands will consider it a worthy enough investment rather than a charity donation which might be the case with trying to sell the naming rights to a stadium where a less than successful football club plays and where the national team might play only about ten times a year.
The obvious bottom-line is that the Akwa Ibom International Stadium faces an uphill task generating enough revenue to sustain itself or recoup the $250 million investment pumped into its construction. Regardless, attempting to monetize is worth a shot else the state government will be burdened with its maintenance costs and if what has happened with the Abuja International Stadium is anything to go by, the stadium may be a shadow of the shiny edifice it currently is if maintenance costs are entirely a prerogative of the government.
Also, while many continue to legitimately ask the question of the economic impact that the Akwa Ibom stadium might have on the local economy like Joachim MacEbong does here, it is important to note that most sports arenas never have economic effects commensurate with its price tag so expecting a $250 million impact on Akwa Ibom’s economy is a fairytale.
Perhaps, the best way to highlight how difficult it will be for the Akwa Ibom International stadium to make significant impact on Akwa Ibom’s economy is to lay bare two simple statistics. The cost of the stadium is rumoured to be $250 million while Akwa Ibom’s internally generated revenue last year stood at around $96 million, according to the Nigerian Bureau of Statistics.
Rather than provide immense economic boosts, the Akwa Ibom International Stadium will mainly have intangible benefits such as providing the state with a source of pride and also elevates its sports industry. The main goal, at this point, should be focusing on making sure that its maintenance is carried out by monetizing it optimally to ensure that years from now, the stadium will remain truly international.