Rising to the Sporting Challenge

Sydney Cricket Ground

Also administered by the Trust is the adjacent Sydney Football Stadium, currently known for reasons of naming rights as the Allianz Stadium. This 45,500-seater takes care of the needs of the city’s more rectangular sports: rugby league and union, and now soccer. Either venue can accommodate a wide variety of diverse entertainments such as concerts, although Allianz Stadium predominates in this area.

In the last year or so, the Stadium has seen Bon Jovi, Eminem, and Coldplay, while Barbra Streisand, Robbie Williams, and the Edinburgh Military Tattoo have also played there. This latter festival lifted the world-famous event from the Scottish capital and placed it in front of a replica of that city’s castle in 2005 (when 150,000 spectators turned out, at least as many as would have seen the original in Edinburgh itself) and in 2010 so successfully that the organisers want to return again to Australia – probably coming to Melbourne or Brisbane this time – in the very near future.

A significant facet of the SCG is its membership—some 20,000 at any one time, with a very substantial waiting list (currently around twelve years). Membership fees range from $1,100 (SCG Membership) up to $40,000 (Platinum). Around half the membership is either “gold” or “platinum” and is entitled to use the superb fitness facilities that the Trust also administers. These include swimming, tennis, squash, gymnasium, aerobics, and just about anything else you can think of to raise a thirst—all just down the road from the CBD.

“A large part of our success comes from the annual subscriptions of our members,” says Jamie, adding that the structure is probably unique in Australia. There are many similarities with Lord’s, although that venue’s august members might shy away from the fitness opportunities.

SCG is “driven by sport and in our business, content is king.” Accordingly, it is vital to offer as many sporting spectacles as possible to give members the opportunity to attend. In doing so, they consume food, beverage, and hospitality services, probably the organisation’s second largest revenue stream. The Sydney Swans, 2012 AFL champions, and current Big Bash League Twenty20 cricket champions, the Sydney Sixers, play at the SCG, which also hosts Test and One Day International cricket matches, while Sydney FC champion the round-ball game at Allianz Stadium (bolstered by Italian star Alessandro Del Piero but prone to the odd drubbing such as a 2-7 loss away to the Mariners recently) and attract crowds of close to 35,000. The Sydney Roosters and the Wests Tigers represent the NRL, while rugby union sees the Australian Wallabies and the NSW Waratahs, who will be hoping for better things in the 2013 Super Rugby competition.

The Trust’s mission is to maximise sport and entertainment opportunities. It is a very successful not-for-profit organisation (up to around five million dollars on a $70 million turnover) and it also controls the land surrounding the two venues. Jamie suggests this is the only place in the world “where all the sports teams are headquartered.” Team headquarters and their centres of excellence, such as the exemplary training facilities of NSW Rugby, cluster around the two arenas, and their sportsmen train there daily. “We have a very successful café-restaurant by the pool as part of the fitness facility for members. The players train, use the pool and facilities, go and have breakfast or lunch, and mix with the members. On any given day, the car park is full, and you have a really eclectic mix of people sharing the premises. It’s a very good balance.”

There are interesting comparisons and contrasts with the situation in big rival Melbourne (see Business in Focus, October 2012), which has probably fewer sporting headquarters (just the tennis) but a similar “cluster” concept and a similar desire to localise the sporting environment for the convenience of the public. Jamie is generous in his praise for what has been achieved in the Victorian capital: “I don’t think there is anywhere else in the world with such venues clustered together.”

But the MCG currently holds just over 100,000 people, more than twice the capacity of Sydney’s flagship. This may have something to do with the relative appetites for sport—even Jamie acknowledges how sports-mad the Victorians are. “Sydney is a very different city,” he says. “It’s hard to explain, but it is not about capacity so much as comfort and convenience.

“We want to make sure that the match-day experience is first-class.” This is a matter of food and beverage, and about interaction with and connection to the game. “It’s about being close to the field of play so you can feel the atmosphere.” Players, as well as spectators, thrive on this “cockpit” concept. “We don’t want to have 60,000 people because we would lose that connection with the game.” Leading sports venues around the world are in fact getting smaller, he points out, as broadcasters do an ever better job of presenting sport. “We compete against two of the best broadcasters in the world, in Channel Nine and Fox Sports. We have to provide an experience live at the game that is better than what you can get at home—that is the challenge.”

Indeed, as broadcasters take control of sport – as evidenced by August’s news of ARLC signing a five-year TV rights deal worth just over $1 billion with Nine Network and Foxtel to broadcast NRL—the outlook for the stadiums where the games are actually played is less certain. Jamie suggests major events such as grand finals or Bledisloe Cups will survive, but Stadium operators the world over face challenges to ensure the match day experience meets fans’ expectations. Accordingly, stadium operators have to look for other revenue streams to replace falling ticket sales. He points out that the SCG provides more revenue to the game of cricket than does the MCG with its much bigger capacity. “It’s not about capacity—it’s about seat yield, and here at the SCG, we have what must be one of the most perfect business case examples of how to get the balance right.”

A smaller venue, packed to the rafters with attendant atmosphere and noise, is a more desirable product than a massive structure with large areas of empty seats; the TV boys have, in the past few years, been herding spectators into stands opposite their cameras for that very reason, because it undermines the confidence of the viewers that the event is worth watching. It is also important to note that “sport in Australia gets upward of eighty per cent of its total revenue from broadcasters.” Gate takings are almost irrelevant in this context, amounting to perhaps five percent.

Nevertheless, “the future for the SCG and Allianz Stadium is very positive because I think fans will see games showcased on TV and then look to attend matches live so they can experience the atmosphere and match-day drama with thousands of other fans.” Jamie and his team have been working hard at developing quality food and beverage as not only a strong alternative revenue stream but as a reason to go to a live game, rather than staying home and watching tube. Offering well-known brands, instead of just burgers or pizzas, has had a tremendous positive effect. Doyles seafood, tested already, is an example. A microbrewery (in co-operation with SCG’s partner Carlton & United Breweries) is in the works too, as part of a drive to offer top-quality premium browsing and sluicing and a top-line overall consumer experience. Video screens are also important for fans, and the SCG will have a giant new 272 metre square video screen, the largest at any Australian stadium, for AFL and cricket from next April.

All of which means that, despite worldwide falling attendances, the SCG Trust is confidently investing some $186 million in a major redevelopment of the facilities. Three old stands have been demolished, and in November, the first concrete was poured on the construction of their replacement. Some 4,000 temporary seats should be in place prior to the Summer of Cricket, and 4,000 to 6,000 permanent seats will be ready for the start of the AFL season; the 13,500-seater stand is expected to be completed before next year’s Ashes series. Seats are wider and bigger than before and fans “will have more space to enjoy the game,” says Jamie. They will be well-connected, too; wifi provisions are currently being evaluated so that spectators can bring their phones and tablets.

“There will be a real focus on food and beverage,” with room for around 700 people to eat in pleasant restaurant surroundings with premium food (wood-fired pizza or gourmet hotdogs) and quality wines. Catering for all tastes, there will be a space outside with views across the city where fans can enjoy cocktails. However, diehard Aussie fans need not worry: Jamie assures that the traditional pies ‘n’ chips fare will never disappear.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

July 19, 2018, 7:49 PM AEST