Match Day

Etihad Stadium

If you thought the likely abolition of the Carbon Tax was going to mean a reduction in costs, think again. Tickets to see the footy could soon cost more because of other, incoming imposts. And before Sydneysiders or Queenslanders protest that footy is not their game, the problem is not limited to Victoria, nor to AFL…

Paul Sergeant is Chief Executive Officer of Melbourne Stadiums Ltd, which manages and operates Melbourne’s Etihad Stadium, home of the AFL. While he is very happy with the general development of the stadium, and speaks warmly of the great relationship between the stadium, its eventual owner the AFL (which will assume ownership in 2025), and its naming rights partner Etihad Airways, Paul is less happy about elements of legislation about to come into effect. He believes that the privately run Etihad Stadium, as opposed to similar venues that are state-owned, is being placed at a disadvantage.

“One of the main challenges we are wrestling with at the moment is that we are a venue that has put up with a lot of development around us but we feel we are the ones now being penalised,” he explains. The venue is about to be hit by new car parking levies, a land tax, and a fire service levy, “whereas some of our competitors,” he says, “are government buildings that don’t always face the same challenges we do.”

Is this stadium being used as a cash cow? “You do get that feeling,” Paul shares. “The problem with the car parking levy that comes into effect in January is that it is not just for us, it’s around the city of Melbourne. At the end of the day, although we try to protect them as far as possible, it is the consumer or our patrons who are likely to have to carry the burden. It’s a hefty levy that we will all have to pay – same as with the land tax and the others. We don’t get any government subsidy, we have to fund all this ourselves and it creates an uneven playing field that makes it challenging for us to be competitive.”

Discounting this cloud on the immediate horizon, though, Melbourne’s Etihad Stadium is in good health. After experiencing teething problems in its early years, the stadium in the Victorian capital’s regenerated Docklands area has developed an outstanding playing surface – absolutely vital for footy, perhaps even more so than for soccer or rugby (rugby union places the greatest strain of any team sport on grass; an 8-man scrum exerts something like three tonnes per square metre of pressure). The introduction of what’s known in the arena industry as ‘grow lights’ have produced a panacea. This is largely due to the resourcefulness of an obscure Dutch horticulturalist who adapted the technique he uses to grow flowers in the winter in his Netherlands’ glasshouses, after hearing of the problems experienced by several new-generation stadiums that either have particularly steep terracing or a closing roof. Both issues can cause a serious shortage of natural light, which has a deleterious effect on the grass and its roots.

Paul knows all about this. He worked at Cardiff’s similarly roofed Millennium Stadium during its start-up phase after moving from the old Wembley (and thence via Brisbane’s Suncorp to Melbourne). Etihad Stadium is unique in having that exclusive relationship with the AFL that sees it tied up for more than half the year – only an occasional soccer or rugby international might interrupt that schedule. This is not an inhibitor of growth, though, says Paul. Rather, “It’s a really healthy relationship and partnership. To have the AFL there for six months is a fantastic acquisition for this business. It’s the winter months and we really want to pitch for business in the summer. It’s complementary.”

In spring and summer, although there is domestic soccer and some cricket, “as a multi-purpose venue we are out there looking for content, whatever ‘entertainment’ means: rock concerts or any other type of event.” The search is a worldwide one and the driver for whether Australia is a sufficiently attractive tour venue for top international stars is strictly economic. The high dollar makes importing cheaper, so it has been relatively easy in the last few years to justify the cost of touring here. However, “Australia is not a cheap place to tour anymore and that tends to reflect in ticket prices. It’s getting more difficult for promoters to make ends meet.”

In any case, Victorians are die-hard sports fans, to a possibly unique extent. Paul makes the point that Melbourne has a global reputation as a city – region – where people are keen to go to live events, where local citizens will put forth the expense to watch live instead of sitting on the couch at home watching the TV. The gate for the AFL Grand Final, remember, was 100,007, well inside the top five crowds for any sport worldwide this year. That is a consideration for event organisers.

Also important, though, are factors such as transport links and hotel accommodation, and Paul says Melbourne does well on both counts. “The transport we have here is world-class.” However, the roof – closing as needed and guaranteeing the success of your event no matter how unhelpful the weather outside – is a major selling point for Etihad Stadium. “Especially outside the sporting sector, for functions like a large convention, you need that certainty. If you put on a dinner for four or five thousand people you need to know it will not bucket down with rain. It is a major factor.”

Indeed, catering is a revenue stream with considerable potential. It is important to keep up with consumer trends. The Medallion Club, the elite corporate membership package of sport, hospitality and entertainment, is now catered by the company’s own team. “It is quite a specialised area,” says Paul. The rest of the building is catered by Delaware North Companies Australia and their own suppliers, many of them international brands. But Paul promises not to try to tamper with tradition; supporters will always be able to buy a pie and a pint, unlike a few other venues where the aim is to take the food and beverage sector upmarket in some vague manner. “It is no use giving people what we think they want; we need to provide them with what they actually do want,” he says. Etihad Stadium is in a competitive environment in any case, with numerous alternatives for the spectator in the precinct nowadays as the area grows up.

As TV perfects its act, is it inevitable that live audiences will dwindle, especially for sporting events? “In many respects the experience of going to any sporting event – any code – has rather stood still and what the industry is doing now is trying to play catch-up,” explains Paul. “There is a lot of investment to improve technology [at the venue]. You can’t influence the game itself, but you have wonderful theatre of sport and today it’s about everything that is going on around you.” Rock bands and dancing girls on the touchline are old-hat, Paul believes. Instead, “It’s about embracing and developing stadium technology. Interaction between the clubs and the supporters will get better to make them feel more at home.” Tongue-in-cheek, he predicts a time when live spectators will have developed a third eye to watch their phone or tablet with (although he agrees referees will still be getting it wrong!).

More seriously, Paul says Etihad Stadium is looking at ways to further improve the connectivity between spectators and sponsors. Unlike some of his counterparts at other Australian stadiums, Paul does not subscribe to the view that crowds will inevitably dwindle. “Each venue is unique and we create our own environment. But there is a challenge for the industry – globally – to ensure you arrest any decline and work to get bums back on seats. It is only inevitable if we don’t do something about it.”

Etihad Stadium “is a sports venue at the end of the day,” and revenue is heavily skewed in that direction. It is multi-purpose, but with nearly 50 AFL matches and a dozen other major sports events every year, the healthy conference and exhibition business (700 to 1,000 such events annually) is always going to be a second stream. Game on!

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?

December 16, 2018, 6:40 AM AEDT