THE NUMBERS DON’T STACK UP: Why it’s a terrible idea to spend $2.3 billion on half-full stadiums

Not a taxpayer underneath. Photo: Jessica Hromas/Getty Images

  • Last Friday the NSW government announced it will spend $2 billion to rebuild two football stadiums in Sydney
  • Replacing the 18-year-old Olympic stadium is priced at $1.25 billion – just 3 years ago its operators were asking for $350 million for upgrades
  • The government says it’s an investment in tourism, but even Western Sydney’s councils say the money could be better spent.
  • The NSW government announced plans last week to demolish the 18-year-old Sydney Olympic Stadium at Homebush, and Sydney Football Stadium at Moore Park, which opened in 1988 during Australia’s bicentenary. They will be rebuilt at a cost of $2 billion.

    At a reduced size of 75,000 seats at Homebush, and the same size, 45,000, next to the SCG, that works out at just under $17,000 a seat.

    Add the new 30,000-seat Parramatta stadium for $300 million and the total cost is $2.3 billion.

    That figure is more than twice the amount allocated towards support for private sector social and affordable housing projects.

    The total cost has already blown out by $700 million in 18 months, up nearly 50% on the $1.6 billion price tag when then-premier Mike Baird first floated the idea and put $600 million aside for it.

    It’s also the second change of heart on the future of the SFS, also known as Allianz Stadium, after Baird shifted in April last year from a rebuild to refurbishing it.

    But you can bet the two things taxpayers won’t see from NSW premier Gladys Berejiklian and sports minister Stuart Ayers as a result of this announcement are the business case and cost benefit analysis. On Friday, Ayers said they haven’t even looked at the idea of a closed roof, something the Olympic stadium asked for three years ago.

    When Berejiklian called the new designs “Colosseum-inspired”, she undoubtedly missed the irony in her comment, but you can bet many will consider her Nero in this new Rome.

    The government is talking about this as an investment in tourism. I’m sure the broader tourism industry experienced similar levels of largesse.

    Even the people this is supposed to be for are astonished and it would seem ungrateful.

    The Western Sydney Regional Organisation of Councils (WSROC) resorted to sarcasm saying it wanted to “congratulate the NSW Government on making the state so prosperous it can afford to splurge $2 billion knocking down perfectly useable stadiums”.

    WSROC President Cr Stephen Bali said it “makes an absolute mockery of real community needs. It implies that major events are more important to the Government than health, schools and transport.”

    Bali said that amid an obesity and chronic disease epidemic the focus should be on upgrading local sports grounds and improving sports participation.

    “Western Sydney has billions of dollars’ worth of backlogs on the social infrastructure needed to meet basic liveability aspirations,” he said.

    “We have severe transport infrastructure backlogs, a critical shortage of commuter car parks, and a lack of lifts at rail stations to help our most vulnerable access public transport.”

    And as he points out, why is a government normally so fond of public–private partnerships for infrastructure projects (eg WestConnex) so focused on going it alone for this job?

    An artist’s impression of what a stadium full of Waratahs fans would look like. Source: supplied

    Arts v sport

    Meanwhile, just across the grass from Parliament House is the Art Gallery of New South Wales, which released its annual audience figures showing growth of nearly 24% to just under 1.6 million visitors in 2016-17.

    The gallery wants to double its size in a $450 million expansion known as the Sydney Modern Project. The Berejiklian government has offered $244 million towards the idea.

    Of course the relocation of the Powerhouse Museum to Western Sydney is another pet government project awaiting a business case and funds.

    But to put those art gallery figures in perspective, last year the combined total crowd at ANZ Stadium was around 1.04 million. In July, The Daily Telegraph reported that “redevelopment of ANZ Stadium has blown out from its original price tag of $750 million to at least $1.1 billion” and could be as high as $1.7 billion.

    The figure quoted by the government now is $1.25 billion. So in the 18 months since Baird first proposed the ANZ Stadium rebuild, the cost has already increased by roughly the same amount as the entire Art Gallery project.

    Around 200,000 people pay to see the Archibald Prize-annually, so when it comes to tourism, why is the government’s priority football and not the arts? Instead the gallery is relying on private philanthropy to get the job done.

    The football stadiums? The government sold off the Land and Property Information service to pay for it.

    It’s even more remarkable because just three years ago, ANZ Stadium’s upgrade proposal was priced at comparatively reasonable $350 million. The plan for the 80,000 seat venue included a retractable roof and movable goal-end grandstands and additional seating to fill in the arc along the sidelines.

    The latest decision is a massive win for the all-powerful Sydney Cricket Ground Trust – think Liberal heavyweights such as Tony Shepherd, Maurice Newman, Barry O’Farrell and Alan Jones. But if they’d bothered to ask fans and members what they wanted, they’d probably prefer to pay less than $7.50 on a meat pie, $6.20 on hot chips and $5 on a bottle of water, as well as lower ticket prices since they were not invited into the corporate suites that ring the ground.

    Victoria’s MCG, which waited until 2005 to rebuild its 1956 Olympics stand, has pies and water at $4 each.

    The proposed cost is astonishing, even by Sydney property standards – and anyone who’s watched the cost of WestConnex balloon by several billion dollars from the original $10 billion estimate knows these projects will go higher too.

    An artists impression of the stadium ‘lounge’. Source: supplied

    The term most heard amongst business people in Sydney’s CBD following the announcement is “white elephant”.

    Just remember that a real elephant has a longer lifespan than the average Sydney building previously deemed “iconic” by the government.

    The shelf life of the new stadiums should also be kept in mind when factoring in the cost to taxpayers, just in case another government isn’t convinced that $2 billion taxpayers are about to spend will no longer be “world class” in 20-30 years.

    But the expenditure on these to sites is even harder to justify when you look at the costs compared to spectator numbers.

    Falling crowds

    NRL and rugby union crowds are in a slump.

    NRL CEO Todd Greenberg may argue that this will bring back crowds, but that leaves just three venues to do a lot of the heavy lifting.

    The Daily Telegraph’s sports editor-at-large, Phil Rothfield, has been a loud and vocal critic of the code for what it costs to go to games.

    In a column earlier this year, Rothfield said the reason NRL crowds have fallen 10% in the last five years is because the league had priced people out of “a working class game”. He thinks the government’s decision spells the end for suburban footy grounds such as Manly’s Brookvale Oval which has been in urgent need of upgrades for several years.

    It will be interesting to see what ticket prices are in $2.3 billion worth of stadia.

    While there will be arguments about the oval configuration of Sydney Olympic keeping away fans, it’s clear from looking at the numbers that when the game is good enough, the crowds are are happy to be there.

    When the Socceroos played their do-or-die World Cup qualifier against Honduras earlier this month, 77,060 people turned up. That number was beaten by the NRL grand final with a crowd of 79,722. In August, 54,846 long-suffering Wallabies fans turned up to watch up to watch the side lose by 20 points to the All Blacks, although that was the lowest ever for a match against the Kiwis at the venue.

    In between, the crowds range from about 6,000 – less than 10% of the stadium’s capacity, to 21,500 – around of quarter of its capacity – for NRL games.

    That suggests it’s not the venue that’s the problem, but the product.

    Back in September, the NRL had the two lowest attendances for finals football in six years, despite the fact that they tried to lure fans with free transport, discount tickets and food offers.

    And while just 15,408 went to a finals game at Allianz Stadium – a third of the capacity of the $705 million new stadium – next door at the SCG, a sold-out record crowd of 46,323 watched AFL.

    Crowds at Allianz, home ground of the Roosters, ranged between 7,000 and 16,000 this season.

    The average crowd sits at just over a third of the stadium’s capacity.

    The slide in NRL crowds is modest compared to rugby. In just two years, the average crowd at a Waratahs games has fallen by a third. In 2015, it was 22,463 per match. This season, it plummeted to 14,500. That means it would take more than 3 games combined to fill the $750 million stadium rebuild planned.

    At one game at Allianz against the Jaguares, just 10,992 people turned up on a Saturday night – after 32,987 watched the Swans v Gold Coast at the SCG.

    The best crowd the venue had all year was 41,546 for the A-League grand final between Sydney and Melbourne Victory back in May.

    But this isn’t just a Sydney phenomenon. Overall, crowds numbers are down nationally.

    Only the A-League is defying the crowd trend for sport on rectangular fields.

    So just who is the government doing this for? They say fans, but in that case it would be cheaper to buy every fan a $1000 large screen TV since that’s where you’ll find most of them enjoying the sport.

    But the next time the Berejiklian government says it hasn’t got the money for a project, keep the stadium announcement in mind.