A new age has dawned for major sporting venues.
The evolution of modern stadium design has long been focused on creating inward looking places of worship for diehard sports fans.
Today, savvy sports owners are collaborating with local governments to create destination hubs that celebrate inclusivity and local culture, providing economic cornerstones for investment, and targeted growth initiatives. However, such an investment requires years of meticulous planning, specialist consultancy and stakeholder engagement before the first shovel is put in the ground.
Indeed, very few asset classes have to consider so many diverse and invested stakeholders, including lifelong sports fans, the general public, local authorities, governing bodies, sports franchises, investors, and sponsors - all with their own drivers and deliverables. This can often lead to the needs of the operational team being overshadowed, which can embed inefficiencies throughout the asset lifecycle and make for a beautiful but clunky product.
In the worst-case scenarios, political and community opposition can lead to delays and design constraints. A good example of this would be the construction of Yankee Stadium in New York City, which faced significant opposition from local residents and community groups concerned about increased traffic and the loss of parkland.
Similarly, the proposed new stadium for the Oakland Athletics reportedly in planning stages since 2018, has ignited political debates and opposition from taxpayers regarding public funding and potential environmental impacts.
In fact, environmental issues, such as soil contamination, are commonplace in stadia development due to the often centralized brownfield locations, For example, the discovery of contaminated soil at the Barclays Center in Brooklyn, New York required extensive remediation efforts.
Environmental legislation can also place protective obligations on the design and delivery team. Levi’s Stadium in Santa Clara, California, for example, had to comply with stringent environmental regulations, including measures to protect local wildlife and manage water usage efficiently.
While these policies are heavily commendable, they do have potential to influence the project schedule and budget and, as such, must be thoroughly explored via detailed investigation as part of the early project viability planning.
On-site construction activity is no walk in the park either.
Modern stadium designs are complex, often including advanced technology and unique architectural features which can require long lead orders and create unforeseen installation difficulties. The Mercedes-Benz Stadium in Atlanta, for example, faced numerous delays due to the sophistication of its retractable roof design.
Indeed, even the coordination of the numerous contractors, suppliers, and workers involved in an average stadium project is a monumental task, and any labor disputes or disruptions in the supply can cause significant setbacks, as seen during the construction of the U.S. Bank Stadium in Minneapolis.
The local climate can also conspire to disrupt even the most meticulously planned schedules. Failure to develop robust risk strategies can quickly lead to delay events and associated cost overruns. A good example of this is the MetLife Stadium in New Jersey, which reportedly experienced several delays when harsh winter weather impacted the construction schedule and increased costs.
However, possibly the most noteworthy and difficult to control influence on project deliverability would be inflationary instability, which without adequate contingency planning can leave projects without the means to complete.
The SoFi Stadium in Inglewood, California faced substantial cost overruns partly due to fluctuating material and labor prices, with the final cost ballooning to a reported $5 billion. Fortunately, the high-quality design generated sufficient commercial potential to maintain investor confidence and ensure the project’s completion, providing California and the USA with one of the most comprehensive stadium experiences in the world.
All these factors have the potential to drive delays and cost overruns, continuously eroding project viability throughout delivery.
Mindful of the revenue-generating event schedules driving the delivery programs on major stadia projects, there is little margin for error. Effective risk management strategies, thorough planning and execution are essential to anticipate and navigate the inherent challenges and ensure successful delivery.
No two projects are the same. However, the application of lessons learned teaches us that one thing remains consistent: risk.
As the scope for major sports stadia escalates, so too does the risk, and never has it been more important to have market-tested risk guidance throughout the design and delivery process.
Experienced risk consultants can guide the process, coordinating and sense checking all outputs with an eye on the end goal, identifying obstacles and working with the delivery team to engineer workable mitigation strategies in accordance with budget and schedule deliverables.
Indeed, much like a football statistician, risk consultants play a crucial role in strategy and gamesmanship, informing game plans and analyzing team performance in order to maximize positive outcomes.
So how do you best manage risk on major stadia projects?
Start with the best statistician.
