Article I\'ve written about the stadia evolution in Brazil, back in 2002

1. Nuts about
football Brazilian stadia developments
Roberto Siviero and Alexandre Rocha Loures for Stadia magazine
football clubs to be run as businesses, issuing regulations are stringently enforced. The old
balance sheets and being independently guard is reluctant to accept new ideas.
Soccer venues in audited. However, the clubs said they were not Happily, there was a strike back towards the
Brazil lack funding ready to be run professionally and were given initial goals of Pelé’s Law. In the light of investi-
until the early part of 2000 to adjust. gations, the government decided to create a
and security. But as Many foreign companies invested heavily in task force to propose measures that could
the country looks to the top commercial prospects – Flamengo, revitalise Brazilian football.
Grêmio and Palmeiras were part of Swiss This task force came up with several
modernise its stadia marketing company ISL’s marketing plans in initiatives regarding all aspects of football
Latin America; Corinthians and Cruzeiro became business in Brazil, including stadium security
to generate better a part of the business strategy of Hicks, Muse, and operations, scheduling, financing
game-day revenue Tate & Furst (HMTF) investment fund interests; structures and fan rights.
Atlético Mineiro and Santos were tapped by
it’s clear one thing Octagon; and Vasco da Gama had a
relationship with Bank of America. Brazilian
they are not short of is football clubs were hot commodities.
Football is embedded
passion for the game In the meantime, only a couple of clubs
(Vitória and Bahia) transformed their football
in the Brazilian culture
businesses into equity entities. Even the ones
razil’s prowess in football is with commercial partnerships did not make
B
unmistakable. Five times changes to meet the guidelines.
as the primary sport
World Cup champions, players Strangely, all other clubs that had not linked
scattered in the best clubs of with strong financial partners, backed by state
Europe and great young football leagues that insisted on maintaining
players popping up at a frantic the status quo, used their political power – there
pace. So what’s the secret? are several club presidents and officials who On the top of the task force work, President
Brazil’s success comes from the fact that it is are also congressmen – to make small changes Fernando Henrique Cardoso issued a
a country of 170 million people and football is in the law, which came into effect in 2001. presidential decree that returns the focus to the
embedded in the culture as the primary sport. The changes were crucial. First, the manda- initial text of Pelé’s Law, adding the
It is the only professional Brazilian sport that tory change into a business-type operation was responsibility for financial losses of the clubs to
charges for admission and, with an adult male made optional. Second, investors were forbid- their presidents and boards of directors. This
population of over 50 million, it has a lot of den to purchase the commercial rights of more has huge implications, since nowadays, if a
fans. Due to the country’s huge size, clubs play than one club, to discourage match fixing. club is in debt, there are no direct mechanisms
regional and national tournaments. There are These changes turned Pelé’s Law into a time to pursue the money from them, so the clubs
584 professional clubs around the country, bomb. Since they were implemented, all don’t worry much about paying their debts,
which is divided into 27 states – usually every commercial partnerships have gone sour. ISL’s especially to the government. Flamengo owes
state has two to five divisions. Clubs play and Flamengo, a situation exacerbated by the an estimated R$30m (US$8m) to social security
roughly 90 games a year, and for all those collapse of the marketing giant, Vasco and alone, and several other clubs carry significant
games and teams there must be a stadium. Bank of America, with legal actions from both debt. The government hopes this added
sides, Octagon pulled out, and Hicks, Muse, responsibility will halt the spending sprees of
Political evolution Tate & Furst got out of Cruzeiro and Corinthians. clubs trying to build better squads but not
In 1998, a law known as Pelé’s Law was intro- Understandably, club and league officials are looking closely enough at their revenues. So far
duced that made it mandatory for Brazilian afraid of losing control and power if these new it is unclear the effects the decree will have.
62 showcase special 2002 stadia magazine

2. Atlético Paranaense is
attracting more families and
female fans back to the game
thanks to its modern stadium
Nilo Biazzetto Neto
Building importance turnover from their main operations. As During those 18 months, Atlético spent
As the largest Roman Catholic nation in the sponsorship deals and media rights money are R$32m to renovate its stadium, none of it
world, there’s a saying that in every one of the stretched to the limit, clubs have to focus on government money. Seats were added to bring
Brazil’s cities you can find two buildings – a game-day revenue to boost their profits. capacity up to 32,000, but there is still one
city hall and a church. And since football takes Premiership football in England has evolved side of the stadium lacking a stand. Although it
on religious proportions, a stadium can be in the 1990s, partly because of upgrades in is not all-seater, the translucent roof and the
added to the list. stadia, facilities and operations. Brazil needs to modern floodlighting (not common in Brazil)
A recent study that found that Brazil has at follow suit if it wants to revamp its football generates a much better atmosphere at games.
least 363 stadiums, with an average capacity of business. The concessions stands are way above average
approximately 14,200. Across the country only for a Brazilian stadium. With a small parking
Advances at Atlético Paranaense
five per cent of stadia had capacities of more lot underneath and a couple of private boxes, it
than 50,000, while 34 per cent had space for Atlético Paranaense, a club from Curitiba, is well-equipped stadium. Atlético was also
less than 5,000. Amazingly, the capacity of one Brazil’s seventh largest city, was the first club to able to construct a modern training facility
in every four stadia in the survey is over grasp the concept of modernising its stadium to with several pitches, as well as five-star accom-
20,000 people. generate better game-day revenue. In 1995, modation along with fitness and health centres.
Of course, several of these stadia are used Atlético Paranaense, together with Deloitte It is no coincidence that the team started
sparingly, for smaller events and local football Touche Tohmatsu, developed the club’s producing good results on the field at national
matches. The big games with larger crowds strategic plan. One of the key elements level in 2001, culminating with victory in the
take place in the first and second divisions. concerned investment in infrastructure, which Brazilian championship.
There is a great polarity in Brazilian football, was by far the most ambitious goal for the Although the team’s performance was
with 80 per cent of clubs concentrated in the club. Investment was divided into three areas – outstanding, the most important results were
south/southeast. Interestingly, 92 per cent of the brand development, establishment of a training off the pitch. The opening of a new ground
stadia have 20 or more years of use, with only centre and construction of a stadium. gave the club greater stature all over the
two stadia built in the 1990s. Although many In June 1999 Atlético inaugurated the first country, and provided new sources of revenue
of them have been renovated, they remain FIFA-standard stadium in Brazil. The construc- derived from facilities such as parking, shop
outdated venues. tion had taken 18 months and had been made rentals, catering and different levels of
Brazilian football struggles financially. It possible due to the sale of players as well as ticketing. The club’s turnover rose considerably
simply can’t make enough money from media the pre-sale of premium seating, including from R$12m in 1998 to R$34m in 2001 – and
rights, game-day revenue, licensing and corporate suites and executive seats. these figures do not include player trading. In
sponsorship. For years the money came from Although the club sold almost three full addition, its modern stadium has brought
player transfer fees, especially from the squads during this time in order to build the female fans and families back to the game,
European market, but, as this revenue stream ground, they also managed to develop a squad with the added benefit of dramatically reducing
decreases, clubs are trying to elevate their of new players. bad behaviour on the stands.
63
showcase special 2002 stadia magazine

3. ARCHITECTURE
Modernising Maracanã and no fences. The total estimated cost of the around US$500m. A few other stadia will be
The most renowned Brazilian stadium, privately financed stadium was US$90m. One redeveloped or refurbished at the same time.
Maracanã, was built to be the centrepiece of the third of the cost would be HMTF’s This is still far from the best scenario in order
World Cup in 1950. By the 1990s, Maracanã’s responsibility, namely the land, the architectural to increase revenue sources for the clubs and a
deterioration was evident, which prompted Rio project and initial phase of construction. The lot of work still has to be done to get Brazilian
de Janeiro’s state government to pull together a other third would come from the sale of suites grounds up to the same standards as British
partnership and inject R$54m into the renovation with a price range of US$40,000-120,000 for a football venues. This is crucial if Brazil
project. The timetable meant completion of the three-year lease, plus the sale of approximately seriously wishes to host a World Cup in the
project ahead of the FIFA World Club 14,000 private seat licences that had 10-year near future.
championship in January 2000. Seats were property leases with prices of US$6,000 to be The first test of the country’s capabilities will
placed in the terraces, new boxes were paid over 36 months. The final third was be the 2007 Pan American Games, which will
developed and a infrastructure refurbishment was expected to come from Brazilian investors. be held in Rio de Janeiro. It has been a long
done. New entrances and exits were also added Unfortunately, differences of opinion between time since Brazil held a multi-facility event of
and the stadium became all-seater, reducing HMTF and the club on how the football such magnitude. The Brazilian Olympic
capacity to roughly 90,000. New electric and operations should be run are jeopardising the Committee came forward with a great plan,
hydraulic systems were also installed and 92 project. There is little hope that this project will which demands the renovation of 16 sport
luxury boxes added, giving the huge stadium a go forward, unless a new partner is found. facilities and the construction of six others, plus
new revenue stream. In addition, there is also a the construction of permanent houses that will
Revamp at Vitória
museum and parking facilities were extended. be the temporary homes of the 8,000 athletes,
São Paulo’s ground, Morumbi, also went The Esporte Clube Vitória was founded in 1889 coaches and officials expected at the event.
through redevelopment in 1999, at a cost of and is the second-best supported team in Bahia. The project will cost a staggering US$177m,
US$10m, in preparation for the World Club It has won the state title 17 times. EC Vitória with funding divided among the city, state and
championship. The redevelopment saw the plays its home games in Barradão, which has a federal governments. The revenue from the
removal of terraces in favour of all-seater stands 30,000 capacity. The EC Vitória’s Entertainment event is expected to be in the region of
and the introduction of new executive boxes. Complex Project includes the development and US$49m, which will make up the total cost.
management of a football stadium, multi-use This promises to be a great opportunity to
Problems for Corinthians arena, open-air theatre and stage, and a museum boost all aspects of Brazil’s sports facility
Corinthians and HMTF’s stadium project was a dedicated to the staging of a multitude of industry, and hopefully it will provide the
45,000-capacity venue, designed as a hybrid of events linked to sports, leisure, culture and platform for a 2014 World Cup bid.
English and American stadia, with 295 suites business activities.
The initial idea was to build the stadium
where Barradão is located, but investors did
not approve of this, so it will be located in a
ollowing the stadium disaster at Vasco da
F business area, which offers greater accessibility.
Gama’s São Januário Stadium at the end of
In this project, estimated at US$50m, the
2000, in which overcrowding brought down a fence
The first test of the
operational management will be demanding,
and left hundreds injured, a group of football
focusing on maximisation of revenues. Besides
professionals concerned with the state of Brazilian
country’s capabilities
the income provided by renting the space for
stadia founded ABREA, the Association of Brazilian
events, the club is concentrating on generating
Stadia and Arenas.
will be the 2007 Pan
revenue from other activities and sponsorship.
The main goal of the association is to help the
The administration model follows market
development of operations and security in the
innovation and trends, allowing organisation of
country’s stadia, which have been historically
American Games
a calendar of events that will guarantee large
overlooked. In Brazil, stadium administration is
crowds. These will contribute to improving the
connected with maintenance and ground-keeping.
site’s visibility and hence value. This revenue is
All the ticketing and security issues are the
such that in an established stadium, it is possible
responsibility of the club’s administrative and
to project on-site revenues corresponding on
financial staff, who are not focused on game-day
average to one fifth of the total revenue.
operations. This is a serious issue, since a good
Palmeiras is another interesting project. The One thing is certain about the financial
event is made not only by the excellence of the
intention is to refurbish Parque Antarctica in viability of Brazilian football: it exists. Football
facility, but also by the quality of its operations.
order to turn it into a multi-event facility and sells in Brazil. The major problems regarding
ABREA’s strategy is to spread information to
the most modern ground in the city of São poor financial administration and operations
educate its members in matters such as:
Paulo. The redevelopment of the single-tier arise from a philosophy that sees only the
• Security issues – taking inspiration from the
stadium, costing around US$30m, will lift benefits from winning championships, losing
excellent Guide to Safety at Sports Grounds.
Security and the private sector
capacity from 21,000-35,000 seats. It will also sight of sustaining the winning cycle with
ABREA is translating this into Portuguese and
include the creation of new executive boxes healthy financial operations.
adapting it to Brazilian venues;
and commercial outlets, including those selling The federal government is trying hard to shift
• Ticketing – ABREA is part of the International
food and beverage and official merchandise. the clubs’ debt responsibilities on to club
Ticketing Association (INTIX), which will provide
presidents and directors. That seems to be the
useful information about modern systems and
Forward thinking best way to encourage clubs to get their
techniques the ticketing industry now available;
Following Atlético’s successful strategy, many finances in order and improve operations,
• Facility management – ABREA is working in
clubs in Brazil are now rethinking their long-term instead of the old “sell-players-to-Europe”
partnership with the International Association
strategies and focusing more on stadium system. However, it remains to be seen if this
of Assembly Managers (IAAM), drawing on its
matters. The clubs from São Paulo and Rio de will be successful. One thing is for sure – there
expertise to develop new strategies.
Janeiro, the main football market in Brazil, are are plenty more twists and turns in the story of
ABREA also wants to provide a safe port of
now also developing stadium projects. Brazilian football. s
entry for both Brazilian and international
Despite all these examples of
companies that want to invest in and help develop
redevelopment, many Brazilian grounds remain Roberto Siviero is secretary director of ABREA,
the country’s football infrastructure. With so many
far from ideal. It is estimated that in the next the Association of Brazilian Stadia and Arenas.
facilities requiring some degree of renovation and
couple of years five to seven new grounds will Alexandre Rocha Loures is sports business
improvement in operations, the potential is huge. s
be built in Brazil at an investment cost of consultant at Deloitte Touche Tohmatsu, Brazil
64 showcase special 2002 stadia magazine