3.1 AFL C-40
3.2 Rugby C-41
3.3 Cricket C-42
3.4 Other Hirers C-43
3.5 In Conclusion C-43
The Taskforce aims to ensure that all of the sporting codes who will be tenants at the new stadium (stadia) will be
“better off” in comparison to playing at their existing venues, i.e. Subiaco Oval, WACA and MES. The following sections detail that, based on the proposed venue governance and management model and the proposed commercial terms detailed previously, all key tenants will be better off at a new multi-purpose 60,000 seat stadium.
3.1 AFL
During the consultation process the WAFC has repeatedly emphasised that its aim is to ensure that football will be
“better off” in a new venue. In this context, football has been defined as the operations of the WCE, FFC, WAFC, and the development of football in general including junior football and umpiring.
The Taskforce agrees with the WAFC that football in WA as a whole should be “better off” in a new venue and believes that a number of benefits highlighted in Table 45 should leave the WAFC and football in a better position at the new venue.
Firstly, the WAFC will be provided with a “clean” venue which has a 39.3% greater capacity than the existing venue which will allow increased attendances and corporate sales at both WCE and FFC matches and, in turn, will provide both clubs with the opportunity to generate greater revenues.
Secondly, the WAFC will be provided with a new venue with state of the art facilities with an estimated economic useful life of 30-40 years. In contrast, the WAFC would need to spend over $600m for the redevelopment of Subiaco Oval. It is assumed that the WAFC would need to fund these costs which would have a detrimental impact on football in WA as a whole. The WAFC has informed the consultants that it does not perceive that Subiaco Oval has a limited useful life as any infrastructure could be funded through football or (though not preferred) through an “expensive, elite stadium” model under which patrons would be charged higher prices to finance the infrastructure investment. In contrast, the multi-purpose 60,000 seat Major Stadium proposed by the Taskforce would
not require increases in ticket prices as it is largely grant funded by Government.
Further, the WAFC will continue to have priority access rights to the venue as is currently the case at Subiaco Oval. For example, the WCE and FFC as anchor tenants of the 60,000 seat major stadium would have the first right to book event days at the venue during the football season.
Finally, it is believed that in an average year football in WA as a whole will potentially be approximately $3.0m “better-off”
annually at the new venue. Further confidential information on the projected financial benefit for the WAFC from playing at the multi-purpose 60,000 seat major stadium is presented in Section D7.1.
The Taskforce recognises that while the WAFC has a long term lease over Subiaco Oval this lease was originally provided at no cost to the WAFC to assist them in addressing the financial difficulties faced by football in WA, and to help in securing a national AFL franchise. Further, while the lease has an unexpired term of 84 years the remaining economic useful life of some of the stands at Subiaco Oval is in the order of 5-10 years. Accordingly, in order for the WAFC to enjoy ongoing significant returns from the operations of Subiaco Oval for the remaining term of the lease it must invest in the order of $600m in the redevelopment of the asset. Therefore, the Taskforce does not believe that there is any inherent net value of the remaining term of the Subiaco Oval lease and that the WAFC and football in WA will be substantially better-off under the Taskforce’s new stadium proposal.
In conclusion, the Taskforce is of the view that the net
present value (NPV) of the future income stream that football will derive from the new stadium will be significantly better than the NPV of the future income stream the WAFC will derive from the existing venue particularly if it assumed that football will fund all future capital expenditure associated with maintaining or replacing Subiaco Oval. Therefore football is in fact better-off under the new Stadium option which we believe does not warrant any further annual compensation to be provided to the WAFC.
Table 45: Key Benefits for Football associated with the Major Stadium proposed by the Taskforce
Key Benefits for Football in WA associated with the Major Stadium proposed by the Taskforce.
Status
Quo Major
Stadium Commentary
Total Capacity 43,082 60,000 Total capacity of the venue will increase by 39.3% at the 60,000 seat major stadium.
Public Admission Seats 39,647 54,600
The total number of public admission seats will increase by 37.7% at the 60,000 seat major stadium.
Corporate / Function
Seats 3,435 5,400 The capacity of corporate facilities will increase
by 57.2% at the 60,000 seat major stadium.
Clean Stadium a a The venue will remain a clean stadium for all
hirers.
Average Attendance
WCE* 40,744 55,000+
The average attendance for WCE matches is projected to increase by 35.0% at the 60,000 seat major stadium.
Average Attendance
FFC* 36,569 50,000
The average attendance for FFC matches is projected to increase by 36.7% at the 60,000 seat major stadium.
Priority Access Rights
during Season a a
The AFL teams will continue to have priority access rights to the venue (e.g first access to book events).
Remaining Economic
Useful Life (EUL) 5-10 years 30-40 years
The EUL of the new stadium will be
approximately 3 times greater than the EUL of some of the stands at Subiaco Oval.
Cost of extension of EUL
to Football +$600m
-Football will be provided priority access to a new venue at limited cost compared to significant costs associated with an extension of the EUL of Subiaco Oval which is assumed will need to be funded by the WAFC. Funding of this investment by the WAFC may require significant increases in ticket prices.
Obligation to maintain
the stadium asset a r
The WAFC is currently responsible for maintaining the existing stadium at Subiaco Oval. In contrast, the WAFC would be relieved of this obligation at the 60,000 seat major stadium with the Government (as the owner) having responsibility for maintaining the asset.
State of the Art facilities
for teams and spectators r a
The new venue will provide the AFL teams, their spectators and, in turn, football as a whole, state of the art facilities.
Additional Potential Annual Return to Football - Average Year
- +$3.0m
Football in WA are forecast to derive potential additional revenues of $3.0m from the new venue in an average year.
*WCE and FFC average attendances are based on mid-points of attendance forecasts presented in the WAFC’s “Subiaco Oval Redevelopment” document dated 21 October 2005. Function room seats for the status quo are based on dining capacities presented in the WAFC Masterplan.
Source: Perth Stadium Consulting Team
SECTION C
3.2 RUGBY
Table 46 highlights the key benefits, for Rugby WA, the Western Force and rugby in Western Australia as a whole, associated with the stadia options considered by the Taskforce.
If the Western Force were to become a tenant of the multi-purpose 60,000 seat major stadium then the team would be provided with a “clean” stadium with significantly higher public / general admission seating as well as corporate seating capacity than currently available at Subiaco Oval. In such a venue, the Western Force would not have any capacity constraints for key blockbuster events. Further, the venue would provide the Western Force and its spectators with state of the art facilities and the use of retractable seating would ensure uncompromised viewing of rectangular sports at the multi-purpose 60,000 seat major stadium if retractable seating is provided.
Further, it is believed that Rugby WA will potentially be approximately $1.7m “better-off” at a multi-purpose 60,000 seat major stadium. Further confidential information on the projected financial benefit for Rugby WA from playing at the multi-purpose 60,000 seat major stadium is presented in Section D7.2.
In conclusion, the Western Force would be provided with a
“clean” stadium, state of the art facilities and uncompromised viewing of rectangular sports.
Table 46: Key Benefits for Rugby Associated with the Stadia Options Considered by the Taskforce
Key Benefits for Rugby WA associated with the Major Stadium proposed by the Taskforce.
Status
Quo Major
Stadium Commentary
Total Capacity 43,082 60,000 Total capacity of the venue will
increase by 39.3% at the 60,000 seat major stadium.
Public Admission Seats 39,647 54,600 The total number of public admission seats will increase by 37.7% at the 60,000 seat major stadium.
Corporate / Function Seats 3,435 5,400 The capacity of corporate facilities will increase by 57.2% at the 60,000 seat major stadium.
Clean Stadium a a The venue will remain a clean stadium
for all hirers.
Average Attendance
Western Force 28,231 28,000
The average attendance at the 60,000 seat major stadium is projected to be similar to the actual attendance in 2006.
Uncompromising Viewing of Rectangular Sports to lower
tier r a
The Major Stadium incorporates 22,000 reconfigurable seats that can be moved closer to the rugby side line and dead ball line. This represents 78%
of the projected average Western Force rugby crowd.
Remaining Economic Useful
Life (EUL) 5 -10 years 30-40 years
The EUL of the new stadium will be approximately 3 times greater than the EUL of some of the stands at Subiaco Oval.
Cost of Extension of EUL to Rugby
-There is limited cost for rugby associated with the development of a major 60,000 seat stadium. The extension of the EUL of some of the stands at the existing Subiaco Oval could potentially result in foregone revenue for the Western Force during the redevelopment phase.
State of the art facilities for
teams and spectators r a
The new venue will provide the Western Force, its spectators and, in turn, rugby as a whole, state of the art facilities.
Additional Potential Annual Return to Rugby - Average
Year - +$1.7m
Rugby WA is forecast to derive potential additional revenues of $1.7m in an average year from playing at the 60,000 seat major stadium.
Source: Perth Stadium Consulting Team
Key Benefits for Cricket associated with the Major Stadium proposed by the Taskforce.
WACA Major
Stadium Commentary
Total Capacity 24,000 60,000 Total capacity of the venue will increase by 150% at the 60,000 seat major stadium.
Public Admission Seats 22,566 54,600 The total number of public admission seats will increase by 141.9% at the 60,000 seat major stadium
Corporate / Function Seats 1,434 5,400 The capacity of corporate facilities will increase by 276.6% at the 60,000 seat major stadium.
Clean Stadium a a The venue will remain a clean stadium for all hirers.
Average Attendance International Cricket (per event day)
12,200
(2005-06) 19,600 The average attendance is projected to increase by over 60% at the 60,000 seat major stadium in an average year.
Remaining Economic Useful
Life (EUL) 10 years 30-40 years The EUL of the new major stadium will be 3-4 times greater than the remaining EUL of some of the stands at the WACA.
Cost of Extension of EUL to
Cricket $50-100m - There is limited cost to cricket / the WACA associated with the development of the 60,000 seat major stadium.
State of the art facilities for
teams and spectators r a The new venue will provide the WACA, its spectators and, in turn, cricket as a whole, state of the art facilities.
Note: No figures are available for cricket as Cricket Australia control fixtures and revenues associated with International Test Cricket and ODI’s not the WACA.
Source: Perth Stadium Consulting Team
Table 47: Key Benefits for Cricket Associated with the Stadia Options Considered by the Taskforce
3.3 CRICKET
Table 47 presents the key benefits for cricket in WA associated with playing its international events at the 60,000 seat major stadium or a combined 35,000 seat Cricket / Rugby venue.
If the WACA would play its international events at the 60,000 seat major stadium it is likely to benefit significantly from the increased public / general admission and corporate seating capacity.
A comparison of average attendances at the WACA and the Gabba indicates that attendances at international cricket events in Perth would have significant upside potential at a new state of the art facility. As highlighted in Table 48 and Table 49 the Gabba has
attracted 35.8% in 2004-05 and 50.8% in 2005-06 more patrons per international cricket event day than the WACA.
The WACA ground is likely to require ongoing investment to extend the economic useful life of some of the stands. If the WACA would play its international fixtures at the 60,000 seat major stadium then it would have access to state of the art facilities with a significantly extended useful life.
The consultants were unable to obtain operational information to estimate the actual returns that international cricket fixtures generate at the WACA (please refer to Section D7.3 for further confidential information). However, the Taskforce is of the view that the increased capacities and state of the art facilities at a new venue are likely to result in a financially better position.
Table 48: WACA International Cricket Average Attendances 2004-05 and 2005-06
Table 49: Gabba International Cricket Average Attendances 2004-05 and 2005-06
SECTION C
3.4 OTHER HIRERS
ARU
The ARU will significantly benefit from hosting its annual Rugby Test match at the 60,000 seat major stadium particularly due to the significant capacity increase of corporate facilities and general admission / public seating compared to Subiaco Oval. The 60,000 seat major stadium will remain a “clean” stadium as required by the ARU and will provide state of the art facilities and uncompromised viewing of rectangular events.
The fact that the 60,000 seat major stadium would become the 3rd largest venue in Australia to host rugby events could result in the ARU awarding more “blockbuster” matches to Perth including Bledisloe Cup matches. As such, the 60,000 seat major stadium would allow Perth to compete directly with Sydney, Brisbane and Melbourne for such events.
FFA
Similarly, the increased capacity of the 60,000 seat major stadium could result in the FFA scheduling a greater number of Asia Cup matches in Perth and consider awarding international matches against
“top” ranked opponents to Perth.