In recent years, some sports facilities have been called “white elephants.” The term dates back to ancient Asia when a king would gift a white elephant to a subordinate he was dissatisfied with because the associated costs of keeping a white elephant significantly outweigh its value.
Today’s white elephants include sports facilities that have experienced substantial construction cost overruns, are underused or present a financial burden to taxpayers. White elephants are so common that sport facility legacies could possibly be the least promising benefit of hosting a major sport event.
However, the term has generally not been applied to sport facilities that professional sport teams call home. The pandemic has further exaggerated these white elephant characteristics of just about all large spectator sport facilities.
For example, the stadium constructed for the 1976 Montréal Olympics — known as the Big O — had an original estimated cost of $250 million. However, it is referred to as the “Big Owe” because construction costs inflated to a $1.4 billion project.
Between 2000 and 2018, there have been substantial cost overruns for hosting the Olympic Games. Much of this can be attributed to sport facilities.
Generally, publicly owned sport facilities have suffered far worse than those that are privately owned. Most sport facilities that were constructed for major sport events between 1996 and 2010 have experienced use and financial challenges. These often become financial burdens for taxpayers.
The problem extends to recently constructed facilities. The 2014 Sochi Olympics produced multiple sport facilities that have struggled with post-event use and cost upwards of US$399 million per year to maintain.
Meanwhile, a judge has ordered the closure of the 2016 Rio Olympic Park over safety concerns. The sport facilities began to fall into disrepair only six months after the Games concluded.
In North America, there have been over 40 professional sport facilities constructed or renovated since 2005 for the five major sport leagues. While the vast majority of these teams are privately owned, the facility projects have received US$12.6 billion in public subsidies, or 48 per cent of the cost. Whether it be new construction or renovation, these projects often experience substantial cost overruns and require ongoing maintenance that can be passed down to the taxpayer.
As a result, public administrators and taxpayers can become skeptical of new publicly funded projects. And conflicts around sports facilities can cause owners to threaten to move or negotiate out of paying rent; once construction is completed, facilities can increase the values of sport team franchises.
To amplify the financial repercussions, newly constructed or renovated professional sports facilities received a total of US$3.2 billion in tax breaks between 2000 and 2016.
A recent example, the privately funded SoFi stadium in Inglewood, Calif. — with a price tag of US$5 billion — sought to recoup US$100 million in tax reimbursements in its first five years of operation. Despite the capacity to hold up to 100,000 for select events, SoFi stadium opened in September 2020 to zero fans in its stands due to COVID-19.
Underused facilities can also be a concern for stadiums and arenas built with the intention of hosting professional sports. Cities have constructed stadiums and failed to successfully attain an anchor professional sports team; examples include the Alamodome in San Antonio, Texas, and the Videotron Centre in Québec City.
In these cases, cities have had to be creative and reimagine purposes for their facilities. For example, while the Alamodome was built with the intention of attracting an NFL team, it has primarily been used as a convention centre, to host NBA games and the occasional college football bowl game.
Several professional sports teams across North America saw attendance drop by more than 10 per cent between 2008 and 2018. Major League Baseball (MLB) experienced a league-wide decline of 10 per cent between 2017 and 2018. Data suggests that younger sports fans may be less likely to attend actual events, instead relying on media for their sport consumption.
The pandemic’s effects
Finally, the COVID-19 pandemic has dramatically impacted use and attendance at sport facilities, and the long-term implications are largely unknown. The immediate impact forced the closure of sport facilities and leagues to operate in bubbles and without fans.
There have been discussions and attempts to allow spectators back into facilities that include blocking the first six to eight rows of lower bowl sections, dramatically reduced seating capacities and enforcing physical distancing.
However, consuming sports from the comfort of home currently provides the lowest risk for sport consumers. Virus-proofing sport facilities and convincing fans will be necessary to encourage post-pandemic attendance.
The future of sports infrastructure
To avoid white elephants, city administrators and planners should consider evidence-based suggestions. The most successful sport facilities are strategically located and linked to urban conditions, demographics and socio-economic status, such as the Aquatics Centre and Copper Box Arena built for the 2012 Olympics in London.
Strategic locations include using brownfields — unused land previously used for industrial purposes — situated within urban regeneration areas that experience high levels of traffic. Brownfields are often occupied by infrastructure that has been deemed obsolete.
Planners should consider repurposing existing facilities and, if there is no immediate need based on the urban conditions, building temporary facilities that will be deconstructed after events.
When new sport facilities align with long-term city plans, strategic partnerships can be explored. For example, partnerships with professional sports teams, because the most successful facilities have a professional sports team as an anchor tenant.
Planners should also consider designing and building adaptable and flexible facilities to create additional opportunity for future use and create spaces for recreation and public use that give the facility additional opportunities for community attachment and public benefits. It’s crucially important to involve future operators when designing the facility to ensure it suits their needs.
Post-pandemic sport facilities will need to be reimagined with alterations to building codes to virus-proof the stands. Return protocols may differ depending on whether it be a professional sport or recreation facility.
The size of facilities should be reconsidered. International competitions need to be reconsidered to prevent unnecessary stadiums and costly renovations.
And finally, the consumption patterns of younger audiences should be studied in order to adapt to and apply new technologies like virtual reality. As technologies advance, the trend of at-home spectator sport consumption will likely increase, reducing the need for large spectator sport facilities.