[size=19pt]A $250m Question: Can The Akwa Ibom International Stadium Become Profitable?[/size]

"It is important to note that most sports arenas never have economic effects commensurate with its price tag so expecting a $250 million impact on Akwa Ibom’s economy is a fairytale." - Ventures Africa





VENTURES AFRICA – Amid a lot of fanfare and in the presence of three African presidents, the Akwa Ibom International Stadium was opened a few days ago.

The stadium cost a whopping $250 million to develop, a spend that seemed joyfully ignored during the opening ceremony. But as the adrenaline from the delightful melodrama continues to ease off and reality sets in, the question that hangs in air is a rather simple one. How can the stadium be monetized?

Perhaps, the best place to start is to highlight the conventional methods and avenues through which stadiums and sports arenas in general are monetized.

The main source of income for sports arenas across the world is the gate revenue. The people who come to the stadium and pay to see sporting events – in this case, mainly football matches- are its biggest source of cash flow. Given that the stadium is equipped with facilities to hold track and field meets, its earning potential is marginally increased as it can also stage athletics meets. As such, a stadium’s profitability or sustainability is based on how frequently it welcomes spectators.

Asides gate revenues, there are other opportunities such as leasing for special events. These could be hosting concerts, public events or political rallies. But as these are one-off opportunities and their regularity can hardly be predicted, they may not be relied on a major source of income.

Leasing could involve a sports entity seeking to stage its games there and in exchange pay for usage. A perfect example is seen in England where Leeds United pays £1.6 million annually in rent to use Elland Road as its home stadium.

There is also the entertainment angle to sports arenas with the addition of bars, restaurants, merchandize sales shops and even offices. All these constitute side-attractions that have double functions: attracting more people to sports arenas and ensuring that they have more things to do and, as a consequence, spend more money there as well as allow the management of sports arenas make extra revenue from shop-owners who lease the space.

At the high end of the sports industry, selling the naming rights of the stadium are another source of revenue. This practice sees a corporate sponsor pay a certain fee to have the stadium renamed with their brand involved. For example, Federal Express pays $7.6 million every year for naming rights of the FedEx field, home to Washington Redskins while American Airlines shells out $2.1 million annually for naming rights of the American Airlines Arena, home to Miami Heat.

With these various avenues highlighted, context must be applied in relation to the Akwa Ibom International Stadium.

Gate revenues will only be a reality if matches are played in the stadium. Akwa Ibom is home to two football clubs- Akwa United who play in the NPFL- the premier division, and Akwa Starlets, who play the NNL, a lower division. Given the notoriety of the local league’s failure to attract crowds, it seems unlikely that either team will sell-out the stadium’s 30, 000 seating capacity on match-days. Leasing the stadium to local clubs is also an awkward impossibility in this case as both local clubs are, like the stadium, owned, run and funded by government.

Asides, the local clubs, national team games could be hosted by the stadium. The national teams will typically attract more crowds but the downside is that national teams play an average of 7-10 home games yearly and sometimes less. All this makes grim reading as the most likely occurrence will be that the stadium will struggle to consistently fill its seats.

With its track and field facilities, the stadium – having already been certified by the IAAF according to state officials- can host international athletics championships and thus widen its pool for raking in gate revenues but Nigerians largely show apathy towards other sports asides football. Regardless, there is a potential to host a truly international sports meet which sees the world’s biggest names in athletics feature. Leveraging the tourism potential of neighboring Cross River as an added attraction, Akwa Ibom might well be able to pull off something of this magnitude.

Special events such as grand concerts could also provide a revenue stream especially during the busy festive periods. Similar tactics have been employed by the management of Wembley stadium which has hosted a fair number of global music stars. Madonna’s 2008 concert at the stadium reportedly grossed $12 million and Akwa Ibom will do well to attempt to tap into the using the stadium as a venue for major concerts and other special events. However, much like the lack of consistency with filling its seats, concerts and other special events cannot be factored into planning and revenue projections until bookings are made.

Exploring the stadium’s entertainment and recreational potential is something that can be added to the plans, if it was not factored into initial architectural designs. Adding shops, bars and restaurants on-site gives people added incentive to go to the stadium and also provides the management with space to lease thus generating extra revenue.

Finally, naming rights could be a source of revenue as it has proven to be in American sports repeatedly. However, the millions of dollars invested in naming rights of major sports arenas in the US are valued in proportion to the exposure the arena offers the corporate partners and the interest of the public in teams who play there. The huge interest in sports in the United States- basketball, baseball, ice hockey and ‘soccer’- means that this investment offers corporate partners significant media mileage and brands will consider it a worthy enough investment rather than a charity donation which might be the case with trying to sell the naming rights to a stadium where a less than successful football club plays and where the national team might play only about ten times a year.

The obvious bottom-line is that the Akwa Ibom International Stadium faces an uphill task generating enough revenue to sustain itself or recoup the $250 million investment pumped into its construction. Regardless, attempting to monetize is worth a shot else the state government will be burdened with its maintenance costs and if what has happened with the Abuja International Stadium is anything to go by, the stadium may be a shadow of the shiny edifice it currently is if maintenance costs are entirely a prerogative of the government.

Also, while many continue to legitimately ask the question of the economic impact that the Akwa Ibom stadium might have on the local economy like Joachim MacEbong does here, it is important to note that most sports arenas never have economic effects commensurate with its price tag so expecting a $250 million impact on Akwa Ibom’s economy is a fairytale.

Perhaps, the best way to highlight how difficult it will be for the Akwa Ibom International stadium to make significant impact on Akwa Ibom’s economy is to lay bare two simple statistics. The cost of the stadium is rumoured to be $250 million while Akwa Ibom’s internally generated revenue last year stood at around $243 million.

Rather than provide immense economic boosts, the Akwa Ibom International Stadium will mainly have intangible benefits such as providing the state with a source of pride and also elevates its sports industry. The main goal, at this point, should be focusing on making sure that its maintenance is carried out by monetizing it optimally to ensure that years from now, the stadium will remain truly international.

Click Like if you think this was a waste of resources

Click Like if you think this was a reasonable investment

which stadium, apart from Aba stadium is self sustaining or profitable, my guess is non . Akwa Ibom ought to have invested in am economic project like a viable sea port though

Good question. Also a very importan one. Sadly, nigerians don't care. Someone will still reply this thread in favour of the same failed government

YORUBA MEDIA AS USSUAL WITH THEIR PULL HIM DOWN SYNDROM.

YORUBAS, LEAVE AKPABIO ALONE AND FACE THE ROT IN LAGOS STATE AND OTHER SOUTH WASTERN STATES.
HOPELESS PEOPLE WITH HOPELESS IDEOLOGIES.

Well the akwa ibom I know now does not need this at this point of time.

Yes it is beautifull, it is worth celebrating but investing in some other sector would have been better.

I have always been telling people that nigerian govement finds it very difficult to invest. 70% of nigeria's workers work under private companies. And with this unemployment rate will continue to increase yearly.

What is wrong if we had something like this from Awka ibom state govement:

Akwa Ibom state goverment builds the largest rubber factory in Africa. Were rubber can be used to produce different type of products.

Or

Akwa Ibom builds largest leader factory in Africa.
Which would have reduced importation of shoes,bags e.t.c from china and else were, hereby boosting the state/countries economy and also creating good number of jobs for ibomites/nigerians starting from loading/offloading of goods to the G.M


I Pray God help us.

masterpower:
YORUBA MEDIA AS USSUAL WITH THEIR PULL HIM DOWN SYNDROM.

YORUBAS, LEAVE AKPABIO ALONE AND FACE THE ROT IN LAGOS STATE AND OTHER SOUTH WASTERN STATES.
HOPELESS PEOPLE WITH HOPELESS IDEOLOGIES.

if the stadium is a waste, it doesn't matter if i'm Yoruba or not. Akwa Ibom is wasting money on numerous projects that cant pay back. With the hope that they would make tourism the backbone of the economy. That's the plan, but the projects are clearly not enough to achieve it.

even if the plan works, then what? smh for the government.

masterpower:
YORUBA MEDIA AS USSUAL WITH THEIR PULL HIM DOWN SYNDROM.

YORUBAS, LEAVE AKPABIO ALONE AND FACE THE ROT IN LAGOS STATE AND OTHER SOUTH WASTERN STATES.
HOPELESS PEOPLE WITH HOPELESS IDEOLOGIES.

In your only thread on Nairaland, you were asking for folks with dredgers to contact you. It sure doesn't seem sensible or sane to abuse an ethnic group when you're into business.

I will pray for you tomorrow in church so that you grow up and start acting like a mature human being.

MOBJECTIVE:


if the stadium is a waste, it doesn't matter if i'm Yoruba or not. Akwa Ibom is wasting money on numerous projects that cant pay back. With the hope that they would make tourism the backbone of the economy. That's the plan, but the projects are clearly not enough to achieve it.

even if the plan works, then what? smh for the government.

I think the biggest waste of money though was by the lagos state government that wasted billions of tax payers money in a rail project , an international airport, a sea port and the eko Atlantic project which up till today none has seen the light of the day unlike Akwa ibom that has commissioned a viable internl Airport and a stadium and is working round the clock to deliver the deepest sea port

MOBJECTIVE:
Click Like if you think this was a reasonable investment

kai,na u get the whole debate.the like dey credit ur account?

The oil price is falling Akwa Ibom government should quickly diversify its source of revenue so that in the near future even if Oil comes down to $1 per barrel their would not be issue maintaining the stadium, airport , hosting the annual christmas carole and maintaning other state assets

Is it not hypocrisy that Awolowo is still praised for building Liberty Stadium in the 1960s why Akpabio is maligned for building a stadium in the 21st Century? I am sure if Fashola built this stadium his army of praise singers would have told us why it is the best thing that has happened to the human race since penicillin.

Two things are required:
1. Business development office to attract business and line up matches from the National and African leagues
2. Music events attracted to the stadium by BDO.
3. Facility Management company to provide cheap maintenance for the stadium.

Sibabasibaba1:
Is it not hypocrisy that Awolowo is still praised for building Liberty Stadium in the 1960s why Akpabio is maligned for building a stadium in the 21st Century? I am sure if Fashola built this stadium his army of praise singers would have told us why it is the best thing that has happened to the human race since penicillin.

Ibadan is an exact opposite to Uyo if i may say , while Uyo is the fastest developing , transforming and growing city in west Afrrica , ibadan in
oyo is a failed city that thrives on past glory with vast ritual forests , marijuana farms and dilapidated structures . The stadium in ibadan even though was the first does not attract good sporting events , the Airport has remained a serious drain on the resources of FAAN while the major source of revenue is the federal allocation.

Uyo remains the major hope of Niger delta and former eastern Nigeria attracting major investments from far and wide , Jim Ovia just made a mouth watering investment,even though Akwa Ibom entered the race of developing states very late they have made the best use of their resources when compared to other Niger Delta states and lagos .

Sibabasibaba1:
Is it not hypocrisy that Awolowo is still praised for building Liberty Stadium in the 1960s why Akpabio is maligned for building a stadium in the 21st Century? I am sure if Fashola built this stadium his army of praise singers would have told us why it is the best thing that has happened to the human race since penicillin.

Trust me, Its not coincidence that Fashola did not spend $250million (42 billion naira) on a stadium.

This was what I posted in another thread a while ago

hardywaltz:


Nobody is arguing which is finer coz asthectic wise the Akwa Ibom stadium is far finer but here are a few questions u need to answer.

How much was spent to build this stadium and how much more will it cost tax payers for Julius Berger to maintain it for the 10 years?

Is that how stadia around the world are maintained?

What are the alternatives forgone?

How much proceeds will the stadium generate from Super Eagles match which is free entry?

How many matches do Super Eagles play in a year and will all the matches be played only in Uyo?

The Alliance Arena in Germany which the stadium is modeled after is put to use at least 30 - 40 times and records minimum of 50% attendance which they use in maintaining the stadium.

Do u think that in the next 5 years that upto 30 matches would have been played in that stadium?

When next do u think that stadium will be filled to 90% capacity?
A) Church program
B) Political rally
C) Recruitment exams
D) All of the above

MOBJECTIVE:


Trust me, Its not coincidence that Fashola did not spend $250million (42 billion naira) on a stadium.

Please do you have any idea which project fashola is really spending money on

kettykin:


Ibadan is an exact opposite to Uyo if i may say , ..........
Uyo remains the major hope of Niger delta and former eastern Nigeria attracting major investments from far and wide , Jim Ovia just made a mouth watering investment,even though Akwa Ibom entered the race of developing states very late they have made the best use of their resources when compared to other Niger Delta states and lagos .

Ibadan doesnt have akwa Iboms resources but its certainly has a larger economy. And it is certainly growing at a faster pace than akwa ibom.

Akwa ibom is wasting its resources, and attracting minimum investment for every naira or dollar it spends. To me wasting doesnt mean that it isnt doing good things though, e.g the road and power infrastructure. Still, i wish it wouldnt use 42 billion naira for a stadium at this stage of development.

example of what that kind of money can achieve. South Korea's first posco steel mill was founded with about $123.6million in 1968 and today posco makes profits of up to $8 billion dollars.

kettykin:


Ibadan is an exact opposite to Uyo if i may say , while Uyo is the fastest developing , transforming and growing city in west Afrrica , ibadan in
oyo is a failed city that thrives on past glory with vast ritual forests , marijuana farms and dilapidated structures . The stadium in ibadan even though was the first does not attract good sporting events , the Airport has remained a serious drain on the resources of FAAN while the major source of revenue is the federal allocation.

Uyo remains the major hope of Niger delta and former eastern Nigeria attracting major investments from far and wide , Jim Ovia just made a mouth watering investment,even though Akwa Ibom entered the race of developing states very late they have made the best use of their resources when compared to other Niger Delta states and lagos .

Hahahaha What a post from a certified dunce and village based cretin LMAO

MOBJECTIVE:


Ibadan doesnt have akwa Iboms resources but its certainly has a larger economy. And it is certainly growing at a faster pace than akwa ibom.

Akwa ibom is wasting its resources, and attracting minimum investment for every naira or dollar it spends. To me wasting doesnt mean that it isnt doing good things though, e.g the road and power infrastructure. Still, i wish it wouldnt use 42 billion naira for a stadium at this stage of development.

for instance. South Korea's first posco steel mill was founded with about $123.6million in 1968 and today posco makes profits of up to $8 billion dollars.

Please apart from the website link, do you have any on the ground proof that ibadan is growing not to talk of growing at a faster rate than uyo the building of a multi billion naira stadium if considered a waste in uyo which has delivered world class hospitals and library projects,, how would you consider the bogus uncommissioned multi billion naira projects under taken at a huge cost to tax payers in lagos like the abandoned cable car project, the. Rail project which is presently in a comatose state

LajaLaba:
Hahahaha What a post from a certified dunce and village based cretin LMAO

Please could you explain how or what is wrong with the post

MOBJECTIVE:


Trust me, Its not coincidence that Fashola did not spend $250million (42 billion naira) on a stadium.

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Yea, you are probably right. That is just as Akpabio did not pour N8billion of tax payers into the Ibeno beach (in the name of Surnburn Yatch) or buy back concession rights of any tolled road in Akwa Ibom with over N25billon of the tax payer.

But Fash bought a Caribbean Cruise.
Awo even build TV station in Ibadan when nobody even the president of Nigeria had none.

MOBJECTIVE:


Trust me, Its not coincidence that Fashola did not spend $250million (42 billion naira) on a stadium.

kettykin:

Please could you explain how or what is wrong with the post

Everything!!!u deserve a big knock on the head for that load of rubbish u put up there

LajaLaba:
Everything!!!u deserve a big knock on the head for that load of rubbish u put up there

What load and what rubbish are you referring to please

kettykin:


What load and what rubbish are you referring to please

Are u seriously telling me u are comparing Uyo with Ibadan?shey na stadium we wan chop or what?

kettykin:

Please apart from the website link, do you have any on the ground proof that ibadan is growing not to talk of growing at a faster rate than uyo the building of a multi billion naira stadium if considered a waste in uyo which has delivered world class hospitals and library projects,, how would you consider the bogus uncommissioned multi billion naira projects under taken at a huge cost to tax payers in lagos like the abandoned cable car project, the. Rail project which is presently in a comatose state

kettykin i dont intend to provide a link about Ibadan's economy or debate anything about Lagos. the poll at the beginning of the thread is my major interest in this thread. i want to see what others think of the project. plus, the only reason i brought up the ibadan issue was to show that what you said about the city is untrue.

kettykin:


I think the biggest waste of money though was by the lagos state government that wasted billions of tax payers money in a rail project

Metro rail is the best investment ever and the project can pay for itself in less than 5 years by moving hundreds of thousands of people/day. The market is available and the population is there to make it thrive.

an international airport, a sea port and the eko Atlantic project

These are private investments and the seaport is a PPP with the FG and Lagos state government. The major investment 60% is private. Saying investing in a seaport is wasteful spending sounds kind of ignorant and thoughtless considering the fact that Nigeria is losing shipping business to other west african countries because of poor port facilities and backlogs...

which up till today none has seen the light of the day unlike Akwa ibom that has commissioned a viable internl Airport and a stadium and is working round the clock to deliver the deepest sea port

The airports is uncompleted and there's nothing successful about it, the stadium is a waste since it sits around till the next game for weeks and months. It's not going to generate any daily cash flow. Can the folks in Akwa Ibom even afford anything? Akpabio is subsidizing the other waste called cinema by N1400 per ticket just to hide his failure, thoughtlessness and poor financial judgement. He's wasting more billions to hide what he can not hide forever. The rest of the project is still uncompleted after N33 billion down the drain or swindled. He'll once again subsidize the stadium, to hide his failure..

What seaport are they working around the clock on? The seaport exists only on paper.

Despite the yearly allocation of several billions of naira for the construction of a proposed greenfield deep seaport at Ibaka in Akwa Ibom State by both the State Government and the Nigeria Ports Authority (NPA) since 2011, the project has remained elusive, with no evidence of a port being built at the proposed site.

The project is missing in the National Integrated Infrastructure Master Plan and in the list of similar projects planned in partnership between the federal government and state government, with expectations of private investors collaborations, investigations by LEADERSHIP have revealed.

The Ibaka Deep Seaport, a project for which the federal ministry of transport, the NPA and the Akwa Ibom State Government have held several workshops and taken commendations at several events is also missing in a maritime and air transport report prepared by Steer Davies Gleave for the Infrastructure Consortium for Africa (ICA) hosted by

The African Development Bank.

The study, which was carried out to assess the potential for enhanced private participation in the maritime and air transport sectors in Africa however identified the Lekki Deep Seaport measuring 970m of container berths, 320m dry bulk berth, 1-2 oil berths and located 60km east of Lagos.

The Badagry greefield port, Koko Port and Olokola Port were also listed with their capacity and promoters.

http://allafrica.com/stories/201312160580.html

Akpabio is budgeting or obviously pocketing billions every year for some seaport that doesn't even exist on paper, not federally documented anywhere..Not identified or in maritime registry, but Lekki and badagry were identified.

The FG paid their share of the lekki seaport/$200 million so where is the FG portion or even recognition regarding ibaka?

So, since they are yet to clear the bush leading to the imaginary seaport, where is the yearly billions/budget going? Who is pocketing it?

I don't know why you mentally crooked people think other people are clueless and dumb just like you...

MOBJECTIVE:


kettykin i dont intend to provide a link about Ibadan's economy or debate anything about Lagos. the poll at the beginning of the thread is my major interest in this thread. i want to see what others think of the project. plus, the only reason i brought up the ibadan issue was to show that what you said about the city is untrue.

The game is always to move away from the topic and derail the thread with meaningless and irrelevant nonsense since they don't have anything better to contribute or defend their leaders with..