Edited by Lorenzo Federici – Russo De Rosa Associati Law and Tax Firm
Owned stadiums increasingly represent a fundamental asset for football teams with the aim of achieving higher functional revenues, firstly, for the economic sustainability of the management costs of the sports facility and, secondly, for finding greater financial resources functional to the support of general operating costs (by way of example, salaries and time cards owned by athletes).
The owned stadium therefore becomes a clear and evident dividing line, in addition to the financial health of the single sports club, the entire national tournament: the lower cash availability, or simply the lower financial revenues, inevitably influence the capacity of the single clubs to attract the most talented professionals, which translates into less interest for viewers and, consequently, in less revenue, inter alia, deriving from television rights.
It is no coincidence, in fact, that the most followed and most active championship in all sessions of the latest markets, the Premier League, is formed, in the current season, by 17 teams (out of 20) whose assets include the owned stadium .
In more analytical terms, contextualizing the analysis of the Italian panorama where there are only 4 clubs in the top flight having their own stadium (i.e. Juventus, Sassuolo, Atalanta and Udinese), the economic capacity seems evident: while Juventus can count on 100 % of the proceeds from the sale of tickets for home games (in the event of a full house we are talking about a receipt of more than 2 million euros per game), Inter and Milan, for example, find themselves having to bear, each annual fee to be paid to the Municipality of Milan of approximately 7 million per year which inevitably goes to significantly decrease the revenue deriving from the proceeds from the sale of tickets.
The modernization of the sports facility also represents a means of offering fans new ancillary services that can allow clubs to generate higher revenues.
To make it clear how much the stadium represents a fundamental asset, from a study by the auditing firm Deloitte – “Deloitte Football Money League 2019” – Real Madrid, Barcelona, Manchester United and Liverpool collected, respectively, Euro 143.4 million, 144, 8 million, 119 million and 92 million from ticket office activities and ancillary services of the stadium against Inter, Milan and Rome, however, stopped at Euro 35.3 million, 36.9 million and 35.4 million.
Bureaucratic process for the construction of a sports facility
The need for a stadium owned by Italian companies, unfortunately, inevitably collides with the legislation of the Italian state which until now has governed the procedure for the construction of sports facilities.
The bureaucratic process required, as in other sectors, in fact represents a real challenge for sports clubs that intend to proceed with the construction of a new stadium (as is evident in the case of Inter and Milan). Specifically, the procedure for building a new sports facility (or even just proceeding with the renovation/modernization of an existing one) provides that:
(i) sports clubs submit to the Municipality, where the sports facility is/will be located, a feasibility study containing, inter alia:
- a. the functional, technical, managerial, economic-financial characteristics of the works to be carried out which, in any case, must be strictly functional to the usability of the system and to the achievement of the overall economic-financial equilibrium of the initiative and concurrent with the valorisation of the area in terms social, occupational and economic and in any case with the exclusion of the construction of new residential building complexes;
- b. the analysis of the current state, in its possible architectural, geological, socio-economic, administrative components;
- c. the description, for the purposes of the preventive assessment of the environmental sustainability and landscape compatibility of the intervention, of the requirements of the work to be designed, of the characteristics and connections with the context in which the intervention is inserted, with particular reference to the verification of the constraints environmental, historical, archaeological, landscape interfering with the areas or buildings affected by the intervention, as well as the identification of suitable measures to safeguard environmental protection and cultural and landscape values;
(ii) the Municipality within 90 days of receiving the study declares the public interest of the project, also indicating any conditions for obtaining consent for the implementation;
(iii) the proposer, in compliance with the conditions required by the Municipality, must present the final project which, in the event that the intervention is the subject of interventions to be carried out on areas of public property or on existing public facilities, must be accompanied by:
- a. a certified economic-financial plan, which indicates the amount of the expenses for preparing the proposal; and
- b. from a draft agreement with the owner administration, which specifies:
- the obligation of the preventive or simultaneous realization of the urbanization works;
- the characteristics of the services and management;
- the duration of the assignment of the surface or usufruct right in favor of the subject who carries out the project (in the case of Inter and Milan, for example, we are talking about a concession of the free surface right for 99 years against the related financial commitment the construction of the new stadium, the redevelopment of San Siro and the entire surrounding area);
(iv) within a further 120 days, the Municipality must verify that the final project complies with the required conditions and deliberate definitively on the project, approving its construction, where appropriate, and may also request, with prior authorisation, modifications strictly necessary for evaluation purposes positive.
The so-called public debate
The process, as if that were not enough, in certain cases is necessarily made more onerous (e.g. the construction of the sports facility requires investments of more than Euro 300 million, excluding VAT): following the presentation of the non-definitive feasibility study, the be called the so-called public debate which consists of a process of information, participation and public discussion regarding the project presented.
The procedure in question, with a maximum duration of 4 months, essentially consists of a series of information, in-depth analysis, discussion and conflict management meetings, in particular in the territories directly affected by the work and in the collection of proposals and positions from the of citizens, associations, institutions. The meetings, like the entire public debate procedure, are managed and coordinated by an independent figure for whose appointment, as if the procedure were not burdensome enough, requires the calling of a public tender for the sole appointment of the relative manager, going even more to slow down the process.
After 30 days from the expiry of the initial term of 4 months, the coordinator of the public debate presents a final report which, inter alia, highlights the main problems and/or modification requests made by the participants in the debate. It should be specified that the results contained in the final report are not binding and the companies intending to build the plant are not obliged to make them their own, being able to modify the project in relation to their needs; in any case, the same could be taken as a reference by the Municipality which will be called to approve or not the final project.
The so-called Stadiums law
It is also specified that the process illustrated, which is already particularly onerous in its current state, is even more so in reality. In fact, in order to present the definitive project, the competent Municipality may request further modifications to the project, involving, in any case, considerable technical feasibility times. Suffice it to say that Milan and Inter have been evaluating the construction of a new facility since 2018…
With the intention of streamlining and speeding up the process of building owned sports facilities, the Italian Legislator issued Legislative Decree no. 38 of 28 February 2021 (the so-called Stadiums Law) which, with effect from 1 January 2023, provides for, inter alia:
- that the feasibility study presents several alternative solutions to the realization of the project, identifying the one that presents the best relationship between costs and benefits for the community, in relation to the specific needs to be satisfied and services to be provided;
- the term reserved to the Municipality for the declaration of public interest of the project, including any conditions for obtaining consent to the realization of the same, is reduced to 60 days (compared to the current 90 days);
- the term reserved to the Municipality for the approval of the definitive project, unless the same Municipality requests changes strictly necessary for the purposes of the positive evaluation of the project, is reduced to 60 days (compared to the current 120 days).
Therefore, the changes introduced could effectively represent the way to accelerate the construction/modernization of sports facilities in Italy, provided that, in practice, there is in any case the participatory and constructive intervention of the competent bodies.