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Public Subsidies and Good Governance in Professional Football: The Case of France’s
New Stadiums
Jérémy Moulard, Markus Lang, Wladimir Andreff
20 November 2023
Public Subsidies and Good Governance in Professional Football:
The Case of France’s New Stadiums
Jérémy Moulard
Institute of Sport Sciences
University of Lausanne
jeremy.moulard@unil.ch
Markus Lang
Institute of Sport Sciences
University of Lausanne
markus.lang@unil.ch
Wladimir Andreff
University Paris 1 Panthéon Sorbonne
andreff@club-internet.fr
20 November 2023
1
Public Subsidies and Good Governance in Professional Football: The Case
of France’s New Stadiums
Abstract
Purpose/Rationale: This paper examines the influence of local government financial support
on the governance of professional football clubs, particularly in the context of stadium
construction and renovation.
Methodology: The qualitative data underpinning this study comprises 14 semi-structured
interviews, totaling ca. 560 minutes. These interviews were conducted in relation to the
development of eight football stadiums in France for the 2016 UEFA Euro. Supplementary
data was added in the form of various written sources (e.g., audit reports).
Findings: Our study identifies an inverse relationship between the degree of public support a
club receives, and the level of resources and competencies invested by its management in the
stadium. We observe that clubs benefiting from more substantial public support generally
exhibit lower investments in resources and competencies in their stadium projects.
Practical Implications: Our findings highlight the potentially adverse effects of public
financial assistance on football club management's strategic decision-making and resource
allocation, especially concerning stadium assets. Specifically, our study shows that public
support fostering soft budget constraints (SBC) can restrict a club manager's engagement in
stadium projects.
Research Contribution: This is the first study to examine how public funding for stadium
projects influences the resources and competencies that football clubs allocate to their new
stadiums.
Keywords: soft budget constraints; professional football; stadium; public aid; governance
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1. Introduction
The construction of new stadiums can significantly boost a football club's economic growth, a
trend exemplified by the renovation of Bundesliga stadiums in Germany for the FIFA World
Cup 2006 (Allmers & Maennig, 2009; Breuer et al., 2011). However, this trend was not
mirrored in France, where many stadiums built or renovated for the UEFA European Football
Championship 2016 have become financial liabilities for their stakeholders (Moulard, 2018).
French politicians envisioned these stadiums as instruments to diversify clubs' business models
(Besson, 2008), but the outcomes have fallen short of expectations. The disappointing
performance is primarily attributed to how the renovation and construction processes were
managed, which resulted in issues related to stadium capacity, accessibility, connectivity, and
the quality of the spectator experience. Additionally, these stadium projects experienced budget
overruns and operating and maintenance costs that exceeded initial estimates. Furthermore, the
operational models adopted were not conducive to maximizing revenue generation for the clubs
from these stadiums.
In the case of the 13 stadiums France renovated or built for the UEFA Euro 2016, local
authorities own 12 of them, and only one club (Olympique Lyonnais – OL) owns and operates
the stadium in which it plays. Another two clubs operate their stadiums under contract with
their local authority, but other actors, often large construction companies (e.g., Bouygues,
Vinci), operate the remaining ten stadiums, and their resident clubs are just leaseholders.
Moreover, the public authorities covered almost 95% of the cost of renovating the 12 stadiums
they own (€1.69 billion out of €1.79 billion), with Paris-Saint Germain (PSG) being the only
club to invest heavily in renovating its stadium (PSG covered the entire €75 million cost). OL
also made a substantial financial commitment to its new Groupama Stadium, providing €430
million of the total cost of €632 million, although it still received €202 million in public
funding. These findings support Moulard et al.'s (2022) conclusion that France’s public
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authorities act as “supporting organizations” for professional football by providing support to
ensure clubs’ financial sustainability and viability. This support gives clubs financial flexibility
but produces soft budget constraints – SBC (Kornai et al., 2003; Storm & Nielsen, 2012).
Germany’s stadium renovation program for the FIFA World Cup 2006 relied much less
on public money, as the 12 clubs concerned covered 60% (more than €850 million) of the total
cost, and the public authorities provided just 40% (€548 million). Nine of these clubs own their
stadiums outright, and the remaining three operate their stadiums, so none have to lease its
stadium. Most importantly, these new stadiums have had a very positive impact on their clubs’
business model. This leads to the inquiry: Could the predominant private investment in
Germany's football stadiums be the key to the program's financial success? Conversely, is the
financial underperformance of France's stadium program attributable to an overreliance on
public funding? Indeed, frequent recourse to public support leads to SBC that can consciously
or subconsciously attenuate managerial efforts to rationalize and efficiently use funds when
acquiring new resources such as a football stadium (Dewatripont & Maskin 1995).
The present study aims to investigate to what extent financial support by local
governments for stadium renovation or construction adversely affects the good governance of
professional football clubs. We address the research question based on a case study in the
context of the building and renovating of eight football stadiums in France between 2012 and
2016. Our study identifies an inverse relationship between the degree of public support a club
receives, and the level of resources and competencies invested by its management in the
stadium. We observe that clubs benefiting from more substantial public support generally
exhibit lower investments in resources and competencies in their stadium projects. Specifically,
public support fostering soft budget constraints (SBC) can restrict a club manager's engagement
in stadium projects. This trend underscores the potential negative impacts of public subsidies
on club management’s strategic decision-making and investment in stadium-related assets.
4
The remainder of the paper is structured as follows. Section 2 provides an extensive
review of the pertinent literature, setting the foundation for our study. Section 3 details the data
sources utilized, and the methodologies employed in our analysis. Section 4 is dedicated to
presenting the findings of our investigation. Finally, Section 5 concludes the paper by
discussing the contributions of our study, acknowledging its limitations, and suggesting
avenues for future research within this domain.
2. Literature Review
Public subsidies play a pivotal role in shaping the economic landscape of professional football
clubs (Dietl et al., 2017), often leading to the creation of soft budget constraints (SBCs). This
dynamic occurs when clubs, buoyed by public funds, face less pressure to maintain fiscal
discipline, knowing they have a financial safety net (Bertheussen, 2023; Meier & Krüßmann,
2022). Kornai (1979) was the first to observe that socialist enterprises, akin to football clubs
relying on public subsidies, are not subject to hard budget constraints as they can count on the
state to absorb their debts in times of financial distress. Szabó (1988) further categorized SBC
as “preliminary” when the state intervenes before an enterprise invests in a project (ex-ante),
and as “incremental” when the intervention occurs post-investment (ex-post). In the context of
professional football, Storm and Nielsen (2012) linked the emergence and persistence of SBC
to the sector's unique political, social, and economic environment, encapsulating it as: “The
institutional mechanism of the football market and the social attachment to the clubs linked to
the specific emotional logic of sport focused on winning.” Expanding on this, Storm and
Nielsen (2012) identified six forms of SBC-inducing support provided by the state, banks, and
shareholders to professional football clubs.
Many French professional football clubs benefit indirectly from public expenditure via
the sums local authorities invest in renovating or rebuilding these clubs' stadiums (Moulard et
al., 2022). This public financing of football stadiums creates SBC via four types of ex-ante
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support and four types of ex-post support, which Moulard et al. (2022) categorized according
to the work of Szabó (1988) and Storm and Nielsen (2015).
Andreff (2009) found that SBC and the resulting lack of incentives to manage costs
were the root cause of French rugby clubs’ poor governance. As Franck (2014) noted: “Bailouts
distort the incentives of decision-makers in football clubs,” resulting in them not investing
enough time and energy in sorting out bad projects and developing good ones. Franck built on
the pioneering work carried out by Kornai, who had concluded that “Money coming like
manna” (Kornai, 1986, p. 12) induces waste and lavishness and that managers in organizations
with SBC concentrate on winning the favor of benefactors rather than focusing on producing
and delivering a competitive service: “The attention of the firm’s leaders is distracted from the
shop floor and from the market to the offices of the bureaucracy where they may apply for help
in case of financial trouble” (Kornai 1986, p. 10).
The lack of incentives to optimize management depends on whether funding is provided
ex-ante or ex-post, with ex-ante funding being “more in line with sound financial management”
and ex-ante funding being “counter-productive to financial viability” (Jacobsen et al., 2021).
These authors concluded that ex-post funding can be detrimental to the development of good
practices, as it can result in clubs that overspend being rewarded. The presence of macro-
national, meso-industrial, and micro-entrepreneurial support makes the situation even more
complex (Andreff, 2022). The current study uses France’s football stadium renovation program
to examine this link between public support and the efficiency of professional sports clubs’
projects.
3. Data and Methods
3.1 Case Selection
Stadiums represent tangible assets that facilitate exploring and comparing the resources and
competencies football clubs dedicate to their projects. A considerable sample of stadiums,
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either newly constructed or recently renovated within a brief period in the same country, is
essential to conduct a thorough and meaningful analysis. This approach ensures a consistent
and comparative framework for evaluating football clubs' investment and strategic decisions.
The stadium development initiative undertaken by France for the UEFA Euro 2016 tournament
presents such an opportunity.
Due to particular circumstances, we selectively excluded specific stadiums from our
study from the 13 French football stadiums constructed between 2008 and 2016. The stadiums
of Le Mans FC and Grenoble Foot 38 were omitted following the clubs' bankruptcy shortly
after they started using their new stadiums. For instance, Le Mans FC's liquidation in October
2013 left a vacant 25,000-seat stadium, compelling the city to pay €2.1 million annually to
Vinci for its maintenance. This situation led to an unprecedented 209% increase in Le Mans
city council tax from 2010 to 2017. The club, which returned to the second elite division in
2019, six years post-bankruptcy, resumed using the stadium without contributing financially
for over five years. In France, when a professional club goes bankrupt, it loses its professional
status, and the oversight of its financial operations ceases, making reliable financial data
unavailable.
Additionally, the minor renovations in Toulouse and Lens were deemed insufficiently
significant for our analysis. We defined a major renovation as a substantial upgrade enhancing
the fan experience and the venue's revenue potential, possibly including layout changes. Such
renovations typically involve converting standing areas to seated ones, expanding VIP and
business seating, enhancing catering services, installing video screens, improving sound and
lighting systems, incorporating Wi-Fi/5G connectivity, adding elevators, integrating a
(retractable) roof, and boosting security standards. The renovations in Toulouse and Lens,
focusing mainly on aspects like public reception areas and vehicle access to the pitch, did not
meet these criteria and were thus excluded.
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We aimed to analyze a diverse range of stadiums and clubs with varying operational
models. Therefore, the remaining nine cases constituted an optimal sample. However, detailed
data on Valenciennes FC was unattainable, leading to its exclusion.
As a result, our study focuses on the eight stadiums detailed in Table 1, which includes
the full and short names of the clubs associated with each stadium.
[Insert Table 1 here]
3.2 Data Collection
The empirical data for this study comprises a blend of qualitative interviews and quantitative
written sources, including audit reports. A total of 14 semi-structured interviews were
conducted, targeting a diverse group of individuals intimately connected with the football
industry. These interviews included discussions with executives from the resident clubs at
seven of the newly constructed or renovated stadiums (ASSE, OGCN, PSG, FCGB, LOSC,
OL, HAC), a key manager from the French Professional Football League’s (LFP) stadiums
department, and two renowned academic experts specializing in French stadiums, Boris Helleu
and Lionel Maltese.
Carried out in person between 2016 and 2018, each interview in our study had an
average duration of 40 minutes. These interviews amounted to 560 minutes of in-depth and
informative discussions, providing a rich data source for our analysis. The authors recorded the
interviews and then transcribed them verbatim to ensure the accuracy and integrity of the data.
The interview format was structured around open-ended questions to foster a comprehensive
and in-depth exploration of the subjects' perspectives and experiences. This approach aligns
with the guidelines Bryman (2016) set forth for qualitative research. Table 2 provides an
overview of the semi-structured interviews conducted for the current study.
[Insert Table 2 here]
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In addition to the interviews, our empirical data included substantial written sources,
primarily the comprehensive 2017 Court of Audit report (Cour des comptes, 2017), which
focused on public aid for the UEFA Euro 2016 tournament in France. The Court of Audit is an
essential institution in the French administrative system, and its primary function is to
scrutinize and verify the legality and integrity of public accounts. This encompasses a wide
range of entities, including the State, national public bodies, public companies, and the social
security regime. It also extends its oversight to private organizations that either receive State
aid or are engaged in public fundraising activities.
The Court of Audit's role is critical in ensuring transparency and accountability in
public financial management. It provides detailed reports to key stakeholders on the legality
and appropriateness of public account management, including the parliament, the government,
and the general public. In the context of our study, the 2017 report offered invaluable insights
into the financial aspects of the UEFA Euro 2016 tournament, specifically regarding the
allocation and impact of public funds. This report provided a quantitative foundation for our
analysis, complementing the qualitative data obtained from the interviews. It allowed us to
construct a well-rounded understanding of the financial dynamics at play in the development
of these stadiums and the broader implications for public spending and governance in
professional football.
3.3 Indicators
We use five indicators to assess the resources and competencies clubs that football clubs
allocate to their new stadiums:
Indicator 1: Primum movens. As conceptualized by Callon (1986), this indicator is
crucial for identifying the primary initiator of a stadium's renovation or construction project. It
effectively differentiates between stadium projects launched by public entities, like city
councils, and those that the football clubs initiate. This distinction is essential for
9
comprehending the primary motivations and the fundamental driving forces behind each
stadium project, providing insights into the origins of these significant undertakings.
Indicator 2: Governance. This indicator assesses the ownership and operational control
of the stadium, explicitly determining whether the resident football club is the owner or the
operator. It plays a crucial role in evaluating the extent of the club's involvement in the
stadium's management. Within our study, we categorize the operators into three distinct types:
local authorities, the resident clubs themselves, or external companies. This classification helps
understand the operational dynamics and the degree of control the clubs exert over their home
stadiums.
Indicator 3: Financial investment. This indicator evaluates the extent of a club's
monetary commitment towards the renovation or construction of its stadium. A club's financial
investment is a significant measure of its willingness to engage in and support long-term
development initiatives (Walters, 2011). We gain insights into the club's strategic priorities and
dedication to infrastructural advancement by quantifying this investment.
Indicator 4: Operational competencies. This indicator measures the club's investment
in human resources, specifically focusing on recruiting staff to optimize the marketing and
event-management departments. The effectiveness of these departments is pivotal in
leveraging the opportunities presented by the new stadium. The metric used for this indicator
is the number of personnel hired, reflecting the club's commitment to enhancing operational
competencies and maximizing the potential benefits of the new facility. This approach provides
a clear view of how clubs prepare to capitalize on their infrastructural investments through
strategic staffing decisions.
Indicator 5: Strategic marketing adaptation. This indicator evaluates the evolution of a
club's marketing strategies in anticipation of its new stadium's launch. A vital aspect of this
evaluation is the club's ability to redesign its events and offerings, demonstrating adept
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marketing skills and a keen responsiveness to local demand and regional opportunities. The
focus is on assessing how extensively clubs invest in innovative marketing services and
strategize to maximize the utility of their new stadiums upon becoming operational. Inadequate
preparation in this area diminishes the potential revenue streams from avenues like naming
rights and enhanced fan experiences. It underscores a lack of managerial involvement in the
planning and execution phases of the stadium's renovation or construction project. This
indicator, therefore, serves as a measure of a club's foresight and adaptability in leveraging its
new infrastructure for optimal commercial and experiential benefit.
4. Results
In this section, we comprehensively analyze each indicator mentioned above in the context of
the stadium renovation and construction projects included in our study. This detailed
examination will shed light on the specific aspects and implications of these indicators as they
pertain to each project, providing a deeper understanding of the various factors influencing
these significant undertakings.
4.1 Primum Movens (Indicator 1)
For three of the projects (PSG, OL, HAC), the initiation came from the club presidents, with
some harboring the ambition for stadium redevelopment for many years (for example, OL since
2006). Public authorities spearheaded the remaining five projects, notably city councils (OM,
FCGB, OGCN, LOSC, ASSE). Their motivation was often tied to the opportunity of hosting
the Euro 2016 event. Therefore, in five out of the eight cases, the city council took the lead in
the stadium renovation or construction, viewing it as a strategic tool for economic development
and enhancement of their city’s football club.
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4.2 Governance (Indicator 2)
The selection of an optimal governance structure for major sports infrastructure, with a typical
lifespan of at least 30 years, is crucial. Table 3 details the governance structures of the stadiums
in our study.
[Insert Table 3 here]
Interestingly, only the three clubs that were the driving forces behind their stadium
projects (primum movens) operate their stadiums year-round. This operational model is either
due to the club's direct financial investment in the stadium (as in the case of OL) or through an
occupancy agreement with the city council (as seen with PSG and HAC). In contrast, the
resident clubs in the other five stadiums hold a leaseholder status. The operation of these
stadiums is managed by the city council itself (ASSE) or by an external entity under a public-
private partnership agreement (OM, FCGB, OGCN, LOSC).
This variety in contractual arrangements leads to significant disparities in the extent of
each club’s involvement in the operation of their stadiums. Some clubs actively engage in this
process, while others have a more passive role. As noted by Mathieu Malkani, the marketing
director of ASSE, a significant challenge with stadiums owned by local authorities is that the
resident club “has the right to use it only for 48 hours around games and, in theory, anything
set up must be taken down and removable to leave a clean stadium.” Consequently, for clubs
in this situation, given an average of 20 home games per season, their stadium access amounts
to roughly 40 days annually. This limited engagement contrasts with the year-round operational
control exercised by clubs like OL, PSG, and HAC.
4.3 Financial Investment (Indicator 3)
Table 4 provides a detailed overview of the financial contributions made by various clubs
towards the renovation or construction of their stadiums.
[Insert Table 4 here]
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Among the clubs in our study, OL stands out with a significant investment, covering
68% of the total cost (€430 million out of €632 million) for its new stadium. PSG also made a
substantial financial commitment, bearing the entire cost of renovating its stadium, which
amounted to €75 million. In comparison, HAC and FCGB made more modest contributions.
HAC invested €4.5 million, representing 2.5% of the total project cost, and operates its stadium.
FCGB, on the other hand, contributed €20 million, which is 10% of its stadium's total cost, yet
it remains merely a leaseholder.
The remaining clubs in our study – ASSE, OGCN, OM, and LOSC – did not invest
funds in constructing their new stadiums. As a result, they currently occupy these venues under
rental agreements. The clubs' diversity in financial commitment levels reflects the varying
degrees of ownership and operational control within these stadium projects.
4.4 Operational Competencies (Indicator 4)
Through our field research, we gathered data on the number of new staff members each club
hired to operate their new stadiums. This data separated the clubs into two groups based on
their recruitment patterns. The first category, encompassing six out of the eight clubs, shows a
conservative approach with fewer than ten new staff members added. In stark contrast, the
other category, represented by clubs such as OL and PSG, demonstrates a more aggressive
staffing strategy, with each club recruiting over 100 new personnel.
This indicator sheds light on the varying levels of resource allocation and operational
scaling that clubs are willing to undertake in response to their new stadium ventures,
highlighting a clear divide in the strategic approaches to leveraging these new facilities.
4.4.1 Clubs that recruited few new staff
Despite moving into a new stadium, ASSE made only modest adjustments to its ticketing
department. Mathieu Malkani, from ASSE, acknowledged that the department is “at the same
level as before. Since the stadium opened, we have simply created complementary hospitality
13
offers, which means that a salesperson who formerly dealt only with corporate hospitality can
now sell general-public packages.” The team at ASSE is relatively lean, consisting of just four
full-time staff members: a manager, two assistant managers, and a salesperson from Lagardère
Sport, handling additional sales duties.
OGCN recruited five additional employees when it moved into its new stadium. Despite
hiring “an extra person for ticketing, a stadium manager, a stadium supervisor, two
salespeople,” it was not, according to Olivier Renaudo, a “revolution.” Renaudo admitted that
OGCN needs “to beef up our staff, even though we don’t operate the stadium and our
recruitment priorities are on the sporting side.”
At LOSC, Alban Mugner drew a parallel between the old and new stadiums regarding
the competencies within the ticketing department: “Before, there were two of us, so we have
recruited more staff. We’ve gone from two to six.”
FCGB has restructured its sales department to "deliver and sell all our hospitality offers,
which have more than tripled.” According to Florence Labeyrie, this restructuring involved
hiring a sales director and doubling its hospitality sales force by recruiting three new
salespeople. The club does almost everything internally and outsources very few services. Maïa
Lamberrondo believes that FCGB has enough staff but has “a lot of work to do in terms of
competencies,” given how its work has changed.
At HAC, which initiated the Océane Stadium project, Alain Caldarella ran stadium
operations on his own. In 2012, HAC’s subsidiary “absorbed the club’s resources to create a
center that dealt only with organizational management.” Gautier Malandain explained that the
club had taken on “a few staff; two people before we got the new stadium and then four new
staff [after the first matches in the new stadium], “so it now has 17 staff across various
departments: “shop, ticketing, sales, communication, marketing, managing the restaurants and
bars and, finally, managing everything to do with seminars – technical maintenance and
14
security.” In hindsight, the two men felt it would have been better if the club had had more
experience and competencies when the new stadium became operational.
OM followed a similar path, recruiting six full-time staff and one part-time employee
as soon as it moved into its new stadium. According to Lionel Maltese, who “know[s] the club
well, having studied its competencies when it changed owners”, the club “does not have these
competencies” due to it outsourcing most of its sales services. For Maltese, the club has “too
few staff and very little knowledge of [its] clientele.”
These examples illustrate how clubs like ASSE, OGCN, LOSC, FCGB, HAC, and OM
have taken a conservative approach in scaling their staffing for the new stadiums, focusing on
incremental improvements rather than large-scale changes. This approach reflects a strategic
decision to balance new infrastructure demands with existing operational priorities.
4.4.2 Clubs that recruited numerous new staff
Nicolas Arndt believes that “PSG’s increased competencies are the result of a major
quantitative and qualitative change.” PSG’s general manager, Jean-Claude Blanc, agrees and
praises his staff, who he considers the “best talents.” And PSG has a lot of staff: its 2015 annual
report lists no fewer than 631 employees between 22 departments. Its sales department is
unique among French sports clubs, with over 170 staff. Julien Lepron noted that “the stadium
renovation enabled us to recruit hundreds of new staff and to remodel the club’s service
processes completely.”
Moving into a new stadium prompted OL to split its operations into six divisions: “An
administrative and financial division, a legal and HR division, a division covering everything
to do with sales and marketing, a local authority and political relations division, a
communication division, and a stadium division.” For Xavier Pierrot, this was a well-planned
and well-thought-out reorganization that meant the club was ready as soon as it moved into the
new stadium. It also hired a lot of new staff. “In total, we’ve taken on about 100. We’ve
15
practically expanded from 300 people to 400 people.” The main addition was an assistant
general manager to oversee ticketing and marketing. “He defines overall policy regarding
hospitality and the general public. We revamped our entire approach long before the stadium
opened.”
Therefore, both PSG and OL invested significantly in their stadiums and enhanced their
operational competencies. Each club recruited a substantial number of staff, mirroring
strategies employed by clubs in North America's major leagues to maximize the revenue
potential of their stadiums. In contrast, clubs that made minimal investments in their stadium
infrastructure also showed restraint in bolstering the necessary competencies for optimal
utilization of these facilities. This pattern suggests a correlation between financial commitment
to stadium projects and the investment in related operational skills. It raises questions about
the motivation and willingness of these clubs to invest comprehensively, which has often
resulted in a noticeable shortfall in marketing innovation and foresight.
4.5 Strategic Marketing Adaptation (Indicator 5)
This indicator's data provided insights into how each of the eight clubs adjusted their marketing
strategies in anticipation of their new stadiums. Key questions included whether the clubs
developed new marketing policies, introduced novel services to attract different consumer
segments and implemented customer relationship marketing (CRM). The data delineated the
clubs into two distinct groups: the first, comprising six of the eight clubs, displayed minimal
changes in their marketing approaches despite the new opportunities their stadiums presented.
The second group, including the remaining two clubs, significantly enhanced their marketing
strategies. These clubs revamped their methods and looked to benchmark against leading
entertainment practices observed in Europe and the United States. This distinction underscores
the varying degrees to which clubs are willing to innovate and capitalize on the new avenues
opened up by their stadium developments.
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4.5.1 Clubs that did little to adapt their marketing
Mathieu Malkani at ASSE highlighted the club’s lack of preparation for moving into the new
stadium: “The main “packages” are more-or-less still the same, so there was no totally
revamped offer for the larger stadium.” Olivier Renaudo noted that OGCN’s offer for the
general public “evolved only during the second year of using the new stadium. We tried to
offer as wide a range as possible” with ten different price categories and rates for adults and
children. The club has had CRM software since 2016, which is “sometimes used by the sales
and ticketing department.” At the time of our interview, the club was looking for a full-time
employee to apply this software.
Alban Mugnier attributed LOSC’s falling ticket sales to a combination of “a less
favorable sporting environment’ and internal mistakes: “We’ve paid less attention to our
clients, and we’ve become less effective in this area. We’ve had internal changes, with changes
in staff in sales management. We’ve had many problems with the caterer and the delivery of
certain services. We’ve changed the stadium, dividing large lounges into smaller ones,
disrupting our clients and the experience.”
FCGB’s ticketing director, Maïa Lamberrondo, criticized the work the club did to
promote its new stadium. “I don’t think the club did enough on ticketing, marketing,
communication. These days, spectators don’t come just like that. For me, you have to bring
them in, and we didn’t do that very well.” Lamberrondo admitted that during its first year in
the new stadium, the club tried to “get things to work and paper over the things that didn’t
work’ because it needed to “progress in terms of tools and competencies.” For example, the
club is “behind in internet sales, which are not optimal at the moment.” This is also true for its
CRM software, which uses just “10% of [its] capabilities.”
Despite setting up working groups to “benchmark clubs and stadium operators left,
right, and center” before the stadium was delivered, Alain Caldarella at HAC noted “a lack of
17
foresight,” as the club should have “taken on staff before, rather than when the place opened.
A huge expenditure of energy that is nigh-on impossible to predict if you haven’t already
opened a new stadium.” This lack of experience led to longer learning times. “We didn’t put
enough emphasis on the profile of spectators,” some of whom “were abandoned. We missed a
generational leap and didn’t do enough to accompany our long-term season ticket holders in
the new stadium.”
Lionel Maltese observed that OM did not “analyze demand before embarking on the
new stadium. They had a vision but did not consider changes in consumer behaviors within
sports events.” He gave the following example: “Marseille has seen an explosion in the number
of lawyers, solicitors, and accountants. When you build boxes at the Vélodrome with minimum
capacities of 20 people, the BtoB offer is not suited to the needs of these small firms.” He
believes that clubs such as OM don’t have the expertise to make best use of other types of
entertainment such as concerts, so they have to “learn on the job, and it wastes time.”
4.5.2 Clubs that invested heavily in advance marketing
According to Xavier Pierrot, OL’s ticketing offer has increased from “broadly speaking, three
or four general-public rates and three or four hospitality rates. We now have eight lounges plus
18 boxes and three different types of boxes. We have a price structure. We’ve got a wider
palette in terms of hospitality, and we’ve started offering around 20 different prices for the
general public because we’ve divided the stadium into many more zones.” The club also has
many more refreshment stands. “I call them cash desks. We had about 50 at Gerland, and here
we’ve got 300.” The stadium offers WIFI internet access and an app for spectators to order
from their seats. “We launched in-seat deliveries two matches ago—the comfort of the seats,
accessibility. We had about 100 turnstiles at Gerland, and now we have 156 all around, which
means you can get into the stadium much more quickly. There are many more reception staff,
a customer department, and information points. We’ve adopted a leisure-center approach.”
18
This customer-centered approach comes “straight from the USA, where we have traveled a lot
to change our approach and reach a new audience.” Pierrot welcomed the club’s increased
competencies and the resources provided: “We’ve really taken things in hand. Fortunately,
people like J. Sédoux and J.M. Aulas give us the resources to get where we want to go. They
have taken financial risks, so they know you need to give yourself the resources to succeed.”
He concluded proudly: “They told us that the French are not like the Germans and that it
wouldn’t work. The answer is what we have done at OL.”
PSG’s stadium guest manager, Julien Lepron, noted that PSG’s competencies are “light
years ahead of those of other French clubs’ thanks to its “targeted and specialized”
competencies, which are “unique in France.” Ticketing director Nicolas Arndt explained that
when developing its sales department, the club “looked at what was being done in the USA, in
Germany. The idea was to go and see the best practices in worlds like ours, but also the
practices of [other] industries — amusement parks, hotel industry, travel industry — whether
in terms of pricing activations. See how the market is changing and how it can be adapted.”
The club’s objective is still the same: “spread the PSG brand and build loyalty in an ever-
growing community as part of a fan-relationship management strategy.” Lepron did not
understand the strategy of France’s other leading clubs, which “don’t want to invest in
operating their stadium. Very few clubs want to have a business culture aimed at stabilizing
their financial results.”
4.6 Summary of Results
Our findings show the stark contrasts regarding the resources and competencies football clubs
allocate to their new stadiums. Six of the eight clubs in our study operate in stadiums renovated
or built with public funding initiated by local authorities. These clubs have maintained tenant
status and have only modestly invested in the marketing skills and resources necessary to
harness thoroughly the developmental opportunities their new stadiums presented. On the other
19
hand, two clubs took the lead in initiating and funding the construction or renovation of their
stadiums. These clubs operate their stadiums throughout the year and have committed
substantial resources to developing the marketing competencies and tools crucial for realizing
a return on investment.
Table 5 summarizes these divergent strategies. It also compares our results for the five
indicators and the findings of Moulard et al. (2022) regarding the variety of SBC-inducing
public support provided to each stadium project. Specifically, Table 5 addresses our research
question by explaining the relationship between the extent of resources and competencies a
club invested in its new stadium and the spectrum of ex-post and ex-ante public support the
project received.
[Insert Table 5 here]
The table reveals an inverse relationship between the level of public support a club
receives and the extent to which it allocates resources and competencies in its new stadium.
Clubs that received a broader range of public support exhibit lower investment in resources
and competencies in their stadium projects. OL and PSG exemplify this trend with our study's
highest private investment scores (5/5), coinciding with minimal public support. Notably, the
only subsidies OL received were ex-ante, aligning with Jacobsen’s (2021) findings on the
positive impact of such support on project management. Both OL and PSG not only invested
significantly in their stadiums but also marketing competencies, underlining their proactive
approach. This investment strategy distinctly differentiates them from the other clubs in our
sample.
In contrast, despite a moderate private investment score (2/5), HAC received substantial
public support, including three types of ex-post support that Jacobsen (2021) categorized as
detrimental to effective project management. However, drawing direct comparisons between
HAC and other clubs in our sample is challenging due to the unique circumstance of not playing
20
in France’s top division (Ligue 1) after moving into its new stadium. It was only at the end of
the 2022/2023 season that HAC achieved promotion to Ligue 1.
In our study, half of the clubs (OM, ASSE, OGCN, LOSC) had no private investment
in their stadiums (scoring 0) but received high scores for public support. The absence of private
investment from these clubs is noteworthy, especially considering their substantial annual
budgets ranging from €70 million to €250 million. This lack of private funding limits their
capacity to leverage their stadiums for long-term revenue diversification. Moreover, such
extensive reliance on public support can lead to a lack of accountability, as highlighted in the
Besson Report (2008), which notes the potential for the leading actor to evade responsibility
for their actions.
The dependency of football clubs on local authorities for the construction of their
stadiums has led to a variety of negative and often irreversible consequences, as observed in
many clubs in our study:
1. Many clubs were excluded from the initial design process, resulting in stadiums that
do not adequately cater to their specific requirements. Challenges such as oversized capacities,
inadequate accessibility, and inefficient layouts, including poor connectivity and crowd flow,
are problematic to address after construction.
2. In the absence of ownership or operational rights, clubs find themselves confined to
using their stadiums only during match days, which, on average, amounts to about 20 days per
year. This severely limits their ability to utilize the stadium for diverse business activities on
non-match days and prevents them from accessing additional revenue opportunities, such as
stadium naming rights.
3. The clubs' lack of investment in marketing capabilities in preparation for their new
stadiums has resulted in an inability to diversify their services and offerings. This deficiency
21
has negatively affected their capacity to attract and retain the new fan bases anticipated by the
stadium projects.
4. The clubs' exclusion from the design and construction phases meant they did not
influence the budgeting process. This disconnect led to substantial cost overruns, ranging from
15% to 45% beyond the initial budget (Moulard, 2018). The consequence has been escalated
rental fees, eroding the long-term financial viability of these stadiums.
5. Since stadiums typically have a lifespan of at least 30 years and are not readily
transferable or sellable, the clubs have forfeited a crucial chance for enduring development and
revenue diversification.
In summary, the current situation, characterized by political entities largely directing
and financing projects aimed at helping clubs diversify their business models, has led to adverse
outcomes for both the medium-to-long-term financial well-being of the clubs and the health of
public finances. A potential remedy to this situation could be imposing stricter budgetary
constraints on sports clubs for new facility financing. Particularly, phasing out public subsidies
for professional clubs might incentivize them to refine their governance structures and foster
greater self-sufficiency in their development projects.
5. Discussion
The elimination of public subsidies to professional football was discussed in the French Senate
in 2014.
1
Franck (2014) identified two obstacles to this possibility:
• Past “soft” behavior, which “makes it rational for the state to choose “soft” behavior in
the present, which unfortunately confirms the SBC expectations of the clubs.”
1
https://www.senat.fr/rap/r13-484-1/r13-484-12.html
22
• Political decision-makers with limited time horizons miscalculated bailout costs: “For
example, fans and supporters would lose their object of identification and have to write
off emotional and social capital at least temporarily, leading to a “wave” of
unhappiness. Additionally, which might make potential voters unhappy; the city's
image would deteriorate, discouraging investors, etc.”
To these obstacles, we would add the relationship between politics and football in France, a
country where the public sector plays a more central role in professional football than it does
in other sectors. For example, Moulard (2018) highlighted the desire of many French politicians
to be associated with stadium projects, which is why the mayors of Nice (Christian Estrosi),
Bordeaux (Alain Juppé), Marseille (Jean-Claude Gaudin), and Lille (Martine Aubry) initiated
or led their cities’ stadium renovation/building projects. Boris Helleu made a similar
observation when we interviewed him in 2018: “There are quite a few mayors, politicians, who
are very sensitive to ideas of heritage, of leaving the area they represent a legacy of their
political actions in the form of a well-known stadium.”
Similarly, French politicians can draw substantial electoral capital from being
associated with community-based organizations (Koebel, 2000), especially in sports, and
supporting professional football is a highly profitable investment for local politicians (Sawicki,
2012). The local football stadium is still an essential component of some French cities’ identity
and a social and electoral sounding board of which it is dangerous to lose control. This
philosophy leads city councils to invest large amounts of public money in renovating/building
football stadiums, which results in club executives having little say in their new stadiums.
Andreff (2022) argues that SBCs are challenging to eliminate because they are not an
economic issue but a political issue that impacts the ecosystem on three levels. France’s new
football stadiums illustrate these impacts on all three levels:
23
On the macro level: Two ministerial reports published in 2008 led to a change in the
law (Act of 28 July 2008) that made public-private partnerships a more attractive option for
building sports stadiums. The new law made it easier for construction companies (e.g., Vinci,
Bouygues) to finance and build stadiums, but it also prevented clubs from operating these
stadiums, and the high interest rates and substantial overbilling on these contracts have had a
massive long-term impact on public finances.
On the meso level: A particularly striking example is the impact of central government
subsidies allocated to local authorities for Euro 2016 preparations on the development of Nice's
new stadium. Nice had already decided to build the Allianz-Riviera Stadium before UEFA
attributed the Euro 2016 tournament to France. The initial design, agreed with the resident club,
was for a 25,000-seat stadium, but this capacity was increased to 36,000 spectators to host Euro
2016. In a press interview given on 19 September 2013, Nice’s mayor, Christian Estrosi,
admitted: “I could have built a new Ray Stadium with 25,000 seats just for OGCN, but it would
have cost me as much as the [new stadium] for which the state contributed €20 million after
being selected to host Euro 2016. I wasn’t going to miss that opportunity.” But this political
opportunity had a high financial price. Adding an extra 10,000 seats to the Allianz-Riviera
Stadium, without consulting the club, meant it could hold 5,600 more people than UEFA
required for Euro 2016 and 26,466 more people than OGCN’s largest crowd since 1999. Hence,
Estrosi’s “€20 million opportunity” greatly increased the stadium’s operating costs, the club’s
rent, the number of empty seats during matches (14,000 on average), and the stadium’s deficit,
which costs the city of Nice €11.13 million a year (Moulard, 2018).
On the micro level: Local politicians promised their cities’ clubs various indirect
subsidies. These included selling land to OL at a price below its market value. In addition,
resident clubs at most local-authority-run stadiums benefit from rents below market rates.
24
Cities such as Le Havre and Bordeaux have gone as far as to give their local clubs rent-free
access to the stadium and exonerated them from certain taxes (Moulard et al., 2022).
This successive public assistance leads clubs to believe that public funding will always
be there to cover their deficits and support them in their poor governance. Clubs often use these
short-term gifts to increase their player payrolls or speculate on the transfer market (Dietl et
al., 2017). Despite this model’s negative impact on French football clubs’ long-term health,
there is no sign that it is about to change.
6. Conclusion
This study investigated how public funding for stadium projects influences the resources and
competencies that football clubs allocate to their new stadiums. Our primary research question
focused on whether financial assistance from local governments for stadium renovations or
construction adversely affects the good governance of professional football clubs. Utilizing
data from eight stadiums built or renovated for the UEFA Euro 2016 tournament in France, our
analysis identified an inverse relationship between the degree of public support a club receives
and the level of resources and competencies invested by its management in the stadium. We
observed that clubs benefiting from more substantial public support generally exhibit lower
investments in resources and competencies in their stadium projects. Significantly, public
support fostering soft budget constraints (SBC) has restricted club managers' engagement in
stadium projects in six of the eight cases examined, primarily due to a reliance on public
funding. This trend underscores the potential negative impacts of public subsidies on club
management’s strategic decision-making and investment in stadium-related assets.
The comfort of having a local authority as a financial safety net is appealing to many
clubs (Dietl et al., 2011). While this approach provides short-term security, it can impede the
clubs' progress towards self-reliance and hinder their long-term strategic development,
particularly in fully capitalizing on their stadium assets. Public financial support in sports has
25
prompted some executives to formulate strategies heavily dependent on public funding for their
developmental projects. Franck (2014) highlights how this scenario effectively insulates
football club managers from the repercussions of failure, underwritten by state support. This
assurance fosters a propensity for more audacious strategic decisions among club managers,
who are aware of and sometimes exploit the state’s readiness to provide financial safety nets.
This dynamic may provide immediate stability, but it potentially limits clubs' strategic agility
and economic independence in the long run.
While short-term initiatives such as transfer market speculation may offer immediate
gains, reliance on local authorities to provide a suitable new stadium carries more significant
risks. The active involvement of the club, particularly during the critical design phase that
typically starts at least five years before construction, is essential. Participation at this early
stage allows the club to significantly impact the stadium's design, ensuring that it meets their
specific requirements and supports their broader aspirations, especially in diversifying their
business model. Such proactive involvement is vital for clubs to circumvent the drawbacks of
excessive dependence on public funding and to establish a sustainable, strong foundation for
future development and growth.
The main limitation of this article is its absence of comparative analysis with other
European public stadium programs. To fill this void, we recommend that future research be
directed towards Germany to scrutinize the planning phase of the 12 German stadiums utilized
for the 2006 FIFA World Cup. This analysis should focus on examining private and public
entities' roles and contributions in resource allocation and competency development. Given the
notable economic success of German football clubs and the efficiency of their stadium
operations, a comprehensive examination of their investment strategies and processes could
uncover valuable best practices. These insights might be beneficial and adaptable for broader
application across European football stadium development projects.
26
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29
TABLES
Table 1. Summary of the stadiums analyzed in our study
Club
Abbreviation
Stadium
City
Year stadium
became
operational
Capacity
AS Saint-Étienne
ASSE
Geoffroy
Guichard
Saint-
Étienne
2015
42,000
OGC Nice
OGCN
Allianz
Riviera
Nice
2013
35,624
LOSC Lille
LOSC
Pierre Mauroy
Lille
2012
49,834
FC Girondins de
Bordeaux
FCGB
Matmut
Atlantique
Bordeaux
2015
43,500
Olympique de
Marseille
OM
Orange
Vélodrome
Marseille
2015
67,354
Le Havre AC
HAC
Océane
Stadium
Le Havre
2012
25,278
Paris Saint-
Germain F.C.
PSG
Parc des
Princes
Paris
2014
47,929
Olympique
Lyonnais
OL
Groupama
Stadium
Lyon
2016
58,000
Source: French Professional Football League (www.lfp.fr, accessed on 1 April 2023), Cour
des Comptes (2017), and authors.
30
Table 2. List of the semi-structured interviews conducted for the study
Club
Interview
type
Interviewee
Nom
Date
OL
Semi-
structured
Stadium
manager
Xavier Pierrot
March 2016
LOSC
Semi-
structured
Ticketing
director
Alban Mugner
September 2016
OGCN
Semi-
structured
General public
ticketing director
Olivier Renaudo
May 2016
ASSE
Semi-
structured
Stadium
manager
Samuel Rustem
April 2016
ASSE
Semi-
structured
Marketing
director
Mathieu Malkani
April 2016
ASSE
Semi-
structured
Ticketing
director
Beatrice Salen
April 2016
PSG
Semi-
structured
Stadium-guest
manager
Julien Lepron
May 2016
PSG
Semi-
structured
Ticketing
director
Nicolas Arndt
May 2016
FCGB
Semi-
structured
Ticketing
director
Maïa Lamberrondo
September 2016
FCGB
Semi-
structured
Stadium events
manager
Florence Labeyrie
September 2016
HAC
Semi-
structured
Océane Stadium
general manager
Alain Caldarella
October 2016
LFP stadium
department
Semi-
structured
Director
Benjamin Viard
May 2016
Stadium expert
Semi-
structured
Academic
Boris Helleu
January 2018
OM stadium
expert
Semi-
structured
Academic
Lionel Maltese
January 2018
31
Table 4. Overview of ownership and operational control of the stadiums
Club
Club status
Legal status
Club’s Access to its Stadium
ASSE
Leaseholder
Public domain concession
Game day
OGCN
Leaseholder
Public-private partnership
Game day
LOSC
Leaseholder
Public-private partnership
Game day
FCGB
Leaseholder
Public-private partnership
Game day
OM
Leaseholder
Public-private partnership
Game day
HAC
Operator
Occupancy agreement
Always
PSG
Operator
Occupancy agreement
Always
OL
Operator
Private
Always
Sources: Interviews, Cour des Comptes (2017), and authors.
32
Table 5. Amounts of public and private investment in the stadiums
Club
Did the
club
help
fund the
project?
Total
cost of
stadium
project
(in M€)
Private
investment
(in M€)
Private
investment
(in %)
Public
investment
(in M€)
Public
investment
(in %)
ASSE
No
69.4
0
0%
69.4
100%
OGCN
No
211.0
0
0%
211.0
100%
LOSC
No
585.0
0
0%
585.0
100%
FCGB
Yes
221.4
20.0
10%
201.4
90%
OM
No
474.8
0
0%
474.8
100%
HAC
Yes
154.0
4.0
2.5%
150.0
97.5%
PSG
Yes
75.0
75.0
100%
0
0%
OL
Yes
632.0
430.0
68%
202.0
32%
TOTAL
2,420.0
529.0
22%
1,890.0
78%
Source: Interviews, Cour des Comptes (2017), and authors.
33
Table 6. Relationship between a club management's investment in stadium resources and
competencies and the number of types of SBC-inducing public support
Indicators of a club’s involvement in its new stadium (0 = no, 1 = yes)
ASSE
OGCN
LOSC
GDB
OM
HAC
PSG
OL
Indicator 1: Primum movens
0
0
0
0
0
1
1
1
Indicator 2: Governance
0
0
0
0
0
1
1
1
Indicator 3: Financial
investment
0
0
0
0
0
0
1
1
Indicator 4: Operational
competencies
0
0
0
0
0
0
1
1
Indicator 5: Marketing
adaptation
0
0
0
0
0
0
1
1
Level of private investment
0/5
0/5
0/5
0/5
0/5
2/5
5/5
5/5
Number of types of SBC-inducing public support (Moulard et al. 2022)
Types of ex-ante support
2/8
2/8
2/8
2/8
2/8
2/8
1/8
3/8
Types of ex-post support
2/8
3/8
2/8
4/8
2/8
3/8
2/8
0/8
Total types of support
4/8
5/8
4/8
6/8
4/8
5/8
3/8
3/8
