A Blueprint for Successful Stadium Development Budapest 15

A Blueprint for Successful Stadium Development Budapest 15 October 2013

Today’s Presentation Background to the Stadium Landscape in EMEA The development process Conclusions © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 1

Average of 20, 000+ capacity stadiums in selected EMEA countries © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 2

The majority of stadiums in Europe are publically owned © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 3

Technology is changing the stadium of today © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 4

A Blueprint for Successful Stadium Development Alastair. Graham@ kpmg. hu Marton. Kadocsa@ kpmg. hu © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 5

The development process © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 6

The main professionals involved © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 7

Phase 1 - Development of a project vision © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 8

Identifying the key stakeholders © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 9

Renovation vs. new build © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 10

Phase 2 – Planning and Feasibility © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 11

Stages of planning and feasibility An understanding of the opportunities and constraints of the potential site Phase 1 Location & site assessment Identification of the catchment area, demand segmentation, analysis of the competition and potential pricing strategies Phase 2 Market analysis Stadium conceptualisation according to planning regulations, market requirements and operational model Phase 3 Stadium conceptualization Estimations of the expected revenues and operating costs associated with the stadium concept Phase 4 Refinement cycle Operational forecasts Phase 5 Financial feasibility & funding © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Define funding sources, financing structures and the verification of the financial feasibility of the new stadium 12

Planning and feasibility 2 – Market analysis © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 13

Planning and feasibility 3 – Stadium conceptualisation © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 14

Multi- and mixed-use potential Other sporting events Residential real estate Conference facilities Major music/ cultural events Office Leisure services (e. g. sports centre) Multi/ mixed use stadium functions/ services Secondary tenant requirement Core tenant requirement Hotel Club associated museums Retail parks © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Restaurant and other F&B outlets 15

The Corporate Mix © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 16

Construction cost benchmarking © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 17

Stages of planning and feasibility An understanding of the opportunities and constraints of the potential site Phase 1 Location & site assessment Identification of the catchment area, demand segmentation, analysis of the competition and potential pricing strategies Phase 2 Market analysis Stadium conceptualisation according to planning regulations, market requirements and operational model Phase 3 Stadium conceptualization Estimations of the expected revenues and operating costs associated with the stadium concept Phase 4 Refinement cycle Operational forecasts Phase 5 Financial feasibility & funding © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Define funding sources, financing structures and the verification of the financial feasibility of the new stadium 18

Planning and feasibility – operating performance projections © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 19

Planning and feasibility 5– Financing options Average annual value per seat of current naming right deals 44 70 96 0 20 © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 40 60 80 Annual value per seat (EUR) 100 120 20

Planning and feasibility – drivers of financial feasibility Design brief © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 21

Phase 3 – Permitting and design Key phases, milestones, and timings in the development process 1. Preparation 2. Concept design 3. Development design 4. Technical design 5. Construction drawings © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 22

e. g. Technology in roof design © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 23

e. g. Identity and cityscaping © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 24

e. g. Environmental sustainability © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 25

Phase 4 – Construction © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 26

Construction – contracting strategies Contracting strategies © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 27

Phase 5 – Operations © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 28

Models for stadium operation © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 29

Conclusion – Keys to a successful stadium development Understanding the interrelationship of various planning activities, involving the appropriate experts at different stages of development and effective project management are key elements in a successful stadium development process. • Robust process • Detailed analysis leading to justification of the concept • Maintain flexibility of input • Creativity of financial structure © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 30

A Blueprint for Successful Stadium Development Alastair. Graham@ kpmg. hu Marton. Kadocsa@ kpmg. hu © 2013 KPMG Advisory Ltd. , a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. 31

Thank you Alastair Graham KPMG Sports Advisory Practice