Public Private Partnership for Football Stadiums

by Harmit Singh Kamboe

As the Indian economy awakens, PPP (Public Private Partnership) is a raging concept as the resource poor governments (central and state) look to finally make investments in physical infrastructure that the citizens have every right to expect.
The basic premise of the PPP is to have the state and the private enterprise come together and work out an approach where by the social good and the return on investment criteria can be combined for a satisfactory outcome for all stakeholders.

With the AIFF reportedly looking at taking some football stadiums on a long term lease in order to keep pushing the progress being made in Indian football, we thought it might be appropriate to do a write-up on the PPP model for football stadiums. This write up focuses on the BMO (Bank of Montreal) field, which is the home of Canada's only professional football Club, Toronto FC (Major League Soccer side).

Pictures of the picturesque stadium can be seen at http://www.bmofield.com/


Stakeholders

There are three stakeholders when it comes to B.Mo field:

1. The City of Toronto - the city in which the stadium is located

2. The Board of Governors of Exhibition Place - The actual operators of the location (Exhibition Place is an amusement, exhibition and parade location used throughout the year for various events). The land is owned by the City of Toronto.

3. Maple Leaf Sports Entertainment - owners of the Toronto FC team


The Agreement

An operating agreement was signed between the City of Toronto and MLSE. The agreement stipulated that all profits from the facility would be split equally between the city and the MLSE. In the first year of operations, 2007, a total of $ 900,000 was generated as net profit that was split equally between the City and the MLSE. The profits were largely as a result of Canada staging the FIFA U20 World Cup in that year.
All event management is the responsibility of the MLSE. MLSE has ensured that the fan experience as shown on TV is a tremendous one and as a result, there is already talk of expanding the only 20,000 capacity stadium.


The Community Aspect

The City of Toronto wanted to ensure that amateur football players would be able to use the stadium for purposes of amateur football. 90,000 amateur soccer players have been able to use this facility for 1,500 hours (hourly sessions). While this helps the development of amateur football, it also helps in creating a bond between Toronto FC and their fans.
The stadium has an artificial turf and that allows the stadium to be used without it requiring a gap for the grass to recover or to be relayed.


The Funding:

Built in 468 days and on a budget of $ 62.9 million (excluding cost of land which was another $10 million), the B.Mo field is a result of four partners that contributed to come up with the required funds. The four financial contributors to the project were:

1. The Federal Government (Central government as referred to in India) - $ 27 million - 43%

2. The Provincial Government (State government as referred to in India) - $ 8 million - 12.7%

3. The City of Toronto - $ 9.8 million - 15.6%

4. MLSE - $ 18.1 million ($ 10 mm from the naming rights for the stadium) - 28.8%

We hope that some day, some where, we can see such examples of PPP in India's sporting landscape.