Melbourne venues boosted by The Ashes and Australian Open crowds

A record crowd of 90,831 on the first day of the 2013 Boxing Day Ashes Test at the MCG provided Melbourne venue managers with an encouraging start to a busy summer season.

Followed by the Australian Open at Melbourne Park, both events showed the strength of consumers' appetites for major sporting events and have benefitted both the Melbourne Cricket Club (MCC), operator of the MCG, and the Australian Open host, the Melbourne and Olympic Parks Trust.

Based on these events and wider industry trends, business information analysts IBISWorld expects that the sport venue operations sector will grow at an annualised 3.3% over the five years from 2013/14 to $1.6 billion due to the diversification of income streams, development strategies focused on increasing participation and attendance and government-funded refurbishments.

IBISWorld Researcher Tristan Williams suggest that "the MCC has maintained steady revenue due to events like the Boxing Day Test and regular AFL matches.

"Revenue growth, however, has largely been the result of government grants (for example), the refurbishment of the Great Southern Stand at the MCG was completed in 2012 with a $30 million grant from the Victorian Government.

"High-quality facilities, combined with sophisticated marketing, have helped to attract major international events such as the Cricket World Cup, with the MCG to hold a number of matches in 2015.

"This has steadily grown the MCC's and Australian cricket's global brands, helped by Cricket Australia's Strategy for Australian Cricket for 2011-2015. The strategy is aimed at diversifying cricket's fan base through initiatives like the faster-paced T20 Big Bash League and increasing investment and attendance.

"Community involvement in sport is key to expanding a sport's brand and developing new talent, and ensuring continued government support is crucial for facility operators to maintain growth.

"The Melbourne and Olympic Parks Trust's revenue has contracted over the past five years - largely due to fewer concerts at Rod Laver Arena and ongoing refurbishment works (but) revenue is likely to increase once these infrastructure redevelopments are completed.

"To boost revenue, the Melbourne and Olympic Parks Trust heavily markets events such as the Australian Open a major tourist drawcard to maintain attendance levels and encourage participation.

"Attendance has risen over the past five years, but is expected to slow in 2013/14 due to rising ticket prices and better access to sports on the internet. Furthermore, most fans attend matches due to their passion for a team or game, keeping demand relatively fixed.

"However, big events or strong performances by popular teams and players attract casual fans and players.

"This is a major reason behind Tennis Australia launching its Tennis 2020: Facility development and management framework for Australian tennis strategy in 2008, which was designed to boost falling grassroots participation in the game by providing local clubs with a standardised framework for developing a welcoming culture and facilities. Such an increase, if successful, would support future growth.

"Such strategies are important as industry participants have limited opportunity for expansion. This is due to high competition between sporting codes for consumer participation and spectator dollars.

"To maintain profitability, industry participants have diversified their operations. The Melbourne and Olympic Parks Trust often uses Rod Laver Arena and its other high-capacity stadiums for non-sporting events, particularly live music concerts, while the MCC hires out its facilities for corporate functions.

"These revenue streams are susceptible to fluctuations in business and consumer confidence, changes in disposable income and the ability to attract popular acts.

"Although the relative volatility of the MCC’s and Melbourne and Olympic Parks Trust’s diversified revenue streams may hamper growth over the long term, the popularity of the Boxing Day Test indicates that consumers still desire to attend major sporting events. Combined with stadium refurbishment and strategic plans for increasing attendance and participation, the outlook for sports and recreation facility operators is positive."

For more information, go to the IBISWorld website at www.ibisworld.com.au

27th December 2013 - MCG BOXING DAY SELL OUT A WORLD RECORD ATTENDANCE