A Blueprint for Successful Stadium Development Budapest 15 October 2013

© 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 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. 2 Average age 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. 3 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. 4 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. 5 A Blueprint for Successful Stadium Development kpmg.hu 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. 6 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. 7 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. 8 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. 9 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. 10 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. 11 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. 12 Stages of planning and feasibility Phase 1 Location & site assessment An understanding of the opportunities and constraints of the potential site Phase 2 Market analysis Identification of the catchment area, demand segmentation, analysis of the competition and potential pricing strategies Phase 3 Stadium conceptualization Stadium conceptualisation according to planning regulations, market requirements and operational model Phase 4 Operational forecasts Estimations of the expected revenues and operating costs associated with the stadium concept Phase 5 Financial feasibility & funding Define funding sources, financing structures and the verification of the financial feasibility of the new stadium Refinement cycle

© 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 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. 14 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. 15 Multi- and mixed-use potential Multi/ mixed use stadium functions/ services Residential real estate Conference facilities Office Leisure services (e.g. sports centre) Hotel Restaurant and other F&B outlets Retail parks Club associated museums Core tenant requirement Secondary tenant requirement Major music/ cultural events Other sporting events

© 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 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. 17 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. 18 Stages of planning and feasibility Phase 1 Location & site assessment An understanding of the opportunities and constraints of the potential site Phase 2 Market analysis Identification of the catchment area, demand segmentation, analysis of the competition and potential pricing strategies Phase 3 Stadium conceptualization Stadium conceptualisation according to planning regulations, market requirements and operational model Phase 4 Operational forecasts Estimations of the expected revenues and operating costs associated with the stadium concept Phase 5 Financial feasibility & funding Define funding sources, financing structures and the verification of the financial feasibility of the new stadium Refinement cycle

© 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 – 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. 20 Planning and feasibility 5– Financing options Average annual value per seat of current naming right deals

© 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 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. 22 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. 23 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. 24 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. 25 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. 26 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. 27 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. 28 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. 29 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. 30 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. 31 A Blueprint for Successful Stadium Development kpmg.hu kpmg.hu

Thank you Alastair Graham KPMG Sports Advisory Practice