Carlos Eduardo Paes Barreto, CEO of OAS Arenas, a leading player in the Brazilian venue market, talks to PanStadia & Arena Management.
Have sports venues always been an important target market for OAS?
One of OAS’ strategies is to invest in infrastructure. In the last few years, the company as been awarded projects to operate airports, highways, metro stations, just to name a few. And of course, we could not be out of the new industry of arenas in Brazil.
The awarding of the 2014 FIFA World Cup was a catalyst for the company; however, we consider our project as visionary because it was conceived even before Brazil was officially host country of the World Cup 2014. The involvement of OAS with the arenas’ industry started in 2007 with the deal with Grêmio football club to construct and operate its new arena for the next 20 years. By that time we already knew that this new kind of facility in Brazil would be designed to go beyond the sporting calendar and believed in both the success and development of this industry. Arena do Grêmio, in Porto Alegre, our first business in this industry, is the proof of this also because it was built entirely with private funds and is not part of the stadiums that will host the 2014 FIFA World Cup matches.
What challenges did you face in bringing this concept of a multi-purpose venue to Brazil?
We were the first company to introduce such concepts to the country so of course we found challenges. The World Cup helped, but a new type of business, which is unprecedented in Brazil, requires barriers to be broken. The construction challenges followed us during the entire construction period due to the particular requirements of this type of building. And after the inauguration, we are still facing issues to adjust the team to the industry’s needs.
How important was it to incorporate local culture and requirements?
I would say that to incorporate the local culture and requirements into each sports project we are working on is the key to success. We see each venue as unique, with its own particular needs relating to the region where it’s located. One of our projects, Arena do Grêmio, has a football scenario with a high number of fans and a world-class football team. There is no way not to take this into account when doing the business plan for this project. In a different scenario, Arena das Dunas, another project of ours, in the north of the country, has an incredible location within the city and a good area to develop commercial spaces that will be a must for the local community. We cannot turn our back on these advantages.
Did Itaipava Arena Fonte Nova in Salvador follow the same strategic model as in Grêmio?
The strategic model of Itaipava Arena Fonte Nova is broadly the same as Arena do Grêmio. We focus on service, security, safety and content, seeing the supporters as customers and trying to deliver to our partners a good deal at the end of the day. Of course we need to respect the details of each project to suit the different stakeholders and a local community.
What are the main lessons learnt from these projects?
First of all, venue and football club must work together. Although the final goals are different, one is trying to win the tournaments while the other is doing its best to deliver a unique positive experience to its visitors; both entities will only achieve their best results if they walk in the same direction side by side. Second, there are some deals that the venue must close before its opening: having the appropriate catering operator already working is among one of them. Finally, in Brazil it is of huge importance to work closely with public organisations such as the police department, fire brigade, traffic control, and public health departments. A successful event cannot be accomplished without the collaboration of all these entities.
Do you think there is now an acceptance in Brazil that multi-purpose sports venues are the key to creating economically viable facilities or is it too early to draw that conclusion?
For those who are highly involved with the multi-purpose sports venue it is clear that these kinds of buildings are a key to create economically viable facilities. However, for the mass audience it still too early to draw this conclusion. We will need to wait for the maturity of the industry and it will not happen before the 2014 FIFA World Cup.
What are the prospects for a second phase of stadium renovation and new build in smaller towns? Will they combine professional and community use?
I am confident that a second phase of stadiums will come when the competitors of the football clubs, that will start to make money with arenas, understand that they will be facing competitive disadvantages. It may not happen in smaller towns, but in the big ones first. After that, smaller towns may be entering into the industry scenario; however, it needs a combination of economic changes in the country for this to happen.
What future goals does OAS Arenas have in the sports market? Do you have any plans to expand internationally?
First of all, OAS Arenas needs to consolidate its presence in the Brazilian Market and its position as the industry leader.
Did you spend much time researching successful multi-purpose sports internationally?
Since what we wanted to do with Arena do Grêmio was to develop a state-of-the-art arena, we did vast research into leading projects around the globe. We are proud to say that the project in the south of Brazil has at least a little of each wining projects in Europe and USA, such as Amsterdam Arena, Estadio do Dragão, Emirates Stadium and Estadio do Porto, to name just a few. We carefully thought through and designed the arenas aiming to provide the very best in infrastructure and services, to offer to Brazilian soccer teams an international standard.
What’s the early experience at Arena do Grêmio? Is it a typical football town and what’s been the reaction of fans to the new facilities? Do early sales figures support the financing model?
The reaction of fans to the Arena do Grêmio has been fantastic. It is really an emotion to see the fans entering at the Arena for the first time. I saw grown up people crying like children, and every time there were a huge number of pictures being taken since everyone wants to return home with at least a little memory of the new stadium. It still too early to make a deep analysis of the sales figures, but we are confident that increasing the level of services, adjusting some issues in the surroundings, and acting closer to the clubs, the figures will rocket.
The Arena do Grêmio was the first arena in the country to claim the International LEED certification, awarded by the US Green Building Council to projects that meet the requirements of sustainability and preservation of natural resources. Were environmental considerations a key driver for OAS in this project and for your future activities in the sports market?
Sustainability and preservation of natural resources are key drivers for OAS and could not be different at Arena do Grêmio. Our strategies are always aligned with the utmost you can find in the market. A good example is the LEED Certification. It is a requirement to the World Cup arenas but for Arena do Grêmio it was a choice; we understood that the certification would be addressing important issues to the project related to its promise to the local community, the environment and the company’s goal.