Implementation of PublicPrivate Partnerships Sport Finance

1
Implementation of Public-Private
PartnershipsSport Finance
2
What are they?

• A collaboration of two or more stake-
• holders pooling resources to achieve a goal
• that neither party can do alone.

3
Why did these partnerships become necessary?

• Public became less receptive to paying.
• Venues too expensive for private investors.
• Government could not do alone.
• New sources of revenue available.

4
Revenue Innovations

• Why would owners be hesitant to use
• naming rights and luxury seat revenues to
• go towards construction costs?

5
Revenue Innovations

• Owners wanted those dollars as profit
• Bottom line
• Team operations

6
Partnership Challenges

• Two players
• Government
• Private business
• Separate Agendas
• Logistics / Communication

7
Government Objectives

• Serve community
• Social outcomes
• Intangible entity
• Accountability to the public
• Long loan process
• Media scrutiny

8
Private Entity Objectives

• Financial returns
• Maximize returns for the stock holders
• Tangible (money)
• Profit

9
Assets of a Public Agency

• Land Bank
• Low cost development capitol
• Tax Waivers
• Zoning and permit applications

10
Assets of Private Corporations

• Specialized Management Expertise
• Reduced Labor Cost
• Adaptability to scale of service
• Reduced Liability

11
Public-Private Partnership Models

• Public sector leasing
• Leaseback arrangements
• Public sector takeovers
• Private sector pump-priming
• Multiparty arrangements