Warsaw: Polonia bidding for new stadium’s partnership
source: StadiumDB.com [MK]; author: michał
The city of Warsaw is seeking a new private partner in order to finance the €87-million redevelopment of Polonia’s stadium. The club unexpectedly came forward and offered to cover 75% of the expense, despite playing second fiddle in fourth league at the moment.
Dilapidated stadium. The story behind Warsaw’s second biggest footbball club stadium is a complex one, although over the past two decades one sentence was repeated more often than any other: “the city hasn’t got enough funds for upgrades”. As a result, Polonia Warszawa had to come to terms with using modular container facilities in daily operations.
Turbulent situation of the host club. The Black Shirts’ story is also twisted. As recently as 2010 the club played in Europa League, having won the Polish Cup the previous year. But by 2019 it collapsed and had to begin almost from scratch in the fourth league. In early 2020 a new investor came in, French millionaire Gregoire Nitot. He covered outstanding debt, though the club still hasn’t climbed out of the 4th tier (the goal is to be back in Ekstraklasa in 2030).
New concept by the city. Before Polonia’s future became somewhat brighter under Nitot, the city decided to revamp the stadium and surrounding facilities to create Warsaw’s largest multi-disciplinary sports and training centre. After all, Polonia has many more sections than just football. Architectural competition was won by JSK Architekci back in spring of 2019 but to this day the detailed design hasn’t been created. The biggest issue is: the city has PLN 114 million to spend, while the price tag is at least PLN 399.9 million (€87.8m / $105.8m). Local authorities have thus opted for public-private partnership (PPP) and are now looking for said partner to cover the massive gap in funding.
Polonia unexpectedly steps in. On April 1 the club was informed by Warsaw that the search is still ongoing. Not surprising, since no stadium across Poland was built with the PPP framework. Polonia’s results or modest popularity might not be the commercial magnet guaranteeing revenue to a third party. That’s why yesterday the club released a 14-page statement, arguing that Polonia should be that partner.
Polonia’s conditions. The club is asking for a 40-year freehold of the entire new complex in exchange for the lacking PLN 300 million. While a 4th-league club obviously cannot come up with such funds on its own, the freehold in a central location of Warsaw would help secure loans and external partners.
Ideal partnership? Potentially. There are a number of reasons why Polonia could be the desired private partner. First, this would limit possible conflicts of interest, very common in PPPs with an external commercial partner. Second, Polonia’s letter offers guarantees that revenue would be reinvested in the club, also in its commercially unviable sections. Third, lack of external interests would allow Polonia to grow under such deal, the goal which some PPPs impede. But, in order for all these benefits to be achieved, the city has to agree on the deal and its specifics have to address expectations of both sides. On top of, of course, the club being able to build the financial structure for its end of the deal.
Author: Michał Karaś