Adelaide Oval management reveals financial details, says it needs new revenue streams

Adelaide Oval’s financial details have been revealed in a submission to a parliamentary committee examining the proposed 128-room hotel, as it urges development of new revenue streams other than game-day sales.

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Adelaide Oval management approached the State Government about building its controversial new hotel almost six months before the ultimate public announcement, and referred to it by the codename “Project X” in an apparent bid to keep the plan under wraps.

As a state parliament committee prepares to investigate the 128-room hotel proposal, a submission from the Stadium Management Authority reveals details about its own financial position and urges development of new revenue streams other than game-day sales in a bid to win the “arms race” with other stadiums.

Emails released by the Government also show that the SMA approached Premier Steven Marshall at least as early as May 30 seeking a meeting over “a major investment opportunity”. Later, on September 24, SMA chairman and former governor Kevin Scarce contacted Mr Marshall’s chief of staff to seek a further meeting on “Project X”.

The public announcement, on November 25, included agreement from the Government to offer the SMA a loan of up to $42 million. To counter claims of a taxpayer “giveaway”, the Government has also published terms of the loan.

Artist impression of the proposed Adelaide Oval hotel.

It shows the SMA will be charged a 4.5 per cent interest rate on money the Government can access at 3.2 per cent, meaning taxpayers will ultimately profit from the deal.

In its submission published online on Sunday night, the SMA says profits from the hotel will be recycled into the stadium’s upgrade and operation.

“A hotel provides such an opportunity and enables an international scale of innovation that keeps Adelaide Oval at the leading edge in the ultra-competitive global stadium and events market,” it says.

It shows the SMA made a $2.9 million audited statutory profit last year but lost $500,000 in 2017. Its turnover was $104 million and $122 million respectively in those years.

The loss was attributed to power costs skyrocketing from $1.5 million in 2016 to $2.5 million in 2017, and warranties expiring on equipment bought for the Oval’s $535 million upgrade, which opened in 2014.

That led maintenance costs to swell from $1.9 million in 2014 to $5.5 million last year.

The submission includes a letter from consultants Horwath HTL that says the proposed 128 rooms are “an increase that is not considered to be a material impact on the future Adelaide hotel market”.

Asked why more revenue was needed when patrons already paid almost $10 for a beer, Mr Scarce said diverse income would “take the pressure off the prices we need to charge to square our books”.

Labor wants the committee to explore whether Liberal Party president John Olsen helped negotiate the loan.