Business & Finance - Friday 8.11.2002

Jokerit Group to build multipurpose arena in Stuttgart


JHC Arena Holding Company, a part of the Jokerit Group, will today open its 15,000 seat multipurpose arena in Hamburg. The company will not settle for just celebrating the accomplishment. At the turn of the year it plans to start building another identical arena in Stuttgart.
    Harry Harkimo, the Jokerit Group CEO, explains that his company has won the bidding contest for the building of the arena. Next week Harkimo will travel to Stuttgart to close the deal and to negotiate some final arrangements.
    Harkimo believes the building of the Stuttgart arena will prove to be "a very good business move".


According to Harkimo, the arena built in Hamburg will act as the company's calling-card in Central Europe. It proves that the Finnish enterprise can successfully execute such construction projects abroad.
    "Of course the Hamburg arena will also generate profit, but the conditions in Stuttgart are definitely better, as there the city is to pay for the construction of the entire building. The city of Hamburg merely donated a site for the arena."
    The concept of the Stuttgart arena is identical to that of Hamburg. The drawings, the structures, and the stand layout are all exactly the same. Only the exterior facade as well as the décor will be slightly altered to give the impression it is a different structure altogether.
    "I guess you could say we are the McDonald's of the arena construction business", Harkimo laughs.


Harkimo's first multipurpose hall was Helsinki's Hartwall Arena completed in 1997. Harkimo adapted influences for his business venture from North American models.
    Harkimo took advantage of Finland's ice hockey craze, incorporating it with an all-around entertainment centre that would entice corporate clients as well. The Arena was completed with restaurants and shops, the concession rights of which were sold to different retailers. The Hartwall brewery bought the name of the arena, plus the exclusive right to sell beer in the premises.
    The selling of corporate boxes further financed the constructing of the arena.
    "Hartwall Arena has generated profit right from the start", Harkimo testifies. According to Harkimo the secret of success lies in the fact that the same company has all the threads in its hands. The Jokerit Group built the arena, owns its main tenant the Helsinki Jokerit ice hockey team, co-owns the Lippupalvelu ticket retailer chain, and owns the arena's catering services, just to name a few.


According to Harkimo the building of the first arena was a tiresome exercise, and one he thought he'd never want to go through again. Only afterwards did he think of hiring a couple of people to document and conceptualise the whole process. This project was promoted by the National Technology Agency, Tekes.
    On his computer, Harkimo demonstrates the use of one of the fruits of this conceptualisation: a database containing all the phases of the construction process. The whole chain of events related to building such a centre has now been merchandised, including the planning and construction phases, as well as the actual running of the arena.
    As a specific example, Harkimo punches up on screen the GSM base station requirements for such an arena.
    The purpose of the conceptualisation is to minimise expenses. The Hartwall Arena has a permanent staff of 18, whereas Stockholm's Globen employs over one hundred people. "When needed, we hire outside help", Harkimo explains.


Harkimo's company has no real competitors in Europe. That gives him a strategic advantage in all the bidding contests. Harkimo does not see the billionaire Philip Anschutz as a competitor. Anschutz recently decided to build a multipurpose arena in Berlin.
    "We have agreed that he builds the arenas in Berlin and London. The rest of Europe is ours", Harkimo explains.
    Harkimo's company has acted as a consultant in several arena projects across Europe. The Hamburg project was the first one outside of Finland in which the Finnish company acted as sole contractor. This was due to a bankruptcy of the German partner, contracting concern Deuteron.
    Harkimo denies there are risks involved in the arena business. He firmly believes the Hamburg venue will also be a success. The corporate boxes are rented out on a yearly basis, and the name of the arena has been sold to Color Line, which is the largest cruise ferry line in Norway.
    According to calculations, 120-130 events are required annually to keep the running of the arena profitable. So far, some 80 events have already been booked for the first half of the year.


Previously in HS International Edition:
 Hockey boss Harkimo exports the Helsinki Arena format (14.6.2001)


 Jokerit HC
 Hartwall Arena
 Color Line Arena

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