Development of sports facilities and clusters through investment agreements with universities

Ol'shanskaya Mariya Vadimovna ORCID: 0000-0002-7728-3593 PhD in Economics Deputy Director for Development; Higher School of Economics of the Federal State Educational Institution of the Russian Academy of Sciences 123001, Russia, Moscow, Blagoveshchenskiy Lane, d 3 page 1 olshanskaya@spbu.su

The creation of sports infrastructure is closely linked to the development of the urban environment and the improvement of living conditions of the population, including students of higher educational institutions. In conditions of limited budget opportunities and growing demand for the construction of multifunctional sports complexes, public-private partnerships (PPPs) and various investment schemes are of particular importance. These mechanisms make it possible to effectively involve private capital to finance, implement and modernize both permanent sports facilities and temporary facilities, which contributes to the optimal allocation of resources in conditions of a shortage of public funding. The need to form financially sustainable schemes for the development of sports infrastructure is due to the limited budget funds, which gives this problem special relevance. In this context, universities, having extensive land resources and striving to create favorable conditions for students, play the role of important participants in such projects. Despite the obvious advantages of using public-private partnership mechanisms, projects related to sports facilities, especially non-capital ones, often face serious difficulties. These difficulties include long periods of return on investment, relatively low profitability and the need for regular modernization of facilities. In light of these difficulties, approaches that provide flexibility and innovation, for example, the use of lease schemes for land plots or the conclusion of joint management agreements, are of particular value.

The purpose of this study is to examine in detail the potential for the development of sports facilities through investment agreements with educational institutions, with special attention being paid to the efficiency of operation of non-capital facilities and their importance in the formation of sports clusters.

Research methodology

In the course of this study, an in-depth review of literary sources was carried out, including a comprehensive analysis of 212 publications, of which, based on specially developed criteria, 20 of the most significant were selected. The main focus was on research released over the past five years on various aspects of the development of sports facilities through public-private partnership (PPP) mechanisms and other investment formats. Key terms such as "development of sports complexes", "PPP in sports infrastructure", "university real estate", "sports clusters" and "real estate of non-capital facilities" were used for selection. The sources were extracted from the databases of Scopus, Web of Science and a number of specialized publications. In addition to the study of literary sources, for a deeper understanding of the specifics of the implementation of public-private partnership (PPP) in the context of university sports infrastructure, data published on the official resources of educational institutions such as the University of Birmingham (Sport & Fitness), Universitat de Barcelona (Esports) and Université de Lille were analyzed in detail (Sport). The information collected from these web resources allowed not only to illustrate modern examples of sports facilities, but also to significantly expand the empirical base of the study, providing a more comprehensive understanding of various aspects of the development of sports facilities within the framework of partnership agreements.

PPP models and risk allocation in sports projects

The analysis of the possibilities of the development of sports facilities through PPP agreements) is an important area, especially in conditions of budget deficit for the construction and maintenance of sports infrastructure. Such contracts assume that a private company obtains the rights to build, modernize or operate an object for a specified period, followed by the return of this object to the state. Concession agreements are not suitable for non-capital facilities, since the latter are not considered capital structures, which excludes them from the scope of Federal Law No. 115-FZ on concessions. For projects involving temporary or lightweight structures, such as sports fields, other PPP models are more often used, such as land leases or joint venture agreements. These forms provide more flexibility and do not require the transfer of the object to the state, which makes them more attractive to private investors ^[1].

One of the key aspects of such agreements is the distribution of risks between public and private partners. Within the framework of the agreement, there are a number of principles on the basis of which the distribution of risks between the parties involved is carried out. First of all, an important aspect is that risks should be transferred to a party with greater competence in their management, that is, one that is able to prevent potential threats, use hedging strategies or take pre-planned measures ^[2]. Secondly, the amount of risks that a private partner assumes should be within the limits of his ability to cover them financially. Thirdly, the risk imposed on the university is determined taking into account the current budget constraints and should not cover the risks associated with private investments ^[3]. Sports facilities require significant initial investments, as well as operating and maintenance costs. Among the key advantages of development, investment agreements can be distinguished:

- a more flexible mechanism for attracting investments compared to direct budget expenditures. Private companies can raise funds through bank loans, bond offerings and other financial instruments, which speeds up the implementation of projects;

- the introduction of innovative solutions in the design and operation of facilities is stimulated ^[4]. Private companies, having high flexibility in management and the desire to make a profit, are more inclined to introduce modern technologies into the operation of sports facilities. This may include the installation of energy-saving equipment, digital platforms for facility management, as well as the development of programs to attract new users ^[5].

The structure of clusters of non-capital sports facilities includes several key elements: playgrounds for various sports, infrastructure for spectators and participants, administrative and technical facilities ^[6]. The main factor in the development of clusters of non—capital sports facilities is the flexibility of their operation ^[7]. The use of multifunctional venues that can be transformed to host various sporting events is becoming a key element in the development of such clusters. This makes it possible to significantly increase their economic efficiency, since the facilities can be used more intensively, without long downtime. An important aspect influencing the development of clusters of non-capital sports facilities is environmental sustainability ^[8]. The use of portable modular systems makes it possible to reduce the volume of construction waste and reduce resource consumption. Such measures increase the environmental sustainability of non-capital facilities and make them attractive to investors focused on sustainable development ^[9]. Thus, clusters of non-capital sports facilities represent a flexible, sustainable and cost-effective model for the development of sports infrastructure. Their structure and flexibility allow them to adapt to different operating conditions, and the introduction of modern technologies and financial models contributes to their further development and popularization. Universities, having significant potential for the implementation of such projects, can actively contribute to the development of sports infrastructure, improve the quality of life of students and the local population, as well as stimulate scientific research in the field of sports ^{[10, 11]}

To form a more accurate idea of the scale of financial investments in sports facilities built according to the PPP model, Table 1 shows examples of projects implemented over the past ten years according to the Rosinfra state electronic platform. This table contains both capital and temporary structures, indicating construction costs and types of agreements concluded. This makes it possible to assess the total volume of investments, as well as analyze the potential benefits and risks of such projects for educational institutions and private investors.

Table 1 - Sports facilities and their cost by PPP

These examples of facilities include both capital and temporary structures, which illustrates the variety of approaches to their development. Temporary and mobile sports facilities will help universities effectively use their territories, as well as adapt the infrastructure to the needs of different sports and events.

The analysis of the dynamics of investments in sports facilities in recent years requires the study of general patterns and approaches. Graph 1 shows the total volume of investments in the development of sports infrastructure for the period from 2017 to 2023, however, there is no detailed allocation of funds between different types of facilities, such as educational institutions and other structures. Nevertheless, the data collected allows us to assess the current state of the infrastructure, including the participation of both public and private capital. Significant fluctuations in the volume of investments observed in certain periods may be associated with the implementation of large-scale national projects and programs aimed at infrastructure development, which opens up the possibility of further study of specialized initiatives, especially in the context of educational institutions and universities.

Graph 1 – Dynamics of investments in sports infrastructure in Russia, 2017-2023

The data presented in the graph reflect the dynamics of investments of both public and private capital in sports facilities during 2017-2023. The significant fluctuations observed during this period may indicate the influence of various foreign economic factors, changes in legislative initiatives and fluctuations in investor activity. From 2020 to 2023, several key programs aimed at the modernization and construction of sports infrastructure were implemented, including such forms of interaction as public-private partnership (PPP) and concession agreements enshrined in federal laws 115-FZ and 224-FZ. These measures aimed at the development of both new sports facilities and the modernization of existing ones could significantly affect the growth of the total investment volume, which is shown on the graph. The growth of private investments in 2022-2023 was particularly noticeable, which may be due to the increased use of the model of attracting private capital for the creation and management of sports facilities at educational institutions. This is especially true for universities, where sports complexes are increasingly leased or managed by the private sector, which confirms the growth of private investment in this segment.

However, despite the obvious benefits, PPPs and concession agreements in the field of sports facilities have their drawbacks. First of all, it is a long payback period. Sports facilities, unlike commercial real estate, often generate low incomes, especially when it comes to non-capital buildings such as temporary arenas, sports fields or indoor football fields ^[12]. Government support in the form of tax incentives or direct subsidies can mitigate these risks, but in general, for private companies, concession agreements in sports represent a more complex investment tool than in other industries. Unlike stationary stadiums or sports centers, non-capital facilities are usually less expensive to build, but require regular renovation and modernization ^[13]. To ensure a more effective return on investment in sports facilities, it is advisable to consider them in the context of large-scale regional and international sports initiatives. The involvement of such facilities in the programs of major sporting events at the international level or their use as training bases for national teams can significantly increase their attractiveness for both investors and users. This approach contributes to the formation of sustainable demand and accelerates payback by diversifying sources of financing and increasing the flow of users, which reduces the risks of long-term investments.

Sports facilities can become part of a broader urban strategy to create a cluster of sports services, which makes it possible to use non-capital sports facilities not only as autonomous structures, but also as elements of an integrated system that includes educational, cultural and recreational elements ^[14]. In such cases, investment agreements play a key role in coordinating the interests of various project participants.

Universities as drivers of the development of sports clusters and infrastructure

Universities, being large educational institutions, are interested in the development of sports facilities for several reasons. Firstly, it is an important element of improving the quality of student life and creating a favorable learning environment ^[15]. The availability of modern sports facilities increases the competitiveness of universities in the educational market and helps attract students. Moreover, sports facilities serve as a platform for strengthening corporate culture and a healthy lifestyle among students and teachers ^[16].

At the same time, universities have significant resources that can be effectively used. Such resources include land, infrastructure, and even teaching staff capable of developing and implementing innovative sports programs ^[17]. Investment agreements allow universities to attract private investors to create new facilities without direct costs for their construction and operation ^[18]. At the same time, universities get the opportunity to use these facilities, creating additional benefits for students.

Examples of successful cooperation between universities and developers within the framework of concession agreements in European countries clearly confirm the productivity of public-private partnership in the development of sports infrastructure. This is especially evident when comparing capital and temporary facilities, which allows us to assess in detail the difference in approaches to their operation and efficiency (Table 2) The data presented in the table were collected and analyzed based on information published on the official websites of the relevant educational institutions, which makes it possible to ensure their reliability and relevance for research purposes ^{[19, 20, 21]}. Universities, being not only educational, but also scientific centers, are actively involved in such projects with private companies. Such a partnership not only renews and expands the sports infrastructure, but also creates platforms for research in the field of sports, which strengthens their role in the development of sports science.

Table 2 - Comparison of capital and non-capital sports facilities of European universities

The analysis clearly shows the key differences in the financial efficiency and operation of these types of structures. First, capital facilities such as stadiums and sports complexes require significant initial investments and regular maintenance costs. However, their long-term operational stability and the ability to host major sporting events offset the high costs. On the other hand, non-capital sports facilities, such as temporary arenas or multifunctional playgrounds, have a clear advantage in terms of flexibility and speed of construction. Their operating costs are significantly lower, which makes them attractive for universities with a limited budget. Such facilities quickly adapt to various sporting events and can be used in a wider range of activities. Their lower cost also contributes to the creation of sports clusters, which makes them an important element in the development of the university's sports infrastructure. The choice between capital and non-capital facilities depends on the strategic goals of the university, its financial capabilities and infrastructure requirements. Non-capital facilities represent a cost-effective alternative, especially in conditions of shortage of funds, whereas capital facilities are more focused on long-term investments and sustainable development of sports clusters ^[22].

The key advantage of universities in participating in concession projects and PPPs is their ability to effectively use sports facilities for educational and scientific purposes. Universities can use sports complexes not only for physical education classes, but also for scientific research in the field of sports, biomechanics, physiology and other related disciplines ^[23]. Thus, the joint activities of a private and public partner in the field of sports infrastructure open up new opportunities for universities for research activities, which contributes to strengthening their role as research centers.

Discussion of the results obtained

This study stands out for its uniqueness, since for the first time in the Russian context it focuses on differences in approaches to capital and non-capital sports facilities within the framework of public-private partnership (PPP). The presented analysis reveals the specific features of risk distribution and models of interaction between the parties involved in PPP projects aimed at the development of sports facilities. The study focuses on the differences in approaches to capital and non-capital sports facilities, which is an important topic, but previously insufficiently studied in Russian practice. In particular, it is emphasized that the success of such projects is determined not so much by the volume of investments as by a reasonable distribution of risks: private operators assume operational obligations, while public authorities provide financial and regulatory support. Non-capital facilities, such as temporary sports grounds, can be a rational solution for universities operating under budget constraints. Their high adaptability and cost-effectiveness make it possible to create multifunctional complexes that can be easily changed to meet the needs of various sports events. At the same time, the introduction of advanced technologies and environmental solutions becomes an integral part of the strategy aimed at increasing the profitability and long-term effectiveness of the project.. Although public-private partnerships (PPPs) are actively used for infrastructure projects, investors often face bureaucratic difficulties. The main obstacles include lengthy document approval processes and complex competitive procedures for selecting partners. To solve these problems, it is advisable to create specialized agencies that will coordinate PPPs at the federal and regional levels. These agencies could offer package solutions for universities and investors, reducing approval times and reducing administrative costs. There are also difficulties in the regions due to a lack of funding and support from local authorities. To improve the situation, it is possible to organize professional development programs for regional managers and university staff. Such programs will help to reduce errors in the implementation of projects and simplify interaction with private investors. The use of foreign experience in Russian universities can significantly accelerate the development of sports facilities through PPP and concessions. An important aspect is the separation of capital and non-capital facilities, where the latter are built faster and cheaper to operate, which is important for universities with limited finances. Concession agreements allow private investors to participate in the construction and management of facilities, reducing the burden on university budgets. And the integration of scientific research with infrastructure increases the attractiveness of universities for investors and promotes participation in international projects. In foreign practice, this increases the status of universities as research centers. The creation of sports clusters consisting of various facilities helps to use resources more efficiently. This approach can also be useful in Russian universities, where resources are limited, and the multitasking of sports facilities will help organize both mass and specialized events. When comparing Russian and foreign practices, noticeable discrepancies are revealed. In Russia, legal obstacles and administrative delays remain a central constraint on the path to effective implementation of PPPs, which significantly slow down the process of concluding agreements. While in the international arena, such mechanisms have been brought to automatism, which makes projects more attractive to private sector investors. There is also a noticeable difference in risk allocation: private partners abroad clearly assume the bulk of operational risks, which encourages them to introduce advanced technologies and improve the efficiency of infrastructure facilities. In the Russian system, this process requires further elaboration in order to shorten the payback period and increase the investment attractiveness of sports initiatives.

Conclusion

In the course of the research, the prospects for the development of university sports infrastructure through public-private partnership mechanisms were considered. It has been revealed that cooperation between universities and developers contributes to significant modernization changes, while educational institutions can receive updated facilities without serious costs. This provides a sustainable model where private investors receive guaranteed income, and universities receive modern sports facilities. The implementation of concession agreements and PPPs opens up new horizons for universities, which not only accelerates the development of sports infrastructure, but also stimulates scientific research in this area. Non-capital objects play an important role in this context. Their use makes it possible to form sports clusters with minimal investment and reduced cost of operation. The flexibility of such facilities is becoming a key factor in their attractiveness, especially for universities with limited budgetary resources. Multifunctional sports facilities demonstrate economic efficiency due to the possibility of active use for various purposes, which enhances their investment attractiveness. In this context, PPP plays an important role in the development of university sports infrastructure, creating conditions for more flexible and rational resource management. This approach helps to reveal the advantages of non-capital structures, including their environmental sustainability, minimal maintenance costs and quick adaptation to various tasks. Thus, PPP not only expands the capabilities of universities, but also strengthens the competitive advantages of such facilities, making them attractive both for educational institutions and for investors focused on long-term solutions. The use of such solutions is an effective tool that allows you to adapt the infrastructure to different tasks, while improving economic sustainability and increasing the level of use of university resources.

Further research directions

Despite the existence of successful PPP implementation cases, significant issues remain related to the long-term sustainability of such agreements, in particular, when implementing projects on non-capital facilities and sports clusters. The next stage of scientific research should be the in-depth study of financial mechanisms, such as life cycle models of facilities, which can significantly reduce risks for private investors and make the allocation of obligations more transparent. One of the key vectors will be the analysis of international experience gained during the implementation of PPP at major global sporting events, for example, the Olympic Games or World Championships. Such experience can play an important role in improving the legislative and operational mechanisms of PPP in Russia. An example is countries such as Singapore and the USA, where private capital is successfully integrated into the processes of creating sports infrastructure, ensuring the long-term operation of facilities and their use for educational and social purposes. It is also necessary to deepen research in the field of environmental sustainability of facilities built on the PPP model. The use of flexible modular structures and energy-saving technologies can significantly increase the interest of private investors and at the same time reduce the operating costs of facilities.