Future Murky For Brazil's Arena Da Amazonia

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The Amazon rainforest surrounds the concrete jungle of Manaus, the capital and most-populated city in the Brazilian state of Amazonas. In the heart of Manaus sits Arena da Amazonia, built between 2011 and 2014. The stadium was heavily scrutinized for its remoteness, construction costs and delays, and for the deaths of three workers.

When the World Cup began, the city on Brazil’s distant frontier was giddy. Fans were overwhelmingly positive in the face of negative press. But Arena da Amazonia only hosted four qualifying round matches. Now it sits empty, except for occasional games between a handful of Brazil’s fourth-level, Série D teams, and three games featuring top-level teams from Rio and São Paulo.

Manaus Mayor Arthur Virgilio Neto admitted during the World Cup that the stadium might end up being underused, but he was optimistic about the potential for music concerts, such as Rock ‘n Rio.

"It will be very good for international shows," Neto said. "I've heard that many pop stars have dreamed of singing for a low price in the Amazon jungle."

Financial Concerns

But no firm has been willing to go into a management partnership, let alone buy the stadium outright. Rock shows have yet to materialize, though the stadium has hosted recent near-sellout evangelical Christian concerts. The fear is that once the novelty wears off, so will the revenue stream.

The stadium cost more than $270 million, of which $160 million the state borrowed from a federal bank. While that loan matures in 20 years with minimal interest, there’s already cause for concern -- both the top soccer matches and the concerts have been organized by events agencies who've all paid less than half the recommended $122,000 rental fee needed to cover basic costs. Dr. Marcus Evangelista, president of the Regional Economic Council for Amazonas, pointed out that the costs and returns just don’t add up.

"To know for sure, with complete certainty if it’s going to be a white elephant or not, it's difficult to forecast, because economists work with numbers," he said. "We don't have the numbers in hand to confirm or even do a projection for the future of the project."

Paying off the debt for Arena da Amazonia could mean shortfalls for state priorities such as schools, hospitals and basic sanitation. (Richard Heathcote/Getty Images)
Paying off the debt for Arena da Amazonia could mean shortfalls for schools, hospitals, basic sanitation and other programs that help out residents of Manaus. (Richard Heathcote/Getty Images)

And the numbers aren't just a matter of the paying off a steep loan. Paying off these debts could mean shortfalls for state priorities such as schools, hospitals and basic sanitation. Not paying them off could lead the state to default, or more likely to go into a rotten public-private partnership: the state would foot most of the bill and the corporate partner would maintain use of the structure at a bargain-basement price.

[sidebar title="Inequality, Debt Hold Spanish Soccer Back" width="630" align="right"]Spain's top soccer league is experiencing an economic crisis that has trickled down to lower leagues. Ian Mount reports on the the financial mess from Barcelona. [/sidebar]Governor José Melo, reelected just last month, has so far refused to disclose results of a costly evaluation meant to explore the stadium’s long-term viability. His office declined several requests for an interview on the matter.

"We know that without the stadium being economically viable, this money is never going to be remunerated," Evangelista said. "For that to happen, it would take a long time, and many things have to change in order for it to become economically viable. The argument now is that the stadium is beautiful, that it's a tourist destination but economically, in my opinion, it's totally unviable."

The stadium lights up the Manaus night sky -- when it's in use, that is. (RAPHAEL ALVES/AFP/Getty Images)
The stadium lights up the Manaus night sky -- when it's in use, that is. (Raphael Alves/AFP/Getty Images)

The Multi-Use Vision

The stadium’s strongest supporters disagree. Dr. Aly Almeida, the President of the Olympic Village Foundation, which operates Arena da Amazonia, is convinced that it has great potential as a multi-use venue.

"These days stadiums are multi-use," Almeida said. He used examples of stadiums in the U.S. and Europe to make his case. "In the United States, your country, the American football stadiums hosts shows for the Rolling Stones and Shakira. American football stadium is also for shows; not just American football. In Barcelona, 40 percent of the revenue comes from shows. It doesn't come from football. There are events outside of football because the stadiums are multi-use. And our stadium has 17 events in five months."

[sidebar title="The Ultimate Underdog" width="630" align="right"] This weekend, SD Eibar, soccer's ultimate underdog, takes on powerhouse Madrid. [/sidebar]

Almeida believes a private operator will eventually purchase the stadium, in which case the state would only suffer a slight loss.

"The Amazonian has pride for his arena," he said. Almeida said his optimistic outlook is shared by the citizens of Amazonas. "The claims of white elephants have already gone away — under our management, under this government, under the government of Professor José Melo, [it] will not be a white elephant."

Renato de Souza, a Manaus street vendor, estimated he makes about $3 U.S. per day in profits. He said that in the several years he’s worked the area around the stadium, not much has changed.

"A lot of people complain about the stadium," he said. "There are those who support it and those who complain about it. It's all politics, you know? A politician is the kind of person who after they win just gets into a lot of corruption. These politicians, when they think they're going to make things better, they make things worse. This is the way we see things. These days it's everyone out for themselves."

Coming off a Brazilian national election that put the cost of living and government spending in high relief, any future operator of Arena da Amazonia will have plenty of work ahead of them — and a forest of skeptics to prove wrong.

This segment aired on November 22, 2014.


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