Local authorities still owe millions from Euro 2004

It was a poisoned apple for the local authorities, who saw their finances collapse with millions of euros in overruns for the construction of the stadiums that hosted Euro 2004. The obligations to which the municipalities were subjected were too much for the financial capacity of cities such as Faro/Loulé (Algarve), Aveiro, Leiria, Coimbra and Braga. With the exception of the Algarve and Aveiro, which have already paid off their loans, the other local authorities have made an effort to pay what is left. And what is left is millions.

Municipal councils were required to comply with UEFA's requirements for hosting Euro 2004, which, in addition to the stadiums, involved refurbishment or the creation of new infrastructure: road, airport and rail access. The hotel capacity of the 10 cities that hosted European football championship matches also had to be increased. In Portugal's preparations for Euro 2004, only the Bessa stadium (Boavista) and the Dom Afonso Henriques stadium (Guimarães) were remodelled. The others were built from scratch, which left a heavy legacy for the local authorities who did not see a return on this investment.

Bessa, Guimarães, Dragão, Luz and Alvalade belong to the clubs themselves or to private owners, and are not included in the local authority accounts.

In a report by the Court of Auditors (TdC) in May 2004, it was immediately warned that State funding for these works — despite the 25% reference value not having been changed — ended up resulting in only 13% of the estimated final cost, given the budgetary overruns. This reduction in the final percentage of public funding (from the Central Government) ended up resulting in an increase in local government debt.

The Court of Auditors also considered that the high deviations found between the reference investment and what was actually carried out “demonstrate the difficulties experienced by public prosecutors in the cost management process”. And while there were concerns on the part of the Central Administration in controlling its financial involvement, when establishing limits for the Euro's contribution, companies and municipal councils did not do the same — no limits were set for the corresponding debt, warned the Court of Auditors.

Leiria: Two million missing and the stadium isn't even finished yet

Until last year, it was the highest debt. Twenty-one years later, the local authority led by Gonçalo Lopes still owes around 8 million euros of the 100 million that the stadium cost. Leiria City Council explained to Observador that, since 2009, it has managed to reduce its debt by 90%, but “it still has an additional two million euros to invest in the construction of the stadium’s east tower, which will house public services”. The north end of the stadium, which was never finished, also needs to be completed — this is where the Leiria Innovation Hub will be located.

According to the local authority's explanations to Observador, all of Leiria City Council's debt is related to the football stadium. And to minimize the financial impact, “there is a strategy of dynamization to try to cover costs. The municipal stadium has been the stage for events such as the Final Four of the League Cup [men's and women's], there are also games of various levels of the National Football Team, and in the cultural aspect it hosts several concerts”. In the corporate sphere, the stadium also hosts conferences.

It was a European championship that left scars on those who invested in it. According to statements made by Mayor Gonçalo Lopes last year to Lusa, “the investment required to build the Dr. Magalhães Pessoa Municipal Stadium for Euro2004 traumatized Leiria and had major consequences for the municipality’s investments in the first 20 to 30 years”.

Braga: Stadium for sale but no consensus

The stadium where Sporting Clube de Braga plays is up for sale and, for now, the only option is for Arsenal SAD (sports limited company) to be the buyer. Observador understands that there have already been meetings to that effect, however, no agreement has yet been reached. The local authority is asking for more than the company linked to the club is willing to give. For now, the possibility of selling to other investors has been ruled out. The amount still owed is more than two million euros and is the result of court rulings that condemned the municipality.

For the local authority led by Ricardo Rio, the sale is a possibility that allows the debt associated with the maintenance and management of the infrastructure to be definitively resolved, but “the process does not depend solely on political will”. In the meantime, the football club will pay a monthly fee of 500 euros to the City Council for the use of the stadium, which ended up costing the most money during Euro 2004: 200 million euros.

As for the strategies for paying off this amount, the “municipality has complied with the contractual payment agreement, thus ensuring the fulfillment of financial commitments in a gradual and sustained manner. This effort has been accompanied by rigorous management of municipal finances, within the scope of the Municipality’s annual budgetary possibilities”, Braga City Council explained to Observador.

Coimbra. Coldplay was good but it didn't arrive

The Coimbra local authority owes twice as much as the Braga City Council. The mayor of Coimbra admitted to Observador that the amount still to be paid is more than 4.7 million euros, out of a total cost of 50 million. The loan for the construction was signed in 2002 and renegotiated in 2023. “The local authority expects to pay off the debt in two years’ time”, guarantees José Manuel Silva.

The stadium is prepared for intensive use for football, rugby and athletics, but it is not managed by the City Council — the management is carried out by the Associação Académica de Coimbra.

José Manuel Silva explains that the stadium is home to several companies, administrative services and commerce, including multinationals, in addition to the concerts that the stadium hosts. The mayor believes that “shows like Coldplay and now Guns N' Roses have helped to promote the city on a larger scale”.

Aveiro. Stadium paid for with 10 million in expenses waiting

The project, which was supposed to cost less than 30 million, ended up costing more than double (almost 70 million). Before the debt was paid off, which happened last year, the stadium already needed 10 million euros worth of work to replace parts of the structure and roof.

Interviewed on the Onde Para o Caso programme on Rádio Observador, Ribau Esteves, Mayor, explains that maintenance alone and a structure of this kind “doesn’t cost thousands, it costs millions”. The local authority spends around 500 thousand euros per year on managing the building to ensure it remains fit to host various competitions, from national championship games, namely the Beira Mar, to the Super Cup.

Over the years, Ribau Esteves has considered that the construction of the Aveiro Stadium represented a “disproportionate and absurd” investment, and he continues to criticize it: “The big mistake was the rush, the work was done in a very superficial way. The stadium was built on a forested area, without a road, without anything, and it was necessary to build all the infrastructure. All the accessibility and water, sanitation and electricity infrastructures had to be built. Therefore, the calculations were poorly done”.

Regarding the Court of Auditors’ report, Ribau Esteves agrees, in part. The mayor of Aveiro argues that the municipal councils, the Government [then led by Durão Barroso] and the organization of the championship followed “an absolutely wrong path. It was very safe for the Government and the Portuguese Football Federation, and it was horrible for the local authorities” since the amount defined for the State’s contribution was low, the mayor believes. Ribau Esteves recalls that, at the time, the municipal councils “accepted that game and, therefore, history is made in this way. Obviously, today it would be unimaginable for us to accept a situation like that”.

Faro. The first to pay off the debt, 20 years later

The Algarve stadium “is fully paid for”, the office of the mayor of Faro, Rogério Bacalhau, confirmed to Observador, adding that the payment of the last loan instalment took place in March 2024. Like the works on the other municipal stadiums, the one in Algarve slipped, although to a lesser extent. “The overall value of the contracts awarded for the construction of the Algarve Stadium was 37 million euros. The final cost of the work reached the amount of 38,054,814 euros”, details the municipality.

When asked about the profitability of the Algarve Stadium — whose ownership is divided between Faro and Loulé City Councils — over the last three years “it has presented financial years with positive results, namely 24,213 euros in 2022, 142,207 euros in 2023 and 51,207 euros in 2024”.

The specifications are long and there are requirements that stadiums need to meet to host football matches, but not only. “Support in areas such as security, immigration, issuing of visas and work permits and customs services, as well as the availability of public transport and other infrastructure for the event” must be guaranteed. In the case of immigration services, “a visa-free or visa-friendly environment” is required for those travelling to watch or take part in the World Cup. Governments are asked to issue temporary work visas without restrictions for citizens who need to perform functions within the scope of the championship.

The host countries are also responsible for the security of the event. This means that the costs of this operation are borne by their respective executives. Portugal does not need new stadiums, as it will host the World Cup in the Luz, Alvalade and Dragão stadiums, but FIFA requires that all of these facilities have completely covered stands, for example, which may require some renovation work. Among other requirements in the hotel and service sectors, FIFA also requires that sustainable consumption objectives be met with regard to the environmental impact of the competition.

Transport and accommodation are not left out, and the World Cup organisers want the delegations to be accommodated in hotels with the best facilities, within a maximum distance of 30 minutes on foot from the venue where the games are taking place, preferably with public transport at the door and parking facilities for cars and heavy vehicles. The so-called “fan zones” should also be set up in areas, preferably in the city centre, with access to buses, trams or bicycles, and which have the capacity to receive “a large number of people”.

The championship will be played between Portugal, Spain and Morocco (with 3 opening matches in Argentina, Paraguay and Uruguay). At the time of the bid, air and rail connections between the capitals of the three countries were taken into account. The evaluation report presented by FIFA mentions that Lisbon and Madrid have high-speed connections. However, as reported by Diário de Notícias , to travel between the two cities in 2026, passengers will have to change trains even with the new Évora line, resulting in a journey time of 6h30, approximately the same as the journey time between the two capitals by car. The clock is counting down and the countries hosting the championship have five years to ensure all FIFA requirements.