They were never going to pay

Some of the planning that went into the stadiums which were such an integral part of South Africa’s most successful hosting of the 2010 Fifa Soccer World Cup could have been better to limit the damage control of the ongoing cost legacy they have left us with. But it is extremely unlikely that that legacy could have been totally avoided and no one should be surprised about the debate that is now raging about how it should be dealt with going forward.

What was most notably absent in the planning leading up to the construction  of these flashy monuments of modern global sports events, was how the bills would be paid after the international teams and their fans have left. The bills were always going to be there. It is also not a situation that is new, nor is it unique to South Africa.

From the start it was also probably unavoidable that the tax payer was going the saddled with footing at least part of the bill of ongoing costs. The only argument is at what level – national-, provincial- or local government – the brunt of it will of should fall.

Because this was not sorted out before the kickoff of the tournament it has already led to tensions within the mayoral committee of the City of Cape Town over the issue of the council spending R1.8 million for the hosting of a single double header event at the Cape Town stadium. Debate became so sensitive and emotional that officials had to be asked to leave the meeting where the issue was discussed.

A 2007 paper published by Policy Matters of the University of California at Berkeley in the USA and authored by Christopher Diedrich, starts off with the following statement: “More and more professional sports teams are turning to their legislatures in order to secure funding for new stadiums. While previous analysis suggests that there is little economic argument for public dollars going towards such projects, Mr. Diedrich points out there is more to the story than economics. Quality of life issues such as pride and sense of community, as well as a state’s (also read province’s) or city’s prestige on the national (also read international) stage should also be considered.”

In another academic study on the issue in the context of economic development policy by Dennis Coates and Brad R. Humphreys, it is stated, among others:

• “Unlike most studies commissioned by stadium advocates, the consensus in the academic literature has been that sports the environment has no measurable effect on the level of real income in metropolitan areas;”
• “The evidence suggests that attracting a professional sports franchise to a city and building that franchise a new stadium or arena will have no effect on the growth rate of real per capita income and may reduce the level of real per capital income in that city;” and
• “… one thing is clear from the evidence on professional sports franchises (also read Fifa): owners are reaping substantial benefits in the value of their teams (also read tournaments) because they are so skilled at the stadium gambit.”

With the adrenaline rush of the WC 2010 now well behind the country the beautiful game has, on the issue of the ongoing costs of the stadiums, made room for a highly emotional blame game – feel it, it is here!

Other sports codes besides soccer are called on now to the help ensure the viability of some of the stadiums. Rugby is complaining that they were not consulted before hand. The question is whether it would really have helped.

The answer is probably not. It is unlikely that rugby’s business model, which includes the income from hospitality suites could have fitted comfortably with the needs in the stadiums during the WC.

Maybe cricket has a stronger argument with regard to the size of the pitches that were provided for.

Can it be expected of professional soccer in the country to pickup some of the tab? Considering their business model [perhaps give some insight into how their business model works ] and especially the economic position of the critical mass of their target market, which dictates tickets at prices as low as R20, the answer is probably also “no.”

An argument/question often presented in the case of Cape Town is whether the Cape Town stadium should ever have been built. Why was Newlands not just upgraded and retrofitted for the WC?

What should, however, also be considered is the broader context of the upgrading of the transport network to the centre of the city, the fan walk, the fact that Newlands in slab bang in the middle of  a mostly residential area, and the linking and proximity to the Waterfront and other major tourist attractions.

This leaves us with the intangibles like the feel good factor. What would maybe be opportune is a roundtable indaba of all stakeholders to urgently map the way forward – something that should have happened at the start. The acrimonious and emotional debate that is presently developing around the issue is becoming a serious threat to even that.

Piet Coetzer, Editor; Leadership Intelligence Bulletin