Redirecting World Cup Profits to Help Underprivileged Hosts

This column from the Huffington Post looks at the continued poverty issues facing South Africa, and offers some ideas about how FIFA can redirect some of its efforts -- and revenues -- to help counteract social ills during the next World Cup in similarly developing and poverty-stricken Brazil.

with international sporting events trending towards the developing world, both host countries and governing bodies need rethink the bidding system. Currently, it awards games to those building the most luxurious stadiums. Instead, investment needs to go to public transport systems that benefit local populations and infrastructure projects with long-term benefit.

The 2014 World Cup in cities across Brazil with the 2016 Olympics in Rio de Janeiro could start this trend. Like South Africa, Brazil is a large and growing economy. But its cities are also ringed by sprawling slums, high crime rates and poverty.

Willing the Rich to Share in the World Cup Profits
The Huffington Post
July 16, 2010

FIFA Pulls in $3.2 Billion

FIFA expects to make about $3.2 billion from the 2010 World Cup.

Spokesperson Nicolas Maingot said the World Cup was the main source of income for FIFA and its revenue from this one would tide it over for the next four years.

He added that 75% of its revenue would be invested into football development.

FIFA to rake in billions
News24
June 18, 2010

U.S. Pins 2018/2022 World Cup Bid Hopes on Physical Capacity

The United States confidently submitted its bid to host either the 2018 or 2022 World Cup, boasting its physical capacity to host the games and the crowds.

[Sunil Gulati, chairman of the U.S. Soccer Federation] cited several factors that would help make the U.S. case, including having 5 million tickets available, 18 cities with access to international airports and stadiums ready to host the event tomorrow, plus a wealthy populace.

Alas, numbers alone don't win the bidding, and the U.S. also has to convince the 25 members of FIFA's executive committee it has become a full-bore soccer nation. "They don't understand how big it is in this country," Mr. Gulati said.

Confident U.S. Presents World Cup Bid
The Wall Street Journal
May 14, 2010

Durban's New Stadium Already Driving Revenue

The brand new Moses Mabhida Stadium in Durban has already proved itself a viable revenue source for the city, generating more than 4 billion Rand (~$528 million USD) since opening just a few months ago. The stadium's arch and sky car are seen as a major pull for the stadium, which has already seen more than 80,000 people ascend the arch.

"This proves that our stadium will never be a white elephant. The over R4 million does not include money generated by businesses at the stadium,” said city manager, Mike Sutcliffe.

The stadium, which was completed months before the World Cup, had become one of South Africa’s tourist attractions, he said.

Durban's stadium generates R4m
News 24
May 6, 2010

FIFA Rakes Cash, But Slow Ticket Sales May Hurt South Africa

Ticket sales are one of the major sources of World Cup-related revenue for host countries, and South Africa's struggling ticket sales could turn out to be a major problem for the country's economy. Meanwhile, FIFA officials are confident that the tournament will be a financial success for the sport's international governing body.

Match tickets are a "key revenue stream" for a World Cup's local organizers, according to Udesh Pillay, of the Pretoria-based Human Sciences Research Council.

Pillay is editor of the book, "Development and Dreams, The Urban Legacy of the 2010 Football World Cup", the result of a five-year study into the long-term impact of the World Cup.

He notes that the local organizing committee of the Germany World Cup in 2006 made a profit of $237.5 million, "partly due to the near-capacity sales of match tickets."

South Africa 2010, because of a unique set of factors, may not be able to maximize this revenue stream as other hosts have done.

South Africa sacrifices short-term profits, hopes for long-term benefits
The Canadian Press
April 19, 2010

Small Chance for South Africa to Break Even on World Cup Investment

South Africa has very slim chances of breaking even on its investment in the World Cup, according to a report from Human Sciences Research Council executive director of the Centre for Service Delivery research programme Dr Udesh Pillay. The best-case scenario would see a modest 0.5% increase to the country's GDP. But large defecits are expected to occur.

The country's expenditure on the event has been R63-billion ($8.5 billion USD), which is 6,4% of the 2010/11 gross domestic product (GDP). Currently, the only known revenue is R2-billion ($270 million USD) from FIFA and it is estimated that the event's contribution to the GDP will be 0,5%.

Taking these figures into account, Pillay says that the best-case scenario deficit that South Africa will experience is R26,1-billion ($3.5 billion USD), while the worst-case scenario deficit will be R56,1-billion ($7.5 billion USD). But these figures do not take ticket sales, marketing and merchandising into account.

He estimates that ticket sales, marketing and merchandising could add up to a total of about R20-billion, therefore it could be possible to break even in a best-case scenario, but there is a current possible conundrum. There are a total of 3,2-million tickets available for the event. To date, local supporters have bought about 350 000 tickets, or 11%, of these, resulting in 2,8-million remaining tickets.

SA may just break even on 2010 World Cup, research shows
Engineering News
March 19, 2010

World Cup Revenue Not as Much as Expected

A researcher in Durban who's been focusing on the World Cup says the revenue boost expected from the World Cup will in reality be much smaller.

"All of South Africa's urban ills will not be solved by 2010," warns Dr Udesh Pillay, principal investigator and researcher at the Human Sciences Research Council who is leading their World Cup Research Project.

Over the past five years, Pillay has been researching the World Cup and South Africans' views on its benefits.

His findings also indicate that poor local ticket sales means more foreigners will have to buy tickets for the event to be a success.

2010 revenue over-rated
Daily News
March 8, 2010