Only two stadiums may not make the league {writer:Fanie Heyns}

White elephants or cash cows? Would demolishing plans be the only viable option for a few of South Africa’s World Cup stadiums, or are most of them commercially sustainable and destined to become living monuments of South Africa’s gigantic success as host country of the 2010 Fifa Soccer World Cup tournament?

Danny Jordaan, chief executive officer of the 2010 local organising committee, said in October that South Africa does not plan to demolish any of its World Cup stadiums, nor will any of them turn into neglected white elephants.

Speaking at the “Leaders In Football” business conference at Chelsea’s Stamford Bridge ground, he said that of the 10 stadiums that staged matches during the World Cup, eight were expected to flourish by being used for soccer and rugby.

“For South Africa, some of these stadiums will be a challenge,” Jordaan admitted.

But he added: “The fact we have football and rugby union in the same stadiums – for example, the All Blacks played the Springboks at Soccer City and 92 000 people were present – proves that for about 80% of the stadiums, it will be fine.

“One or two stadiums may struggle to be sustainable.”

Jordaan said the two stadiums in question were the Peter Mokaba Stadium in Polokwane and the Mbombela Stadium in Nelspruit, which hosted group-stage matches.

He later told Reuters: “They will not become white elephants, but they do face challenges. However, those challenges can be met.

“Contrary to some reports, there are no plans to demolish any of them.”

The municipality of Polokwane requires R17 million per year to sustain the Peter Mokaba Stadium.

It needs between 10 and 13 big events per year to absorb these losses, but currently, there are only minimal bookings for big events for 2011. (Source: Rapport, 17 October 2010)

Royal Bafokeng

There are two success stories to come out of this year’s World Cup, namely Soccer City and Rustenburg’s Royal Bafokeng.

With an annual operating budget of R5.5 million, and with 22 matches to be played there by the end of 2010 – including 12 Platinum Stars games in the Premier Soccer League (PSL) and local athletics meetings – no cash problems are expected in Rustenburg.

The FNB Stadium in Johannesburg, a hub of activity during the World Cup, is the most profitable facility built or renovated in South Africa for tournament matches – and its success as a venue looks set to continue, reported www.sagoodnews.co.za.

The stadium, also referred to as Soccer City, is now back to hosting big sporting games such as the Soweto Derby between Kaizer Chiefs and Orlando Pirates, other PSL football matches, as well as international football and rugby matches.

World-famous entertainers are billed to perform at the 94 000-capacity venue in the coming months, said Jacques Grobbelaar, director of Stadium Management South Africa, which manages the FNB facility, Soweto’s Orlando and Dobsonville stadiums, and Rand Stadium in
southern Johannesburg.

Neil Diamond and Soccer City

“Big stars are coming to the stadium,” said Grobbelaar at a media briefing at the stadium on 22 September.

It has been confirmed that United States pop sensation Neil Diamond will perform there later this year.

Although there are concerns that the 10 World Cup stadiums will not be used to their full potential, this is not the case with the multipurpose FNB facility, said Stadium Management South Africa, which has been given full responsibility to run the venue owned by the City of Joburg.

The government renovated the FNB Stadium at a cost of R3.3bn ahead of the global football spectacle.

Since hosting the momentous World Cup matches, including the opening ceremony and the final, the stadium went on to stage four high-attendance football and rugby matches, two of which were sold-out events.

The sold-out Telkom Charity Cup, which provided all-day football activities in August, was held there, followed later in the month by a historic Tri-Nations match between the Springboks and the All Blacks of New Zealand. Some 92 000 tickets were snapped up for this face-off.

Bafana Bafana beat Ghana at this stadium in a well-attended match on 10 August.

Port Elizabeth

The future of the Nelson Mandela Stadium in Port Elizabeth is perhaps not secured, but there are indications of growth and positive developments.

The stadium management requires R21m per annum for operational costs, but the management believes there will be sufficient events hosted at the stadium to make it commercially sustainable within two years.

Pierre Voges, head of the Mandela Bay Development Agency, told Rapport (17 October 2010) there is still a year in which to reach this goal.

According to Buli Ngomane, head of communications of the Nelson Mandela Stadium, some of the events planned for 2011 include four Super 15 rugby matches, two international rugby matches against the Eastern Province Elephants, a few soccer matches as well as a Neil
Diamond concert.

The stadium was built at a cost of R1.071bn, and according to a business model, sufficient income can be secured through selling of advertisement rights to sustain it.

Durban

There may be some question marks over the future of the Moses Mabhida Stadium in Durban. With seating for 70 000 people, it has hosted only a few PSL matches after the World Cup, as well as a few pop concerts.

Durban City manager Michael Sutcliffe told The Times that sustaining the stadium of R3.4bn is not an easy challenge: “At the moment, we are trying. I think for now we can say that we are doing the best we can.”

The sky-car at the stadium began bringing in money months before the tournament and is still profitable.

A Twenty20 cricket match between South Africa and India will be played there in January.

But all these efforts could only generate R7.5m, while the city is battling to get its hands on outstanding debts of billions, reported Rapport (17 October 2010).

Durban sending legal letters to Fifa about debt

Sutcliffe told The Times that the host cities had been engaging with Fifa for at least three years, but were still waiting to be paid for work done in the run-up to the tournament.

Host City contracts with the world soccer body state that the cities are entitled to 10% of World Cup ticket sales.

“Fifa also has to pay a rehabilitation fee, which was used to rehabilitate different areas. In Durban’s case, it was the area outside the stadium known as People’s Park,” Sutcliffe said.

“Fifa also owes us money for additional work on stadiums, which they requested.”

He said Durban had sent letters of notice to Fifa, and was considering legal action.

“There will come a time very soon when letters will not be enough and we will be forced to go the legal route,” he said.

Rugby and cricket facing predicament

Oregan Hoskins, South African Rugby Union president, told members of parliament in Cape Town there had been no discussions between Durban city officials and rugby representatives before the Moses Mabhida Stadium was built, and now it did not have sufficient suites to accommodate the local Sharks rugby team’s suite holders.

The situation in Cape Town is as bad, according to Hoskins, because of the deteriorating relationship between the local Western Province Rugby Football Union and the Cape Town Stadium operators.

Sapa quoted Western Province Rugby president Toby Titus as saying that on the advice of an independent financial adviser, Western Province Rugby was staying at its current stadium, Newlands. (Source: The Times, October 2010)

Gerald Majola, CEO of Cricket South Africa, said the pitches at the stadiums (including Durban and Cape Town) were too small to host cricket games, and blamed this on the failure of cities to consult cricket authorities before construction.

Lease with Stadefrance in Cape Town collapses

Cape Town recently announced the collapse of its 30-year lease with stadium operator Sail Stadefrance Operating Company. It cost R4.4bn to build Cape Town Stadium.

Morné du Plessis, executive chairperson of Sail Stadefrance, said his company had analysed market trends and operating costs and had found it would incur major losses if it entered into the lease agreement with the city.

The company’s shareholders were not prepared to sign the deal with the city “under circumstances that projected substantial losses”, he told The Times.

Demolish or sustain?

The City assesses that less than R40m per year is required to sustain the Cape Town Stadium, says Pieter Cronjé, director of communications of the City of Cape Town.

The City is negotiating with all possible users of this multipurpose stadium – sporting bodies for rugby and soccer, and promoters for exhibitions and artists.

The stadium will be actively promoted and marketed locally and internationally, Cronjé told Service magazine.

The operator and the City agree that in the medium- and long term, the Cape Town Stadium is sustainable. The operator’s investors were simply not prepared to invest the money for the initial establishment phase, said Cronjé.

JP Landman, an independent analyst, told Rapport that South Africa may follow the example of the US, Korea and Japan.

These countries demolished some of the stadiums where the maintenance was sky high.

Cronjé said that demolishing the stadium was not even on the agenda. It is a beautiful stadium, and all the matches hosted there were successful.

Enter Ajax

The soccer club Ajax has decided to make the new Cape Town Stadium its headquarters and home stadium.

But according to a representative of Ajax, Shooz Mekuto, it will only be sustainable if they can draw a crowd of 20 000 people or more, for hosting matches there costs more than R400 000.

And drawing big crowds seems to be a problem. For one double-header, Ajax attracted a crowd of 45 000, but for its next match, against Platinum Stars, it drew only 7 500 fans. (Source: Rapport, 17 October 2010)

Sales of tickets are not looking too good, said Mekuto.