Hosting a world cup is an expensive commitment Brand Cialis and as FIFA have come to realise it is not just the host country which is impacted but the global economy is affected as well. For this reason corporate sponsorship is always keen to be involved and in particular sports brands. 80% of the sponsorship at the South Africa world cup came from sports companies alone. 36 billion viewers around the world are too big an advertising opportunity to ignore.

South Africa hosted the 2010 world cup for the first time and it will undoubtedly bring economic benefits to South Africa, a developing economy with many social and economic problems and inequalities between rich and poor. It may not be able to attract as many foreign visitors as an American or European world cup but it will still generate enough interest to have a major impact on South Africa. It is expected that South Africa will receive 350,000 foreign visitors during the tournament, a lower estimate than originally thought due to the global recession and lower ticket sales than expected. A major advantage for South Africa is the attraction of foreign investment and international trade and for this reason it is imperative that the hosting of the world cup goes as smoothly as possible, to project an image that South Africa is ready to cope with this type of investment and trust in their ability to handle it correctly. FIFA will of course be keen to have a successful event and will assist South Africa to ensure this. Outside investment is essential in order for South Africa to host a successful tournament.

South Africa has hosted international events before including the 1995 Rugby World Cup, 2003 Cricket World Cup and 2009 Fifa Confederations Cup. The world cup, however, is on an even bigger scale; the 2006 world cup in Germany was the most viewed event in the history of T.V. The world cup in South Africa is predicted to sustain 695,000 jobs and create 159,000 new ones, both full and part time, permanent and temporary. It will have an impact of R93 billion on the economy, including the estimated 350,000 visitors expected to spend an average of R30,200 per trip. 62% of the R93 billion was generated before 2010 and the remaining 38% during 2010 itself.

South Africa was selected as the host nation due to its excellent transport, telecommunications, tourism, sporting infrastructure and well known reputation as a hospitable nation. This does not mean that significant work was not required to make South Africa world cup ready. The majority spend will be on infrastructure, approximately US$7 billion. A new international airport has been built in the capital of Botswana, Gaborone and millions has been spent on upgrading stadiums. Ten new stadiums are being built and more are being upgraded. Demolition began in 2006 and by 2007 all the major construction had begun. Stadia design has ensured that after the world cup is over they will still be functional as venues for other sports, entertainment and community use. The five new stadiums will be the Cape Town Stadium, Nelson Mandela Bay Stadium, Durban Stadium, Mbombela Stadium and Peter Mokaba Stadium. The upgraded stadiums are the Royal Bafokeng, Free State Stadium in Bloemfontein, Loftus Stadium in Pretoria and Soccer City and Ellis Park in Johannesburg. The road and rail network will also undergo extensive redevelopment. The Gautrain high speed rail link between Johannesburg, Pretoria and Johannesburg International Airport will be in place for the tournament. Johannesburg also built a park in Mary Fitzgerald Square to allow those who can’t afford tickets the opportunity to watch the matches. South Africa’s advertising industry also benefited with a US$221 million increase from major sports brands investing in marketing during the World Cup.

Back in 2007 the South African government raised concerns about their finances when they stated the world cup will cost an estimated 20% more than originally estimated, requiring an extra US$500m on top of the original budget of US$2.5 billion. They were laying the blame for the rise in costs on increasing material costs, particularly steel and a weaker rand contributes to this expense. Rising petrol prices and inflation are also to blame. The extra money needed came from the government and the African Development Bank who supplied low interest loans.

The world cup alone is expected to be responsible for increasing the growth of GDP by 0.5 %. There are questions over whether Fifa may benefit more from the world cup as it retains all marketing and media revenues whilst the costs are borne by the host nation. Fifa argue that these revenues are used to fund development work and activities between world cups. South Africa can keep some ticket income to cover costs and Fifa sees the potential foreign investment and promotional opportunities available to the host nation as ample reward. The South African government is using the world cup as an opportunity to secure economic growth and development in the country. It is estimated that the world cup will contribute R19.3 billion in income tax to the government. The Organising Committee is dedicated to using companies which comply with South Africa’s Black Economic Empowerment (BEE) legislation and SME’s. By mid 2008 55% of the Organising Committee’s spend was conducted through BEE companies and 26% through SME’s.

South Africa’s bid to host the world cup was carried out on the premise that the world cup should leave a lasting and positive legacy on the country. To this end a number of benefits will arise from the tournament. The world cup has quickened the rate of infrastructure development, which although already planned was pushed up the timetable as a result of the tournament. The boom in tourism, during what is South Africa’s low season will be enormous and should encourage tourists to return and new ones to arrive in the coming years. The world cup has led to the construction of 25 new hotels in South Africa. Its legacy will also be used to build and sustain a number of social improvement projects, including the Football Turf programme where one football turf will be built in each of the 52 South African Football Association regions to ensure communities have the facilities to play. The government’s spend for the world cup has been centred around stadium and precinct development, transport, telecommunications, event operations, security, volunteer training, communications, hosting, legacy and culture.

Author Bio: Graham Worrall is a writer at www.FootballSanctuary.com, a Football website which brings all the latest transfer rumours, football news and football comment from around the world.

Category: Recreation and Leisure/Sports/Soccer
Keywords: economics of football, economics of the soccer world cup, football world cup finance