Cartoon: Autonomy Island From The Executive Editor: Vinik's plans How to make Olympic Games work Recognize value women bring From the Executive Editor: Bud Selig Boston 2024 offers national opportunity Marching orders for sponsorship execs Cartoon: Selig's strength From The Executive Editor: Paul Godfrey Sutton Impact: Loyalty lessons
Upcoming Conferences and Events
World Cup organizers eager to show Africans can deliver
Published June 7, 2010
Whenever a global sporting event like the World Cup is on tap, speculation rages regarding its impact on the host nation. The reference is always to “legacy” when it comes to the value these mega events will leave behind. This has particularly been the case with the FIFA World Cup being held on the African continent for the first time. The focus of such discussion is traditionally economic, but in recent years that has tilted slightly toward the social and psychic impact, and so it should be.
Frankly, the true economic impact of any sporting event is difficult to pin down. Assigning a measure to social and psychic impact is admittedly even more difficult. However, new positive views of global regions are difficult to acquire any other way than by the hosting of mega sporting events.
On the economic impact side the projected number of attendees is a key variable in determining the impact of an event. Three years ago the accounting firm Grant Thompson developed projections calling for 483,000 visitors to attend South Africa’s event. Last month, due to a combination of the global economic downturn and increased concerns regarding crime and security in the region, the estimates were reduced to 373,000. There was also a decrease in the projection of the number of visitors from African countries outside of South Africa. That number is a strikingly low 11,300.
This perspective on the size of the live gate is important. As is typically the case in a global sporting event, most of the first time “visits” will be via the images delivered in homes by event broadcast partners not by visitors actually setting foot on the host’s soil. So, the impact of increased tourism related to the event comes further out in time, if at all.
The theme that I hear most consistently from organizers is the desire to show that South Africans — “Africans” — can deliver a successful logistically complex event. Think of the universal raves about the opening ceremonies presented by the Chinese in Beijing in 2008. There is a degree of Doug Williams as the first black quarterback winning the Super Bowl and the MVP award. Not just exploding the myth that it can’t be done, but completely blowing it out of the water and ending a stereotype. This event “coming out party” has been seen with the Olympics in Tokyo in 1964, the Mexico City Olympics in 1968 and the Seoul Olympics in 1988. All three used the Games to display how advanced their countries had become. This time a continent can leverage a mega event.
In addition to realism on visitors, there needs to be a similar stepping back on the excessive predictions of physical infrastructure that will be left behind. The real numbers never match the uninformed hype. Some legacies, like the swimming pools in Munich, Montreal, Los Angeles and Seoul, and Olympic Villages turned into housing in Barcelona and student housing in Atlanta, stand the test of time. But too often venues, like the cycling velodrome in Los Angeles, are no longer with us or remain like the Bird’s Nest in Beijing, as potential white elephants. In South Africa there is a new train from the airport in Johannesburg into the city. There is a new airport in Durban. These World Cup-related projects are likely to have a sustained positive impact. But it is equally as likely that some of the stadiums will be underutilized.
Hosting a global event is an expensive path to social and psychic impact. Some estimates have the cost of building the South African World Cup facilities alone at $5 billion. But isn’t that a part of what governmental leadership should do? To the extent it can be afforded, the social and psychic are a more realistic return than the mythical economic investment numbers we have come to expect. Organizers should certainly seek needed infrastructure projects and plan long-term for whatever surplus a mega event may leave behind, but they shouldn’t count on it.
One of the most lasting legacies of any mega sporting event has been the LA 84 Foundation in Los Angeles. A portion of the more than $200 million surplus from the 1984 Olympics was used to endow the funding of youth sports in the region. It is still doing so three decades later. Those surplus days may be gone forever. Both FIFA and the International Olympic Committee now make it nearly impossible for local organizing committees to take in that amount. In the last World Cup in Germany, FIFA took in a profit of $1.8 billion.
The lessons we learn from South Africa will help us to better understand what we should anticipate for the next World Cup and Olympics in Brazil and South America. There are certainly the basic lessons about how best to sell tickets and understanding that in some economies over-the-counter sales will still be preferable to Internet sales. The Internet was an initial blunder, but local sales increased when tickets were made available via the old fashioned method. Also, to understand that even at $18, the tickets may still be too expensive for the average person in an African or, looking forward, South American economy.
What is still missing from the pantheon of scheduled events? The Olympic Games hosted in Africa. South America is finally getting the Games in Rio in 2016. If all goes well, the IOC should make the move a high priority, and all should have proper perspective on the legacy hosting the event will leave going forward.
Kenneth L. Shropshire (email@example.com) is the David W. Hauck Professor at the Wharton School, professor of Africana Studies and faculty director, Wharton Sports Business Initiative, at the University of Pennsylvania.