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PARLIAMENTARY COMMITTEE CAPE TOWN 16 AUGUST 2005

PARLIAMENTARY COMMITTEE CAPE TOWN 16 AUGUST 2005. Presentation By Mr Danny Jordaan CHIEF EXECUTIVE OFFICER FIFA WORLD CUP 2010 tm LOC. The planning and set-up of 2010 FIFA World Cup TM is currently in a compliance phase. The operational phase will begin after 2006 FIFA World Cup TM. Today.

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PARLIAMENTARY COMMITTEE CAPE TOWN 16 AUGUST 2005

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  1. PARLIAMENTARY COMMITTEECAPE TOWN16 AUGUST 2005

  2. Presentation By Mr Danny Jordaan CHIEF EXECUTIVE OFFICER FIFA WORLD CUP 2010tm LOC

  3. The planning and set-up of 2010 FIFA World CupTM is currently in a compliance phase. The operational phase will begin after 2006 FIFA World CupTM Today 2006 - 2007 2008 - 2009 2010 2005 - 2006 2009 Contracts, Projects and Resources Strategic Planning Concept of Operations Operating Plans Test and Refine Operational Readiness & Operations Debrief - 2010 • Dissolution • Debrief • Provide knowledge and experience for 2014 • OAA requirements, deliverables • Government Guarantees • Budget • Human Resources Requirements • Understanding what is required for the project • Vision • Mission Statement • Goals and objectives • Venue Requirement & Strategy • Key principles • Key activities • Scope definition • Levels of service • Roles and responsibilities • Delivery method concepts • Resources reconfirmation • Detailed budget • Detailed milestones • Risks • Policy and procedures • Timings • Procurement • Staffing • Model venue • Detail, detail, detail…based on previous stages • Test Event plan must be the yardstick of standard delivery • Test Event delivery • Contingency Planning • Lessons learnt from Test Event plan with 8 months for improvement leading up to 2010 FIFA World CupTM • Identify the divisions which will be tested in advance, whether it is full test or not – this exercise in itself must be planned for, failing which the entire purpose shall be defeated • Staff training • Simulations and testing • Refine Plans • Rehearse • Move-in and set-up operations Key Activities Compliance Phase Operational Phase Debrief Phase

  4. SOUTH AFRICA: A LAND OF INFINITE POSSIBILITIES • Where else can you • feel nature’s beauty • experience first-world technology • face a fiery passion for sport, and • live the world’s only political miracle

  5. 2010 FIFA WORLD CUPtm The foundation of this Bid lies in our resolve to ensure that the 21st century unfolds as a century of growth and development in Africa. The new Partnership for Africa’s Development (NEPAD) was launched to open new space for the economic progress of the continent. There remains work to be done, but the Successful hosting of the FIFA World Cup in Africa will provide a powerful irresistible momentum to this resolute African Renaissance. Extract from President Mbeki’s letter to Mr Blatter

  6. THE EVENT 32 Teams 64 Matches 28 – 43 Days 200 Viewing Hours 40 billion TV Audience 2.78 million tickets 13 Stadia proposed

  7. OPPORTUNITIES: Mega-Sporting Event Commercial Opportunities Comprise of Primary and Secondary Revenue Streams SOUTH AFRICA 2010 Mega-Sporting Events Primary Revenue Streams BROADCASTING SPONSORSHIP Traditional Revenue Streams TICKETING CORPORATE HOSPITALITY LICENSING Secondary Revenue Streams OTHER INCOME TRAVEL AND TOURS NEW MEDIA Non- Traditional Revenue Streams Significant commercial growth opportunities exist for Mega-Sporting Events by optimising Traditional Revenues and exploring Non-Traditional Revenue streams

  8. International Trends – Mega International Events EXPECTED REVENUE DISTRIBUTION IN SPORT(ILLUSTRATIVE) New Media (New Media Multimedia Rights, Infotainment etc) Others Licensing Others Licensing Gate Revenues Gate Revenues Sponsor-ships Sponsorships Broadcasting Rights Broadcasting Rights 2000 2010 As there are a multitude of platforms for revenue growth, specific platforms and their related benefits should be in line with the Mega-Event strategy Source: A.T.Kearney analysis

  9. Broadcasting Rights of $1.1b remained the most lucrative revenue streamfor the FIFA World CupTMwhile the Local Marketing Programme generated ticketing income of ~ $475m in 2002 Local Sponsorship 5% ($80m) Other(3) 9% ($149m) Marketing(2) 20% $340m $581m $26m(4) $475m Broadcasting Rights 69% ($1,100m) $80m Local Sponsorship Tickets Licensing Total Local Marketing Revenue Source: A.T. Kearney analysis Source: FIFA 8 April 2003 Media Conference, A.T. Kearney analysis Notes: (1) Converted from CHF using 30 June 2002 conversion date: 1 CHF=0.675 USD. (2) Represents Official Partners’ sponsorship revenue and excludes CHF 336m (USD 227m) which was securitised and allocated to period 2003-2006. (3) Includes licensing, adidas brand, levies. (4) FIFA Marketing, A.T. Kearney Analysis, CPLG

  10. COMPARATIVE INVESTMENT(Amount in ZAR billion)

  11. WORLD CUP TICKET SALES COMPARISON

  12. TICKETS AND SPONSORS • FIFA controls ticket sales and tour packages through “Match” • -1/3 tickets international (including Africa) • -1/3 tickets to FIFA family and commercial partners • -1/3 tickets host country • -In total 2,78 million tickets will be sold • Hospitality, reserved & unreserved tickets, Africa Ticket proposed • Confirmed financial support and commitment from multinational corporations

  13. SA FOOTBALL BRAND DOMINANCE 2004 - Markinor % Top Sports Brands in SA 2004

  14. SA FOOTBALL REVENUE LAGS BEHIND ZARmillions

  15. SA SPORT SPECTATORS 7.4% 9.9% 54.2% 13 682 000

  16. COST ( R BILLION) BENEFIT STADIA 2.5 FIFA 3.1 TO LOC TRANSPORT TAX 9.8 BROADCASTING TOURISM 5.7 ICT FOOTBALL STADIA SECURITY PROFIT GUARANTEE

  17. BUDGET • The inspection report reveals the following budgetary implications for SA: • Expenditure – Infrastructure: USD 112,000,000 • Operations: USD 364,054,993 • Total expenditure: USD 476,054,993 • Income – ticket sales: USD 467,459,448 • Local sponsors:USD 73,726,103 • Total income for SA: USD 541,185,551

  18. IMPACT • 350,000 visitors projected • 2,78 million tickets to be sold (18,500 visitors Cricket World Cup) • 40 billion viewers in 204 countries • Sectors of 2010 tourists • FIFA Exec, Congress Del., Staff (1,200)*VIP Guests • Commercial partners/b’casters *Foreign govts/officials • Participating teams (32 nations) *Media • Officials * • Spectators/Fans (350,000) *

  19. ECONOMIC IMPACT • Direct expenditure of R12,7 billion • R21,3 billion contribution to GDP • Will generate 129,000 jobs • Additional R5.7 billion to be paid in Government taxes • Spectator spend: R9,8 billion

  20. THE EVENT: MAJOR MARKETS

  21. CHALLENGES: TOURISM • 2,78 million tickets to be sold • 40 billion viewers in 204 countries • Sectors of 2010 visitors (2002 Korea-Japan): • FIFA Exec, Congress Del., Staff, VIP Guests 3,000 • Commercial affiliates & other rights holders 25,000 • Foreign governments & officials 1,000 • Participating teams (32 nations) 3,000 • Media 15,000 • Spectators/Fans 200,000 • TOTAL (2002): 247,000 • EXPECTED IN 2010: 350,000

  22. THE EVENT: FANS’ EXPECTED SPEND • Licensed merchandise • Transport • Meals • Accommodation • Entertainment • TOTAL EXPECTED SPECTATOR SPEND • R9.8 BILLION

  23. The Cities Johannesburg Pretoria Durban Bloemfontein Cape Town Port Elizabeth Polokwane Rustenburg Kimberly Nelspruit Orkney

  24. Technical and Socio-economic positioning, with cost of developing stadia and potential proposed matches R1,526m

  25. MATCH ALLOCATION Number of World Cup matches 64 Number of Venues (WC) 10 Number of Friendly matches 64 Training Venues ( 4 x 10) 40

  26. STADIA ALLOCATION RUGBY FOOTBALL KINGS PARK Soccer City Ellis Park Royal Bafokeng Nelson Mandela Polokwane Nelspruit Newlands Athlone Kimberley Free State

  27. TRAINING VENUES Rugby/ Cricket Football Wanderers Orlando Rand Marks Park Makhulong George Thabe Super Stadium (Atteridgeville) HM Pitje (Mamelodi) Caledonian

  28. TRAINING VENUES (CONT) Rustenburg Mafikeng Olympia Ethekwini Umlazi Princess Magogo Kings Park (Soccer) Univ KZN

  29. TRAINING VENUES (CONT) St George's Oval Telkom Adcock Wolfson Cape Town Vygies Kraal Langa Green Point Kimberley, Polokwane,Nelspruit and Orkney to be visited 10-14 October 2005

  30. VENUE Soccer City • NET CAPACITY 94,700 [PMG note: Stadium picture not include]

  31. VENUE Ellis Park • NET CAPACITY 60,000 [PMG note: Stadium picture not include]

  32. VENUE Rainbow Junction • NET CAPACITY 41,000 [PMG note: Stadium picture not include]

  33. VENUE Loftus • NET CAPACITY 45,093 [PMG note: Stadium picture not include]

  34. VENUE Peter Mokaba • NET CAPACITY 40,080 [PMG note: Stadium picture not include]

  35. VENUE Oppenheimer Stadium • NET CAPACITY 40,000 [PMG note: Stadium picture not include]

  36. VENUE Kimberly Stadium • NET CAPACITY 40,010 [PMG note: Stadium picture not include]

  37. VENUE Kings Park • NET CAPACITY 60,010 [PMG note: Stadium picture not include]

  38. VENUE Port Elizabeth Stadium • NET CAPACITY 49,500 [PMG note: Stadium picture not include]

  39. VENUE Mbombela Stadium • NET CAPACITY 40,000 [PMG note: Stadium picture not include]

  40. VENUE Newlands • NET CAPACITY 40,020 [PMG note: Stadium picture not include]

  41. VENUE Royal Bafokeng Sports Palace NET CAPACITY 40,010 [PMG note: Stadium picture not include]

  42. CHALLENGES • Accommodation • Transportation • Security • Hospitality • Information Technology • Broadcasting • Telecommunication

  43. BENEFITS (TANGIBLE) • Sport itself and global competitiveness • **360 Billion US Dollars • **Our objective: Secure a greater share of the global football economy • Economic considerations for SA • **R16,9 billion direct investment; At least 122, 800 jobs • **+ 350 000 visitors • Human resources and capacity-building • **Demands highly skilled organisers, professional individuals and world-class technology • Taxes R5,6 Billion

  44. BENEFITS (INTANGIBLE) • National unity • Pride • Promotion of country • Infrastructure attracts tourists / investors

  45. THANK YOU

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