JG (2009) Media statement by President JG Zuma following the report back by the leadership group of the framework response to the economic crisis, Presidential Guesthouse, Pretoria, 3 December 2009. Downloaded from www.gov.za in January 2010.
CHAPTER 3
The economic impact of South Africa’s 2010 World Cup: Ex ante ambitions and possible ex post realities
Scarlett Cornelissen
The significance of South Africa’s hosting of the nineteenth Fédération Internationale de Football Association (FIFA) World Cup in mid-2010 extended far beyond the fact that it would be the first time that this mega-event would be hosted on the African continent. It was rather that the World Cup, because of its size and the capital investments that were required to host it, held a number of long-term implications for economic and social development in South Africa. Over the years many expectations had been raised by the country’s leaders of the event’s effects on employment and growth; concomitantly, extensive financial commitments had already been made by public authorities. The central question is therefore how such investments and the infrastructural developments that were undertaken for the World Cup were consonant with broader economic processes in the country, and what the legacies of the tournament would be for South Africa’s political economy. What lessons, in this regard, could be taken from similar sport mega-events hosted in other locations? This chapter evaluates the ex ante projections and potential ex post impacts of the tournament against the practices, experiences and principles derived from the study of sport mega-events in other parts of the world. It reviews the main economic and sectoral changes that have been made in recent years for the hosting of the World Cup and considers what some of their long-term economic legacies – and their related socio-political fall-outs – may be.
The first part of the chapter is conceptual in nature. It contextualises both the nature and the economic dimensions of sport mega-events in the contemporary era and reviews the varied legacies – infrastructural, economic and sectoral – of such events. It gives an overview of the various scholarly perspectives on the measurement of impact and considers some of the methodological and other drawbacks in established impact assessment practice. The second part of the chapter reviews the projections that have been made about the 2010 World Cup’s likely impacts and the macroeconomic, infrastructural and sectoral investments which were undertaken. A concluding section considers some of the principal prospects and challenges that the World Cup posed for South Africa.
SPORT MEGA-EVENTS AND THEIR LEGACIES
The FIFA World Cup is an archetypal first-order mega-event: that is, it is a large-scale and prestigious sports competition among elite athletes held on a regular and rotational basis in different locations across the world. Sport mega-events are marked by the high levels of interest they evoke internationally; the resultant high levels of spectatorship they draw; and the volumes of corporate investments – and revenues – that they can command. In terms of revenue, the FIFA World Cup is the largest sport mega-event, closely matched by the Olympic Games. The World Cup differs from the Olympics in that it is a multi-site (or multi-city) tournament. Both are however global media festivals with major economic importance for sport and nonsport stakeholders. The 2004 Summer Games in Athens drew an estimated television audience of 3.9bn viewers and a cumulative audience of 40bn (Horne 2008). The 2006 FIFA World Cup hosted by Germany, by contrast, had a cumulative television audience of 26.3bn (FIFA 2006). As an indication of the extended ‘mediatising’ of sport mega-events in recent years, the sale of global television rights for the 2006 FIFA World Cup generated US$1.97bn in revenue for FIFA, six times the value of television receipts for the World Cups hosted in the 1990s (Horne 2008). Television sales for the 2010 World Cup were worth just over US$2bn, causing it to be the most profitable tournament thus far for the FIFA federation.
It is not only the commercial scope, but also the size of sport mega-events that has grown over the years. Seven new sports were added to the Summer Olympics, for instance, between 1980 and 2000, so that the programme of the Games today consists of twenty-eight different sports.1 A decade ago the number of national teams participating in the FIFA finals was expanded from twenty-four to thirty-two, extending not only the geographical representation but also international interest in, and the reach of, the tournament. The programme and format of the FIFA tournament was concomitantly broadened, so that since 2002 sixty-four matches are played over a four-week period.
Sport mega-events are defined by their scale and the opportunities they present to hosts and corporate sponsors for profiling and promotion. There has been growing enthusiasm over the past number of decades to host such events – which has much to do with the desire by public (particularly urban) authorities to catalyse local regeneration through the expansion of service-led consumer-based industries. It is notable therefore that many of the recent hosts of the Olympic Games (such as Barcelona, Atlanta, Sydney and Athens) and the smaller-order Commonwealth Games (in particular Manchester and Melbourne) have aligned their hosting of the event with other infrastructural and sectoral developments aimed at stimulating, variably, local culture industries, sports tourism economies or local business (also see Euchner 1999; Harvey 1989). Strategies toward re-imaging or re-branding are generally a key part of cities’ mega-event campaigns (see A Smith 2005 and Smith & Fox 2007).
It is worth noting that the ambition to use mega-events to rejuvenate urban economies is also common to hosts from the developing world. Cape Town’s bid for the 2004 Olympic Games, for instance, intended to use the city’s staging of the event as a platform to stimulate development across the city, to help foster physical integration by means of new transportation and other infrastructure linkages, and to boost foreign and domestic tourism (see Swart and Bob 2004). Kuala Lumpur, host to the 1998 Commonwealth Games, sought to use its staging of the event inter alia to advance the diffusion of technology in the city (Dobson and Sinnamon 2001). However, there are some significant differences in the motives for holding a mega-event between aspiring hosts from the developing world, and those from the developed world, that can influence how they view and design events. In the cases of the 2008 Beijing and 1988 Seoul Olympics, for example, the Games were as much aimed at displaying the host city’s features to the outside world as they were intended to demonstrate national achievements. To a significant extent the Beijing 2008 Games were designed to represent ‘the shop window for a Chinese economy that is experiencing record growth rates and one that seeks international recognition for its relatively recent re-entry into the world economic system’ (Poynter 2006: 6). While an important concern for the Chinese authorities, boosting Beijing’s local economy was not the prime motivation for their staging of the Games (also see Brownell 2008). The city nonetheless benefited by new and upgraded infrastructure, most prominently the newly built Olympic stadium, the refurbished international airport and the new rapid rail connection to the neighbouring city of Tianjin.
In general, therefore, hosts from the developing world seek to use mega-events to stimulate local economic development (mostly coupled with wider national objectives which could range from boosting macroeconomic growth to providing dynamism to national tourism economies) or to achieve greater exposure for the nation-state and its foreign policy (also see Black 2008). Host cities from the developing world also differ from their counterparts in the developed world in that they aim for widespread development, rather than targeted regeneration of specific,