2010 - Football business is booming

Football business is booming

Wednesday, 11 June 2008

There are myriad opportunities for businesses to become involved in the World Cup, and the City is actively pursuing public-private partnerships.

The JSE, Africa's largest stock exchange

WITH projects needed across the board to prepare for the largest sporting event on the planet, the investment and development opportunities in Joburg are almost endless - from large-scale infrastructure support to smaller entrepreneurial enterprises, from the hospitality industry to community upliftment.

And these opportunities are not bound to, or limited by, the 2010 FIFA World Cup™.

As a host city, Johannesburg is involved in a number of developments aimed at upgrading areas of the city in preparation for the World Cup - and beyond. As such, it encourages private-public partnerships, which it is determined to create in relation to several business opportunities it has identified, including in sectors such as:

Waste management, which would include waste removal, recycling and providing litter bins;
Environmental management, which would look at landscaping, and greening and beautifying the city, among other projects;
Health and safety management sectors, with partnerships in providing equipment and upgrading facilities, including mobile clinics;
Transportation, which would involve creating park and ride facilities, managing transport facilities, and so on;
Construction, one of the most obvious sectors for business opportunities with the precinct revamps under way, the upgrading of electricity networks, and the burgeoning need for various facilities; and
Information communications technology, looking at ways to keep communication channels open with the public.

It also has a range of comprehensive policies to encourage investment, including promoting investment; a single suppliers database to ensure all prospective suppliers of goods and services are afforded a "fair, transparent and equitable" process in applying for business opportunities; guidelines for SMMEs (small, medium and micro enterprises); requirements for black economic empowerment; and tax incentives for developments within designated areas such as the Urban Development Zone in Braamfontein and other areas.

Prospective entrepreneurs and businesses will benefit from taking advantage of the business opportunities. Joburg has lots to offer:

It is the commercial and economic capital of the continent;
It accounts for 16 percent of South Africa's gross domestic product, and accounts for 40 percent of the province's economic activity;
It is home to many multinational companies.
The headquarters of the mining sector are based in Johannesburg;
A range of manufacturing industries also operates in the city;
Many banking and commercial companies are also located in Johannesburg; and
It is home to Africa's largest stock exchange, the JSE.

In addition, leading up to the 2010 FIFA World Cup™, Johannesburg is the venue for the world’s largest soccer exhibition and convention – Soccerex – and is expected to gain handsomely from this.

“To us as the Gauteng government, this is not just about football; this is also about the economy,” says Paul Mashatile, the province’s MEC for finance and economic affairs.

Construction, one of the most obvious sectors for business opportunities

And businesses in the province - especially smaller companies - are being encouraged to venture into the soccer industry in the fields of merchandising, hospitality, media, manufacturing and contracting.

Opening Soccerex 2007, FIFA president Sepp Blatter said football had become so big that the game was no longer merely entertainment but a product on offer to more than one billion people around the world.

“The game of football has become a product – a very good product in marketing terms. Along the way big partners like the television and the market [spectators and business involved in football] have come on board, making football one of the most lucrative businesses in the world.”

He added that the beautiful game had also developed to such an extent that there were now about 260-million people directly involved in it.

Soccerex
Soccerex, which got off to a successful start in 2007, will be held in the city in until 2009. This year’s event, from 24 to 26 November at the Sandton Convention Centre, will be attended by football clubs from around the world, merchandisers, football sponsors and broadcasters, among others.

The event offers an ideal opportunity for decision makers in the business of football to learn more about the sport and, most importantly, to network and to do business with each other.

The soccer convention, which Blatter has described as the “must-attend” event in the football calendar, is expected to inject R7-billion into Gauteng’s economy and create thousands of jobs for locals in the hospitality, merchandising and manufacturing industries.

Football clubs and football associations in countries where the game is a popular sport have made billions every year, a trend that bodes well for local clubs. With the 20 richest clubs in the footballing world netting a record €3,73-billion in total revenues for the 2006/7 season, football is now one of the most lucrative sports in the world.

International football events like the World Cup have also contributed billions of dollars to host countries’ gross domestic product. In the last FIFA World Cup, in 2006, the host country, Germany, received a major financial injection of about R63,68-billion to its gross domestic product.

According to the official FIFA website, the 2006 FIFA World Cup Germany had a total cumulative television audience of 26,29 billion, representing billions of rands in television rights. South Africa is expected to exceed this number when it hosts the FIFA World Cup in 2010.

Several sponsors, like Coca-Cola, McDonald’s and Budweiser, have come on board, pumping in more than R1-billion into sponsoring the 2010 event. FIFA’s sponsorship deals have created opportunities for local companies like MTN and FNB to join in the fray, with millions of rands of sponsorship for the event.

The coming of the World Cup to South Africa in 2010 bodes well for business in the country. The hospitality and merchandising industry, media, manufacturing and contracting companies in host cities like Johannesburg are expected to gain tremendously from hosting the World Cup.

For example, the host city of Dortmund in Germany received an additional turnover in the retail industry of €35-million and additional spending on accommodation of approximately €6-million.

For the whole country, the tourism industry posted a 19,3 percent growth and the hospitality industry grew by 4 percent, representing a €300-million expansion. Retail businesses received a cash flow of over €2-billion during the World Cup and over 30 000 jobs were created in the construction, hotel and restaurant industry, retail business and service industries.

City of Joburg

Sid Clark / Samantha Govender
City of Johannesburg: 2010 Office

Bold vision

There’s no doubt about it - the 2010 FIFA World Cup™ is the greatest event to happen in Joburg’s 120-year history, except perhaps the discovery of gold, which got the ball rolling in the first place.

And the way the City of Johannesburg pulls off its part in the spectacular tournament will define the success of the entire event, in local and international minds.

Requirements
Joburg’s main emphasis is necessarily on meeting the FIFA requirements for stadiums, transport and supporting infrastructure, but the competition itself is only a month-long “interlude” in a major project to fast-track development that will change the face of Johannesburg forever.

It’s true that hosting the World Cup is a national event, and Joburg can only claim a part in its success. But any way you slice it, that part is pivotal.

Ceremonies
The opening ceremony and opening and final matches will be in Joburg; the headquarters of FIFA and the Local Organising Committee are in Joburg; it will house the International Broadcast Centre; and it will be the transport hub for the event. It has two World Cup stadiums, and is the base for overflow fans from at least four other venues.

Joburg 2010 aims “To host the best World Cup ever”. This is a bold vision. It means the City must surpass the high standards set by previous host cities, and combine it with the warmth, generosity and welcome of an African experience.

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