Much hype has been made about the imminent visit from 19-time English Premier League Champions, Manchester United. But, the City of Cape is expected to make a R3,7 million loss for hosting the event at the Cape Town Stadium. The city’s mayoral committee member for tourism, Grant Pascoe, argues that, despite the loss, hosting the match is part of the City’s drive to market itself as an “events destination”.

The City of Cape Town says it expects to spend R2,6 million hosting next month’s friendly between Manchester United and Ajax Cape Town, as part of the MTN Football Invitational – but will expect a return of just over R2 million.

The City will also pay Primedia Sport R3,5 million for organising the event.

The committee said that the R2 018 500 to be generated from hosting the match would compensate it for its R2,6 million outlay.

The City said it expects to make a loss of R247 330 from hosting the match at the multibillion-rand Cape Town Stadium on July 21.

But, if one does the math correctly, when the payment of R3,5 million is considered, the City’s loss will actually add up to R3 747 330.

Pascoe explained that the Primedia payment was for the rights to host Manchester United, and that considering that United had the largest number of supporters in the world, bringing the club here would have huge tourism spin-offs for the City as a result.

A Cape Times report detailed the finer logistics of the expenditure:

Primedia approached the City last month, to host the match between the world’s most popular soccer club and the Urban Warriors. The hosting of the match is part of the City’s strategy to grow the football culture in the Cape Metropole.

During the negotiations with Primedia, the City agreed that it will enter into a partnership with Primedia for the event and will pay the events company R3,5 million with VAT, where applicable.

According to the agreement, the stadium will cover direct event costs such as cleaning, static events security, standby technical staff and the use of big screens and IPTV in the stadium free of charge. The stadium costs will amount to R1 175 767.

The City will cover the costs of its services such as traffic (R114 035), law enforcement (R35 087), metro police (R35 087), fire services (17 534), disaster risk management (R17 534), utility services outside the stadium (R75 000), transport plan (R433 400), setting up of a fan walk and entertainment (R150 000), emergency medical services (R175 000) and one-night accommodation for 110 members of the United squad and club officials at discounted rates (R212 386).

The City will spend R200 000 co-marketing the soccer spectacle. Primedia will be responsible for private security in the stadium.

While the city holds the rights to the hospitality suites, it will relinquish it to Primedia and will share the generated revenue as follows:

• The City will receive 15 per cent of profit on ticket sales;

• The City will receive 100 per cent of profit on food and beverage;

• Three suites will be made available to the City and;

• Primedia will receive all hospitality profits.

An open training session will also be held at the stadium, and 10 000 tickets will be on sale for that.

However, the committee decided that it would only determine the revenue split between Primedia and the City for it once the total cost for the session had been finalised.

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[Source: IOL]