Sunday, October 01, 2006

1 Billion Problems for South Africa is reporting that the South African government is facing a $1 Billion dollar bill for the refit of 5 stadiums and the building of 5 totally new stadiums.

"The cost is over three and half times higher than the 2.3 billion rand estimate made in 2004 when the country won its bid to become the first African host of the World Cup tournament." -

This is just one more nail in the coffin that is going to bury the South African World Cup, as well as possible future World Cups in any Developing country in the future. FIFA, through its new rules and regulations regarding pitch size, security concerns, stadium size and seating requirements; are creating untenable situations for countries that do not have the fiscal infrastructure to compete with any developed nations. One can just look at the situation with Brasil. Brasilian President Luiz Inacio Lula da Silva said that Brasil needs to build 12 new stadiums in order to meet the requirements to qualify for a FIFA World Cup host.

The constructions of 5 new stadiums, and the refit of 5 stadiums is going to cost South Africa just over $1 Billion dollars, how is Brasil going to cover the construction of 12 new stadiums? According to the CIA World Factbook, Brasil has a Per Capita GDP of only $8,400 Per Person. If the government is going to provide the full backing for the required 12 new stadiums, how are they going to build these? Granted, we are talking about these prices in 2006 prices. If these stadiums must be completed by 2014, how much will these new stadiums cost? Will Brasil be able to afford them?

Regardless of what FIFA has said about wanting to share the greatest soccer tournament with the rest of the world, I really do not see FIFA awarding any future tournaments to developing nations. FIFA has South Africa slated for 2010, and claim that South America will get the 2014 tournament. After the 2014 tournament, the rotation will stop and FIFA will use a new method of deciding the hosts. By altering the rules surrounding the stadium requirements, FIFA is effectively cutting out the number of countries that will be able to host the World Cup. You will get the North American countries (USA, Canada, and maybe Mexico), most Western European nations, some Eastern European nations, Japan, Korea, Australia, New Zealand, and maybe China. I say maybe China because the Chinese Communist government would just push through the stadium construction costs without having that much of a problem.

FIFA is most likely doing this to ensure that they get more World Cup tournaments like the ones in Germany, France, Italy, and the USA. The tournament that was held in Japan and Korea had lower numbers of traveling fans as well as massive amounts of ticket problems and empty seats. The tournaments in Europe proved FIFA with the greatest amount of fan participation, as 3 million people traveling to Germany this last summer proved. Having more people show up and pay money for the fan events, matches, and buy their merchandise only gives FIFA a better chance to get more money from their sponsors and for TV rights. Having the tournaments these nations makes for better selling pitches to McDonald's, Microsoft, Coca-Cola, Yahoo and more. Also having the tournaments take place in countries that have the ability to play the matches at times that allow for optimal TV viewing timeslots in the countries that provide the highest TV buyrates, namely Western Europe and maybe the United States.

FIFA is laying the groundwork now for higher revenues and higher sponsorship rates in the future. Money, money, money.


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