Why the 2010 FIFA World Cup matters so much

CAPE TOWN, South Africa - It will take some time for most of us to wrap our heads around this, but the 2010 FIFA World Cup -- which wrapped last night in Johannesburg with Spain's 1-0 championship win over the Netherlands -- is the most important modern-era global sports event the world has ever witnessed.

Never has a sports event meant as much, either to a host nation domestically, the hosting continent or to the world around it.

I'm not talking about sport business basics such as ticket sales, which saw more than three million spectators take in the 64 matches at 10 venues around South Africa. It's not about revenue generation, which saw FIFA sell a record $3.3 B US in sponsorships, television and other commercial rights on the strength of the tournament. And it's also not about television grandeur, despite the more than 700 million -- or the equivalent of between four and five Super Bowl audiences -- who would have watched Fernando Torres and Cesc Fabregas set up Andres Iniesta with the winning marker in extra time or the multiple billions in aggregate audiences the month-long event drew in 215 countries.

I'm talking about sheer economic, political and social significance to South Africa and the rest of the world.

Since winning the rights to host the 2010 FIFA World Cup in 2004, South Africa invested more than 39 billion rand or $5.3 billion in stadia and transportation infrastructure, including upgrades to highways, airports and transit systems. The stadium projects alone generated 66,000 jobs. What South Africa now has in terms of Planes, Trains and Automobiles -- or better still, planes, trains and buses -- is a far cry forward from what it had a half-decade ago.

And you simply cannot build an open country or modern economy without them.

The total direct spend on the World Cup hosting will come in at R55 B or almost $8 B. According to Grant Thornton Strategic Solutions, that will mean a contribution of close to R93 B or $13 B to South Africa's Gross Domestic Product. Most analysts believe the World Cup has accounted for almost half of the country's GDP this year and over the past couple of years as the ramp-up to the event gained steam.

With estimates of more than 400,000 tourists visiting South Africa for the World Cup alone -- and twice that overall -- the impact on tourism in South Africa in particular and Africa in general will be felt for years to come. That kind of public relations, in turn, will improve the media negativity the country has endured for decades.

And that is what makes the 2010 FIFA World Cup such a bellweather among global sports events. It is by no means an instant fix for South Africa nor an elixir for the country's complex economic, political and social problems. What it is, however, is a tremendous opportunity for the country -- and the continent -- to improve its lot on the world stage. It provides a marketing platform like never before to attract the kind of foreign investment -- from Europe and North America as well as existing partners in China and India -- that creates employment and stimulates development.

It will take a decade -- or perhaps a generation -- but that investment will lead to new jobs and those new jobs will lead to better lives for millions of South Africans.

It's that differential impact which makes the 2010 World Cup a more significant event than even the 2008 Beijing Olympic Games, which were a powerful global showcase for the People's Republic of China. The difference is that China's emergence was already happening and its economic growth was coming anyway.

I'm not so sure the same can be said for a South Africa that is only 16 years removed from apartheid. It is a country that "was not even part of the world less than two decades ago", as a South African here reminded me over the weekend. At so many levels -- public relations, tourism, investment and national, even continental, unity -- the World Cup has changed that forever.

As South Africa in particular and Africa in general gain traction with meaningful investment and development in the decades to come -- and the benefits of hosting the 2010 FIFA World Cup go beyond businesses in the major cities and trickle down from the small percentage of South Africans who saw immediate economic impact -- remember what opened the country and the continent to the world.

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South Africa 2010 and Vancouver 2010: Similar pre-event lead-ins, divergent post-event legacies

JOHANNESBURG, South Africa - Beginning with the familiar slogan used by some of the official corporate partners of the 2010 FIFA World Cup -- as in the welcome display used by First National Bank (FNB) at Tambo International Airport -- there are many common storylines between South Africa 2010 and Vancouver 2010, global sports events held four months apart after close to a decade of bidding and development.

At first glance, the South Africa World Cup and the Vancouver 2010 Olympic and Paralympic Winter Games are similarly-sized ventures, at least in terms of operating budgets. Vancouver 2010's operating budget stands at around $1.8 billion. When you add the South Africa local organizing committee's budget of $532 million to FIFA's tournament budget of $1.2 billion, you're pretty close at $1.7 B and change.

They're both huge ticketing machines of similar magnitude, at least when pro-rated. Vancouver 2010 sold about 1.5 million tickets over a two-week Olympic period of events and the month-long South Africa 2010 tournament has surpassed three million spectators at 10 soccer venues with an average capacity of 48,500.

Most important, they're both similarly associated with more than $5 billion in venues and infrastructure.
 
In the case of South Africa, hosting the 2010 FIFA World Cup involved construction or renovation of the 10 stadiums, about half of which were built from scratch. That generated 66,000 construction jobs according to the South African government. Also required were significant airport renewal and expansion (especially in Cape Town, Durban and here in Johannesburg) and massive transportation upgrades, including highways and rail.
 
Sound familiar? Vancouver 2010 saw the provincial and federal governments partner on about $600 M of Olympic venues; including the Richmond Oval, Hillcrest Curling Centre, UBC Thunderbird Arena, Whistler Sliding Centre and upgrades to the Pacific Coliseum and what is now Rogers Arena. In terms of infrastructure, Vancouver 2010 helped generate construction of the Canada Line, Sea-to-Sky Highway upgrades and the new Vancouver Convention Centre.   
 
The largely comparable storylines don't end with the economic costs themselves. In the lead-up to both events, critics and doomsayers dominated the news coverage and spin. Skeptics in both countries questioned why monies were being spent on sports toys instead of providing for the homeless, hungry and ill. There was considerable angst over venue construction in both countries, with shared concern over timelines, costs and overruns.
 
In both cases, the years of severe anxiety and negativity turned into palpable pride and positivity by the time both events were a week old.

Of course, we all know both Vancouver 2010's venues and South Africa 2010's stadiums cost much more than originally forecast and both required additional government support to get the jobs done (the full measure of which is still being tallied by the BC government, especially in what it spent off-line). 

Despite all of the similarities, there are differences and the biggest is in what the countries got for their money. While the spend was indeed similar, the return on investment is clearly higher in South Africa than it was in Vancouver.

South Africa 2010's $5 B in venues and infrastructure went a lot further than Vancouver 2010's $5 B. The stadium legacies alone are awe-inspiring and would make any fully-developed country in Europe, Asia and North America proud, including Canada. That, of course, has everything to do with access to and cost of labour in South Africa.
 
Arguably the most glaring difference between the World Cup and the Winter Olympics is the return on monies spent on security. The federal government of Canada rented close to $1 B worth of it at Vancouver 2010. South Africa, meanwhile, invested in the creation of 44,000 new police jobs. They'll stay in place permanently and, according to many South Africans, will serve as the most important legacy of the 2010 FIFA World Cup.
 
The ROI advantage to South Africa on venues, infrastructure and security will also likely be joined by a big differential in long-term tourism impact. The impact of Vancouver 2010 on tourism in Vancouver, British Columbia and Canada simply cannot be compared to the impact of the World Cup on tourism for South Africa.
 
In the case of Vancouver, it was already playing from a position of strength as a popular Pacific Gateway city which hosted the world's fair in Expo 86. In the case of South Africa, it was truly a coming out party and hence a much bigger deal in terms of what it means for the country over the next generation.
 
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World Cup tournament structure is the key to its marketing, television and media clout

DURBAN, South Africa - With the final weekend of the 2010 FIFA World Cup now set with three days of lead-in hype having begun moments after Spain's 1-0 semifinal win over Germany here last night, it speaks to how the very structure of the tournament is among its greatest strengths.

Giving pace and flow to a month-long event is not an easy thing to do but that's exactly what the scheduling formula installed for 32 teams in 1998 does.

The first-round or Group stage allows the 32 qualifying nations three matches to prove their place among the top 16 teams in the world. Luck of the draw is the wild card of course and round-robin play theoretically tends to promote the good teams but as this year's World Cup has shown, it can also work as a great equalizer (single knockout would of course be a non-starter after two years of qualifying).

What the Group stage does is give the national soccer federations of the 32 countries involved their two-week payoff of massive television and media exposure for soccer. It also sets the stage for the storylines to come in the final two weeks.

The third week -- actually typically nine days -- spans two weekends and gives us the Round of 16 and quarter-finals. In that tight span, the media and fan focus narrows from the 32 countries of the Group stage to 16 to eight to four.

The fourth and final week is where it all comes together, of course, making the quarter-final round the big cut off. What makes losing in the quarter-finals such a bitter pill to swallow is how big a difference there is there between winning and losing. Losers go home. Winners advance to the final four, are guaranteed two matches and bask in the global media attention of the climax of the quadrennial tournament.

There's nothing like being World Cup champion; the winner truly gets the spoils. But there's also a sense of tidiness that comes from the ranking of #1 through #4 at the top of the chart of 32 qualifying nations.

It's the perfect Saturday-Sunday one-two punch ending to the world's greatest single sport event and it's part of what helps make it the television, media and marketing juggernaut it is.

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