Sport Industry Group

09 Jul 2012

It’s not unusual to see a decrease in stadium activity post a world cup, but CEO of Stadium Management South Africa, Jacques Grobbelaar, explains why some of the country’s stadiums are flourishing, whilst others are failing.

Stadium Management South Africa (SMSA) manages and promotes four of South Africa’s stadiums, namely the Soccer City Complex, FNB Stadium; Orlando Stadium; Rand Stadium and VW Dobsonville Stadium. These stadiums are not costing the taxpayer a cent as it is privately funded in this private-public partnership. At SMSA we had a view that the World Cup was just another event and having met with architects, consultants and construction companies we ensured that our stadiums and business plans would have longevity. There are, however, several stadiums in the country facing challenges. 

Cape Town Stadium recently made the headlines after Cosatu [Congress of South African Trade Unions] dubbed the stadium “a white elephant that should either be demolished altogether or be transformed into flats”. In my opinion, it isn’t sustainable for Cape Town Stadium to operate without a resident rugby tenant or team, therefore reports of the City’s intention to finalise plans with the Western Province Rugby Union (WPRU) would indeed be welcomed as it should then result in the stadium operating as a profitable outfit. In spite of the stadium’s failure to host regular events and matches, the Cape community is extremely fond of its stadium and it is in all of our interests for it to be better utilised. However, the stadium poses certain structural challenges such as being too small to host cricket matches as well as containing a significantly smaller amount of suites than that of Newlands Rugby Ground – thus making it impossible to simply transfer matches from one stadium to the other. 

Moses Mabhida has faced its fair share of criticism, as has Mbombela Stadium for failing to secure sporting events or sign contractual agreements with local rugby or football clubs. The former has faced the wrath of Durban ratepayers who continue to criticize government for allowing architectural guidelines to be approved on a stadium that is in essence not a “multi-purpose” venue. For all its beauty, the Moses Mabhida Stadium has not been embraced by locals, who are still of the firm belief that Mr Price Kings Park should have been revamped to FIFA specifications. In an ideal world, the Sharks, LOC and Council would have engaged with each other, worked together and shared ideas, information and needs for legacy purposes. 

As we now know that didn’t happen. However I believe that revamping would have been a more costly exercise than building a new stadium. In fact, that was precisely the reason five of this country’s stadiums were revamped and five were built from scratch. Personally, I believe that Moses Mabhida Stadium would need to undergo a structural re-design if it is to host any events other than football. In 2008 SMSA underwent sustainability and legacy studies on all four of our stadiums. 

Moses Mabhida Stadium should have mirrored Kings Park in terms of the number of suites, because a building that can’t accommodate your biggest revenue generator is a venue that won’t flourish. Cape Town Stadium also has a shortage of suites, which makes the rugby unions reluctant to move some of their games to a stadium that can’t accommodate all its suite owners. In fact, this was the biggest problem SMSA faced when it was decided to bring the Vodacom Bulls to Orlando Stadium for two Super 14 matches. 

Generally, there is a misconception about the funding models for stadiums in our country with regards to government, taxpayers and FIFA’s contributions. Each stadium in the various cities was funded differently but the common denominator is that the National Treasury would have funded up to as much as 66% and the rest would have been contributed by the Provincial Government and Cities. For instance, Soccer City Complex, FNB Stadium received 43% funding by the City of Johannesburg and the National Treasury funded the remainder. Stadium Management SA (SMSA) receives no funding either in the form of a monthly or annual grant from national or local government whatsoever, which means that the four stadiums under our management are not paid for or run by taxpayers’ money. FIFA did not contribute financially towards the building or revamping of stadiums. They did however, build and later donate SAFA House. 

Irrespective of the number of events you host monthly, your fixed operating expenses remain the same.  Soccer City Complex, FNB Stadium is home to Kaizer Chiefs, while VW Dobsonville Stadium is home to Moroka Swallows and Orlando Stadium will continue to host double treble winners Orlando Pirates. Having a home team increases the commercial value of the stadium due to guaranteed matches and activities to be held at the stadium for the season. Not having resident teams is another problem that several of this country’s stadiums find themselves in.

When it comes to Rand Stadium, we are undergoing a change in business plan with the view of making it home to a high performance soccer training venue as well as home to other exciting sporting codes such as boxing and extreme motor-biking. It is not our objective to have a resident PSL team at Rand Stadium. 

In my opinion this country is made up of some of the most passionate sports lovers in the world. Coupled with that are savvy and experienced business experts, world-class construction companies and dedicated stadium staff. There is absolutely no excuse to having made and continue to make the errors that we are when it comes to the spectacular stadiums that we have created. It’s time we all cleaned up our act and provided facilities that our Rainbow Nation deserves.

Stadium management will be one of several topics discussed in depth at the inaugural Sport Industry Summit in Johannesburg on October 25th, and Grobbelaar said of the event: ‘An exchange of theories, experiences and approaches with local and international industry colleagues will be hugely beneficial particularly as we strive to ensure that all stadiums in our country remain profitable. 

The Summit will give us a unique opportunity to interact with the world influencers in sport and business and I have no doubt that this will help us implement strategies in line with our vision for sport in South Africa.’