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Cape Town - South Africa’s 2023 bid promises World Rugby a financial net return that would be unprecedented in the tournament’s history.
World Rugby would win big financially and this commercial reality will be primary to influencing the General Council vote on November 15.
But why should South Africans want the World Cup to be in South Africa?
There is an obvious case to be made that pulls at all the heartstrings. South Africa last hosted the World Cup in 1995 and there is an emotional sell that it is Africa’s time, especially with Africa being the biggest growth area of the sport.
Emotion aside, the Grant Thornton economic impact assessment also makes a compelling case for every South African to understand the motivation in bidding, and also support the tournament being in South Africa.
Hosting the Rugby World Cup in 2023 will bring South Africa R27.3 billion in direct, indirect and induced economic impact. It will also sustain 38 600 annual job equivalents - some temporary and some will be permanent.
SA Rugby, as part of the bid process, commissioned the Grant Thornton assessment, and the report was independently verified for the South African Government to financially underwriting the tournament guarantee of £120 million.
The detail of the report and South Africa’s overall bid offering meant that the government could commit to £160 million, which is more than France’s £150 million and Ireland’s £120 million official bid tournament guarantees.
The South African Government would not have financially endorsed the necessary guarantees if the data indicated that hosting 2023 would in any way be a financial risk to South Africa or an economic liability.
It is quite the opposite, and estimates are that the Rugby World Cup 2023 will generate R11 billion in direct spend in South Africa and R1.4 billion in tax revenue. Low-income households will also benefit by an amount of R5.7 billion.
It was extensively reported in the media that the Grant Thornton team carried out numerous interviews and surveys to determine the costs of hosting the tournament. Other data that was scrutinised included economic impact studies from previous Rugby World Cup events, rugby tournaments and internationals held in South Africa, as well as other large sports events hosted here in the past.
The results are expressed as direct, indirect and induced impact. For example, direct impact will be the amount that a guest pays for a hotel room. Indirect impact is what the hotel spends buying food for guests during the tournament, while induced impact will be the amounts that the hotel’s employees spend in local shops as a result of their employment with the hotel.
South Africa will benefit and an important consideration is that the economic impact will be shared across the seven host cities, although Johannesburg will profit more than the other cities because it will host more matches, including the opening match and the final. Johannesburg will benefit by an amount of R10 billion with 14 102 jobs created or sustained. The contribution to Cape Town’s GDP will be R5.2 billion with 7 304 jobs.
The economic impact for the remaining six host cities are: Durban - R4.5 billion and 6 404 jobs; Tshwane - R2.5 billion and 3 491 jobs; Bloemfontein - R1.4 billion and 2 022 jobs; Nelson Mandela Bay - R1.4 billion and 1 996 jobs and; Mbombela - R1.4 billion and 1 964 jobs.
South Africa’s international profile and the increased tourism before and after the tournament are among the other tangibles of a successful bid.
The Grant Thornton bid also stresses the importance, in cost consideration, that no additional stadia needs to be built. The stadia legacy of the 2010 Soccer World Cup in South Africa means all the stadia infrastructure is in place for South Africa to already host the World Cup.
