The most expensive entertainment on the planet

Mbombela Stadium in Nelspruit, South Africa. Host to four FIFA World Cup matches.

We’ve spoken recently about what an expensive party the FIFA World Cup is.  Contrary to many erroneous ‘studies’, the event is not an economic benefit but a net cost to the economy and a drag on prosperity.  It is enough of a fraud already when the likes of Grant Thornton along with government claim the tournament will boost GDP growth and aid in much needed economic development, but it really gets bad when government tries to move the competition into the more provincial areas to achieve a short cut to rural or small town development. 

And so it happens that the far-flung Nelspruit and Polokwane will be host cities…ah, ok, host villages, during the FIFA 2010 World Cup. 

Here are some quick numbers: 

Together the Mbombela stadium in Nelspruit and the Peter Mokaba stadium in Polokwane cost R1.4 billion.  A total of 8 matches will be played at these stadiums (4 at each). Australia v Serbia, Italy v New Zealand, Korea DPR v Cote d’Ivoire, and Honduras v Chile in Nelspruit (horribly low-profile matches), and in Polokwane France v Mexico, Greece v Argentina, Algeria v Slovenia, and Paraguay v New Zealand (a marginally better offering). 

So that’s 8 matches of 90 minutes each, or a total of 720 minutes of football, for R1.4 billion. 

That’s just under R2 million per minute of on-field action. 

Given the low profile nature of most of the matches at these stadiums getting anywhere near filling them will be a tall order.  Expect lots of free or near-free tickets to be given away to locals closer to the time.  Banking on an average of 20,000 paying spectators per match (maybe optimistic but possible in the 40,000 seaters) forking out on average about R250 per ticket leaves SA Inc. about 97% short of covering pure infrastructure expenditures, let alone the additional running costs of the stadiums during the match events. 

Many will argue that this is a simplistic view because the stadiums will be used over and over again in the future.  Well, of course they will, their municipal owners, or any private consortiums courageous enough to buy the ‘assets’ off municipal hands, will sweat blood to find enough events to make any smattering of a return on investment.  Alas, the South African hinterland is not exactly a Mecca for packed-to-the-rafters U2 stadium concerts and there’s only so many international football fixtures you can hold at these stadiums before the other 47.5 million South African’s feel a little left out. 

Meanwhile the running costs will keep mounting year in year out.  Staff, ground staff, maintenance, management etc. 

It has become regarded as almost unpatriotic to criticise the preparations for the World Cup.  But in this case, blind optimism and more than a sprinkling of Keynesian nonsense is the enemy of economic wisdom in what, we cannot forget, is still a very poor country.  I’m excited about the FIFA 2010 World Cup, but the level of wastage has been sad.  Add to the sorry tales above a R400 million dud in Rustenburg and a totally superfluous (albeit beautiful) R3.5 billion stadium in Durban. 

Durban has the perfectly adequate Kings Park a chip ‘n a put away from the newly constructed architectural eye-candy that is Moses Mabhida.  At a tiny fraction of the cost Kings Park could have been turned from a 55,000 seater into a 70,000 seater by barely breaking a sweat.  Instead SA Inc. paid R3,500 million for 650 minutes of World Cup fiesta. 

That’s about R5.5 million per minute.  Now that’s what I call expensive entertainment. 

Those penalty shoot-outs better be good.