Chris Moerdyk

Extravagance or good investment?

2010-06-14 07:22

If, in five weeks time, the international media decides that Africa's first World Cup was a success and assuming for the moment that in the next 10 years, greedy politicians, angry unemployed youth and self-centred unionists don't completely wreck this country, there is a more than fair chance that the R47bn we spent hosting the event will turn out to be a pretty good investment.

Just take some simple sums. In spite of FIFA talking about a "cumulative TV audience" of 28 billion viewers, let's look at a far more realistic figure of eight billion.

This translates into 125 million people all over the world watching each of the 64 games, according to Fortune Magazine.

During the broadcast of each match FIFA has demanded 14 minutes of airtime from all the official broadcasters worldwide. Assuming conservatively, that only two minutes of this airtime is used, as FIFA has promised, to promote South Africa as a tourist and investment destination, the value of this "free advertising" comes to about R450m. Add to that all the newspaper and magazine articles, radio commentaries and shows, the opening and closing ceremonies as well as all the top players using Twitter to talk to their millions of fans and the total amount of free advertising South Africa will get, will be almost R1bn.

Now usually, with that kind of advertising one can expect to entice at least four or five percent of your target market to buy your product or service.

But, let's assume we only manage to get a measly one percent of those 125 million TV viewers (who are the same people who read the papers, listen to the radio and follow Twitter) to fall for the advertising and decide to come on holiday here in the next five years that's well over a million new visitors to this country. Conservatively, let's say all spend an average of R20 000 each, that's R25bn we've got back already.

Now, assume that only half of them bother to tell their friends about their trip to SA and that only five per cent of those friends decide to come here on holiday, that's another R6bn in the kitty. So far we'd have got back R31bn of the R47bn investment in World Cup 2010.

Given that these figures are all hugely conservative it is arguable that in the next ten years we could possible get all of that R47bn back and more just from additional tourism alone.

On the assumption that everything goes off well it is entirely probable that some of the really big business tycoons who have come out for the World Cup or who will watch it on TV, will think about investing here.

So, there we go. Maybe it’s not all money wasted on extravagant self-indulgence. Maybe it will be a good investment. I say maybe because it all depends on everything going well over the next five weeks and even more so on those greedy self-centred politicians, unionists and angry unemployed youth not ruining this country completely.

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