Durban - Durban’s Moses Mabhida Stadium suffered a record R34.6 million loss last year as the government’s World Cup subsidy ended, tenants closed their doors and the iconic “white elephant” failed to attract new events.
With depreciation, the deficit for 2012/2013 was more than R151m, compared with the R126m loss the previous financial year.
However, eThekwini Municipality, which took over management of the stadium six months ago, believes it will break free from ratepayer bailouts in just two years as its sweeping takeover plan – which includes opening a museum – hits top gear. And this is without The Sharks moving to the stadium.
Already the financials for the six months since the takeover show some profit, the city’s new management team told The Mercury at a meeting last week.
“We have been looking very critically at the stadium’s costs and pulled back in certain areas, but we have also seen that we can’t cut any more,” said newly appointed stadium manager, Gary Kimber.
The stadium’s increased deficit was largely due to the cessation of the national Treasury’s 2010 World Cup grant funding – paid annually over four years since 2009.
This amount contributed almost R15m to the stadium’s coffers in 2011/2012.
The stadium’s financial statement showed that rentals for “non-bowl” events decreased to R9.6m last year, down from R13.6m in 2012, when the Keg closed its doors.
Musa Gumede, one of two deputy city managers assigned to the stadium, said three main shops and three food outlets remained vacant, but that by mid-year a “tweaked” process, similar to that used at the beachfront, would be implemented to invite tenders for the space.
The biggest cost increase from 2012 to last year was refuse removal, which jumped from R565m to R934m. But Kimber explained this was because of more events being hosted. By taking over the stadium, the city had saved more than R4.5m in management fees.
“We are eating away at the deficit,” Kimber said.
Like Durban, the City of Cape Town will also take over the management of its World Cup stadium, in an attempt to cut down its R51m deficit for this financial year.
Moses Mabhida’s operational costs, including maintenance, increased by about R11m last year to R88.5m. As it’s still new, no major maintenance has been needed
“Obviously this will change in the coming years. Tenders will be required for big jobs and those will appear as separate budget items on our financials,” Kimber said.
But the main task is to attract events. The first major one for the year is the internationally acclaimed Nitro Circus, a festival of dirt bikes and stunts, later this month.
The city is also looking at targeting specific events and “dabbling” in a few things.
“We need to be brave,” Kimber said. “We are planning a lot of things, including getting involved in other sports. We are also working with the Comrades Marathon Association to see if we can get the marathon to finish at the stadium.”
Gumede said he wanted something “iconic” to be held annually at the stadium.
Although AmaZulu Football Club use the stadium for training and the majority of their home matches, spokesman Philani Mabaso said it did not pay the city for use.
Gumede defended this, saying the city wanted to invest in AmaZulu in the interest of the people of Durban.
Grant Medcalf, the stadium’s commercial manager, said the vision for AmaZulu was to help grow the brand and public support.
Echoing the stance of former city manager Michael Sutcliffe, Gumede and his management team emphasised that the purpose of the city’s entities, including the ICC, uShaka and the stadium, was not to generate profit.
“Yes, they have to be sustainable, but they also need to benefit the city, which it is doing by bringing people to the precinct… I think that at the end of two years we will be fine, we will break even.”