The City of Cape Town says it expects to spend R2.6 million hosting next month’s friendly between Manchester United and Ajax Cape Town – but will expect a return of just over R2m.
According to a report tabled at Tiesday’s mayco meeting, the city will also pay Primedia Sport R3.5m for organising the event.
The committee resolved that the expected income of R2 018 500 to be generated from hosting the match would compensate the city for its R2.6m expenditure.
The city said it expects to make a loss of R247 330 from hosting the MTN Football Invitational match at the multibillion-rand Cape Town Stadium on July 21.
However, when the payment of R3.5m is considered the city’s loss will add up to R3 747 330.
When asked about this bigger loss, Grant Pascoe, the city’s mayco member for tourism, events and marketing, said the R3.5m payment to Primedia was for rights to host Manchester United.
Pascoe said that considering that United had the largest number of supporters in the world, bringing the club here would have huge tourism spin-offs for the city.
He said hosting the match was part of the city’s drive to market itself as an “events destination”.
The committee also decided that the city’s executive director for tourism, events and marketing would determine the revenue split between Primedia and the city for the open training session to be held at the stadium, once the total cost for the session has been finalised.
Primedia approached the city last month, to host the match between the world’s most popular soccer club and the Urban Warriors. The hosting of the match is part of the city’s strategy to grow the football culture in the Cape Metropole.
During the negotiations with Primedia, the city agreed that it will enter into a partnership with Primedia for the event and will pay the events company R3.5m with VAT, where applicable.
According to the agreement, the stadium will cover direct event costs such as cleaning, static events security, standby technical staff and the use of big screens and IPTV in the stadium free of charge. The stadium costs will amount to R1 175 767.
The city will cover the costs of its services such as traffic (R114 035), law enforcement (R35 087), metro police (R35 087), fire services (17 534), disaster risk management (R17 534), utility services outside the stadium (R75 000), transport plan (R433 400), setting up of a fan walk and entertainment (R150 000), emergency medical services (R175 000) and one-night accommodation for 110 members of the United squad and club officials at discounted rates (R212 386).
The city will spend R200 000 co-marketing the soccer spectacle. Primedia will be responsible for private security in the stadium.
While the city holds the rights to the hospitality suites, it will relinquish it to Primedia and will share the generated revenue as follows:
* The city will receive 15 percent of profit on ticket sales;
* The city will receive 100 percent of profit on food and beverage;
* Three suites will be made available to the city and;
* Primedia will receive all hospitality profits.
An open training session will be held at the stadium and 10 000 tickets will be on sale.
Tickets for the match between Manchester United and Ajax Cape Town will go on sale on Monday, June 25, according to Computicket.