Cape Town - A close-out report for last year’s Cape Town Cup confirms that the City of Cape Town lost R28 million in direct revenue.
Ajax Cape Town and SuperSport United took on Sporting Lisbon from Portugal and English Premiership side Crystal Palace in the tournament that took place on July 24 and 26.
Only 22 000 tickets were sold for the weekend, resulting in a huge financial loss and which prompted the city council’s executive director of tourism, events and marketing, Anton Groenewald to resign.
Garreth Bloor, the mayoral committee member for tourism, events and economic development confirmed that they had spent more than R30m to organise the event and received just over R2m in direct revenue.
Bloor said: “While we are pleased with the destination marketing exposure, we cannot accept such a large loss of direct revenue.”
He said while the city council was confident it followed all due legal and financial requirements, it was clear that the underlying revenue model for the event had flawed assumptions.
“Further, it is also clear that there were shortcomings in the marketing to attract crowds to the event.
“We are sorry for these shortcomings and will do everything we can to ensure that they do not happen again.”
But Xolani Sotashe, the ANC’s chief whip in the city council, said he hadn’t seen the report and accused the city council of having something to hide.
“They should account for the R28m. It’s taxpayers’ money,” he said.
Freedom Front Plus councillor André Fourie, who last year correctly estimated the city council had lost R28m or more, said he hadn’t seen the document either and was still concerned about the financial loss of the tournament and the stadium project as a whole.
Last August it emerged that the city council had paid Crystal Palace and Sporting Lisbon R12.4m each, Ajax Cape Town R3.2m and SuperSport United R1m for their involvement in the tournament.
Other costs were R500 000 for marketing, R500 000 for branding rights and activation costs, and R3.5m to Cape Town Stadium for direct costs and services.
Fourie had asked during a council meeting for a detailed income and expenditure statement on the tournament, including how many tickets were sold, and whether mayor Patricia de Lille considered the tournament a success.
The city council had said it was waiting for its “close-out report” to answer these questions.
However, the report says there were no legal implications and that risks had been reported to the chief risk officer.
However, Auditor-General Kimi Makwetu said the event would form part of its annual audit.
At the time, concerned resident Thomas Johnson of Lansdowne asked the AG to investigate.
Johnson didn’t receive a response at the time, but a spokesman for the AG’s office told the Cape Argus the complaint was being considered in line with the institution’s standing procedures and the complainant would receive feedback in due course.
Johnson, who describes himself as an “armchair activist”, e-mailed the AG’s office again in August and was told they were still in the process of “consulting internally” and would get back to him.
Nearly six months after his original complaint, Johnson received a letter from the AG last week saying they considered the “alleged fruitless and wasteful” expenditure on the Cape Town Cup in a “serious light” but had decided not to conduct a separate investigation.
“Given the timing of your correspondence, the matters you raised that might impact on the audit will be considered as part of the audit risk assessment processes for the 2015/16 audit cycle in line with the Auditor-General of South Africa’s mandate.”