The Economics of the Football World Cup 2010
Author : Graham Worrall
Hosting a world cup is an expensive commitment and as FIFA have come to realise it is not just the host country which is impacted but the global economy is affected as well. For this reason corporate sponsorship is always keen to be involved and in particular sports brands. 80% of the sponsorship at the South Africa world cup came from sports companies alone. 36 billion viewers around the world are too big an advertising opportunity to ignore.
South Africa hosted the 2010 world cup for the first time and it will undoubtedly bring economic benefits to South Africa, a developing economy with many social and economic problems and inequalities between rich and poor. It may not be able to attract as many foreign visitors as an American or European world cup but it will still generate enough interest to have a major impact on South Africa. It is expected that South Africa will receive 350,000 foreign visitors during the tournament, a lower estimate than originally thought due to the global recession and lower ticket sales than expected. A major advantage for South Africa is the attraction of foreign investment and international trade and for this reason it is imperative that the hosting of the world cup goes as smoothly as possible, to project an image that South Africa is ready to cope with this type of investment and trust in their ability to handle it correctly. FIFA will of course be keen to have a successful event and will assist South Africa to ensure this. Outside investment is essential in order for South Africa to host a successful tournament.
South Africa has hosted international events before including the 1995 Rugby World Cup, 2003 Cricket World Cup and 2009 Fifa Confederations Cup. The world cup, however, is on an even bigger scale; the 2006 world cup in Germany was the most viewed event in the history of T.V. The world cup in South Africa is predicted to sustain 695,000 jobs and create 159,000 new ones, both full and part time, permanent and temporary. It will have an impact of R93 billion on the economy, including the estimated 350,000 visitors expected to spend an average of R30,200 per trip. 62% of the R93 billion was generated before 2010 and the remaining 38% during 2010 itself.
South Africa was selected as the host nation due to its excellent transport, telecommunications, tourism, sporting infrastructure and well known reputation as a hospitable nation. This does not mean that significant work was not required to make South Africa world cup ready. The majority spend will be on infrastructure, approximately US$7 billion. A new international airport has been built in the capital of Botswana, Gaborone and millions has been spent on upgrading stadiums. Ten new stadiums are being built and more are being upgraded. Demolition began in 2006 and by 2007 all the major construction had begun. Stadia design has ensured that after the world cup is over they will still be functional as venues for other sports, entertainment and community use. The five new stadiums will be the Cape Town Stadium, Nelson Mandela Bay Stadium, Durban Stadium, Mbombela Stadium and Peter Mokaba Stadium. The upgraded stadiums are the Royal Bafokeng, Free State Stadium in Bloemfontein, Loftus Stadium in Pretoria and Soccer City and Ellis Park in Johannesburg. The road and rail network will also undergo extensive redevelopment. The Gautrain high speed rail link between Johannesburg, Pretoria and Johannesburg International Airport will be in place for the tournament. Johannesburg also built a park in Mary Fitzgerald Square to allow those who can’t afford tickets the opportunity to watch the matches. South Africa’s advertising industry also benefited with a US$221 million increase from major sports brands investing in marketing during the World Cup.
Back in 2007 the South African government raised concerns about their finances when they stated the world cup will cost an estimated 20% more than originally estimated, requiring an extra US$500m on top of the original budget of US$2.5 billion. They were laying the blame for the rise in costs on increasing material costs, particularly steel and a weaker rand contributes to this expense. Rising petrol prices and inflation are also to blame. The extra money needed came from the government and the African Development Bank who supplied low interest loans.
The world cup alone is expected to be responsible for increasing the growth of GDP by 0.5 %. There are questions over whether Fifa may benefit more from the world cup as it retains all marketing and media revenues whilst the costs are borne by the host nation. Fifa argue that these revenues are used to fund development work and activities between world cups. South Africa can keep some ticket income to cover costs and Fifa sees the potential foreign investment and promotional opportunities available to the host nation as ample reward. The South African government is using the world cup as an opportunity to secure economic growth and development in the country. It is estimated that the world cup will contribute R19.3 billion in income tax to the government. The Organising Committee is dedicated to using companies which comply with South Africa’s Black Economic Empowerment (BEE) legislation and SME’s. By mid 2008 55% of the Organising Committee’s spend was conducted through BEE companies and 26% through SME’s.
South Africa’s bid to host the world cup was carried out on the premise that the world cup should leave a lasting and positive legacy on the country. To this end a number of benefits will arise from the tournament. The world cup has quickened the rate of infrastructure development, which although already planned was pushed up the timetable as a result of the tournament. The boom in tourism, during what is South Africa’s low season will be enormous and should encourage tourists to return and new ones to arrive in the coming years. The world cup has led to the construction of 25 new hotels in South Africa. Its legacy will also be used to build and sustain a number of social improvement projects, including the Football Turf programme where one football turf will be built in each of the 52 South African Football Association regions to ensure communities have the facilities to play. The government’s spend for the world cup has been centred around stadium and precinct development, transport, telecommunications, event operations, security, volunteer training, communications, hosting, legacy and culture.
Graham Worrall is a writer at www.FootballSanctuary.com, a Football website which brings all the latest transfer rumours, football news and football comment from around the world.
Outsourcing Ideas During A Recession
Living in times like this, when the global economy has been pushed down by a few notches on the charts and the market only seems to be moving downward, a tighter and well evaluated budget seems to be the most important priority right now for everyone. During these times, working with freelancers and virtual assistants does not seem something that most companies will keep doing, as they try to cut off unnecessary expenses. Especially for small businesses, which are the ones most threatened by this situation, this could be testing times. Is this valid though?
You will probably say yes, without dwelling too much on it. However here is a revolutionary idea for you. Outsourcing can actually be the most cost effective solution for your company, especially in times like this. You can make your business not only survive but flourish through the recession, if you think and act the right way.
Outsourcing means hiring people to do what you cannot do or dont have time to do, in simple words. These assistants can perform all sort of tasks, providing extremely useful assistance in administration, copywriting, translation, web development, project monitoring, maintenance and other time consuming services. They are basically contracted assistants who work for you without costing you any extra expense other than their regular rates with no benefits, no taxes and no frills that usually tag along with a regular in house employee. It is proven that hiring an outsourcer to do the job that an employee would do, generally means at least 30% less expense.
Consider a simple example. An average business spends at least 40% of the working time in all kinds of administrative work, including both simple and complicated tasks. If you hire an assistant to do this work online for you, then you can free some in house employees and create more time for both them and you, which you can then dedicate to other tasks, equally vital for your business.
Consider the advertising and marketing field. Usually advertising companies and marketing managers cost a thick packet when working full time for you. Why
not hire an outsourcer to do the same job? There are a lot of experienced and creative people out there who will work for you for lesser money than an
in house employee, will produce the same amount of work and can provide alternatives in communication and marketing solutions that can also prove cost effective. Dont forget that outsourcers do not usually follow the conventional marketing techniques, are extremely familiar with the workings of the World Wide Web and can establish some great PR and marketing campaigns for you from anywhere in the world.
Think how an outsourcer can help you and start engaging your existing freelance assistants in new projects and new ideas. It is important to remember that surviving a recession means to get more creative and more proactive and think of ways to tide over the crisis.
Understand The Subtleties Of Going International
Author : Jane Dawson
We are living in a global economy so you might correctly reason that you should take advantage of the Internet’s global reach by extending your business into other cultures.
Conceptually that approach makes good sense, but there are some considerations that you take into account as you re-orient your web site for global sales.
Do not select new target markets based on existing analytics
You may look at your website analytics and discover that you are selling a certain amount of your product to German customers. That discovery might lead you to believe that if you translated your website into German you would increase sales to all of the other German people who would have the same tendency to use your product but can not access it due to language barriers.
The problem here is that you may find that the German people who find your website are searching based on your English keyword because that is how they expect to find what they are looking for. If you translate that keyword into German, it would not necessarily bring you more German people because they are not actually looking for that search word or they are not generally interested as a group.
On the other hand, if you look beyond your own analytics to find out how your product is translated in other languages and do this keyword searches, you may find that Italian and French people buy lots of products like yours. Translate your site into Italian and French may bring you a flood of new business that could not locate your site before.
Using translators
One of the biggest mistakes business owners make in going international is to under spend on translation services. If you do not use a native speaker who understands the subtleties of the two languages, you can make hideous mistakes that you will never know you have made; you just would not get the business you are expecting.
This is especially true when it comes to keyword translation. Search terms of phrases are very frequently colloquial, e.g., buy boom box. Or, consider the word cellophane. If you sell cellophane in the U.S., you may be selling a sticky tape or a membrane used in dialysis or even clear plastic wrap for foods. In the UK and other European countries, however, cellophane is a registered trademark of Innovia Films Ltd and specifically means material made out of regenerated cellulose.
You can see the problem between two English speaking countries; just imagine what you might miss with a poor translation of your keyword into Swahili or Chinese.
Domain names
If you want to sell your potpourri in Poland, do not translate your website into Polish and just give Polish speakers the ability to click on the Polish flag icon when they arrive. Instead, buy the appropriate Polish domain name if you can. So Pattyspotpourri DOT com becomes pattyspotpourri DOT com DOT pl. This country specific domain extension gives your site credibility in the eyes of the group you are trying to attract.
Your potential Polish customers would not worry that you might not know how to ship to Poland (do you?) if they can see that you are committed enough to maintaining a Polish website.
The global economy is a wonderful promise, but you need to realize the value with care.
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