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The World Cup: No Winner in South Africa


South Africa has spent $4.6 billion to host the soccer World Cup, including building and refurbishing 10 world-class stadiums. All it needs now is fans—lots of them.

The government had expected the world's most-watched sporting event to attract 450,000 international spectators, helping to create jobs for the one in four South Africans now out of work. But as the June 11 kickoff date nears, officials have had to scale back their expectations. The visitor estimate has been cut to 350,000—a number that may still prove overly optimistic, considering only about 100,000 international air tickets had been sold as of early March. Similarly, the tournament's projected contribution to gross domestic product has been halved, to half a percentage point. "When the World Cup was awarded to us in 2004, the economic situation was completely different," Sports Minister Makhenkesi Stofile told reporters in Pretoria on Mar. 19. "We have to revisit those projections and be realistic."

A low turnout would be a blow to the government's efforts to bolster South Africa's economy, which is emerging from its first recession in 17 years. It would also be an embarrassment for President Jacob Zuma and Sepp Blatter, head of the sport's governing body, the International Federation of Football Assn. (FIFA), both of whom gave repeated assurances that holding the event in Africa for the first time would be a success.

The numbers so far don't look good. MATCH Services, a Swiss company that FIFA contracted to supply ticketing and accommodation services, has relinquished booking rights for more than 450,000 room nights. Sales of corporate hospitality packages are 50% below target, with sponsors and partners returning thousands of tickets for premium seats, according to FIFA.

Some fans of the "beautiful game" are balking at the cost of long-haul flights and peak-price accommodations. "The whole trip for a couple of weeks would have ended up setting us back more than three grand each," says David McNally, an accountant from Swindon in southern England who hoped to make the journey with a group of friends. "That's just too much." Surprisingly, outside of South Africans, Americans have purchased the most World Cup tickets—107,576 at last count—a testament to the sport's growing popularity stateside. To stoke U.S. interest, FIFA pressured Emirates airlines, a World Cup sponsor, to slash the price of its New York-Johannesburg round-trip flights to $2,000, from $3,000.

Even under the best of circumstances, South Africa would be hard pressed to replicate the success of the 2006 World Cup in Germany. That event drew about 2 million visitors, earning the tourism industry close to $400 million in revenue and generating $2.7 billion in retail sales, according to government figures. "Any European World Cup has the benefit of having approximately half of the participating teams being within driving distance of the hosts," says MATCH Chairman Jaime Byrom.

While Pretoria is banking on a last-minute rush for tickets as tour operators bring down prices, experts say it would do well to temper expectations. Says Udesh Pillay, co-author of Development and Dreams: The Urban Legacy of the 2010 Football World Cup: "The event will not help to significantly mitigate poverty."

Cohen is a reporter for Bloomberg News in Cape Town.

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