By our Chief Football Correspondent, Sell Outter
See the Evening Cancer on Tuesday?
Unfortunately its World Cup “fluff” piece of the day wasn’t considered worth putting on their internet site ...
But essentially it was about a World Cup jolly to Hannover and Frankfurt by the council’s new Partnership and Innumeracy Manager (are you sure that’s his title? Ed.), Stephen Wray and Guy Price, Development advisor for Bristol City FC – let’s hope the Bristol public didn’t pay for his ticket! – telling us how wonderful the World Cup would be for Bristol’s economy on the basis of some remarkably vague figures that related to the whole of the German economy in 2006, not any individual city.
The Bristol 2018 World Cup bid team have returned from Germany with the invigorating message from two 2006 World Cup cities – “we would do it again tomorrow”.
Hannover refurbished an existing stadium, sticking to a strict budget of 65 million euros, while Frankfurt spent 188 million euros on a new stadium and a further 42 million euros on associated infrastructure.
Er, actually Frankfurt spent 126 million euros on its stadium: 64 million from the City of Frankfurt itself, 20.5 million from the Hesse state government plus a capital loan of 41.5 million euros.
The cost of the stadium in Hannover was 64 million euros: 24 million from the City of Hannover and its region, 20 million provided by a banking consortium and a 20 million reconstruction loan underwritten by the City of Hannover.
However, the associated infrastructure costs for the World Cup were 53 million euros for Frankfurt and a massive 304 million euros for Hannover, which is possibly why the Cancer forgets to mention them.
So instead of the 295 million euros (approx. £250 million) spend implied in the Cancer, the two cities spent nearer 547 million euros.
Despite the significant investment required by both German cities, they confessed to their visitors from Bristol that they would do it again tomorrow if they could, with the rewards of the tournament far outweighing the initial outline of hosting it.
So what exactly are these rewards for World Cup host cities? Where are they recorded? In a report by the German Ministry of the Interior the only mention of direct income to the cities themselves is a fee from FIFA of 300,000 euros or about £250,000, although the stadium owners received a payment 1.8 million euros (£1.5m) plus 15% of net revenue from ticket sales.
By contrast, Bristol ’s proposed new stadium at Ashton Vale, which is currently subject to a planning application, will be predominantly funded by Bristol City FC
Really? In the very same issue of the Cancer, in a story about the Bedminster WI joining the campaign against the proposed Tesco at Ashton Gate, the figure of £65m is given as the cost of the stadium. Yet on 9 July, the stadium developer Ian Cawley, in the presence of Bristol City Chief Exec, Colin Sexstone, told Bristol’s planning department that the stadium would cost £90m and they would be seeking funding from the SWRDA.
And at present the only hard investment figures available for this new football stadium are this £20 million figure constantly touted as available from the sale of Ashton Gate to Tesco and the £5m value of the land at the new stadium’s proposed Ashton Vale site owned between Steve Lansdown and his son and Jon Pontin and his partners.
There have also been reports that Lansdown has sold shares in his financial services business, Hargeaves Lansdown, worth £47 million but he has also said that he does not intend to invest all of this in the stadium.
Germany’s Interior Minister in 2006, Wolfgang Schäuble, reported in December that year that the four-week tournament earned Germany’s tourism industry an extra 300 million euros in revenue, added two billion euros to retail sales and yielded 50,000 new jobs.
The report referred to is the WM2006 Abschlussbericht der Bundesregierung and is available in English here.
The revenue figures mentioned by the Cancer are of course national figures, not those for the individual cities.
The breakdown for the tourism industry is as follows; hotels – 220 million euros, up 8.5%; catering including airlines – 35 million euros, up 6.7%; beverages (bars, pubs and clubs) – 34 million euros, up 4.7%; restaurants – 2 million euros, up 0.3%.
The report also adds the caveat that not all of the increase in the catering and beverages sectors should be associated with the World Cup.
The overall increase in retail sales was just 1.2% and the only sector that showed an increase that might possibly be attributed to the World Cup was the electronics sector, including flat-screen TVs, which showed an increase of 5.2%.
But the report quoted by the Cancer also says this increase might in part be due to the fact that the German government had announced that they were going to increase VAT on electronic products immediately after the World Cup.
Of the 50,000 jobs “created” many are temporary lasting only for the length of the tournament. Another report anticipates that there may be just 9,000 permanent jobs created, many of them related to infrastructure work that was due to be completed regardless of the World Cup.
the German World Cup Organizing Committee earned a net profit of 56.5 million euros which was passed on to the German Soccer Federation (DFB) and German Soccer League (DFL), according to the report
Er, no mention that FIFA gave a grant of 129 million euros to the German World Cup Organising Committee then? Without this, the 56.5 million euros profit would actually have been a 72.5 million euros loss.
The Frankfurt tourist board reported an increase of 13.5 per cent in overnight visitors in 2006 (with an increase of almost 25 per cent in visitors from the UK) and between 2005 and 2008 has seen a rise of 8.2% per cent, attributed mostly to the exposure from the World Cup.
Frankfurt along with Kaiserlautern was the most successful city in terms of attracting overseas visitors while still increasing it’s level of domestic visitors. Other cities reported an increase in overseas football tourists but a reduction in high-spending domestic business visitors. Hanover saw a 14% decline in domestic visitors.
[Mr Price] told the Evening Post: “They described the benefits as nothing short of ‘immense’. They cited pride and self-image, a huge increase in reputation and an increase in overnight stays as the main benefactors and were amazed at the amount of exposure the city received on TV.”
So the “immense” benefits are:
1) pride and self-image
3) overnight stays
4) TV exposure
Only one of those involves a direct increase in expenditure and only then if the foreign visitors spend more than any domestic visitors they displace.
A mark of the enthusiasm for the tournament, likely to be repeated in the West Country should Bristol be successful, was reflected in the sheer number of big screens erected for people to congregate around.
The Hesse region, population around six million people (of which Frankfurt is the capital), is similar in size to the West Country and staged 1,150 public viewing areas, excluding pub gardens.
Amazing eh? The wonderful thing about TV is that it allows you to watch a game without actually being there – the tournament doesn’t even have to be in the same country can you believe? During the 2006 World Cup in Germany many pubs and bars in Bristol showed an increase in revenues from showing big screen coverage of the games live. Big deal.
Perhaps the main point here though is why did a team of people from Bristol fly all the way to Hannover (and Frankfurt) to find out information that’s available in a report you can download from the internet?
In addition, if we paid for the trip when do we get to see their report?