Economics of FIFA World Cup

What are the economic implications of 2010 World Cup in South Africa following 2006World Cup in
Germany?
Introduction
The FIFA (Fédération Internationale de Football Association)World Cupis arguably thelargest international sporting
event around the globe. There is always a carnival like ‘feel-good’ atmosphere surrounding the host nation from the
moment the decision is made toallocate the World Cup to a nation. It is often easy to get caught up in and become
blinded bythe excitement of the occasion, and with the media attention ambushing the host nation, theeconomic
effects linked with the considerable investment associated with hosting such aprestigious event are almost totally
ignored. However, those involved in the detailedbackground work required to make the World Cup a
massive success expect a positive returnon the expenditure associated with the tournament. The 2006 hosts Germany
possess thelargest economy in Europe, but even then, there was a fear that a net benefit might not havebeen
achieved by hosting the World Cup (Plessis & Maennig, 2007).In May 2004, FIFA awarded the hosting of the FIFA
World Cup to an African country for thefirst time in the 101 years of FIFA’s existence. As the host, South Africa
stands not as acountry alone –but rather as a representative of Africa and as a part of an African family of nations
(www.sa2010.gov.za/node/1079, 2010). The need for a positive net benefit fromhosting a successful football
World Cup is an urgent necessity for South Africa. Within SouthAfrica the challenges of economic development are
acute because even though South Africa is the largest economy in its region, it is located in the world’s poorest
region
In terms of assessing the impact of the world cup on South Africa’s economy, this paper willlook at two key
literatures. One is an economic assessment by Grant Thornton KesselFeinstein but it is a little dated from 2003.
Some potential benefits to the economy arehighlighted and the 2003 study found that the staging of the 2010 FIFA
World Cup wouldFeinstein but it is a little dated from 2003. Some potential benefits to the economy arehighlighted
and the 2003 study found that the staging of the 2010 FIFA World Cup wouldcreate significant direct and indirect
economic benefits for the country’s economy, withminimal tangible and intangible costs (Mabagu & Mohamed,
2008). According to the GrantThorntonstudy, the event was expected to contributeR21.3 billion to the
economy,generating an estimated 12.7 billion in direct spending, creating159,000 new jobs and raisingan
additional R7 billion in government revenue (Mabagu & Mohamed, 2008). Although the cost-benefit analysis
approach used in the study is limited in its application, it remains thesimplest and most easily understood method of
measuring potential economic impacts.(Bohlmann and Van. Heerden, 2008)The other piece of literature I will look
to assess is Heinrich R. Bohlmann and Jan H. VanHeerdens’ study on predicting the economic impact of the 2010
FIFA World cup in SouthAfrica. They used a CGE model to derive the likely economic implications of the world
cup.They simulated an increase in government expenditure on construction and found apositiveimpact on most
macroeconomic variables, including GDP and employment. These gainswerefound to be driven mainly by unskilled
unemployed resources that were drawn into economicactivity by the demand injection (Mabagu & Mohamed,
2008).Due to the institutional structure of the World Cup the financial consequences of hosting thetournament can
be analysed separately for FIFA and for the host country (Plessis & Maennig,2007)

FIFA (Fédération Internationale de Football Association)

Often said that FIFA’s vision is what makes it such an influential power in the world of football and as a business
federation around the globe. It is believed by many that the FIFAfederation can only be successful if football is
being developed on a global scale, is touchingthe world everywhere and is also used as a tool to achieve beneficial
social change worldwide(build a better future). Joseph S. Blatter, the President of FIFA, also foresees a world
wherethe language of football unites people from every background. (FIFA Communications,2008)Astonishingly
FIFA spends over 2 billion USD every 4 years on its football events,footballdevelopment programmes
andCorporate Social Responsibility(CSR)acti viti es. All the FIFAevents(including 11 other ‘minor’
World Cups)run up a defi cit except the World CupFinals which are held every four years.

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 TV, MKTING,HOSPITALITY,
LICENSE

Figure 1-FIFA Revenue 2007-2010Source: FIFACommunications (2008)

FIFA’s revenue created during the period 2007-2010 amounts to US$3.2 billion. As thefigure above illustrates
majority of this revenue is generated through the sale of media rightssold to television, radio and other media for the
World Cup. Currently, about 2 billion USDhas been generated from the rights. In detail, revenue generated through
sales of rights for2010 FIFA World Cup and all events included in the 2007-2010 period are: Total of 3.2billion
USD where of 2 billion TV (63%), 1 billion marketing (31%), 120 million USDHospitality (4%) and 80 million
Licensing (2%).In the 2008 calendar year, FIFA invested 72% of its generated revenue directly back intoseveral
development projects and used the generated revenue to fund the expenditurepayment of the 2006 World Cupin
Germany. A total of 133 million USD was spent onFIFA’s development projects equating to26% of the total
expenditure
 

F i g u r e 2 - E x p e n d i t u r e b y F I F A Source: FIFA Communications (2008)

The figure above indicates the allocation of expenditure by FIFA. Along with the majorexpenses mentioned earlier,
breaking down the otheroutgoing paymentsfor FIFA, we haveto include the payment tothe32 participating
teamsof the World Cupin the form of prize money and compensation for travel and preparation costs
which equated to around €222million. Reported FIFA’s costs for the 2006 World Cup were about €530 million.In
economic terms FIFA is a business powerhouse. The amount of capital they invest inprojects is enormous, even on a
global scale. This investment leads to several opportunities inemployment and evidently has many economic
benefits. The use of resource allocation andproductivity enhances the federation’s reputation, and also indirectly
looks to help globalobjectives such as poverty and crime.

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 Operational, 17%FootballGovernance, 6%Exploitationof rights, 5%Additional FIFAEvents, 6%
F i g u r e 2 - E x p e n d i t u r e b y F I F A Source: FIFA Communications (2008)
The figure above indicates the allocation of expenditure by FIFA. Along with the majorexpenses mentioned earlier,
breaking down the otheroutgoing paymentsfor FIFA, we haveto include the payment tothe32 participating
teamsof the World Cupin the form of prize money and compensation for travel and preparation costs
which equated to around €222million. Reported FIFA’s costs for the 2006 World Cup were about €530 million.In
economic terms FIFA is a business powerhouse. The amount of capital they invest inprojects is enormous, even on a
global scale. This investment leads to several opportunities inemployment and evidently has many economic
benefits. The use of resource allocation andproductivity enhances the federation’s reputation, and also indirectly
looks to help globalobjectives such as poverty and crime
 
Germany 2006
The key macroeconomic indicators for the German economy in 2006 were pretty good, whichis expected
considering it is the “largest” economy in Europe and subsequently one of thebiggest in the world. The population of
Germany was just over 82 million in 2006. Accordingto the Economy Watch website(2006), GDP growth
was 3.176%, inflation levels was a fairlysustainable and healthy1.784%, unemployment rate was 9.833%(%
of labour force) andthere was around 39 million people in employment.A substantial budget of approximately €430
million was granted to the organising committeeof the FIFA World Cup in 2006. Even on a relatively hefty budget
such as this, a surplus wasable to be produced by the organisers of the event. The public sector was provided more
thansufficient support in addition to the cost incurred by the Local Organising Committee (LOC),as it raised €1.4
billion to finance investment for only the stadiums alone, and arranged €2million for other related infrastructure
(Maennig & Plessis, 2007).From the very beginning, the LOCfor the 2006 World Cup in Germany had
very clearobjectives, but it was concerning that several external issues were surrounding the eventatthe time. The
main objective was to deliver a well organised event, hoping to resultin a longlasting legacy left behind for
the football communityand general population ofGermany.Prior to the world cup, there was an abundance of
negativity surrounding the host nation.Most of the sceptics came within the host nation, as the media was dominated
by negativereports directed towards Germany, the population and even the national football team itself.All this
pessimism led to security and hospitality concerns and overall doubts about thesuccess of the event and presented
early difficulties to justify thelarge investmentsmade forthe tournament. (FIFA Communications, 2008)The world
cup was a mega success, which was helped by near perfect weather conditions,along with a great performance
by the heavily criticised(prior to the event)German NationalTeam which helped unite the nation and kept the
atmosphere buzzing throughout thetournament.The final report by the German government from 6th
December 2006(FIFACommunications, 2008)indicates some of the extent of the impact on the host
country,Germany. They analysedoverall figures, and not surprisingly approximately €8-10 billion
 was spent in total association with the world cup in terms of investment. Also, in terms of growth, the tourism and
hospitality industry both increased by 19.3% and 4% respectively.The retailing business generated around €2 billion
and direct tax income from ticketing,players’ fees and profit equated to an estimate of €104 million. In addition to
all thesebenefits, approximately 40,000 additional long-term jobs were generated. All these effectsdeemed to have
boosted GDP by 0.3% purely down tothe FIFA world cup. (FIFACommunications, 2008)To host a global
international sporting event, it is certainly vital to obtain new and attractiveinfrastructure. The figure below shows
the capacity and costs of new or upgraded stadiumsfor the 2006 World Cup and further indicates the magnitude of
hosting such a prestigious event.
  

Source: Maennig & Federsen &.. (2008) Investment in Stadia and  Regional Economic
Development
We can see from Figure 1how the €1.4 billion was allocated amongst the stadiums. Maennig& Federsen (2008)
argue that the ‘positive effect of new stadiums claimed by many sportprotagonists are not true’. It is not necessarily
correct to say stadium investment doesn’tprovide economic benefits;nevertheless, it is entirely complicated to
measure the associatedbenefits. A proposed justification of heavy investment for stadiums could be the
excitementand ‘feel-good’ effect it produces for the host nation, as well as positive image effects createdby new
infrastructure. However, even these benefits are difficult to quantify
 

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 South Africa 2010
South Africa is regarded globally and by UN classification as a middle income nation,emerging market with a rich
supply of natural resources; newly-developed financial, legal,communications, energy, and transport sectors; a stock
exchange ranked amongst the top 20in the world; and modern infrastructure supporting an efficient distribution of
goods to majorurban centres throughout the region.(Central Intelligence Agency, 2010)
The South African economy experienced constantand stable economic growth from 2003 to2007 (3.11% to 5.1% in
terms of GDP)as South Africa reaped the benefits of macroeconomic stability and a global commodities boom, but
began to slow in the secondhalf of 2008 due to the global financial crisis. GDP fell nearly 2% between 2007 and
2008,from 5.1% to 3.06%. Unemployment remains high and outdated infrastructure has restrictedfurthergrowth.
South Africa's former economic policy was fiscally conservative, focusing oncontrolling inflation, and working
towards a budget surplus. Unresolvedeconomic difficultiesremainan issuefrom the apartheid era -especially
poverty (with 50% of the total population underneath the ‘poverty line’). The current government largely
follows the same cautiousmentality towards certain policies, but must assert itself and dominate against the impact
of the financial global crisis.(Central Intelligence Agency, 2010)
The figure below (fig 4) exemplifies how the South African economy is composed of different sectors, and their
overall contribution to the economy. Noticeably you can see thereis no single outstanding sector they heavily rely
on, they have a number of growing industriesbut not one substantial enough which the whole economy relies on. As
you will see later,travel and tourism is a main component of South Africa’s economy and we will see how it will be
affected by the world cup
 
Figure 4-Sectoral Composition of South African Economy Source: Mabugu & Mohamed
(2008) The Economic Impacts of Government Financing of the 2010 FIFA World Cup
According to the WorldBank(2008)and Statistics South Africa (SSA) (2009) the total population of
the country was just below 48.7 million in 2008.
Figure 5-Population in South Africa 1998-2008 Source: World Bank (2008)
TheSSAmid 2009 estimates indicatethat the South African population has increased further to
approximately 49.32 million people. In 2008, around 31% of South Africa’s population was younger than 14 years
of age, 65% between the ages of 15 and 64 years, and 5% olderthan 65 years. According to the SSA 2001census
statistics almost 18% of South Africa’spopulation, aged 20 years or more, have had no schooling and a further 16%
have only hadprimary education. Only 8% of South Africa’s population older than the age of 20 years havehad a
tertiary or higher education.In 2008, South Africa had around 18.6 million economically active people of
whichapproximately 4.3 million (23%) were unemployed. However, the accuracy of these statisticsis questionable
as the CIA World Factbook(2010)haspublished 17.32million economically active in 2009 which is a
massive decline to have over a year
 
Figure 6-Unemployment from 2000-2008 in  South AfricaSource: World Bank (2008)
The participation rate was 55.3% in 2008. According to the 4th quarter 2009 Labour
ForceSurveyreport(2010)published by SSA, unemployment for the 4 th
quarter in 2009 wasaround 24.3%. The quantity of population in the labour force increased slightly by
61,000between the third and fourth quarter of 2009. This resulted in the unemployment rateremaining virtually
unchanged between the two quarters at 24.5% in the third quarter of 2009and 24.3 in the final quarter of 2009.
Compared to final quarter of 2008, there was an annualdecrease of 6.3% (870 000) in employment; an increase of
292,000 in the number of unemployed population along with an increase of 947,000 in the quantity of people who
arenot economically active –518 000 being discouraged work-seekers.
 
South Africa’s inflation has been up and down in recent years with the rate of inflation nearlyreaching double
figures in 2008 (9.93%)
 
Figure 7-Inflation (Consumer Price Index) 2000-2008 in South Africa Source: World
Bank (2008)
Latest SSA statistics show the level of inflation as of February 2010 is 5.7%. The figureabove illustrates that there
has been a high level of inconsistency in the inflation rates overthe past 10 years or so in South Africa.The Gross
Domestic Production for South Africa in 2008 was around 3.06%. Latest statsindicate that the GDP figure for the
4thquarter in 2009 is approximately 3.2%. (SSA GDP,2010)

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Figure 8-GDP annual percentage change 2000-2008 in South Africa Source: World Bank
(2008)
The Figure above illustrates how economic growth was constant before a large fall in 2007-2008 from 5.10%
to 3.06%.
Travel and Tourism South Africa
A major component of the South African economy is tourism. International tourism to SouthAfrica has surged since
the end of apartheid. In 1994, the year of South Africa’s firstdemocratic elections, only 3.9 million visitors arrived
in the country
 
Grant Thornton Kessel Feinstein (2003) in their report use 2002 statistics provided by theWorld Travel and Tourism
Council to measure the contribution made to the South Africaneconomy by both industry sectors. Back then, tourism
contributed 7.1% to South Africa’sGDP; 12.5% of total exports; tourism represents 10.3% of total investment; and
the tourismindustry contributed 6.9% (1,148,000 jobs) to total employment.Latest 2010 World Travel and Tourism
Councilstats show that the contribution of travel andtourism is around 7.7% (26.4billion USD) to overall GDP. The
real GDP growth for thetravel and tourism industry is expected to increase by 0.4%. Total employment remains
thesame as 2002, with 6.9% contributing to work force (869,000 jobs). Export earnings frominternational visitors
are expected to generate 10.1% of total exports (9.5billion USD) in2010. Travel & Tourism investment is estimated
at (9.7billion USD) or 13.0% of total investment in 2010.
All these statistics evidently indicate that tourism is a key component along with one of thefastest growing sectors
of South Africa’s economy, and the outlook for the industry isextremely bright. The exposure the country will
receive due to the FIFA WorldCup can onlypromote South Africa’s travel and tourism industry, leading to an
enhancement of theeconomy.Foreigners arriving for the World Cup will be the major proportion of the tourism
during theWorld Cup, in the main; it will generate additional economic impact for the South Africaneconomy. It is
important to keep in mind though that even though the FIFA World Cup is aglobal event it is not watched by
everyone. This causes displaced tourism, meaning thattourists may not travel to the country in the immediate
period proceeding, during andsucceeding the event. Displaced tourism doesn’t just relate to the average tourists
but also tothe lesser events which are no match for the world cup and hence are not taking place.Nevertheless,
luckily for theSouth African economy the World Cup is being held in the “lowseason” which minimises the
problem, but there will still be some displaced tourism and theindustry has to be aware and plan to mitigate
displaced tourism. (Grant Thornton, 2010)It is estimated by many that around 2.7 million spectators will watch the
football world cup inSouth Africa and a television audience of up to 2.8 billion people will witness the
finalshowpiece (Swiss Business Hub South Africa, 2007). To cope with this massive influx of  visitors attracted by the
prestigious mega-sports event, great emphasis has been placed onupgrades in infrastructure especially for travel and
tourism.To improve transport standards and efficiency, a Canadian-French-South African consortiumknown
asBombela invested around R25billion for the Gautrain. Its purpose is to link Johannesburg, Pretoria and/or Tambo
International Airport. Significant investment like thissuggests the South African economy is progressing already,
even at this early stage before theevent has even begun. The Department of Transport further announced that there
are threemore Gautrain-type rapid-rail proposals on the cards (Swiss Business Hub South Africa,2007). A point to
now is that the only city with two football stadiums, which of one has beenchosen to host the final game, is also the
base for the International Broadcast Centre, whichwill accommodate around 2,000 journalists.The tourism industry
is expected to be one of the main beneficial aspects of hosting theWorld Cup in South Africa. A few cities
negotiated with nearby towns to help support theaccommodation of the visitors to South Africa. An example of this
is Bloemfontein, whichhas approximately 7,000 beds but forecasts around 20,000 will be needed (Swiss
BusinessHub South Africa, 2007

CGE Model -Economic Impact of 2010 World Cup

Heinrich Bohlmann and Jan H.van Heerden (2008) use a Computable General Equilibriummodel to observethe
possible economic implicationsfor South Africa following the 2010FIFA World Cup. In their paper they used a 32-

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sector CGE model to give more accurate anddetailed results. There are fewer equations and more variables in a
CGE model so thevariables have to be categorised into exogenous and endogenous variables. Nominalexchange
rate is exogenous along with capital stocks, technical change, tax rates andinvestment. Employment is the only
endogenous variable. The CGE model responds tovarious shocks applied to the economy and Bohlmann & Heerden
(2008) created differentscenariosfor the simulation to generate alternative outcomes. The first scenario assumes
thatcapital stock of the communication and hotel industries are both increased by 1%. It alsoassumes the capital
stock of the transport and construction industries are bothincreased by2%. The second scenario assumes
technical change has improved productivity by 5% each inthe transport industry, and 2% in the construction and
communication industries. Scenario 3 assumes a marginal increase in tourism because of the presence of the world
cup and takesinto account the ‘crowding out’ effect caused by it

The table above summarises the effects of the various shocks presented by the scenarios. Theincrease in capital
stock in the first scenario leads to growth in GDP, higher employment,lower inflation levels, cheaper labour, higher
exports which causes competitiveness to alsoincrease resulting in a positive impact on the balance of trade
payments assumes a marginal increase in tourism because of the presence of the world cup and takesinto account
the ‘crowding out’ effect caused by it.

T a b l e 1 - M a c r o e c o n o m i c V a r i a b l e s Source: Heinrich Bohlmann and Jan H.van Heerden

(2008), Predicting the economic impact of the 2010 FIFA World Cupon South Africa
The table above summarises the effects of the various shocks presented by the scenarios. Theincrease in capital
stock in the first scenario leads to growth in GDP, higher employment,lower inflation levels, cheaper labour, higher

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 exports which causes competitiveness to alsoincrease resulting in a positive impact on the balance of trade
payments.
Figure 10 –AS/AD diagram to show Table 1 effects
The diagram above shows the effect of an increase in supply of capital stock. It clearlyillustrates a decrease in price
and the subsequent increase in real GDP and employment whiledemand is held constant. At lower prices there is an
increase in the demand for domestic goods leading to a rise in domestic exports, increasing its competitiveness and
improving thereal exchange rate. If this were the case then this provides a significant benefit to the SouthAfrican
economy, which has been suffering from large indifferences in inflation levels over aprolonged period of time.The
second scenario generates identical effects to that of the first scenario, but to a greaterextent. This is due to the fact
that it offers a larger percentage increase in the technical changewhich improves the productivity of the transport,
construction and communication industries.The increase in productivity due to technical progress results in higher
outputs in proportionto the inputs. Technical progress causes more efficient and arguably cheaper production, thus
increasing employment which leads to growth in GDP again leading to prices falling.Subsequently, the real
exchange rate drops and the countries competitiveness enhances.For the effects of the third scenario it is
important to remember that the percentage change inall exogenous variables that were not directly shocked
obtained the value of zero. The resultof a marginal increase in tourism shows no effect on real GDP or
employment, and indicatesa slight increase in inflation which reduces the real exchange rate and consequently
thedomestic country’s competitiveness declines

 
The table above illustrate the expenditure side of contributions to changes in GDP. All threescenarios yield similar
results. It is important to remember that a negative value for imports isan increase because Y = C + I + G + (X-
Z). Again, all the exogenous variables yield a resultof zero if they are not directly involved in the shock. For the first
two scenarios, there arelarger increases for both consumption and exports than that of the results from the third
scenario. This is due to scenario 3 just being a marginal increase in tourism whereas the firsttwo scenarios
generate lower prices and increased competitiveness due to an injection in thesupply of capital goods and related
productivity

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Table 3-Percentage change in basic export demands of selected commodities Source:
Heinrich Bohlmann and Jan H.van Heerden (2008), Predicting the economic impact of the 2010
FIFA World Cupon South Africa
Table 3 only deals with scenario 3: a slight increase in the level of tourism. Naturally, anincrease in tourism would
cause a consequent incline in demand for hotel accommodation,communication and transport services. This scenario
will logically shift the curve for demandto the right for these services on an AS/AD diagram. The result of this will
be increasedlevels of output, and the marginal increase in tourism would also lead to higher price levels.The
inflated price levelsfor these  three servicesleads  to anoverall increase inprices of all other
merchandises.As the law of demand defines, this increase in prices would lead to adecrease in the quantity
demanded for these services, and subsequently, reduce the outputproduced. Furthermore, some industries would
shift production to those servicesfor which ahigher demand exists. This would also contribute to the lower levels of
output in otherindustries
In table 4 a new scenario is used where the demand for capital expenditures increases duringthe world cup. The
first three scenarios measure only the impact caused by the benefitsassociated with the various shocks. Scenario 4
measures the impact of the increased demandfor the relevant goods and services. The table above shows the most
significant changes tomacroeconomic variables thus far due to the scenario presented. An increase in demand
forcapital goods and services would clearly shift the demand curve to the right, increasinginflation levels, output
and employment. This increase in inflation would devalue thecurrency, reducing the country’s international
competitiveness, resulting in reduced exports
The table above provides us with two different scenarios that would impact the mainmacroeconomic indicators. To
fund the world cup it is fairly assumed the South Africangovernment would use taxation to finance majority of the
expenditure. A high taxscenarioindicates a very slight increase in the real GDP growth levels, a decline in
overallemployment and increased inflation levels. A low tax scenario is evidently much morebeneficial but not at
all feasible for the South African government as they need to usetaxation as a main tool to generate funds for the
World Cup. According to effect caused by anincrease in taxation for these indicators, the economic cost of hosting
the mega event seems to outweigh the economic benefits for South Africa
 
Grant Thornton Economic Impact of 2010 World Cup
Grant Thornton (2003) compiled an economy impact assessment of South Africa’s 2010World Cup bid which
highlighted potential benefits to the economy, and found from theirresults that hosting the World Cup in South
Africa will generate significant direct and indirecteconomic benefits for the nation’s economy, with bare minimal
costs, both tangible andintangible.
The e figure above illustrates the cost-benefit analysis approach used by Grant Thornton(2003). It is argues that
the approach is limited in its application, nevertheless, evidently it isthe simplest and most easily understood

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method of measuring potentialeconomic impacts. Asseen above, the study estimates around 160,000 jobs being
created and a R21.4 billion contribution to the overall growth of the economy (GDP). It also expects heavy
investment of over R2 billion for new stadia and infrastructure. As we will discuss later on, this figure isway above
the actual amount of investment. Updated projections by Grant Thornton (2009)suggest they expect around 48,000
foreign visitors for the event only, and expenditure of R8.5 billion, worth R11.5 billion in additional impact on the
South African economy andsustaining the equivalent of 144,000 jobs. They also suggest the total impact from the
event isanenormous sum of R55.7 billion

CONCLUSION
From entirely an economic perspective, there is a lack of hard evidence provided by the CGEModel that would
force us to believe there would be any significant overall impact for SouthAfrica in hosting the FIFA World Cup.
However, the long-term effects are unknown anddepend purely on whether the success of the World Cup can
attract a vast amount of directforeign investment and aggravate further domestic productivity, which could see
keymacroeconomic variables such as GDP and employment to potentially increase byconsiderable amounts in the
future (Bohlmann, 2008).However the projections developed in 2007by Grant Thornton, andthe pre-event
numbershave probably beensurpassed with South Africa hosting global events such as theIndianPremier League,
the ICC ChampionsTrophy, the Miss World 2008 pageant and anumber of international conferences(Grant
Thornton, 2009). So this is not a new occurrence for SouthAfrica, as they have hosted global events before but
never to the extent of this magnitude.After the World Cup in Germany, there was a lot of talk of how the event had
a quite positivere-branding effect, which goes a lot further than just simply the impact on GDP. Also theembassy in
Abu Dhabi was quoted to saying “The FIFA World Cup was without doubt thebest PR activity for Germany since its
inception”. Positive quotes like these just further arguethe point that the potential benefits of the World Cup are
very difficult to quantify because itis extremely difficult to measure positive externalities and the ‘feel-good’ factor
related withthe World Cup. The German embassy in Stockholm was also quoted following the 2006mega-event,
“The World Cup has improved the Brand Germany more than a million politicalmedia campaigns could have
done.” So it is fairly predictable that events of this nature canbe viewed as a massive marketing campaign for the
host country and hosting a successful 

world cup does not necessarily imply bombarding the country with the most expensiveinfrastructure and
merchandises, nor does it imply that hosting a successful world cup meanshosting the most expensive World Cup
with regards to stadiums and supporting infrastructure(Bohlmann, 2008).It is important not just for South Africa, but
for the whole African continent that theymaximise the opportunity that has been given to them to deliver
a memorable and successfulWorld Cup. It is the biggest stage on which they can showcase their country and
hospitality.Some sceptics may argue that the opportunity to host the world cup comes at too great a costand too early
for the nation. However, given the detailed long-term planning and vision thathas been devoted to the event, the
FIFA 2010 World Cup could turn out to be a definingpiece of history for South Africa