Cape Town is hoping to attract sport teams and nightclubs to the rarely used, loss-making stadium it built for the 2010 soccer World Cup, according to Councilor Grant Pascoe.
“We are looking at an anchor tenant, which will be one of the bigger sports, so that’s rugby,” Pascoe said in a phone interview on May 17. “We’re also looking at the possibility of some nightclubs to be accommodated within that precinct, which will help lower the cost of the stadium.”
The local Cape Town council is trying to find tenants and uses for the 68,000-capacity Cape Town Stadium, which cost R4.5 billion to build and hosted eight World Cup matches including the semi-final between the Netherlands and Uruguay. The city is trying to lift restrictions on the stadium that prevent commercial activity on non-event days, Pascoe said.
Ajax Cape Town, a local soccer team, played South African Premiership champions Kaizer Chiefs at the arena on May 1, while the stadium also hosted teenage pop star Justin Bieber’s sell- out concert on May 8. The Western Stormers rugby team are the city’s biggest sporting attraction and play matches in a different part of the coastal city at the 51 900-capacity Newlands Stadium, which hosted its first match in 1890 and is the world’s third-oldest rugby stadium.
Cape Town Stadium cost R56 million to operate in its most recent financial year and generated income of R14 million, Pascoe said. Even if the city gets regular tenants for the stadium, it will probably still be unprofitable, he said.
Break even
“We’re hoping to break even, but I think we’re looking at a 5% operating cost we would be happy to accept,” the councilor said. “Maximum 10% if that’s tolerable for the rate payer. But that stadium needs to start paying for itself.”
The search for different users for Cape Town stadium could echo the use of the U.K.’s Wembley stadium, which will host National Football League matches between the Pittsburgh Steelers and Minnesota Vikings in September and the San Francisco 49ers versus Jacksonville Jaguars in October.
©2013 Bloomberg News
Source: Moneyweb
