Bay’s new stadium ‘profitable by 2013’

By Alvin Reeves and Mthetho Ndoni

INITIAL fears that the Nelson Mandela Bay Stadium would become a white elephant have been allayed, with the stadium generating R11-million in revenue since the Fifa World Cup – believed to be more than any other South African stadium purpose-built for last year’s soccer extravaganza.

Despite the fact that the city has no PSL soccer team or top-level rugby franchise, officials say the stadium has become the most economically successful of the six stadiums built for the World Cup, and could start to turn a profit by as early as 2013.

The facility – which cost R2.4-billion to build – costs ratepayers R21-million to operate each year.

However, an investigation into the feasibility of the world-class stadium has revealed that Access Management, appointed as the official operator in 2009, has helped generate R11-million in revenue since then, more than halving the running costs for the municipality.

Next year, revenue is expected to increase to R17-million and by 2013 it is expected to start breaking even and even turn a profit.

Meanwhile, some other World Cup stadiums have yet to even leave the starting blocks. The Cape Town Stadium, which cost R4.5-billion to build and costs R57-million a year to operate, does not even have an operator yet and city officials were unable to give projections this week as to when the stadium would become sustainable.

But the promise of Super Rugby in the Eastern Cape and the prospect of further Test matches involving the Springboks has resulted in all 49 of the Nelson Mandela Bay Stadium’s hospitality suites being sold out for rugby for the next three years.

That, coupled with the success of recent concerts, soccer matches, music festivals and the provision of cleaning, security and food and beverages has ensured the stadium is the most viable of all those built for the World Cup.

This weekend’s Tri-Nations match between South Africa and the All Blacks, PSL matches involving Kaizer Chiefs, Orlando Pirates, Bloemfontein Celtic and Mamelodi Sundowns, as well as the IRB Sevens for the next five years, will add even greater value for sport fans, and also assist in offsetting costs.

Municipal economic development and recreation services executive director Zolile Siswana confirmed the figures this week. “In the first year of operation the stadium operators [Access Management] have reduced the maintenance cost to the municipality to R10-million,” Siswana said. “But in its second year of operation, it is expected the cost will be reduced to a R4-million shortfall.”

Siswana said it was estimated the stadium would break even in the 2012/13 financial year and in doing so it would create a situation where the municipality would incur no operational costs.

“Following the SA Rugby Union’s confirmation that the Southern Kings will be part of Super Rugby in 2013, as well as partnerships with Maritzburg United FC and Jomo Cosmos, the operators have ensured both soccer and rugby are being played at the new stadium.”

Access Management chief executive Stephan Pretorius said the company, of which former Saru chief executive Rian Oberholzer is managing director and a shareholder, was satisfied with its progress.

“We are looking at breaking even in about two to three years’ time. It’s quite a big thing to accomplish but as you can see, it’s all about the events that you do and bringing these events to the stadium is what makes it successful.

“We are very excited about where we are and we are also certain this will be by far the most successful stadium in the country.

“The municipality is very happy with us. The one thing I can tell you is that this will not be a white elephant. The city and the people of PE can really be proud of what has happened here. It’s a good news story for the region.”

Until recently, the stadium was the only new World Cup facility with an anchor tenant in EP Rugby. The Bay branch of the SA Football Association is also based at the stadium.

“Cape Town will now be the second one, with Ajax moving in there. It’s great to have an anchor tenant but it’s obviously important to have both rugby and soccer,” Pretorius said.

“So our long-term plan is to develop or get a soccer team that is a Port Elizabeth-based side that can play all their matches here. I think getting Maritzburg and Cosmos to play here is a lead-up to that.

“It’s important we have done this to show people we want to bring soccer to the city, but I think in the longer term you want to create your own PSL team which people can identify with and come and follow.”

The Tri-Nations Test on Saturday will be the 50th event held at the stadium since it opened officially with the match between the Southern Kings and British Lions on June 16 2009.

Asked which events generated the most income, Access Management marketing and communications manager Buli Ngomane said they were reluctant to give exact figures because they were competing with all the new stadiums.

“Our ability to attract the large events to our metro depends partly on structuring attractive packages for the event organisers to lure them away from those venues and consider us instead,” she said.

“But generally we work on a percentage of the gate or we charge a flat rate for hiring the stadium. Each quote is tailored to each client’s needs,” Ngomane said.