Case Study 1: Cape Town Stadium Development and Management

Case Study 1: Cape Town Stadium Development and Management
When South Africa put forward its bid for the 2010 FIFA World Cup, Newlands Stadium was identified as the competition venue and Athlone Stadium was noted as the training venue, yet the final competition was
hosted at Cape Town Stadium in Green Point. Despite this announcement being made in February 2006, the City of Cape Town undertook a study to evaluate alternative venues in July 2006 (Bayette Consulting,
2006, cited by Swart & Bob, 2009). In 2012, the City of Cape Town proposed a Business Plan for Cape Town Stadium and Green Point Park which was welcomed by Future Cape Town (2013) as a step forward
in the future viability of the stadium and greater precinct. This Business Plan (2012) acknowledges that the past two decades has seen unprecedented growth in the number of large stadiums worldwide; largely driven by the requirements of international sports federations in relation to their respective mega-events. The City of Cape Town (2012, p. 7) further notes that in many instances, “after the hosting of these events, owners and operators are confronted with the harsh realities of the extremely competitive major stadium environment.” Moreover, the running costs of these stadiums are considerable, and Cape Town is no exception to this reality. This Business Plan (2012, p. 7) also underscores that “stadium owners have been forced to re-assess their traditional stadium management structures and event delivery models, and take a broader – and more strategic and professional – view of the spread of products and services required at their facilities.” Given the current operational realities, the City of Cape Town (2012) appointed a business analyst in September 2011 to develop and consider five potential governance and business models for Cape Town Stadium based on best practice. These included the following (City of Cape Town, 2012, p. 10):
• Model 1: City as operator, with anchor tenant
• Model 2: Independent operator, with anchor tenant
• Model 3: Anchor tenant as operator
• Model 4A: City as operator, with no anchor tenant
• Model 4B: Independent operator, with no anchor tenant
• Model 5A: Analyst-proposed mixed management model – public-private partnership
• Model 5B: Analyst-proposed mixed-management model – municipal entity
More recently, Chothia (2017) reported that the City has made a decision on the management and operation of the Cape Town Stadium.
Evaluate some of the key aspects that need to be considered when selecting alternative venue sites when constructing a sport facility, and the Cape Town Stadium case in particular. Additionally, evaluate the
proposed business models and justify the selection of the most appropriate business model.
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