Still, the city says the losses will be offset by the injection into the local economy.
“We are aggressively pursuing to become the events capital of Africa and hosting this event assists us in that regard. Although there is a deficit over the three-year period, we have to be mindful of the proposition value to the city such as visitor spend,” said mayoral committee member for tourism, events and economic development, Eddie Andrews.
He said the city would also benefit from hours of television broadcasting and extended visits in the city by spectators to the event.
Cape Town hosted the event for the first time last year, injecting R539m into the local economy with an attendance of 106 245 spectators over the two days.
Similarly, Andrews said the hosting of three PSL Kaizer Chiefs games at the Cape Town Stadium between December and February could be viewed as “a resounding success” when compared to other PSL events, despite the R500 000 in losses suffered.
“Finances are always a consideration but such events are also about creating opportunities for social integration, bringing the game of soccer to the local fan base and growing the sport. The stadium was built as public good and such events present opportunities to use and showcase the stadium more regularly and more inclusively,” he said.
In an initial report to mayco last month, the city said it expected to make around R3m from this year’s Sevens Series event, but that report had not yet factored in city-related costs of R2.1m.
An updated report considered by mayco on Wednesday said this year’s event would lead to a deficit of around R750 252.
It’s anticipated that next year the city will make a loss of R889 508, and R1m in 2018. The projected costs for the next two years are based on the event footprint of next month’s event.
Hosted on December 10 and 11, the city will cover all city-related services while Saru will pay for stadium hire at a cost of R500 000 a day, a further R250 000 for hospitality, food and beverage rights and R1.4m for stadium direct costs.
All revenue will go to Saru.
Stadium income is estimated at R2.9m and expenditure at R3.7m.
The Green Point Athletics stadium will be used for accreditation and warm-up facilities at no cost.
Original source: Cape Town 'to benefit' from rugby sevens