Financial disaster looms
Paddy Lewis
“SPORT can’t be afforded a soft touch. It’s still a commercial operation. Running big events is a risky, complex issue and it’s a timely reminder about the importance of good governance.”
So said Sport and Recreation NZ CEO Peter Miskimmin after the recent report into the $2.2 million loss from hosting the World Rowing Championships in New Zealand was released. Miskimmin acknowledged that the championships were an operational success, but a financial disaster. Then last week we had the news that twelve New Zealand cities have been invited to bid for the right to host games at the 2015 men’s under-20 football World Cup. Potentially up to eight cities will be awarded matches next year for the tournament. Both subjects have been an interest of mine since the bills started totting up for the Rugby World Cup.
Is hosting major events the best use of our sports resources? The cost in infrastructure, new facilities, people hours, and event management seems to be at odds with our population, our commercial sector’s ability to fund sponsorships, and our general interest in sports. The Rugby World Cup is a bit like arguing with a greenie over climate change. One side vehemently says it will make a profit, the other side says it has no show of making a profit. The proof of that particularly expensive pudding will be in the eating post-Cup.
Nevertheless, I still believe that given our constraints in terms of overall resources, that sports money is best spent getting our best athletes to relevant competitions overseas. The FIFA under-20 tournament has cleverly been pitched by organizers to individual cities. That way, successful host cities will have to carry the can via their ratepayers for any costs and losses. Is that a good use of ratepayer funding? For example, how are places like Invercargill, Napier and Palmerston North going to get a return on investment if they win the right to host matches?
The perennial tenuous argument about tourism dollars and bed nights is always trotted out, but to be honest, if I were a football fan travelling to New Zealand to follow my team which might happen to have a game in Invercargill, I’d be taking the opportunity to get jiggy somewhere like Queenstown pre-match before heading to Invercargill on game day.
And let’s remember councils aren’t generally investors in tourism enterprises or the hospitality businesses that get the cash from such events. Nor are they, as the Rugby World Cup is going to show, major beneficiaries from the ticket sales or event licensing rights. Councils, in this case, are going to be offsetting costs of running the tournament via their poor old ratepayers.
We need to start putting a stop to this kind of thing. We invest too much in massive events that hold little ongoing benefit for the country. The money being expended on everything from feasibility studies through to hosting and stadiums could be far better directed to give much more impetus to the actual sports themselves.
That doesn’t mean we should stop hosting events – Arthur Klap has done wonders with events like the World Mountainbiking Champs and the Winter Games. But we need to do a proper benefit-cost analysis of the long-term advantage to the country from spending so much on one-off extravaganzas. We have limited resources. We need to make sure they are used to maximum benefit.
So said Sport and Recreation NZ CEO Peter Miskimmin after the recent report into the $2.2 million loss from hosting the World Rowing Championships in New Zealand was released. Miskimmin acknowledged that the championships were an operational success, but a financial disaster. Then last week we had the news that twelve New Zealand cities have been invited to bid for the right to host games at the 2015 men’s under-20 football World Cup. Potentially up to eight cities will be awarded matches next year for the tournament. Both subjects have been an interest of mine since the bills started totting up for the Rugby World Cup.
Is hosting major events the best use of our sports resources? The cost in infrastructure, new facilities, people hours, and event management seems to be at odds with our population, our commercial sector’s ability to fund sponsorships, and our general interest in sports. The Rugby World Cup is a bit like arguing with a greenie over climate change. One side vehemently says it will make a profit, the other side says it has no show of making a profit. The proof of that particularly expensive pudding will be in the eating post-Cup.
Nevertheless, I still believe that given our constraints in terms of overall resources, that sports money is best spent getting our best athletes to relevant competitions overseas. The FIFA under-20 tournament has cleverly been pitched by organizers to individual cities. That way, successful host cities will have to carry the can via their ratepayers for any costs and losses. Is that a good use of ratepayer funding? For example, how are places like Invercargill, Napier and Palmerston North going to get a return on investment if they win the right to host matches?
The perennial tenuous argument about tourism dollars and bed nights is always trotted out, but to be honest, if I were a football fan travelling to New Zealand to follow my team which might happen to have a game in Invercargill, I’d be taking the opportunity to get jiggy somewhere like Queenstown pre-match before heading to Invercargill on game day.
And let’s remember councils aren’t generally investors in tourism enterprises or the hospitality businesses that get the cash from such events. Nor are they, as the Rugby World Cup is going to show, major beneficiaries from the ticket sales or event licensing rights. Councils, in this case, are going to be offsetting costs of running the tournament via their poor old ratepayers.
We need to start putting a stop to this kind of thing. We invest too much in massive events that hold little ongoing benefit for the country. The money being expended on everything from feasibility studies through to hosting and stadiums could be far better directed to give much more impetus to the actual sports themselves.
That doesn’t mean we should stop hosting events – Arthur Klap has done wonders with events like the World Mountainbiking Champs and the Winter Games. But we need to do a proper benefit-cost analysis of the long-term advantage to the country from spending so much on one-off extravaganzas. We have limited resources. We need to make sure they are used to maximum benefit.
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