DEVELOPMENT: Cape Town Stadium Will Benefit Province Rugby
Recent Western Cape Business News
The announcement by Cape Town’s mayor last week that the union and the city were entering formal talks for Cape Town Stadium in Green Point to become WP rugby's new home is promising because the stadium can hold an additional 20 000 spectators compared to Newlands.
“In terms of growth of rugby as a sport in the province, the Newlands stadium is beginning to constrain the WP Rugby team,” says Gillian Saunders, head of Advisory Services at Grant Thornton Johannesburg. “In the build up to the World Cup in 2010, research indicated that there could be demand for an extra 50% more spectators at some rugby games, which the Newlands stadium could not accommodate.”
The Western Province rugby body also owns the Newlands stadium as well as a few additional properties in the neighbourhood.
“WP Rugby could make a considerable profit on the sale of this land, which would help to boost union coffers,” she adds.
Should Newlands stadium be sold, the Stormers Super15 team would also need to consider moving across to the Cape Town Stadium.
However, Saunders agrees with the Western Province Rugby Football Union (WPFRU) head Tobie Titus stating last week that the move will take many years of negotiations and planning.
“There is a huge emotional attachment which Cape Town rugby supporters have to Newlands - many generations have supported the rugby team at the WP Rugby home grounds,” adds Saunders. “The City of Cape Town is effectively the landlord of the Green Point stadium and it will have to be realistic to ensure that the move to Green Point is attractive in all aspects. Getting buy-in from the community plays a vital role here.”
But Saunders emphasises that consideration needs to be made regarding the reduced suite capacity in Green Point, with approximately 100 corporate suites available compared to Newlands Stadium’s 315 suites.
“Executive and corporate suites are an important revenue source for the union and it would not make business sense to lose profit from more than 200 suites,” continues Saunders.
A cost effective option which would prevent further construction costs to build extra suites could be to consider the new “business club seating” option. The business club seating provides for a large group of seats to be exclusively available for corporate sponsorship and this seating is then serviced by a central hospitality offering.
Saunders added that the Cape Town stadium is fairly well utilised already but that the move of WP Rugby to the stadium would significantly improve this, making the stadium highly utilised, operating at breakeven and probably at a surplus.
“Green Point Stadium has done very well since the World Cup with many high profile concerts and additional corporate usage linked to the International Convention Centre, but the public’s opinion that stadiums should be used more than three or four times a month is unrealistic,” she says. “Even top UK football stadia don’t experience utilisation statistics which are that impressive.”
Saunders believes that if the Cape Town Stadium in Green Point experiences two or three reasonable capacity utilisations per month, the venue is well occupied.
“While there is a lot more negotiation to take place before this move is formally agreed, we do believe the solution is beneficial to the team, the Cape Town supporters and to the union overall, as well as to the City to ensure good utilisation levels of its asset,” Saunders concludes.
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