David Beckham Kicks Off Search for 2012 Olympic Torch Bearers; Did Hosting 2010 World Cup Make a Difference for South Africa?; Financial Successes and Disasters for World Sporting Events
DAVID BECKHAM, MIDFIELDER, LOS ANGELES GALAXY: For it to be in the east end of London, first off, is a proud moment for myself. And to be there with my sons, possibly my daughter, my wife, it's going to be a proud moment for myself, but for many people in this country.</s>FOSTER: David Beckham, there, on why his first goal is to be a fan at the London 2012 Olympics. The star footballer is here to officially launch the search for torch bearers at the Games. Now, just to host a major world sporting event takes countless hours of planning and preparation, and the financial burden alone can be crippling. London Olympic officials, for example, will be tapping the private sector to the tune of $3.3 billion. But it's an economic risk that many countries are willing to take. A gamble, they hope, will be worth it. For South Africa, staging the 2010 World Cup was not just a privilege, but a chance for a fresh start. So, did it pay off for the people of Johannesburg? CNN's Nkepile Mabuse takes a look.</s>NKEPILE MABUSE, CNN CORRESPONDENT (voice-over): The vuvuzelas made it a noisy World Cup but, in the end, South Africans deserved to blow their own horn. They organized a successful football tournament.</s>MABUSE (on camera): I watched the opening game on June the 11th right here in Alexandra Township with some of the country's poorest citizens. Many of them were dressed in the colors of the national team, and they really got into the spirit of the vent, but the euphoria didn't fool them. They told me then that they didn't expect hosting the World Cup to change their lives.</s>MABUSE (voice-over): Some of the benefits touted from hosting the event included improved infrastructure, tourism, and jobs, but many in the target sects were never reached.</s>MABUSE (on camera): Initial estimates were that the event would cost $2.5 billion, attract nearly half a million visitors, and create jobs. In the end, government expenditure nearly doubled, only 300,000 visitors came and, according to statistics, South Africa at 25 percent, the unemployment rate is back where it was before the World Cup.</s>UNIDENTIFIED MALE (through translator): "Here, it only benefited those who could provide accommodation for visitors. The rest of us, didn't gain anything," this man tells me.</s>UNIDENTIFIED FEMALE (through translator): "All four of my brothers are unemployed," this woman says. "There are no jobs, and the World Cup didn't make a difference."</s>MABUSE (voice-over): Organizers blame the global financial crisis for robbing the country of the desired economic boost.</s>DANNY JORDAAN, FORMER CEO, LOCAL ORGANIZING COMMITTEE: When we were awarded the event in 2004, not a single one of these economists predicted that in 2008 there would be a serious economic crisis and a global one at that.</s>MABUSE: It was a crisis out of which FIFA emerged unscathed. The football governing body raked in nearly $4 billion from the World Cup, making it their most lucrative ever. For South Africa, the biggest gains may lie in the future. While some economists say it was an expensive marketing campaign, others believe the hosting of the event has altered the country's image in the eyes of investors and travelers.</s>JORDAAN: Most tourists, when they talk South Africa, they said "Is it safe?" That's the first question, and throughout the bidding and also the state leading up to the deliberation, that was the first question all over the world. And after the World Cup, that question disappeared.</s>MABUSE: And as for the country's poor, Jordaan says not a single cent was diverted from programs earmarked to improve their lives. Nkepile Mabuse, CNN, Johannesburg.</s>FOSTER: Well, let's take a look into some of the financial successes, but some of the horror stories of some other major world sporting events. The US held the football World Cup in 1994, and the end result -- well, it was a tiny profit, really, $60 million. If you take a look at Canada, another story there worth telling you about. Canada's try at an Olympic Games was a financial disaster. The cost for the 1976 Montreal Games skyrocketed and taxpayers were still making payments on debt more than 30 years later. They weren't really expecting that. Barcelona had better luck, though. Back in 1992, the Olympics are credited with transforming Barcelona into a truly global city. Germany, well, there, the World Cup in 2006 brought local businesses some $2.6 billion, so some financial success, there. Over to Japan. Well, Japan and South Korea were the first joint hosts of a World Cup, but almost ten years later, they'll still paying the costs. Taxpayers spent up to $6 million a year on maintenance of stadiums, many of which, disastrously, lay empty. Benefit or burden? Well, before you decide, just wait until you hear what our next two guests have to say. With us now is Dennis Coates, he's professor of economics from the University of Maryland in Baltimore in the US, and Michael Fennell also, president of the Commonwealth Games Federation. He's in Kingston, Jamaica. First of all, Michael, what's the reason for holding one of these big events. Is it to make money, is it to make a profit?</s>MICHAEL FENNELL, PRESIDENT, COMMONWEALTH GAMES FEDERATION: I think one has to be -- I've always said, be very, very careful with the reasons for the excess expenditure. And quite often, if not in most cases, that excess expenditure resulted from local decisions, not because of requirements for hosting the event itself. You'll find that governments and cities and other authorities decided on their own that they wanted to put in excessive expenditures to host the games, but those were not precise requirements for the hosting. So, I think we need to be quite clear on that, that those are local decisions outside of the scope or the responsibility of the body that owns the games or the event.</s>FOSTER: Fair enough, but we often hear with these big events, even Commonwealth Games, that the promises are made that it's not going to cost anything, it'll at least break even. But that's rarely the case, right?</s>FENNELL: Well, not in all cases. If you take the case of Melbourne in 2006. They were quite clear that in their budgeting and planning their operational costs would not be covered by the operational income. But they justified it by the value of the legacy that they saw themselves achieving from those games. Now, Melbourne was unique in that they did not have a lot of need for new capital expenditure. They had basically all the infrastructure in place already. By contrast, in Manchester in 2002, they saw as a big part of what they wanted to do was the regeneration of the city, a certain part of the city that was pretty run down, and I think that was done very successfully, and that legacy continues to pay dividends today.</s>FOSTER: Yes, it's a great city, isn't it? Professor Coates, if I could bring you in. How -- Barcelona is a good example, I guess, in this Manchester another example. They have given a legacy to those cities. How do you value that? How do you work out whether or not it's a positive value?</s>DENNIS COATES, UNIVERSITY OF MARYLAND BALTIMORE COUNTY: Well, I have a hard time believing that there's any meaningful legacy. If you want to be a world class city, as I believe Barcelona and Manchester are, I don't think that you really need to host the Commonwealth Games to do that. You can do that in a much more cost-effective way simply by upgrading your community in terms of the infrastructure, the highways, the public transportation, airports, making it a tourist destination. You can do all of that without hosting a world-class sporting event.</s>FOSTER: But the event does subsidize is, doesn't it, through sponsorship and the like? And it also gives a spotlight to all of that infrastructure that's shown around the world.</s>COATES: Certainly it does that. I'm -- I'm at a loss to believe that there are very many people who would travel to Barcelona that never heard of Barcelona before it had the Olympics. Likewise, I have a hard time believing there are many people who would travel to Manchester who had never heard of Manchester before the Commonwealth Games. So, the question is, really, what does all of that expenditure really get you? Is it really that it's turning this place into some sort of tourist mecca? Or is it a lot of hype that you could have gotten for far less expenditure? And I believe that you could get it with far less expenditure.</s>FOSTER: Michael, if we take an example of Japan, they're paying off debts years and years into the future. Do you really think that a big sporting event in Japan is really worth that immense amount of debt when you can't really predict what situation the economy's going to be in in five, ten years' time?</s>FENNELL: It's up to their local decision-makers, because some people feel that they've gone way over the top. Others feel that it's justified. But may I just come back to a point that the professor just made, that some of these developments will take place in any event and, certainly in theory, that could be true. But what is a fact, and it has shown itself all over the place for many, many years, that some of these developments really do not take place until cities and countries are forced to do it by the imposition or the commitment to host the games. I can recall in Kuala Lumpur, Malaysia, in 1998, although they had planned a brand-new airport at the time, they brought it forward by years because of the games, and that gave them almost a commitment to do that. If I could draw another very simple example, you know that whenever dignitaries are visiting countries, there is always a lot of preparation work, cleaning up, and so on. And many of the citizens say that they wish they had more visits of these dignitaries because they would get their cities fixed up and spruced up in time. It just doesn't happen. The theory is not the same as the practice.</s>FOSTER: OK. They've become very big corporate events, haven't they, as well, Professor? Do you suspect that this is about big business as much as anything else? And it's not always about the people of the city benefiting.</s>COATES: Oh, absolutely. I believe that it's all about the big business, it's all about the organizing entity, FIFA or the International Olympic Committee or the Commonwealth Games Federation. When people talk about the World Cup and how profitable it has been, or the Olympics and how profitable it has been, usually the idea is that somehow that's profitable to the citizens. But in actuality, it's profitable to FIFA or the International Olympic Committee. The enormous profits from the Los Angeles Olympic Games that you often hear about, they didn't go to Los Angeles. They didn't go to the citizens of Los Angeles. They went to the International Olympic Committee and the Los Angeles Organizing Committee.</s>FOSTER: OK.</s>COATES: So, you need to be careful when you think about if these are profitable events or not.</s>FOSTER: OK, Professor Coates, Michael Fennell, as well. Thank you both very much, indeed, for joining us. Now, a little earlier, you heard some of what David Beckham had to say about London's 2012 Olympics, the next big sort of global event, I guess. For the full interview with "World Sport's" Pedro Pinto, do make sure you stay tuned to find out what his future plans are in football. That'll be coming up in about 45 minutes on "World Sport." Still to come on this program, the Lebanon-born beauty who made history in the United States. Your Connector of the Day, Miss USA, is preparing to hand over her crown. She talks to us about the controversy surrounding her win, up next.