bid overview for host cities

England 2018Applicant Host City Engagement Process

Bid Overview for Applicant Host Cities

Agenda

• Introduction

• FIFA levels of engagement

• Host city deliverables

• Timelines & deadlines

• Cost summary• Cost summary

• Revenue summary

• Economic impact

• Highlights from Germany 2006

• Potential governance considerations

• Conclusion and next steps

Introduction (1/2)

• FIFA engages with a successful World Cup Bidding Nation on three different levels:

– Central Government

– Host Cities

– Local Organising Committee (LOC)

• At each level there are a series of complex and demanding • At each level there are a series of complex and demanding undertakings and contracts to be signed

• FIFA insist that these agreements are signed without any changes being made

• These requirements apply equally to all nations bidding to host the World Cup in 2018/2022

• Therefore, at each level there is a simple question: Do we want to be part of staging the FIFA World Cup or not?

• If the answer is ‘yes’, it is incumbent on the contracting entity to carry out their own due diligence and convince themselves that they understand the full implications of signing the necessary agreements

• Applicant Host Cities need to ensure that they understand the

Introduction (2/2)

• Applicant Host Cities need to ensure that they understand the financial and legal implications of engaging with FIFA

• This document provides the critical information which will feed into the Applicant Host City decision-making process for individual Host Cities

• It should be understood however that the timetable set by England 2018 is based on submitting our Bid in terms of FIFA’s timetable. Any delays would seriously affect the quality of the England 2018 Bid and failure to meet FIFA deadlines would invalidate our Bid

• Introduction




• Cost summary

Agenda

• Cost summary

• Revenue summary

• Economic impact




FIFA Requirements

FIFA has issued standard template agreements to all Bidding nations…

Agreement Executed By

1 Host City Agreement • Applicant Host Cities

2 Stadium Agreement• Applicant Host Cities (Stadium

2 Stadium Agreement• Applicant Host Cities (Stadium

owners / operators)

3 Training Site Agreement• Applicant Host Cities (Stadium

owners / operators)

4 Government Guarantees • Central Government

5 Hotel Agreement • England 2018 and hotel owners

6 Bidding Agreement • England 2018

7 Hosting Agreement • England 2018

• FIFA expect all agreements to be signed unaltered

• Annex 4 of the Bidding Agreement states the following specifically referring to Host Cities:

“(i) The Host City Agreements are the agreements to be duly executed and initialled by the LOC

and the competent executive authority of a proposed Host City, containing all rights and

obligations of a Host City in relation to Competitions.

FIFA Requirements

(ii) The Host City Agreements duly executed and initialled by the executive authority of a

proposed Host City must fully comply with and shall not deviate in any way from, the template

agreement provided by FIFA…”

• Host Cities and stadiums will not be considered by FIFA unless properly executed agreements are submitted with the official England bid

In view of this requirement, England 2018 will not include in its Bid Book Cities and Stadiums that have not complied fully with the FIFA requirement

• Introduction

• FIFA levels of engagement– Central Government– Host Cities– Local Organising Committee


Agenda


• Cost summary

• Revenue summary

• Economic impact




Central Government Contribution

Central Government Requirement

• Central Government is required by FIFA to sign eight Government Guarantees

• To meet FIFA’s timetable, these are

Cost Implication

• Cost to the Government of signing the guarantees is approximately £300-350m

• ‘Safety and security’ is the most • To meet FIFA’s timetable, these are to be signed by the relevant Secretary of State by 4 December 2009

• If the Government Guarantees are not signed as worded then, England’s bid will be deemed not to be compliant and consequently invalid

• ‘Safety and security’ is the most significant guarantee as Government is responsible for all safety and security requirements relating to the staging of the FIFA World Cup

Central Government Guarantees

Government Guarantee Secretary of State Cost

Entry and Exit Permits

• Home Secretary • Loss of revenue from issuing of unconditional and free entry visas to:

– FIFA delegation, teams, national associations, fans with valid tickets, commercial sponsors and media partners

Work Permits• Secretary of State for Business,

Innovation and Skills• Cost of administrating unconditional work

permits for foreign nationals.

Tax Exemption • Chancellor of the Exchequer • Loss of tax revenue

Tax Exemption • Chancellor of the Exchequer • Loss of tax revenue

Legal Issues and Indemnification

• Secretary of State for Justice • Mainly legislative implications

Safety and Security

• Home Secretary • Security to provided at no cost with full liability for any related safety/security incidents to be accepted by the Government

Bank and Foreign Exchange Operations

• Chancellor of the Exchequer • Loss of income through the unrestricted import and export of currency exchange

Protection and Exploitation of Commercial Rights

• Secretary of State for Business, Innovation and Skills

• Mainly legislative implications

Telecommunication and Information Technology

• Secretary of State for Business, Innovation and Skills

• Cost of supplying IT and telecommunications infrastructure

• Introduction



Agenda


• Cost summary

• Revenue summary

• Economic impact




Role of Host Cities

• Fan fests

• Transportation

• City marketing and dressing

• City management and planning

• FIFA inspection visits

• City hospitality• Competition related events

• City volunteers

• Tourism

• Agency liaison (Traffic / Police / Transport)

• City hospitality

• Stadium & venue specific training site delivery

• Legacy planning and management

• Environmental sustainability

• Introduction



Agenda


• Cost summary

• Revenue summary

• Economic impact




Roles of LOC

• Event planning and management

• FIFA inspection visits

• Finance and funding

• Volunteers

• Opening and closing ceremonies

• FIFA observer tours

• IT & T planning and delivery

• Host broadcaster planning and delivery

• Media liaison and management

• Accreditation

• Marketing

• Communications

• Ticketing

• Hospitality

• Stadium & training site preparation

• Competition related events

• Competition management

• Hotels and team base camp management

• Government and stakeholder management

• Transportation management and delivery

• Staffing

• FIFA Fan fest planning and management

• FIFA liaison

Agenda

• Introduction





• Revenue summary

• Economic impact




Host City Deliverables

Agreement Commentary

1 FIFA compliant stadium

• A Host City will not be chosen by FIFA unless it can deliver a compliant stadium

• Delivery of elements such as 2 Host City Agreement

• Delivery of elements such as transport, fan fests and city marketing and dressing

3 Stadium Agreement Cover• Stadium reservation agreement

augmented by stadium use agreement

4 Training Site Agreement Cover • Training site reservation agreement

Host City Contract Process

England 2018 win the right to host

Inspection visits

Stadium selection

FIFA sign Host City

Dusseldorf, Bremen, Leverkusen and Munchengladbach were presented in Germany 2006’s bid book but did not

ultimately become Host Cities

December 2010

LOC proposes Host Cities to

January 2012 March 2013

FIFA will not countersign the Host City Agreement until March 2013 in the event

England 2008 is successful.

the right to host 2018 World Cup

visitsconfirmed

City Agreement

FIFA’s Hosting Agreement for the Formal Selection Process of the Host Cities

8.1.3 (i) – By no later than 1 January 2012 (FIFA World Cup Host City Bid Process Due Date) the LOC and FIFA shall agree on a formal final Host City bid selection process for the FIFA World Cup and Confederation Cup …

Host Cities to FIFA

… The final decision must be concluded no later than 1 March 2013 when the actual Host Cities will be selected by FIFA.

• Introduction




• Cost summary

Agenda

• Cost summary

• Revenue summary

• Economic impact




Timeline Overview

Applicant Host Cities final bid submitted

Host Cities submit FIFA Host City Agreement

Host City presentation

Candidate Host City Announcement

England 2018 circulate 1st draft of bid book

England 2018 circulate 2nd draft of bid book

England 2018 circulate final copy of bid book

Bid book signed off

Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10

26 Nov

26 Nov

14,15 & 16 Dec

16 Dec18 Jan

19 Feb

19 Mar

2 Apr

England 2018 submit bid book to FIFA

• Selected Candidate Host Cities and their final bid submission will form an essential component of the Technical Bid Book around which England’s bid will be built

• In order to produce the best technical bid possible, there is a substantial amount of work to be done by England 2018 once the Cities have been selected and the final May deadline is not moveable

• England 2018 cannot announce Candidate Host Cities until all documentation has been received

• Failure to submit the agreements in accordance with these deadlines will mean that the Applicant Host City is excluded from the process going forward

Bid book signed off

Bid book sent to printers

Delivery of final bid book to England 201814 May

2 Apr

5 Apr6 May

• Introduction




• Cost summary

Agenda

• Cost summary

• Revenue summary

• Economic impact




FIFA World Cup Staging – Financial Overview

• FIFA accrue all revenue generated from hosting the World Cup except for specific revenues allocated to Host Cities

– FIFA Fan Fest sponsorship and hospitality

– Rental income for use of the stadium

• No revenue accrues to the LOC with the LOC costs being funded in their entirety by FIFA

– Over and above the LOC expenditure budget, FIFA will agree a profit or surplus amount of money with the LOC; the surplus will be used for football surplus amount of money with the LOC; the surplus will be used for football development-related projects

• The expenditure budget agreed by FIFA will exclude all capital costs relating to stadiums as well as those costs detailed in the host city agreements and central government guarantees

• England 2018 requested a stadium use agreement from FIFA, FIFA responded by stating that the stadium use agreement would only be available in 2012 and provided a sample agreement from the 2011 Women’s World Cup in Germany

• This has been reviewed by England 2018’s legal advisers and is inadequate as essential information will only be provided by FIFA in 2011. England 2018 will therefore confirm stadium remuneration by way of a covering letter to contracting parties.

Funding Overview

Three entities fund a FIFA World Cup…

Entity Area of Expense

Government• Safety and security

• Government guarantees

• Host City obligations

Estimated Expenditure

c.£350m

Host Cities• Host City obligations

(c.£15m per venue)

• Stadium overlay

LOC• Staging costs (LOC funded

by FIFA revenue sources)

Total c.£900m

c.£200m

c.£350m

Following inspection visits, we have collated the generic Host City cost items; the following example represents a typical city hosting group matches with a single stadium (stadium development capital costs excluded)

Net 40k capacity stadium

Stadium Media Centre

Access Control Points (80) Outer

Access Control Points (80) Inner

Floodlight Upgrade

Pitch Installation

IT infrastructure

Temporary Accreditation

Temporary Merchandising (2x500 m2)

Stadium Associated Costs (£k) Other City Costs (£k)

3,000

795-992

800-960

800-960

800

200-500

300

220-270

220-260 c.£15m total costs; of

Specific costs incurred by each

Applicant Host City will vary

depending on: the size of each city;

the number and size of FIFA Fan

Fests; the different stages of the

World Cup matches hosted; and the

hosting of competition related events.

Temporary Merchandising (2x500 m2)

Signage

Giant Screen Rental

Media Seats w ith desks (300)

Commentary positions (110)

Pow er infrastructure

Outer Perimeter Fencing (1k metres)

Temporary Conference

Temporary Mix Zone

Temporary Off ices

Temporary Generator 1000Kva

Temporary Stadium Ticketing Centre

Outside Broadcast compound off ices

Temporary food concessions

Outside Broadcast compound fencing

Additional TV platforms (10)

Storage Containers (400 m2)

Fan Fests (2 x

20k)

City DressingMarketingTransport

Concept

Venue-

Specific

Training Sites

2,0002,000

1,500

220-260

200

150

150

150

120-175

120-140

108-132

100-120

100-120

92-113

80-106

60-80

24-35

20

16-20

c.£15m total costs; of which c.£6m is stadium

related200

400

Other training sites not included in host city funding

Overall cost will

change depending

on the stadium

presented and the

matches hosted

which require

additional facilities

i.e. c£300k for media

facilities at semi-

final and final

venues

England 2018 suggests the following allocation of costs; this may vary from city to city (1/3)

Cost Line

Source of Finance

City CostStadia Owner

LOC Government




Floodlight Upgrade

Suggested Allocation of Cost Lines (1/3)

Sta

diu

m A

ss

oc

iate

d C

os

ts

Floodlight Upgrade

Pitch Installation

IT infrastructure


Temporary Merchandising (2 x 500 m2)

Signage

Media Seats with desks (300)


Power infrastructure

Outer Perimeter Fencing (1,000 metres)

Temporary Media Conference Facility

Sta

diu

m A

ss

oc

iate

d C

os

ts

Cost LineSource of Finance

City Cost Stadia Owner LOC Government

Temporary Mix Zone

Temporary Offices


Temporary STC

Outside broadcast compound offices


Suggest Allocation of Cost Lines (2/3)

Sta

diu

m A

ss

oc

iate

d C

os

ts



OB compound fencing


Storage Containers

Fan Fests (2 x 20,000)

City Dressing

Marketing

Transport Concept

Venue-Specific Training Sites

FIFA Family Hotel

Venue Specific Team Hotel

Team Base Camp

Private Security

Sta

diu

m A

ss

oc

iate

d C

os

tsO

the

r C

ity C

os

ts

Cost LineSource of Finance

City Cost Stadia Owner LOC Government

Volunteers

Stewarding

Hospitality

Utilities

Cleaning

Waste Management

Suggested Allocation of Cost Lines (3/3)

Oth

er

Cit

y C

os

ts


Waste Management

Emergency blue light services

Legacy

Staffing

Commercial Rights Guarantee

I.T. & T. Guarantee

Safety and Security Guarantee

Entry and Exit Permits Guarantee

Work Permits Guarantee

Tax Exemption Guarantee

Legal issues and indemnification G.

Bank and Forex Ops Guarantee

Oth

er

Cit

y C

os

tsG

ove

rnm

en

t S

up

po

rt

Some costs vary depending on the number of stadiums used, number of games staged and competition stages played in the city (1/3)

Cost LineNature of Cost

Fixed Stadium Variable Games Variable*




Floodlight Upgrade

Nature of Costs (1/3)

Sta

diu

m A

ss

oc

iate

d C

os

ts Pitch Installation

IT infrastructure


Temporary Merchandising (2 x 500 m2)

Signage

Media Seats with desks (300)


Power infrastructure

Outer Perimeter Fencing (1,000 metres)

Temporary Media Conference Facility

Sta

diu

m A

ss

oc

iate

d C

os

ts

* Minimum 4 group games, maximum 7 games per venue (exc Final)



Temporary Mix Zone

Temporary Offices


Temporary STC

Outside broadcast compound offices


Sta

diu

m A

ss

oc

iate

d C

os

ts




OB compound fencing


Storage Containers

Fan Fests (2 x 20,000)

City Dressing

Marketing

Transport Concept

Venue-Specific Training Sites

FIFA Family Hotel

Venue Specific Team Hotel

Team Base Camp

Private Security

Sta

diu

m A

ss

oc

iate

d C

os

tsO

the

r C

ity C

os

ts




Volunteers

Stewarding

Hospitality

Utilities

Cleaning

Waste Management

Oth

er

Cit

y C

os

ts



Waste Management

Emergency blue light services

Legacy

Staffing

Commercial Rights Guarantee

I.T. & T. Guarantee

Safety and Security Guarantee

Entry and Exit Permits Guarantee

Work Permits Guarantee

Tax Exemption Guarantee

Legal issues and indemnification G.

Bank and Forex Ops Guarantee

Oth

er

Cit

y C

os

tsG

ove

rnm

en

t S

up

po

rt


This results in the following total funding requirements for a typical Host City (with a single venue)

£25m

£15m

£13m

Typical Host City Funding Estimate£m

Cost is spread between now and

2018

£2m£13m

Host City Cost Stadium Owner Total Typical HostCity / Stadium

Owner FundingRequirement

LOC CostApportioned

Across The Cities

(as a comparison)

Aggregating host city funding nationally gives a total requirement of c.£200m

18

23

17

4

5

27

92

5

1

31

23

146

Aggregated Host City Funding Estimate

£m

200

Based on generic city assumptions

To be updated when Candidate Host Cities selected

17

124

165

Cities with 1 stadium Cities with 2 stadia Cities with 3 or morestadia

Total Host CityFunding Requirement

Host City / RDA / County Councils Stadium Owner LOC

Agenda

• Introduction





• Revenue summary

• Economic impact




There are some direct income opportunities for certain stakeholders

• FIFA have stated there will be an opportunity for host cities to generate income :

– Sponsorship at FIFA Fan Fests

– Hospitality at FIFA Fan Fests

• FIFA believe Fan Fests could break even on the above revenue model

Host Cities

• Stadium rental of c.10-15% net ticket revenue to be negotiated with each stadium

• Net ticket revenue from the 2010 World Cup in South Africa is expected to total approximately $400m for 64 games; adjusting for inflation and market conditions, net revenue at an England 2018 World Cup could be considerably higher

Stadium Owners

• Training site rental and compliance funded by the LOC

Training Sites

Agenda

• Introduction





• Revenue summary

• Economic impact




Economic Impact

• An independent review of the Economic Impact of Hosting the 2018 FIFA World Cup in England has been conducted by PriceWaterhouseCoopers (PWC)

• The nationwide study was then broken down to Host City level using a series of key parameters

• England 2018 sent to this breakdown Applicant Host Cities; it is a broad tool to enable Cities to calculate their own economic impact based on their aspirations as a Cityas a City

• This report indicated a minimum economic impact of £130m; applicant Host Cities were encouraged to make their own assessment and many have commissioned their own report

• England 2018 issued the total Economic Impact Report on 8 September 2009; these figures reflect a total incremental spend of £5.3 billion associated with hosting the World Cup with a £3.2 billion impact on GDP

• The Economic Impact Assessment is based on our provisional plans and will be revised during 2010 once the Candidate Host Cities have been selected and detailed costs have been refined

Agenda

• Introduction





• Revenue summary

• Economic impact




Comparative Costs reported by German cities

Host Cities should take some comfort from the level of cost reported by cities involved in hosting the 2006 FIFA World Cup in Germany

Gelsenkirchen Cologne (Köln) Munich

€10-13m to stage World Cup matches



Host Cities in Germany benefited significantly from being part of the 2006 FIFA World Cup

… and consequently tourism and the

local economy

• “The influx of visitors put a lot of money into local

businesses in the short term and we hope to see a

rise in tourist numbers in the long term”

Burkhard Jung, Major of Leipzig

• “The FIFA World Cup has given the city a real

boost, and our citizens can now have a real sense

The World Cup helped to boost the

City image

• “The FIFA World Cup, and in particular the Fan

Fests in Cologne city centre have given a huge

boost to the image of Cologne… the sense of

excitement has really lifted spirits in Cologne. This

feeling of community, of achieving something

important together as a team will have a lasting

effect on all of us” boost, and our citizens can now have a real sense

of pride . This was the biggest and most

impressive way of advertising the region we

could have imagined, and the tourism industry will

reap the rewards from it in the years to come”

Dr. Ulrich Maly, Mayor of Nuremberg

• “It would be remiss of me not to mention the fact

that hosting the tournament brought with it a 150m

Euros investment in infrastructure and

development projects representing a huge shot in

the arm to the local economy and ensuring long

term benefits for our city”

Bernard J Deubig, Mayor of Kaiserslautern

effect on all of us”

Fritz Schramma, Mayor of Cologne

• “Around a million people came to the Fan Fest in

the Olympiapark, while eight million fans flocked to

the city on match days, including many who simply

wanted to sample the Munich FIFA World Cup

atmosphere. This has made a lasting positive

contribution to the city’s image…”

Christian Ude, Mayor of Munich

• “Thanks to the FIFA World Cup, Hamburg has

gained a lot of international prestige, a fact that

cannot be emphasised strongly enough”

Ole von Beust, Mayor of Hamburg

Agenda

• Introduction





• Revenue summary

• Economic impact




Host City Governance

• In the event we are successful England 2018 will ensure Host Cities are represented from a governance perspective within the overall national staging strategy

• Further discussion is required but Host City representation is a key objective of England 2018 given representation is a key objective of England 2018 given their vital role in the staging of a World Cup

The most likely approach is to create a Host City sub-committee reporting to the LOC

Agenda

• Introduction





• Revenue summary

• Economic impact




Conclusion and Next Steps

• England 2018 appreciate the significant involvement and support of all the Applicant Host Cities throughout the bidding process.

• To assist all Applicant Host Cities over the next six weeks, Colin Roberts, Former CEO of Greenwich Council has been recruited to assist with final bid submissions

– Colin can be contacted by email [email protected] or by phone 07801560346

• We are in the process of appointing a sports lawyer with in-depth understanding of club football to assist in the processing of stadium and training site agreements.

• We understand that this is a demanding and complicated process, placing stress on the City Councils at a difficult time.

• However we take great comfort from the way in which major stakeholders from all cities have worked together and worked with the Bid team

• We look forward to receiving your final bid submissions on 26 November and all signed agreements by 26 November 2009

• Please contact us immediately if you have any questions or comments

bid overview for host cities

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