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Bid Overview for Host Cities

Bid Overview for Host Cities

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World Cup 2018 UK bid overview document for host cities
World Cup 2018 UK bid overview document for host cities

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Published by: bristol_citizen on Nov 16, 2009
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02/23/2011

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England 2018

Applicant Host City Engagement Process
Bid Overview for Applicant Host Cities

Agenda
• Introduction • FIFA levels of engagement • Host city deliverables • Timelines & deadlines • 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 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

Introduction (2/2)
• 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 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

Agenda
• Introduction • FIFA levels of engagement • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

FIFA Requirements
FIFA has issued standard template agreements to all Bidding nations…
Agreement 1 Host City Agreement 2 Stadium Agreement 3 Training Site Agreement 4 Government Guarantees 5 Hotel Agreement 6 Bidding Agreement 7 Hosting Agreement Executed By • Applicant Host Cities • Applicant Host Cities (Stadium owners / operators) • Applicant Host Cities (Stadium owners / operators) • Central Government • England 2018 and hotel owners • England 2018 • England 2018

FIFA Requirements
• 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. (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

Agenda
• Introduction • FIFA levels of engagement – Central Government – Host Cities – Local Organising Committee • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

Central Government Contribution

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

Cost Implication
Cost to the Government of signing the guarantees is approximately £300-350m ‘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
• Home Secretary Entry and Exit Permits

Cost
• 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 • Cost of administrating unconditional work permits for foreign nationals. • Loss of tax revenue • Mainly legislative implications • Security to provided at no cost with full liability for any related safety/security incidents to be accepted by the Government • Loss of income through the unrestricted import and export of currency exchange • Mainly legislative implications • Cost of supplying IT and telecommunications infrastructure

Work Permits Tax Exemption Legal Issues and Indemnification Safety and Security Bank and Foreign Exchange Operations Protection and Exploitation of Commercial Rights Telecommunication and Information Technology

• Secretary of State for Business, Innovation and Skills • Chancellor of the Exchequer • Secretary of State for Justice • Home Secretary

• Chancellor of the Exchequer • Secretary of State for Business, Innovation and Skills • Secretary of State for Business, Innovation and Skills

Agenda
• Introduction • FIFA levels of engagement – Central Government – Host Cities – Local Organising Committee • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

Role of Host Cities

• Fan fests • Transportation • City marketing and dressing • Competition related events • City volunteers • Tourism • Agency liaison (Traffic / Police / Transport)

• City management and planning • FIFA inspection visits • City hospitality • Stadium & venue specific training site delivery • Legacy planning and management • Environmental sustainability

Agenda
• Introduction • FIFA levels of engagement – Central Government – Host Cities – Local Organising Committee • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

Roles of LOC
• • • • • • • • • • • • Event planning and management FIFA inspection visits Finance and funding Volunteers Opening and closing ceremonies Marketing Communications Ticketing Hospitality Stadium & training site preparation Competition related events Competition management • • • • • • • • • • • FIFA observer tours IT & T planning and delivery Host broadcaster planning and delivery Media liaison and management Accreditation 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 • FIFA levels of engagement • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

Host City Deliverables

Agreement 1 FIFA compliant stadium

Commentary • A Host City will not be chosen by FIFA unless it can deliver a compliant stadium • Delivery of elements such as transport, fan fests and city marketing and dressing • Stadium reservation agreement augmented by stadium use agreement

2 Host City Agreement

3 Stadium Agreement Cover

4 Training Site Agreement Cover

• Training site reservation agreement

Host City Contract Process
FIFA will not countersign the Host City Agreement until March 2013 in the event England 2008 is successful. Dusseldorf, Bremen, Leverkusen and Munchengladbach were presented in Germany 2006’s bid book but did not ultimately become Host Cities March 2013 Inspection visits Stadium selection confirmed FIFA sign Host City Agreement

December 2010 England 2018 win the right to host 2018 World Cup

January 2012 LOC proposes Host Cities to FIFA

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 …

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

Agenda
• Introduction • FIFA levels of engagement • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

Timeline Overview
Nov 09 Dec 09
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 Bid book sent to printers Delivery of final bid book to England 2018 England 2018 submit bid book to FIFA
26 Nov 26 Nov 14,15 & 16 Dec 16 Dec 18 Jan 19 Feb 19 Mar 2 Apr 5 Apr 6 May 14 May

Jan 10

Feb 10

Mar 10

Apr 10

May 10

• 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

Agenda
• Introduction • FIFA levels of engagement • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

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 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 Government Host Cities LOC Area of Expense
• Safety and security • Government guarantees • Host City obligations (c.£15m per venue) • Stadium overlay • Staging costs (LOC funded by FIFA revenue sources)

Estimated Expenditure c.£350m c.£200m c.£350m

Total

c.£900m

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)
Stadium Associated Costs (£k)
Net 40k capacity stadium

Other City Costs (£k)
795-992 800-960 800-960 800

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) 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 Offices Temporary Generator 1000Kva Temporary Stadium Ticketing Centre Outside Broadcast compound offices Temporary food concessions Outside Broadcast compound fencing Additional TV platforms (10) Storage Containers (400 m2)
200-500 300 220-270 220-260 200 200 150 150 150 120-175 120-140 108-132 100-120 100-120 92-113 80-106 60-80 24-35 20 16-20

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.

3,000

c.£15m total costs; of which c.£6m is stadium related
1,500

2,000

2,000

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 semifinal and final venues

400

VenueSpecific Training Sites

Transport Concept

Marketing

City Dressing Fan Fests (2 x 20k)

Other training sites not included in host city funding

England 2018 suggests the following allocation of costs; this may vary from city to city (1/3)
Suggested Allocation of Cost Lines (1/3)
Source of Finance Cost Line Stadium Media Centre Access Control Points (80) Outer Access Control Points (80) Inner Stadium Associated Costs Floodlight Upgrade Pitch Installation IT infrastructure Temporary Accreditation Temporary Merchandising (2 x 500 m2) Signage Media Seats with desks (300) Commentary positions (110) Power infrastructure Outer Perimeter Fencing (1,000 metres) Temporary Media Conference Facility City Cost Stadia Owner LOC Government

England 2018 suggests the following allocation of costs; this may vary from city to city (2/3)
Suggest Allocation of Cost Lines (2/3)
Cost Line Temporary Mix Zone Temporary Offices Temporary Generator 1000Kva Temporary STC Outside broadcast compound offices Temporary food concessions OB compound fencing Additional TV platforms (10) Storage Containers Fan Fests (2 x 20,000) City Dressing Other City Costs Marketing Transport Concept Venue-Specific Training Sites FIFA Family Hotel Venue Specific Team Hotel Team Base Camp Private Security Source of Finance City Cost Stadia Owner LOC Government

Stadium Associated Costs

England 2018 suggests the following allocation of costs; this may vary from city to city (3/3)
Suggested Allocation of Cost Lines (3/3)
Cost Line Volunteers Stewarding Other City Costs Hospitality Utilities Cleaning Waste Management Emergency blue light services Legacy Staffing Commercial Rights Guarantee Government Support 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 Source of Finance City Cost Stadia Owner LOC Government

Some costs vary depending on the number of stadiums used, number of games staged and competition stages played in the city (1/3)
Nature of Costs (1/3)
Cost Line Stadium Media Centre Access Control Points (80) Outer Access Control Points (80) Inner Floodlight Upgrade Stadium Associated Costs Pitch Installation IT infrastructure Temporary Accreditation Temporary Merchandising (2 x 500 m2) Signage Media Seats with desks (300) Commentary positions (110) Power infrastructure Outer Perimeter Fencing (1,000 metres) Temporary Media Conference Facility
* Minimum 4 group games, maximum 7 games per venue (exc Final)

Nature of Cost Fixed Stadium Variable Games Variable*

Some costs vary depending on the number of stadiums used, number of games staged and competition stages played in the city (2/3)
Nature of Costs (2/3)
Cost Line Temporary Mix Zone Temporary Offices Temporary Generator 1000Kva Temporary STC Outside broadcast compound offices Temporary food concessions OB compound fencing Additional TV platforms (10) Storage Containers Fan Fests (2 x 20,000) City Dressing Other City Costs Marketing Transport Concept Venue-Specific Training Sites FIFA Family Hotel Venue Specific Team Hotel Team Base Camp Private Security
* Minimum 4 group games, maximum 7 games per venue (exc Final)

Nature of Cost Fixed Stadium Variable Games Variable*

Stadium Associated Costs

Some costs vary depending on the number of stadiums used, number of games staged and competition stages played in the city (3/3)
Nature of Costs (3/3)
Cost Line Volunteers Stewarding Other City Costs Hospitality Utilities Cleaning Waste Management Emergency blue light services Legacy Staffing Commercial Rights Guarantee Government Support 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
* Minimum 4 group games, maximum 7 games per venue (exc Final)

Nature of Cost Fixed Stadium Variable Games Variable*

This results in the following total funding requirements for a typical Host City (with a single venue)
Typical Host City Funding Estimate £m
£25m
Cost is spread between now and 2018

£15m £13m £2m

Host City Cost

Stadium Owner

Total Typical Host City / Stadium Owner Funding Requirement

LOC Cost Apportioned Across The Cities
(as a comparison)

Aggregating host city funding nationally gives a total requirement of c.£200m
Aggregated Host City Funding Estimate £m
Based on generic city assumptions To be updated when Candidate Host Cities selected
31
5 23 1 2

200 9
27

146
5 17

23 4 18

165 124

Cities with 1 stadium

Cities with 2 stadia
Host City / RDA / County Councils

Cities with 3 or more stadia
Stadium Owner

Total Host City Funding Requirement
LOC

Agenda
• Introduction • FIFA levels of engagement • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

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 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 Training site rental and compliance funded by the LOC

Host Cities

Stadium Owners

Training Sites

Agenda
• Introduction • FIFA levels of engagement • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

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 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 • FIFA levels of engagement • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

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

€8-10m to stage World Cup matches

€18-20m to stage World Cup matches

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

… 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 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

Agenda
• Introduction • FIFA levels of engagement • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

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 their vital role in the staging of a World Cup

The most likely approach is to create a Host City subcommittee reporting to the LOC

Agenda
• Introduction • FIFA levels of engagement • Host city deliverables • Timelines & deadlines • Cost summary • Revenue summary • Economic impact • Highlights from Germany 2006 • Potential governance considerations • Conclusion and next steps

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 england2018@colinroberts.myzen.co.uk 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

• • • •

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