Presentation to the Joint Committees

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vodacom

• Presentation to the Joint Committees Meeting on
  Second 2010 FIFA World Cup South Africa Special
  Measures Bill (proposed section 76 B16-2006) and
  2010 FIFA World Cup South Africa Special Measures
  Bill (proposed section 75 B13-2006)
• 14 July 2006

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Mr Mthobi Tyamzashe Executive Director,
Stakeholder Relations.
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An Outline

• Introduction
• Vodacom Key Areas of Concern
• Discussion of Concerns
• Recommendations

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1. Introduction

• Vodacom is represented by Mr Mthobi Tyamzashe
  Executive Director, Stakeholder Relations and Mr
  Peter Matlare, Executive Director, Commercial.
• Vodacom thanks the Portfolio Committee on Sport
  and Recreation and the Select Committee on
  Education and Recreation for the opportunity to
  submit comments on both Bills.

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Introduction cont.

• Vodacom has been a key supporter sponsor of
  sport in SA for more than a decade.
• Vodacom works closely with federations, clubs and
  individuals to promote best practice in South
  African sport.
• Vodacom believes that the success of the 2010
  World Cup is critical to all South Africans.
• Vodacom will be there beyond 2010.

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Mr Peter Matlare, Executive Director, Commercial.

• Key considerations with respect to the proposed
  legislation.

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Background

• We all worked hard to get the right to host the
  2010 FIFA Soccer World Cup.
• We all celebrated when we won the award.
• We are all committed to making it a success.
• We believe that gain should be for all.
• Those who negotiate with FIFA on the detail of
  the commercial arrangements must ensure that
  Africa is a net beneficiary.

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2. Vodacom Key Areas of Concern

• Vodacom accepts in principle the need to have
  clean stadia for a certain period before,
  during and after the 2010 FIFA Soccer World Cup.
• There are however some consequences which might
  not have been identified by the policy makers
  which we wish to bring to the attention of the
  committee.
• These have been identified by Vodacom and some of
  the federations and clubs we have dealings with.

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2. Vodacom Key Areas of Concern

• Vodacoms key concerns relate to
• Clause 2 of the Section 76 Bill
• Clause 7 of the Section 76 Bill
• Clause 5 of the Section 75 Bill, and
• Clause 9 of the Section 75 Bill.
• These concerns are with regards to both the World
  Cup and the Confederation Cup.

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3. Discussion.

• Clause 2 of the Section 76 Bill
• Clause 2 reads thus the Minister of Trade and
  Industry can stipulate a period in excess of one
  month after completion of the final competition
  as the date on which the protection afforded by
  the declaration of the competition as a protected
  event, shall end

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3. Discussion.

• Clause 2 of Second 2010 FIFA Bill
• Vodacom submits that the period contemplated in
  terms of clause 2 should
• be reasonable and must take into account
  existing rights and contractual arrangements of
  stadium owners, their sponsors and other business
  partners
• There is no compensation by FIFA or the LOC for
  stadium owners during the period.
• -We believe that the duration of the period may
  put some organisations in financial jeopardy.

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3. Discussion

• Clause 2 of the Section 76 Bill
• Vodacom is concerned that an overly lengthy
  period will have the following potential adverse
  impact
• Sponsors will suffer considerable loss, and
  undue prejudice to their brand value if the
  period is too long as the penalties wont
  compensate for such loss of brand value
• Stadium owners will suffer severe financial loss
  if they are required to pay substantial penalties
  to their sponsors for loss of branding rights
  over a long period in terms of the respective
  sponsorship contracts and
• Business partners of stadium owners such as
  companies which are in the business of selling
  advertising space at the various stadiums will
  suffer severe financial prejudice if the stadiums
  are required to be clean for a long period of
  time.

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3. Discussion.

• Clause 5 (b) (iv) of the Section 75 Bill
• iv) zone surrounding or adjacent to a stadium,
  venue, place or facility that the LOC identifies
  as an exclusion zone in which prescribed
  commercial activities by any person other than
  persons identified by the LOC are prohibited.

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Discussion.

• Vodacom seeks clarity on whether this would mean
  closure of private business operations falling
  within the designated zones as this will have
  severe commercial implications.
• Small business might be severely affected.
• Surrounding business will be affected.

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3. Discussion.

• Minister's Regulation making powers in terms of
  clause 9 of the Section 75 Bill and clause 7 of
  the Section 76 Bill.
• In terms of clause 7 of the Section 76 Bill and
  clause 9 of the Section 75 Bill, the Minister is
  empowered to promulgate certain regulations.
• Clause 7 of the section 76 Bill specifically
  provides that the Minister consults with the
  Ministers of Trade and Industry, Agriculture and
  Land Affairs, and Health
• Vodacom submits that consultation should not only
  be limited to the afore-mentioned Ministers but
  should also include all relevant stakeholders,
  including amongst others, sports federations,
  commercial entities and sponsors.

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4. Recommendations

1. As regards clause 2 of the Section 76 Bill
   Vodacom proposes that the period contemplated in
   terms of clause 2 of the section 76 Bill should
   be restricted to a cumulative period of three
   months i.e. the period before, during and after
   completion during the protection subsist must not
   exceed three months.
2. A key question is who should compensate for
   losses suffered ?
3. As regards clause 5 of the 2010 FIFA Bill Vodacom
   humbly requests the Committee to consider the
   potential adverse impact of the designation of
   areas surrounding or adjacent to stadiums and
   other venues on private business operations.
4. As regards clause 7 of the Second 2010 FIFA Bill
   and clause 9 of the 2010 FIFA Bill Vodacom
   submits that the Minister must also consult all
   relevant stakeholders including amongst others,
   sports federations, commercial entities and
   sponsors before promulgating regulations

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• THANK YOU!