CARDIFF COUNCIL CYNGOR CAERDYDD

EXECUTIVE BUSINESS MEETING: 3 NOVEMBER 2005

WALES RALLY GB

REPORT OF CHIEF EXECUTIVE AGENDA ITEM: 2

PORTFOLIO: CORPORATE

Reason for this Report

1. To inform the Executive of the Council’s current contractual position regarding the Wales Rally GB event and to consider whether the Council should continue to act as the host city for the Rally. This would involve a re-negotiation of the current contract with the objective of reducing the Council’s financial commitment to the event.

Background

2. The Council is coming to the end of a 6 year contract with the Wales Rally GB as host city in 2005. The existing contract has a 3 year option for the Council to continue the host city status from 2006 to 2008.

3. Wales Rally GB are discussing a sponsorship agreement with the WDA/WAG that will extend the current agreement for 5 years up to 2011. The Rally organisers announced the new sponsorship at this years Wales Rally GB event in September 2005, but are still working on the final contract details.

4. The Rally organisers are aware that the host city contract is up for renewal and would like to secure an agreement for 2006 and beyond, possibly linking into the same term as the main sponsorship contract with WDA/WAG. They are keen to agree a contract with the Council and they want to retain Cardiff, as the Capital of Wales, as the host city for the Rally.

5. The Wales Rally GB Rally event has developed over the past 6 years and improvements have been made to Race stages, infrastructure, etc. The Rally is attracting more people to the event and raising the profile of Cardiff and Wales throughout the World.

6. The WDA commissioned an economic appraisal of the Rally in 2004. The main conclusions were that:-

¾ The 2004 Rally produced an improved financial return for Wales over the 2001 study commissioned by Cardiff Council

Page 1 of 3 ¾ In UK the event was covered by ITV and S4C. 13.4 million views watched at least some of the event which has a direct impact in increased leisure visitation, increased business investment and a halo/recognition effect ¾ For comparison, recent research revealed that in 2004 the FA Cup in Cardiff created around £2 million additional demand in the City. In 2001 the comparable figure for the Rally was £2.4 million.

7. TV exposure for the is increasing Worldwide and ISC have confirmed that in 2004, the worldwide audience was 770 million and shown in 202 countries.

8. Cardiff Businesses including hotels, restaurants, retail, etc., are very supportive of the Rally as it provides an increase in visitor numbers and therefore an increase in business income. The feedback we have received has been very positive and is seen as a key event for Cardiff should we lose the major soccer events such as the FA Cup Final, etc., in 2006.

9. The Rally organisers want to broaden the base of the fan support from the Rally Championship. Already the Wales Rally GB attracts foreign visitors from Europe, particularly from Scandinavia, and Germany. The Millennium Stadium stage in 2005 provided a family spectator opportunity to allow non-enthusiasts, the opportunity to see Rally cars close up. This was a bold step by the organisers which will be good for the Rally and good for Cardiff.

Issues

10. Informal discussions with the Rally organisers have been positive and it has been accepted by them that the Council’s financial contribution to the Rally will be reduced. A re-negotiation of the contract could see a significant reduction in costs from the current £300,000 budget. In addition the Council will be reducing it's level of practical support for the Rally. The removal of the Superspecial Stage in Cardiff Bay will reduce the Council's commitment to the event. However we will still be supporting the start and finish arrangements, the Stadium stage and help facilitate the organisers operational requirements.

11. The term of the contract would need to be considered and it may be appropriate to sign up to the same time period as the WDA/WAG sponsorship agreement. This is provisionally set for 2011. A more cautious approach would be to sign up to 2008 with a 3 year option up to 2011.

12. At the right terms, it would be in Cardiff’s interest to retain the host city status of the Rally. With the likelihood of FA Cup and other major soccer events going back to Wembley, the Rally has key economic impact benefits which shouldn’t be lost. The Rally is also a key event in the Council’s major event strategy.

Page 2 of 3 13. The Wales Rally GB event held in September staged the first Stadium event in the World Championship and attracted over 20,000 spectators. However on the Sunday morning stage, a tragic accident occurred which resulted in the death of the team co-driver Michael Park. Michael was a professional team co-driver and been involved in the World Championships for many years. This was the first fatal crash in the World Rally Championships for more than 20 years. Michael’s funeral took place on October 6th and appropriate messages of condolences and sympathy were sent by the Lord Mayor, on behalf of the Council.

Reasons for Recommendations

14. The Wales Rally GB event will enhance Cardiff’s Global image and profile and generate significant economic impact for businesses within the City.

Legal Implications

15. The Council has powers to encourage visitors to its area for recreation and to contribute to the expenses of entertainment of any nature pursuant to sections 144 and 145 of the Local Government Act 1972

Financial Implications

16. The Council's budget for the current financial year was eventually set at the level of cap imposed by the Welsh assembly Government. Indications for the 2006/07 budget suggest an equally, or indeed tighter, budget round in prospect. The current budgeted cost for Wales Rally GB is £300k per annum. It is important, given the Council's budget position that the proposed negotiations result in a reduction in funding as indicated in the report.

RECOMMENDATIONS

The Executive is recommended to agree that

(1) an ‘in principle decision to support the Wales Rally GB, as host city be agreed, subject to final confirmation that the WDA/WAG conclude the main sponsorship for the Rally and the host city contract has a similar time-line to the main sponsorship agreement;

(2) further discussions and negotiations take place with the Rally organisers and that the Chief Executive be authorised to agree a revised host city contract on the understanding a reduction is achieved regarding the budget allocation for the event.

BYRON DAVIES Chief Executive 24 October 2005

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