Madonna in Rio: City Hall publishes study to justify investment of R$ 10 million

The show that Madonna will perform at Copacabana Beach, on May 4th, will be sponsored by R$ 10 million from the city of Rio, as published in last Monday’s edition (8) of the Official Gazette of the Municipality. The person who will receive the amount will be Bonus Track Entretenimento Ltda, which organizes the show.

The sponsorship generated questions about the use of public resources for the event of a private institution, since the singer’s show is part of the celebration of the centenary of Banco Itaú, of which she is the poster girl, as well as Fernanda Montenegro, Ronaldo Fenômeno and Jorge Benjor.

This Saturday morning (13), the city hall released a study in which it seeks to justify the high amount invested in the presentation. “It’s worth noting that a major event or show, like Madonna’s in Rio, in addition to the direct economic effects they can have on the local economy, there are also indirect effects, which are commonly left aside due to their measurement being significantly more difficult. These effects concern the cultural, political or image impacts related to the holding of these events — which can be substantial”, says one of the excerpts from the statement.

According to the study, prepared by the Municipal Secretariat for Urban and Economic Development (SMDUE), in partnership with the Municipal Secretariat of Tourism (SMTUR), New Year’s Eve was used as a basis to estimate potential economic impacts.

“Therefore, the expectation is for an audience of at least one million people. Cariocas and residents of the Metropolitan Region of Rio de Janeiro correspond to 85% of this total; national tourists, 12%; and foreign tourists, 3%”, he states the text.

These numbers, according to the city hall, “make sense, given that there is already news and information about extra flights, coming from several cities in Brazil, in addition to the increase in passengers at the Bus Station, coming by bus during the event period, as well as the strong hotel occupancy. In some neighborhoods, like Copacabana — where the show takes place —, occupancy should be close to 100%.”

The study also states that, based on FGV research on New Year’s Eve 2018, the average ticket for Brazilian tourists is R$491 per day; for foreign tourists, R$ 561. And for Rio residents and residents of the Metropolitan Region of Rio, it is R$ 127. The total impact on Rio’s economy would be R$ 293.4 million, with public spending.

Another excerpt from the text reminds us that the investment by Rio City Hall, through a sponsorship contract, for this show is R$10 million. “A relevant point is that City Hall’s public investment could bring a return, in terms of movement in Rio’s economy, of approximately 30 times!” (The exclamation appears in the document).

The city hall also foresees a 20% increase in collection in service taxes (ISS) from activities related to tourism, such as the airport, road and municipal transport sectors, “which would lead to a collection of R$ 60.9 million this month of May, with an increase of R$10.2 million compared to the same month of the previous year.”

“In other words, based on these estimates and hypotheses, the public investment for the Madonna show would also be returned to City Hall, in the same magnitude, with an increase in tax collection”, states the text.