Big game, big bucks!

A television audience report produced for FIFA noted that the 2010 World Cup had “reached over 3.2 billion people around the world — 46.4% of the global population.” Even in India, hardly one of football’s traditional powers, the effect of the World Cup is big. IPL 7 had almost 225 million viewers and nearly 60 per cent of this viewership is expected for the 2014 FIFA World Cup. By SHREEDUTTA CHIDANANDA.

In June last year, the FIFA Secretary General Jerome Valcke announced that football’s governing body was set to make near $4 billion from the 2014 World Cup. “The exact number I do not know but around $4 billion,” he said in Rio de Janeiro. “Of course it’s not all profit, it is commercial revenue related to the cycle of not just the World Cup, but the cycle between the 2010 Cup and 2014.”

Close to two-thirds of that money would come from the sale of broadcast rights, Valcke stated, and the rest from marketing and sponsorship. The figure represents a tidy increase in revenues from South Africa four years ago, when FIFA had earned some $3.6 billion.

The World Cup has always been big business. No other sporting event comes close to it for universal appeal. A television audience report produced for FIFA noted that the 2010 edition had “reached over 3.2 billion people around the world — 46.4% of the global population.”

It is no surprise then that association with the tournament commands such value. Visibility is high and promotional opportunities are immense. In the UK, 38 companies had told the market that they expected business to flourish during the World Cup, according to The Telegraph. “The 38 companies expecting a boost include 10 bookmakers, seven media companies, seven technology groups, five retailers or consumer-facing businesses and two pub groups,” it said.

It is remarkable — and yet not a surprise — that beneficiaries extend even to the smallest levels. The report revealed that Domino’s Pizza was seeking to recruit 1300 new drivers to deliver 6 million pizzas during the tournament! Further, the market research firm Nielsen was quoted as saying that in 2010, “sales of certain goods during the week the World Cup started got a real shot in the arm, such as TV sales up 70% compared with the same week the year before, with beer up 51%, crisps by 10% and chocolate 37%.”

At the top of the chain, though, are the giant companies. Sportswear manufacturers, through apparel and replica kit sales, expect handsome growth. In January, Frank Dassler, President of the World Federation of the Sporting Goods Industry (WFSGI), told reporters in Munich that he predicted growth of between 3.5 percent and 4 percent in the business this year.

Even in India, hardly one of football’s traditional powers, the effect of the World Cup is big. Avinash Pant, Marketing Director, Nike India, feels the sport’s popularity is undeniably on the rise. “As a brand, we are very encouraged by the growing support for football in India,” he says. “Of course there is a spike in the viewership of football during the World Cup but what is encouraging is the popularity of the football leagues throughout the year.”

The demand for national team kits (10 participating countries in Nike’s case) and related apparel has so far been ‘encouraging’, Pant says. “We expect increased enthusiasm once the tournament begins. It will further fuel demand for football products.”

How valuable a product the World Cup is in India can be gauged from the advertisement rates on TV. Despite the event coming close on the heels of the IPL, the official broadcaster, Sony Six, seems optimistic. “We are selling ad spots at ₹2.5 lakhs for 10 seconds and expect revenue to almost touch ₹200 crore for the 64 matches,” the network’s representatives told The Hindu-Business Line. “IPL 7 had almost 225 million viewers. We expect nearly 60 per cent of this viewership for the FIFA World Cup.”

The advertisement rates are estimated to be only half of what was charged during the IPL, but they are similar to what ODI cricket matches would command in India. The World Cup is also an opportunity to push new products and ideas through, for the market exists. “We can use the World Cup to drive advances in television technology because with a large platform of broadcasters, anything we want to try, we immediately have reasonable economics around it,” television director Niclas Ericson said recently. “We did 3D in South Africa and quickly had a number of broadcasters around the world working with us and participating in the project. For this World Cup we are working with 4K and 8K, and immediately we have broadcasters who say they want to be part of it.”

Amidst all this, how much the host nation will stand to benefit has been hugely debated. Brazil is estimated to have spent over $11 billion on the World Cup, with the government triumphantly expecting revenues of $13 billion from tourists and other long-term infrastructural benefits.

Critics like Romario, though, have been sceptical and angered by FIFA’s standard tax-exemption demands. “FIFA will make a profit of four billion Reals which should provide one billion Reals in tax, but they will not pay anything,” the former Brazil striker fumed in a video he posted last year. “They come, set up the circus, they don’t spend anything and they take everything with them. The real president of our country is FIFA.”