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The Economics of the World Cup

THE WORLD CUP IS THE NUMBER-ONE MAJOR IНЕ HE ECONOMICS OF GLOBAL SPORTING EVENT IN TERMS OF VIEWER- SHIP. THAT MEANS MAJOR MONEY FOR ADVERTIS- ERS, SPONSORS FIFA AND HOST COUNTRIES. THE WORLD CUP .com CORPORATE SPONSORSHIP BROUGHT TO YOU BY: SPONSORING THE WORLD CUP IS NOT CHEAP OFFICIAL WORLD CUP OFFICIAL PARTNERS OF THE 2010 WORLD CUP: OFFICIAL SPONSORS OF THE 2010 WORLD CUP: PARTNERS PAY AN AVERAGE OF Coca-Cola adidas $90 MILLION SI12 MILLION, WHILE SPONSORS $90 MILLION Budweiser $28 MILLION PAY ABOUT $28 MILLION A PIECE. ECastrol $28 MILLION Emirates $90 MILLION Onfinental $28 MILLION SONY $90 MILLION MTN $28 MILLION VISA $200 MILLION SEARA $28 MILLION MMcDonald's $28 MILLION $560 MILLION FNB $28 MILLION Telkom $28 MILLION $224 MILLION REVENUES NO PAIN, NO GAIN: 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA REVENUES AND COSTS HAVE 1.5 INCREASED OVER THE PAST TEN +182%" +H0% YEARS. * PROJECTED -15% -60% THE ONLY DIRECT FUNDING A HOST .50 COUNTRY RECEIVES FROM THE PRO- CEEDS OF THE WORLD CUP ARE THE TICKET SALES AND THE PREDETER- MINED AMOUNT PROMISED BY FIFA COSTS FOR HOSTING. IN THE PAST, HOST COUNTRIES HAVE BANKED ON TOUR- ISM TO COMPENSATE FOR THE 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA COSTS OF INFRASTRUCTURE AND NEW STADIUMS. +11.% 6.0 200% GROSS TICKET SALES 5.5 +200% HOST COMPENSATION FROM FIFA 5.0 * PROJECTED STADIUM CONSTRUCTION 4.5 INFRASTRUCTURE CONSTRUCTION 4.0 -60% 3.5 3.0 2.5 2.0 1.5 1.0 .5 LOCAL BUSINESS A CLOSER LOOK: GERMANY 2006 VS. SOUTH AFRICA 2010 THE 2006 WORLD CUP WAS CONSID- 2006 2010 * PROJECTED ERED THE MOST MONETARILY 620 SUCCESSFUL OF ALL PREVIOUS WORLO CUPS. WITH THE 2010 WORLD 300 CUP IN SOUTH AFRICA PROJECTED TÔ BREAK RECORDS, HERE IS A SIDE- MILLION MILLION BY SIDE COMPARISON OF WORLD CUPS 2006 AND 2010, THE WORLD CUP HAS ALWAYS PRO- VIDED A HUGE BOOST TO THE LOCAL ECONOMY, MOSTLY FROM THE INFLUX OF SOCCER TOURISTS. IN COMPARI- SON TO 2006, WORLD CUP 2010 TOURISM IS EXPECTED TO DOUBLE, D ACCOMMODATIONS $ 210 MILLION » LOCAL RESTAURANTS S 50 MILLION $ 496 MILLION $ 65 MILLION $ 59 MILLION MISCELLANEQUS INCLUDING TRANSPORTATION $ 40 MILLION MOSTLY DUE TO THE LOCATION OF THE EVENT. 38% OF TOURISTS TO SOUTH AFRICA ARE PREDICTED TO BE EUROPEAN, STAYING IN HOTELS LONGER FOR THE GAMES. RETAIL THE LARGEST REVENUE GENERATOR INCLUDES ANYTHING THAT BEARS THE FIFA OR WORLD CUP LOGO. IN THE PAST HAS BEEN DIRECT RETAIL. DIRECT RETAIL INCLUDES PRODUCTS THAT CONTAIN THE OFFI- CIAL FIFA OR WORLD CUP LOGO. THE * PROJECTED MAJORITY OF THE PROFIT FROM RETAIL MERCHANDISE GOES DIRECTLY BACK TO FIFA. € 1.59 BILLION $2 BILLION R 21.3 BILLION $ 2.69 BILLION FIFA REVENUE MORE THAN 90% OF FIFA'S TOTAL REV- * PROJECTED ENUE COMES FROM THE SALE OF $95 MILLION HOSPITALITY/LICENSING RIGHTS RELATING TO THE FIFA WORLD CUP. THESE RIGHTS ARE COMMERCIAL- IZED IN THREE AREAS: BROADCASTING, MARKETING, HOSPITALITY/ LICENSING. THE SUCCESSFUL COMMERCIALIZA- $265 MILLION HOSPITALITY/LICENSING $277 MILLION MARKETING RIGHTS $174 MILLION TION OF THESE RIGHTS IS AN ESSEN- $650 MILLION BROADCASTING RIGHTS MARKETING RIGHTS TIAL REQUIREMENT TO ENSURING THAT FIFA AND THE LOCAL ORGANIZING COM- $410 MILLION BROADCASTING RIGHTS MITTEE HAVE THE NECESSARY PRIVATE FUNDING TO STAGE THE WORLD CUP. TOTAL: S849 MIĻLION TOTAL: IN USD SI BILLION IN USD TELEVISION RIGHTS USD IN MILLIONS 50 100 TUNING IN: 150 200 250 300 350 400 450 THOUGH TV VIEWERSHIP HAS 2002 185.0% DECLINED, BROADCASTING RIGHTS ARE STILL THE MAIN FORM OF INCOME FOR FIFA. +254.0% 2006 THE PRICE FOR BROADCASTING THE 2010 WORLD CUP HAS GROWN EXPONEN- TIALLY IN THE PAST 8 YEARS. WALT DISNEY COMPANY (WHICH OWNS ABC, ESPN AND UNIVISION) PAID $425 MIL- The WALT DISNEY COMPANY ur Dianey Company WHICH OWNS: LION FOR EXCLUSIVE US BROADCAST- abc UNIVISION ING RIGHTS. SOURCES: FIFA, WWW.WIKIPEDIA.ORG, THE OBSERVER, WORLD CUP SPONSORSHIP: FOUR YEARS IN THE MAKING' DREW BRENNARD, "ECONOMICS OF WORLD CUP 2006 OS DAVID, SOUTHERN CALIFORNIA BUSINESS 'ECONOMIC IMPACT IN LOS ANGELES", CNN :CATCH WORLD CUP FEVER. BILLIONS IN USD BILLIONS IN USD THE WORLD CUP IS THE NUMBER-ONE MAJOR HE ECONOMICS OF THE WORLD CUP GLOBAL SPORTING EVENT IN TERMS OF VIEWER- SHIP. THAT MEANS MAJOR MONEY FOR ADVERTIS- ERS, SPONSORS FIFA AND HOST COUNTRIES. .com CORPORATE SPONSORSHIP BROUGHT TO YOU BY: SPONSORING THE WORLD CUP IS NOT CHEAP OFFICIAL WORLD CUP OFFICIAL PARTNERS OF THE 2010 WORLD CUP: OFFICIAL SPONSORS OF THE 2010 WORLD CUP: PARTNERS PAY AN AVERAGE OF Coca-Cola adidas $90 MILLION SI12 MILLION, WHILE SPONSORS $90 MILLION Budweiser $28 MILLION PAY ABOUT $28 MILLION A PIECE. ECastrol $28 MILLION Emirates $90 MILLION Onfinental $28 MILLION SONY $90 MILLION MTN $28 MILLION VISA $200 MILLION SEARA $28 MILLION MMcDonald's $28 MILLION $560 MILLION FNB $28 MILLION Telkom $28 MILLION $224 MILLION REVENUES NO PAIN, NO GAIN: 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA REVENUES AND COSTS HAVE 1.5 INCREASED OVER THE PAST TEN +182%" +H0% YEARS. * PROJECTED -15% -60% THE ONLY DIRECT FUNDING A HOST .50 COUNTRY RECEIVES FROM THE PRO- CEEDS OF THE WORLD CUP ARE THE TICKET SALES AND THE PREDETER- MINED AMOUNT PROMISED BY FIFA COSTS FOR HOSTING. IN THE PAST, HOST COUNTRIES HAVE BANKED ON TOUR- ISM TO COMPENSATE FOR THE 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA COSTS OF INFRASTRUCTURE AND NEW STADIUMS. +11.% 6.0 200% GROSS TICKET SALES 5.5 +200% HOST COMPENSATION FROM FIFA 5.0 * PROJECTED STADIUM CONSTRUCTION 4.5 INFRASTRUCTURE CONSTRUCTION 4.0 -60% 3.5 3.0 2.5 2.0 1.5 1.0 .5 LOCAL BUSINESS A CLOSER LOOK: GERMANY 2006 VS. SOUTH AFRICA 2010 THE 2006 WORLD CUP WAS CONSID- 2006 2010 * PROJECTED ERED THE MOST MONETARILY 620 C SUCCESSFUL OF ALL PREVIOUS WORLO CUPS. WITH THE 2010 WORLD 300 CUP IN SOUTH AFRICA PROJECTED TÔ BREAK RECORDS, HERE IS A SIDE- MILLION MILLION BY SIDE COMPARISON OF WORLD CUPS 2006 AND 2010, THE WORLD CUP HAS ALWAYS PRO- VIDED A HUGE BOOST TO THE LOCAL ECONOMY, MOSTLY FROM THE INFLUX OF SOCCER TOURISTS. IN COMPARI- SON TO 2006, WORLD CUP 2010 TOURISM IS EXPECTED TO DOUBLE, D ACCOMMODATIONS $ 210 MILLION » LOCAL RESTAURANTS S 50 MILLION $ 496 MILLION $ 65 MILLION $ 59 MILLION MISCELLANEQUS INCLUDING TRANSPORTATION $ 40 MILLION MOSTLY DUE TO THE LOCATION OF THE EVENT. 38% OF TOURISTS TO SOUTH AFRICA ARE PREDICTED TO BE EUROPEAN, STAYING IN HOTELS LONGER FOR THE GAMES. RETAIL THE LARGEST REVENUE GENERATOR INCLUDES ANYTHING THAT BEARS THE FIFA OR WORLD CUP LOGO. IN THE PAST HAS BEEN DIRECT RETAIL. DIRECT RETAIL INCLUDES PRODUCTS THAT CONTAIN THE OFFI- CIAL FIFA OR WORLD CUP LOGO. THE * PROJECTED MAJORITY OF THE PROFIT FROM RETAIL MERCHANDISE GOES DIRECTLY BACK TO FIFA. € 1.59 BILLION $2 BILLION R 21.3 BILLION $ 2.69 BILLION FIFA REVENUE MORE THAN 90% OF FIFA'S TOTAL REV- * PROJECTED ENUE COMES FROM THE SALE OF $95 MILLION HOSPITALITY/LICENSING RIGHTS RELATING TO THE FIFA WORLD CUP. THESE RIGHTS ARE COMMERCIAL- IZED IN THREE AREAS: BROADCASTING, MARKETING, HOSPITALITY/ LICENSING. THE SUCCESSFUL COMMERCIALIZA- $265 MILLION HOSPITALITY/LICENSING $277 MILLION MARKETING RIGHTS $174 MILLION TION OF THESE RIGHTS IS AN ESSEN- $650 MILLION BROADCASTING RIGHTS MARKETING RIGHTS TIAL REQUIREMENT TO ENSURING THAT FIFA AND THE LOCAL ORGANIZING COM- $410 MILLION BROADCASTING RIGHTS MITTEE HAVE THE NECESSARY PRIVATE FUNDING TO STAGE THE WORLD CUP. TOTAL: S849 MIĻLION TOTAL: IN USD SI BILLION IN USD TELEVISION RIGHTS USD IN MILLIONS 50 100 TUNING IN: 150 200 250 300 350 400 450 THOUGH TV VIEWERSHIP HAS 2002 185.0% DECLINED, BROADCASTING RIGHTS ARE STILL THE MAIN FORM OF INCOME FOR FIFA. +254.0% 2006 THE PRICE FOR BROADCASTING THE 2010 WORLD CUP HAS GROWN EXPONEN- TIALLY IN THE PAST 8 YEARS. WALT DISNEY COMPANY (WHICH OWNS ABC, ESPN AND UNIVISION) PAID $425 MIL- The WALT DISNEY COMPANY ur Dianey Company WHICH OWNS: LION FOR EXCLUSIVE US BROADCAST- abc UNIVISION ESFT ING RIGHTS. SOURCES: FIFA, WWW.WIKIPEDIA.ORG, THE OBSERVER, WORLD CUP SPONSORSHIP: FOUR YEARS IN THE MAKING' DREW BRENNARD, "ECONOMICS OF WORLD CUP 2006 OS DAVID, SOUTHERN CALIFORNIA BUSINESS 'ECONOMIC IMPACT IN LOS ANGELES", CNN :CATCH WORLD CUP FEVER. BILLIONS IN USD BILLIONS IN USD THE WORLD CUP IS THE NUMBER-ONE MAJOR HE ECONOMICS OF THE WORLD CUP GLOBAL SPORTING EVENT IN TERMS OF VIEWER- SHIP. THAT MEANS MAJOR MONEY FOR ADVERTIS- ERS, SPONSORS FIFA AND HOST COUNTRIES. .com CORPORATE SPONSORSHIP BROUGHT TO YOU BY: SPONSORING THE WORLD CUP IS NOT CHEAP OFFICIAL WORLD CUP OFFICIAL PARTNERS OF THE 2010 WORLD CUP: OFFICIAL SPONSORS OF THE 2010 WORLD CUP: PARTNERS PAY AN AVERAGE OF Coca-Cola adidas $90 MILLION SI12 MILLION, WHILE SPONSORS $90 MILLION Budweiser $28 MILLION PAY ABOUT $28 MILLION A PIECE. ECastrol $28 MILLION Emirates $90 MILLION Onfinental $28 MILLION SONY $90 MILLION MTN $28 MILLION VISA $200 MILLION SEARA $28 MILLION MMcDonald's $28 MILLION $560 MILLION FNB $28 MILLION Telkom $28 MILLION $224 MILLION REVENUES NO PAIN, NO GAIN: 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA REVENUES AND COSTS HAVE 1.5 INCREASED OVER THE PAST TEN +182%" +H0% YEARS. * PROJECTED -15% -60% THE ONLY DIRECT FUNDING A HOST .50 COUNTRY RECEIVES FROM THE PRO- CEEDS OF THE WORLD CUP ARE THE TICKET SALES AND THE PREDETER- MINED AMOUNT PROMISED BY FIFA COSTS FOR HOSTING. IN THE PAST, HOST COUNTRIES HAVE BANKED ON TOUR- ISM TO COMPENSATE FOR THE 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA COSTS OF INFRASTRUCTURE AND NEW STADIUMS. +11.% 6.0 200% GROSS TICKET SALES 5.5 +200% HOST COMPENSATION FROM FIFA 5.0 * PROJECTED STADIUM CONSTRUCTION 4.5 INFRASTRUCTURE CONSTRUCTION 4.0 -60% 3.5 3.0 2.5 2.0 1.5 1.0 .5 LOCAL BUSINESS A CLOSER LOOK: GERMANY 2006 VS. SOUTH AFRICA 2010 THE 2006 WORLD CUP WAS CONSID- 2006 2010 * PROJECTED ERED THE MOST MONETARILY 620 C SUCCESSFUL OF ALL PREVIOUS WORLO CUPS. WITH THE 2010 WORLD 300 CUP IN SOUTH AFRICA PROJECTED TÔ BREAK RECORDS, HERE IS A SIDE- MILLION MILLION BY SIDE COMPARISON OF WORLD CUPS 2006 AND 2010, THE WORLD CUP HAS ALWAYS PRO- VIDED A HUGE BOOST TO THE LOCAL ECONOMY, MOSTLY FROM THE INFLUX OF SOCCER TOURISTS. IN COMPARI- SON TO 2006, WORLD CUP 2010 TOURISM IS EXPECTED TO DOUBLE, D ACCOMMODATIONS $ 210 MILLION » LOCAL RESTAURANTS S 50 MILLION $ 496 MILLION $ 65 MILLION $ 59 MILLION MISCELLANEQUS INCLUDING TRANSPORTATION $ 40 MILLION MOSTLY DUE TO THE LOCATION OF THE EVENT. 38% OF TOURISTS TO SOUTH AFRICA ARE PREDICTED TO BE EUROPEAN, STAYING IN HOTELS LONGER FOR THE GAMES. RETAIL THE LARGEST REVENUE GENERATOR INCLUDES ANYTHING THAT BEARS THE FIFA OR WORLD CUP LOGO. IN THE PAST HAS BEEN DIRECT RETAIL. DIRECT RETAIL INCLUDES PRODUCTS THAT CONTAIN THE OFFI- CIAL FIFA OR WORLD CUP LOGO. THE * PROJECTED MAJORITY OF THE PROFIT FROM RETAIL MERCHANDISE GOES DIRECTLY BACK TO FIFA. € 1.59 BILLION $2 BILLION R 21.3 BILLION $ 2.69 BILLION FIFA REVENUE MORE THAN 90% OF FIFA'S TOTAL REV- * PROJECTED ENUE COMES FROM THE SALE OF $95 MILLION HOSPITALITY/LICENSING RIGHTS RELATING TO THE FIFA WORLD CUP. THESE RIGHTS ARE COMMERCIAL- IZED IN THREE AREAS: BROADCASTING, MARKETING, HOSPITALITY/ LICENSING. THE SUCCESSFUL COMMERCIALIZA- $265 MILLION HOSPITALITY/LICENSING $277 MILLION MARKETING RIGHTS $174 MILLION TION OF THESE RIGHTS IS AN ESSEN- $650 MILLION BROADCASTING RIGHTS MARKETING RIGHTS TIAL REQUIREMENT TO ENSURING THAT FIFA AND THE LOCAL ORGANIZING COM- $410 MILLION BROADCASTING RIGHTS MITTEE HAVE THE NECESSARY PRIVATE FUNDING TO STAGE THE WORLD CUP. TOTAL: S849 MIĻLION TOTAL: IN USD SI BILLION IN USD TELEVISION RIGHTS USD IN MILLIONS 50 100 TUNING IN: 150 200 250 300 350 400 450 THOUGH TV VIEWERSHIP HAS 2002 185.0% DECLINED, BROADCASTING RIGHTS ARE STILL THE MAIN FORM OF INCOME FOR FIFA. +254.0% 2006 THE PRICE FOR BROADCASTING THE 2010 WORLD CUP HAS GROWN EXPONEN- TIALLY IN THE PAST 8 YEARS. WALT DISNEY COMPANY (WHICH OWNS ABC, ESPN AND UNIVISION) PAID $425 MIL- The WALT DISNEY COMPANY ur Dianey Company WHICH OWNS: LION FOR EXCLUSIVE US BROADCAST- abc UNIVISION ESFT ING RIGHTS. SOURCES: FIFA, WWW.WIKIPEDIA.ORG, THE OBSERVER, WORLD CUP SPONSORSHIP: FOUR YEARS IN THE MAKING' DREW BRENNARD, "ECONOMICS OF WORLD CUP 2006 OS DAVID, SOUTHERN CALIFORNIA BUSINESS 'ECONOMIC IMPACT IN LOS ANGELES", CNN :CATCH WORLD CUP FEVER. BILLIONS IN USD BILLIONS IN USD THE WORLD CUP IS THE NUMBER-ONE MAJOR HE ECONOMICS OF THE WORLD CUP GLOBAL SPORTING EVENT IN TERMS OF VIEWER- SHIP. THAT MEANS MAJOR MONEY FOR ADVERTIS- ERS, SPONSORS FIFA AND HOST COUNTRIES. .com CORPORATE SPONSORSHIP BROUGHT TO YOU BY: SPONSORING THE WORLD CUP IS NOT CHEAP OFFICIAL WORLD CUP OFFICIAL PARTNERS OF THE 2010 WORLD CUP: OFFICIAL SPONSORS OF THE 2010 WORLD CUP: PARTNERS PAY AN AVERAGE OF Coca-Cola adidas $90 MILLION SI12 MILLION, WHILE SPONSORS $90 MILLION Budweiser $28 MILLION PAY ABOUT $28 MILLION A PIECE. ECastrol $28 MILLION Emirates $90 MILLION Onfinental $28 MILLION SONY $90 MILLION MTN $28 MILLION VISA $200 MILLION SEARA $28 MILLION MMcDonald's $28 MILLION $560 MILLION FNB $28 MILLION Telkom $28 MILLION $224 MILLION REVENUES NO PAIN, NO GAIN: 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA REVENUES AND COSTS HAVE 1.5 INCREASED OVER THE PAST TEN +182%" +H0% YEARS. * PROJECTED -15% -60% THE ONLY DIRECT FUNDING A HOST .50 COUNTRY RECEIVES FROM THE PRO- CEEDS OF THE WORLD CUP ARE THE TICKET SALES AND THE PREDETER- MINED AMOUNT PROMISED BY FIFA COSTS FOR HOSTING. IN THE PAST, HOST COUNTRIES HAVE BANKED ON TOUR- ISM TO COMPENSATE FOR THE 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA COSTS OF INFRASTRUCTURE AND NEW STADIUMS. +11.% 6.0 200% GROSS TICKET SALES 5.5 +200% HOST COMPENSATION FROM FIFA 5.0 * PROJECTED STADIUM CONSTRUCTION 4.5 INFRASTRUCTURE CONSTRUCTION 4.0 -60% 3.5 3.0 2.5 2.0 1.5 1.0 .5 LOCAL BUSINESS A CLOSER LOOK: GERMANY 2006 VS. SOUTH AFRICA 2010 THE 2006 WORLD CUP WAS CONSID- 2006 2010 * PROJECTED ERED THE MOST MONETARILY 620 C SUCCESSFUL OF ALL PREVIOUS WORLO CUPS. WITH THE 2010 WORLD 300 CUP IN SOUTH AFRICA PROJECTED TÔ BREAK RECORDS, HERE IS A SIDE- MILLION MILLION BY SIDE COMPARISON OF WORLD CUPS 2006 AND 2010, THE WORLD CUP HAS ALWAYS PRO- VIDED A HUGE BOOST TO THE LOCAL ECONOMY, MOSTLY FROM THE INFLUX OF SOCCER TOURISTS. IN COMPARI- SON TO 2006, WORLD CUP 2010 TOURISM IS EXPECTED TO DOUBLE, D ACCOMMODATIONS $ 210 MILLION » LOCAL RESTAURANTS S 50 MILLION $ 496 MILLION $ 65 MILLION $ 59 MILLION MISCELLANEQUS INCLUDING TRANSPORTATION $ 40 MILLION MOSTLY DUE TO THE LOCATION OF THE EVENT. 38% OF TOURISTS TO SOUTH AFRICA ARE PREDICTED TO BE EUROPEAN, STAYING IN HOTELS LONGER FOR THE GAMES. RETAIL THE LARGEST REVENUE GENERATOR INCLUDES ANYTHING THAT BEARS THE FIFA OR WORLD CUP LOGO. IN THE PAST HAS BEEN DIRECT RETAIL. DIRECT RETAIL INCLUDES PRODUCTS THAT CONTAIN THE OFFI- CIAL FIFA OR WORLD CUP LOGO. THE * PROJECTED MAJORITY OF THE PROFIT FROM RETAIL MERCHANDISE GOES DIRECTLY BACK TO FIFA. € 1.59 BILLION $2 BILLION R 21.3 BILLION $ 2.69 BILLION FIFA REVENUE MORE THAN 90% OF FIFA'S TOTAL REV- * PROJECTED ENUE COMES FROM THE SALE OF $95 MILLION HOSPITALITY/LICENSING RIGHTS RELATING TO THE FIFA WORLD CUP. THESE RIGHTS ARE COMMERCIAL- IZED IN THREE AREAS: BROADCASTING, MARKETING, HOSPITALITY/ LICENSING. THE SUCCESSFUL COMMERCIALIZA- $265 MILLION HOSPITALITY/LICENSING $277 MILLION MARKETING RIGHTS $174 MILLION TION OF THESE RIGHTS IS AN ESSEN- $650 MILLION BROADCASTING RIGHTS MARKETING RIGHTS TIAL REQUIREMENT TO ENSURING THAT FIFA AND THE LOCAL ORGANIZING COM- $410 MILLION BROADCASTING RIGHTS MITTEE HAVE THE NECESSARY PRIVATE FUNDING TO STAGE THE WORLD CUP. TOTAL: S849 MIĻLION TOTAL: IN USD SI BILLION IN USD TELEVISION RIGHTS USD IN MILLIONS 50 100 TUNING IN: 150 200 250 300 350 400 450 THOUGH TV VIEWERSHIP HAS 2002 185.0% DECLINED, BROADCASTING RIGHTS ARE STILL THE MAIN FORM OF INCOME FOR FIFA. +254.0% 2006 THE PRICE FOR BROADCASTING THE 2010 WORLD CUP HAS GROWN EXPONEN- TIALLY IN THE PAST 8 YEARS. WALT DISNEY COMPANY (WHICH OWNS ABC, ESPN AND UNIVISION) PAID $425 MIL- The WALT DISNEY COMPANY ur Dianey Company WHICH OWNS: LION FOR EXCLUSIVE US BROADCAST- abc UNIVISION ESFT ING RIGHTS. SOURCES: FIFA, WWW.WIKIPEDIA.ORG, THE OBSERVER, WORLD CUP SPONSORSHIP: FOUR YEARS IN THE MAKING' DREW BRENNARD, "ECONOMICS OF WORLD CUP 2006 OS DAVID, SOUTHERN CALIFORNIA BUSINESS 'ECONOMIC IMPACT IN LOS ANGELES", CNN :CATCH WORLD CUP FEVER. BILLIONS IN USD BILLIONS IN USD THE WORLD CUP IS THE NUMBER-ONE MAJOR HE ECONOMICS OF THE WORLD CUP GLOBAL SPORTING EVENT IN TERMS OF VIEWER- SHIP. THAT MEANS MAJOR MONEY FOR ADVERTIS- ERS, SPONSORS FIFA AND HOST COUNTRIES. .com CORPORATE SPONSORSHIP BROUGHT TO YOU BY: SPONSORING THE WORLD CUP IS NOT CHEAP OFFICIAL WORLD CUP OFFICIAL PARTNERS OF THE 2010 WORLD CUP: OFFICIAL SPONSORS OF THE 2010 WORLD CUP: PARTNERS PAY AN AVERAGE OF Coca-Cola adidas $90 MILLION SI12 MILLION, WHILE SPONSORS $90 MILLION Budweiser $28 MILLION PAY ABOUT $28 MILLION A PIECE. ECastrol $28 MILLION Emirates $90 MILLION Onfinental $28 MILLION SONY $90 MILLION MTN $28 MILLION VISA $200 MILLION SEARA $28 MILLION MMcDonald's $28 MILLION $560 MILLION FNB $28 MILLION Telkom $28 MILLION $224 MILLION REVENUES NO PAIN, NO GAIN: 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA REVENUES AND COSTS HAVE 1.5 INCREASED OVER THE PAST TEN +182%" +H0% YEARS. * PROJECTED -15% -60% THE ONLY DIRECT FUNDING A HOST .50 COUNTRY RECEIVES FROM THE PRO- CEEDS OF THE WORLD CUP ARE THE TICKET SALES AND THE PREDETER- MINED AMOUNT PROMISED BY FIFA COSTS FOR HOSTING. IN THE PAST, HOST COUNTRIES HAVE BANKED ON TOUR- ISM TO COMPENSATE FOR THE 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA COSTS OF INFRASTRUCTURE AND NEW STADIUMS. +11.% 6.0 200% GROSS TICKET SALES 5.5 +200% HOST COMPENSATION FROM FIFA 5.0 * PROJECTED STADIUM CONSTRUCTION 4.5 INFRASTRUCTURE CONSTRUCTION 4.0 -60% 3.5 3.0 2.5 2.0 1.5 1.0 .5 LOCAL BUSINESS A CLOSER LOOK: GERMANY 2006 VS. SOUTH AFRICA 2010 THE 2006 WORLD CUP WAS CONSID- 2006 2010 * PROJECTED ERED THE MOST MONETARILY 620 C SUCCESSFUL OF ALL PREVIOUS WORLO CUPS. WITH THE 2010 WORLD 300 CUP IN SOUTH AFRICA PROJECTED TÔ BREAK RECORDS, HERE IS A SIDE- MILLION MILLION BY SIDE COMPARISON OF WORLD CUPS 2006 AND 2010, THE WORLD CUP HAS ALWAYS PRO- VIDED A HUGE BOOST TO THE LOCAL ECONOMY, MOSTLY FROM THE INFLUX OF SOCCER TOURISTS. IN COMPARI- SON TO 2006, WORLD CUP 2010 TOURISM IS EXPECTED TO DOUBLE, D ACCOMMODATIONS $ 210 MILLION » LOCAL RESTAURANTS S 50 MILLION $ 496 MILLION $ 65 MILLION $ 59 MILLION MISCELLANEQUS INCLUDING TRANSPORTATION $ 40 MILLION MOSTLY DUE TO THE LOCATION OF THE EVENT. 38% OF TOURISTS TO SOUTH AFRICA ARE PREDICTED TO BE EUROPEAN, STAYING IN HOTELS LONGER FOR THE GAMES. RETAIL THE LARGEST REVENUE GENERATOR INCLUDES ANYTHING THAT BEARS THE FIFA OR WORLD CUP LOGO. IN THE PAST HAS BEEN DIRECT RETAIL. DIRECT RETAIL INCLUDES PRODUCTS THAT CONTAIN THE OFFI- CIAL FIFA OR WORLD CUP LOGO. THE * PROJECTED MAJORITY OF THE PROFIT FROM RETAIL MERCHANDISE GOES DIRECTLY BACK TO FIFA. € 1.59 BILLION $2 BILLION R 21.3 BILLION $ 2.69 BILLION FIFA REVENUE MORE THAN 90% OF FIFA'S TOTAL REV- * PROJECTED ENUE COMES FROM THE SALE OF $95 MILLION HOSPITALITY/LICENSING RIGHTS RELATING TO THE FIFA WORLD CUP. THESE RIGHTS ARE COMMERCIAL- IZED IN THREE AREAS: BROADCASTING, MARKETING, HOSPITALITY/ LICENSING. THE SUCCESSFUL COMMERCIALIZA- $265 MILLION HOSPITALITY/LICENSING $277 MILLION MARKETING RIGHTS $174 MILLION TION OF THESE RIGHTS IS AN ESSEN- $650 MILLION BROADCASTING RIGHTS MARKETING RIGHTS TIAL REQUIREMENT TO ENSURING THAT FIFA AND THE LOCAL ORGANIZING COM- $410 MILLION BROADCASTING RIGHTS MITTEE HAVE THE NECESSARY PRIVATE FUNDING TO STAGE THE WORLD CUP. TOTAL: S849 MIĻLION TOTAL: IN USD SI BILLION IN USD TELEVISION RIGHTS USD IN MILLIONS 50 100 TUNING IN: 150 200 250 300 350 400 450 THOUGH TV VIEWERSHIP HAS 2002 185.0% DECLINED, BROADCASTING RIGHTS ARE STILL THE MAIN FORM OF INCOME FOR FIFA. +254.0% 2006 THE PRICE FOR BROADCASTING THE 2010 WORLD CUP HAS GROWN EXPONEN- TIALLY IN THE PAST 8 YEARS. WALT DISNEY COMPANY (WHICH OWNS ABC, ESPN AND UNIVISION) PAID $425 MIL- The WALT DISNEY COMPANY ur Dianey Company WHICH OWNS: LION FOR EXCLUSIVE US BROADCAST- abc UNIVISION ESFT ING RIGHTS. SOURCES: FIFA, WWW.WIKIPEDIA.ORG, THE OBSERVER, WORLD CUP SPONSORSHIP: FOUR YEARS IN THE MAKING' DREW BRENNARD, "ECONOMICS OF WORLD CUP 2006 OS DAVID, SOUTHERN CALIFORNIA BUSINESS 'ECONOMIC IMPACT IN LOS ANGELES", CNN :CATCH WORLD CUP FEVER. BILLIONS IN USD BILLIONS IN USD THE WORLD CUP IS THE NUMBER-ONE MAJOR HE ECONOMICS OF THE WORLD CUP GLOBAL SPORTING EVENT IN TERMS OF VIEWER- SHIP. THAT MEANS MAJOR MONEY FOR ADVERTIS- ERS, SPONSORS FIFA AND HOST COUNTRIES. .com CORPORATE SPONSORSHIP BROUGHT TO YOU BY: SPONSORING THE WORLD CUP IS NOT CHEAP OFFICIAL WORLD CUP OFFICIAL PARTNERS OF THE 2010 WORLD CUP: OFFICIAL SPONSORS OF THE 2010 WORLD CUP: PARTNERS PAY AN AVERAGE OF Coca-Cola adidas $90 MILLION SI12 MILLION, WHILE SPONSORS $90 MILLION Budweiser $28 MILLION PAY ABOUT $28 MILLION A PIECE. ECastrol $28 MILLION Emirates $90 MILLION Onfinental $28 MILLION SONY $90 MILLION MTN $28 MILLION VISA $200 MILLION SEARA $28 MILLION MMcDonald's $28 MILLION $560 MILLION FNB $28 MILLION Telkom $28 MILLION $224 MILLION REVENUES NO PAIN, NO GAIN: 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA REVENUES AND COSTS HAVE 1.5 INCREASED OVER THE PAST TEN +182%" +H0% YEARS. * PROJECTED -15% -60% THE ONLY DIRECT FUNDING A HOST .50 COUNTRY RECEIVES FROM THE PRO- CEEDS OF THE WORLD CUP ARE THE TICKET SALES AND THE PREDETER- MINED AMOUNT PROMISED BY FIFA COSTS FOR HOSTING. IN THE PAST, HOST COUNTRIES HAVE BANKED ON TOUR- ISM TO COMPENSATE FOR THE 1994 U.S.A. 1998 FRANCE 2002 KOREA/JAPAN 2006 GERMANY 2010 SOUTH AFRICA COSTS OF INFRASTRUCTURE AND NEW STADIUMS. +11.% 6.0 200% GROSS TICKET SALES 5.5 +200% HOST COMPENSATION FROM FIFA 5.0 * PROJECTED STADIUM CONSTRUCTION 4.5 INFRASTRUCTURE CONSTRUCTION 4.0 -60% 3.5 3.0 2.5 2.0 1.5 1.0 .5 LOCAL BUSINESS A CLOSER LOOK: GERMANY 2006 VS. SOUTH AFRICA 2010 THE 2006 WORLD CUP WAS CONSID- 2006 2010 * PROJECTED ERED THE MOST MONETARILY 620 C SUCCESSFUL OF ALL PREVIOUS WORLO CUPS. WITH THE 2010 WORLD 300 CUP IN SOUTH AFRICA PROJECTED TÔ BREAK RECORDS, HERE IS A SIDE- MILLION MILLION BY SIDE COMPARISON OF WORLD CUPS 2006 AND 2010, THE WORLD CUP HAS ALWAYS PRO- VIDED A HUGE BOOST TO THE LOCAL ECONOMY, MOSTLY FROM THE INFLUX OF SOCCER TOURISTS. IN COMPARI- SON TO 2006, WORLD CUP 2010 TOURISM IS EXPECTED TO DOUBLE, D ACCOMMODATIONS $ 210 MILLION » LOCAL RESTAURANTS S 50 MILLION $ 496 MILLION $ 65 MILLION $ 59 MILLION MISCELLANEQUS INCLUDING TRANSPORTATION $ 40 MILLION MOSTLY DUE TO THE LOCATION OF THE EVENT. 38% OF TOURISTS TO SOUTH AFRICA ARE PREDICTED TO BE EUROPEAN, STAYING IN HOTELS LONGER FOR THE GAMES. RETAIL THE LARGEST REVENUE GENERATOR INCLUDES ANYTHING THAT BEARS THE FIFA OR WORLD CUP LOGO. IN THE PAST HAS BEEN DIRECT RETAIL. DIRECT RETAIL INCLUDES PRODUCTS THAT CONTAIN THE OFFI- CIAL FIFA OR WORLD CUP LOGO. THE * PROJECTED MAJORITY OF THE PROFIT FROM RETAIL MERCHANDISE GOES DIRECTLY BACK TO FIFA. € 1.59 BILLION $2 BILLION R 21.3 BILLION $ 2.69 BILLION FIFA REVENUE MORE THAN 90% OF FIFA'S TOTAL REV- * PROJECTED ENUE COMES FROM THE SALE OF $95 MILLION HOSPITALITY/LICENSING RIGHTS RELATING TO THE FIFA WORLD CUP. THESE RIGHTS ARE COMMERCIAL- IZED IN THREE AREAS: BROADCASTING, MARKETING, HOSPITALITY/ LICENSING. THE SUCCESSFUL COMMERCIALIZA- $265 MILLION HOSPITALITY/LICENSING $277 MILLION MARKETING RIGHTS $174 MILLION TION OF THESE RIGHTS IS AN ESSEN- $650 MILLION BROADCASTING RIGHTS MARKETING RIGHTS TIAL REQUIREMENT TO ENSURING THAT FIFA AND THE LOCAL ORGANIZING COM- $410 MILLION BROADCASTING RIGHTS MITTEE HAVE THE NECESSARY PRIVATE FUNDING TO STAGE THE WORLD CUP. TOTAL: S849 MIĻLION TOTAL: IN USD SI BILLION IN USD TELEVISION RIGHTS USD IN MILLIONS 50 100 TUNING IN: 150 200 250 300 350 400 450 THOUGH TV VIEWERSHIP HAS 2002 185.0% DECLINED, BROADCASTING RIGHTS ARE STILL THE MAIN FORM OF INCOME FOR FIFA. +254.0% 2006 THE PRICE FOR BROADCASTING THE 2010 WORLD CUP HAS GROWN EXPONEN- TIALLY IN THE PAST 8 YEARS. WALT DISNEY COMPANY (WHICH OWNS ABC, ESPN AND UNIVISION) PAID $425 MIL- The WALT DISNEY COMPANY ur Dianey Company WHICH OWNS: LION FOR EXCLUSIVE US BROADCAST- abc UNIVISION ESFT ING RIGHTS. SOURCES: FIFA, WWW.WIKIPEDIA.ORG, THE OBSERVER, WORLD CUP SPONSORSHIP: FOUR YEARS IN THE MAKING' DREW BRENNARD, "ECONOMICS OF WORLD CUP 2006 OS DAVID, SOUTHERN CALIFORNIA BUSINESS 'ECONOMIC IMPACT IN LOS ANGELES", CNN :CATCH WORLD CUP FEVER. BILLIONS IN USD BILLIONS IN USD

The Economics of the World Cup

shared by amie on May 03
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The World Cup is the world's number one sporting event in terms of viewers, which translates to big money for advertisers, sponsors, and host countries. Check out all the interesting facts in this in...

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