The economy of World Cup
Hosted in South Africa, the 2010 FIFA World Cup Final on July 11, 2010 is all about the Netherlands vs. Spain. The football national team of the respective countries will battle for probably the most important sporting event in the world.
Not only respect gained in football world, the winner of World Cup Finals will also see annual economic growth, as much as 0.25 percentage point, as reported by Bloomberg BusinessWeek, largely thanks to increased consumer spending.
From the same article, it is said that winning the World Cup Final will boost Dutch consumer spending on 2010 700 million euros (or $887 million) – approximately 0.25 percent.
For Spain, winning the FIFA World Cup could drag them out from the country’s worst recession in decades, as reported by The Wall Street Journal.
As for South Africa, host the 2010 FIFA World Cup has also enjoy a boost in its economy, particularly in term of getting more interest from foreign investors, as reported by The Atlanta Post. South Africa’s ability to host a successful FIFA World Cup also revved-up trust from those investors.
Interestingly, the negative impact of poor performance during the World Cup is also significant. For example, Italy’s poor 2010 FIFA World Cup performance (a surprising early exit from the Group Stage) potentially lose its economy to nearly $170 million, as reported by LA Times Blog.
Here’s a nice explanation from Wikipedia about the Economics of the FIFA World Cup, with some emphasis added:
The FIFA World Cup has a significant impact on the global economy. FIFA, football’s global governing body with 204 member countries, is beginning to view itself as a global “big business”. This self image is no assumption; it has been proven throughout various World Cups that this football tournament has a global impact.
Furthermore, the wiki gives you a nice picture: World Cup sponsorship has risen from 2 billion dollars in 1984 to 16.6 billion dollars in 1996 – with approximately 36 billion viewers worldwide, the sponsorship program is, indeed, profitable for the sponsors, as well as the host country.
Big impact, indeed
Not only the impact on the winner’s country, the World Cup has also impacted global economy greatly, also in the form of consumer spending, especially anything related to football (soccer.)
However, spending is not the only indicator of positive global economy outlook; psychologically, countries that are performing well during the World Cup would also enjoy positive outlook on the people, thus driving the business world to move forward like a well oiled machine.
What’s your view on this? Please share your thoughts by commenting on this article.
Ivan Widjaya
A football (soccer) fan
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If we can wish every year there’s a World Cup, it can boost everyone’s host country’s economy. It does good especially those countries who participates in this event.
We have an infallible oracle and have only used it for World Cup, go figure
Mouli,
Yes – unfortunately it’s only once every 4 years – it should be an ongoing yearly event, especially in today’s recession!
Let the oracle Paul to predict the stock markets :)
It has to be once in 4 years, to be successful…I think…just like the Olympics. If you have it yearly, it will just be like the EPL & Champions league. It will not give great impact to global economy.
Prakaash,
Hm, you got a point… Cheers!
Just like every past olympics and world cup billions are spent on stadiums etc that are forced upon the poor taxpayers while the organizers sit in their swiss offices getting millions and paying no taxes demanding this and that.These soccer stadiums will just be a tax dollar money pit as they will be kept up for no real reason for decades at a huge expense,they may be used once or twice a year. As far as it being a boost in tourism people have and always will come to South Africa except now their cheesy souvenirs will cost a lot more with the VAT to pay for those stadiums(instead of using that money to pay for decent housing for the native people instead of the dog houses they currently try to live in)…whitey has screwed them again.Trust me it is all wasted revenue and any visitor will wind up paying more for crap too.The S.A finance minister says it may have broke even for now but this guy is paid to state lies like any other Gov’t employee.The World Cup flim flam WILL still cost millions maybe billions of more Rand to keep those 10 stadiums from crumbling like most of South Africas infrastructure.Is Soccer really worth all that shit?Well yes,just ask those FIFA execs sitting in their Ferraris cruising around Lake Zurich while the rest of S.A pays for it all.
Soccer Fooligan,
Reading your rants, I see some truth being shed – I agree that maintaining those stadiums will cost a fortune (mainly, taxpayers’ money.) I assume that although most participating countries get some boost to their economy, this might not be the case of the host country. Exposure is cool, tourism is booming, but maintenance is just a different ball game.
Thanks for sharing your thought!