The Rugby World Cup is one of the greatest competitions in sport and this year’s tournament, which takes place across England and Wales, is set to get underway on September 18th. The opening match of the competition will see Stuart Lancaster’s side take on Fiji at Twickenham Stadium and the hosts will be quietly confident of their chances ahead of a World Cup in front of their own fans, even though they know they have issues to fix before the campaign begins.

Wales vs. New Zealand - Rubgy 2014
photo credit: Stefano Delfrate / Flickr

While the Rugby World Cup has a moral and social impact on everyday life, it will also have a heavy impact on financial markets too. Some people may be unaware just how much of an impact that major sporting events can have on financial shares and stock markets, but they are beginning to play a more potent role in the modern era, particularly since the early 1990s when corporate players became wise to the benefits to be had from joining the sporting party.

Why the Rugby World Cup impacts the financial markets

Sponsorship and other key indicators are the primary reason for sport’s sudden impact on financial markets. The majority of sports are now run like businesses, largely because of the colossal sums of money that are now involved in the present day. In fact, the Rugby World Cup (amongst other sporting events) is even predicted to have an effect on the likes of Forex, which is the largest financial market in the world.

Some of the sponsors for this year’s event are colossal companies. Heineken, DHL, AG and Toshiba are just some of the main sponsors for the 2015 Rugby World Cup and these will be expecting to flourish from the added advertising and marketing throughout the tournament. Coca Cola was the main sponsor for the 2014 FIFA World Cup in Brazil and experienced some very impressive increases in its market share. Perhaps the same could happen again this year, the drinks giant is this tournament’s most valuable sponsor too and has long-benefitted from an association with top level sport. None of the companies supporting this year’s tournament have suffered negative growth since the last tournament – proving that rugby is equally able to attract successful market leading brands as the likes of football.

Twickenham Stadium - Rugby World Cup 2015
Twickenham Stadium, England – one of Rugby World Cup 2015 venues – photo credit: Wikipedia

While the figures involved may be higher now, there have been previous instances where success in a major sporting event has had an impact on financial markets. After England’s success at the 2003 Rugby World Cup, there was a major rally for the FTSE markets and the pound grew stronger in value. The Chancellor of the Exchequer certainly wouldn’t mind another win and timely boost now.

The team with the lowest GDP, Georgia, would relish that just as highly as the nation with the highest, Australia – a sport-mad country that will be desperate for success on the international scene after losing the Ashes cricket series to England this summer. The knock-on effect of positivity in the market – whether that be in general for a top performing nation or for key sponsors – should not be overlooked. Sport has the power to inject that positivity and this Rugby World Cup, with blue chip sponsors and global attention, certainly has plenty of potential to deliver.

Takeaway

While the competition won’t cause a complete market change, there is a benefit there to be had. The stakes are high and, from September 18 to October 31 it won’t just be sports fans on the edge of their seats – financial investors will be too.