How football generates Billions

How football generates Billions

writer icon Jonathan Lewis     Jonny Lindner   |   Business     🕐 16. Nov. 2017

As a rule, successful companies are a product of hard work, financial strategy and business plan execution. While these are often the main fundamentals, one component is rarely talked about or figured into the equation; luck.

Recently, both Sweden and Denmark’s football teams won play-off games to qualify for the FIFA World Cup finals, to be held next year in Russia. Being its nation’s most popular sport, their achievements will be celebrated throughout the respective countries. However it will not only be football fans who will be revelling in the build-up for the most watched sporting event on the planet; businesses will be too.

The FIFA Football World Cup generates a worldwide television audience in excess of 3 billion people, while nearly 3.5 million people attended the 64 live matches at the previous tournament in Brazil. With such large numbers the business opportunities before and during the event are colossal, from media to merchandise, technology to transport, culinary to corporate - the list is almost endless.

This boost in economy spans globally, but is particularly significant for the participating nations. Along with non-tech businesses such as bars and restaurants, the cyber world benefits too, with increased internet usage and goods purchasing. It also creates healthy competition in fields such as air travel, an industry that has hit troubled times in recent years.

The traction gains of these economic surges have a direct correlation with one thing – how well the individual nation does in the competition. For a country to make it all the way to the World Cup final, the financial implications are huge.
”Looking at history, there is a clear pattern of outperformance by the winning team in the weeks after the World Cup final. On average, the victor outperforms the global market by 3.5% in the first month” Golman Sachs wrote in one of their reports.

Conversely, the ramifications of a nation not qualifying for this globally iconic event are vast. Sweden’s beaten opponents in the play-off match were Italy, a historical footballing powerhouse. When Italy last won the World Cup in 2006, GDP increased by 1% - an economy boost of 16 billion euros. Their non-participation next year will have a huge detrimental effect. Sweden themselves suffered the same fate 4 years ago, again with negative financial consequences.

The timing of these footballing successes could not have been better for businesses in Scandinavia. Many of the biggest companies have not performed as well as in the previous year, with Swedish giants such as Ericsson, AstraZeneca, Electrolux, H&M and Spotify all showing reduced profit margins in comparison with 2016. Danish companies have also had their issues with A.P.Moller-Mærsk, ISS and Carlsberg all recording reduced profits.

These companies, along with smaller businesses and start-ups, will be desperate to capitalise on this immense opportunity.

A simple kick of a football has given Scandinavian companies and entrepreneurs a chance to maximise their potential, and give the region a welcome financial boost. When offered a bit of luck, capitalising on it is paramount.

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