For FIFA, the World Cup is Big Business

For FIFA, the World Cup is Big Business

World soccer governing body FIFA poised to make a record-breaking $6 billion from the World Cup in Russia.

The 2018 World Cup, soccer’s premiere tournament, was tipped by many to be a disaster.

Scandal—graft allegations against FIFA, soccer’s global governing body, and doping charges levied at Russia, this year’s host country—left a stain on the World Cup that most expected would result in dampened enthusiasm from broadcasters, fans and advertisers alike.

Yet numbers show this could be the biggest World Cup in history. Whatever happens on the field ahead of the final on July 15, the business of the World Cup looks better than ever. Everything, from TV to online viewership, from licensing revenue to sponsorship cash, is on the upswing.

Internal FIFA documents, first reviewed by The New York Times, show the world soccer body is set to generate $6.1 billion in revenue from this tournament, $1.3 billion more than the last World Cup in Brazil in 2014 and fully 10 percent above FIFA’s own predictions.

While TV revenue was a little over 2 percent above FIFA’s target of $3 billion, sponsorship deals generated $1.65 billion, $200 million more than projected, largely due to deals with Chinese companies. In 2014, just one Chinese company sponsored the World Cup. This year, seven of the 20 official tournament sponsors are from China, led by property giant Wanda Group.

Their cash has more than compensated for the decline in Western support, as many U.S. and European companies, including Johnson & Johnson, Castrol and Continental, pulled back from FIFA amid the corruption investigation launched by the U.S. Justice Department in 2015, which alleges widespread bribery and vote buying in the selection of World Cup hosts, particularly the 2022 World Cup in Qatar.

The corruption scandal, and FIFA’s efforts to clean up its act, have cut into revenues at the organization, which reported profits of just over $100 million for the four-year cycle that ends after the tournament. Losses of some $997 million over the past three years are set against an estimated $1.1 billion profit for 2018.

When it comes to TV audiences, the 2018 World Cup looks set to break all-time records. Research company GlobalWebIndex has forecast total viewership of 3.4 billion, or nearly half the total world population of 7.6 billion, for the entire tournament. That compares to 3.2 billion who tuned in for the 2014 event in Brazil.

Brands will be taking advantage of audiences’ extra viewing time by filling it with commercial spots. Zenith estimates this year’s tournament will add $2.4 billion to the global ad spend, fully 10 percent of the total growth for the year. Unsurprisingly, China is forecast to see the biggest increase, with the World Cup generating $835 million in extra ad spend.

As far as social media, the last World Cup set several records. Eighty-eight million people worldwide engaged with the 2014 final match on Facebook, racking up 280 million Facebook interactions. (For comparison, this year’s Super Bowl drew 62 million people and 270 million interactions on Facebook.)

This year, mobile and online viewing is likely to be even greater. YouTube, Facebook, Instagram, Twitter and Snapchat are currently lit up, while China is in the midst of its own World Cup-driven social media storm on local services WeChat, Youku and Weibo. Advertisers in particular will be paying attention to online viewers, which skew younger and more upscale. Fully a quarter of World Cup fans aged 11-20 said they planned to watch the tournament via smartphone or tablet.

2018-06-28T17:08:42+00:00

About the Author:

Paul Imison
error: Content is protected !!