The Business of the Beautiful Game

“The beautiful game is not only a sporting event but a serious business with potential gains and losses. It is interesting to discover the workings behind the world’s favorite sport.”

The world is yet again on its toes as 32 national teams compete in Russia for the 2018 FIFA World Cup, organized by the Federation Internationale de Football Association (FIFA), football’s global governing body. The World Cup’s inaugural tournament was held in Uruguay in 1930, and every four years, fans from all over the world — never mind if their national teams did not qualify, travel to the World Cup host nation, gather in pubs, or in their homes glued to the TV, to catch their favorite teams play the sport also known as the beautiful game.

Foreign colleagues I have worked with recently asked if the World Cup fever has become popular in the Philippines, to which a staff of mine said that the 2018 NBA Finals will be much talked about for hours on end until the next year’s finals. While the Philippines is considered as a basketball-loving nation, I can see football has started to gain ground in the country, especially after the memorable Philippine Azkals win over Vietnam at the ASEAN Football Federation Suzuki Cup in 2010.

Billions of people all over the world play and watch football, with or without the hosting of a big sporting event like the World Cup. Football, like any other sport, is a part of an industry—- licensing and media rights, trademark and branding, marketing, and endorsements, among others. It is a business to run. I wonder if there are real, lasting economic contribution the most played and watched sport has to offer.

In Europe, where football is widely followed, an estimated market of about 24.6 billion USD has been posited, according to Statista. Most celebrated football leagues like the Premier League, La Liga, Bundesliga, Serie A, and Ligue l, are a ll operating in Europe as well.

Statista also stated that these leagues also known as the Big Five, has combined revenues estimated at 15 billion Euros in 2017-2018. According to reports by Sports Business, total media rights for the top 20 football leagues in Europe amounted to a combined total value of €ll.4bn or 12.7 billion USD in years 2016-2017. An Ernst and Young study shows that England’s Premier League alone has contributed 3.4 billion British Pounds gross value added to GOP and over 100,000 jobs in the United Kingdom.

Of course, if there are football leagues, there sure are football clubs. So how much do you think the world’s most profitable football clubs are worth?

According to Forbes, Premier League’s Manchester United is the world’s most valuable football team, worth 4.2 billion USD in 2016!

Brands matter a lot in football, too. I know some of you have worn or have seen a friend wear football kits with the football club’s logo on it. Recognizable to you or otherwise, these football clubs have great brand value, too.

When all the world’s eyes are on you, is it worth it?

Staging a World Cup in one’s home country is a great feat as the home team gets a chance to play in the World Cup. Other benefits include providing the visitors accommodation and amenities like hotels, restaurants, transportation and related serv ices. But is it feasible in the long run?

Countries with more football-related infrastructure already set up like the United States, for example, which hosted the FIFA World Cup in 1994, only needed to repair some of its existing stadium infrastructure, which amounted to about $5 million, according to Professor Victor Matheson from Holy Cross University.

But much of the skepticism lies in the staging of the World Cup in countries where the needed infrastructure is not yet in place. The budget needed to put up vital soft and hard infrastructure can linger even after the prestigious World Cup.

Countries where the World Cup were held such as South Africa in 2010 and Brazil in 2014 saw the rise of stadiums that were built to cater to the matches, only to underutilize them or not use them at all after the event was over.

As for the tourists coming in, well, they come in full force. However, the numbers do not illustrate the gains clearly and studies show that while the spending is over and as the hotels get booked and restaurants get filled, these do not have lasting economic benefits for the host countries.

The beautiful game is not only a sporting event but a serious business with potential gains and losses. It is interesting to discover the workings behind the world’s favorite sport.

For now, I will spend the rest of the week anticipating the winner of this year’s World Cup and how the football industry will flourish in the years to come.