FIFA & Global Economy - Bharath

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Bharath Gowda

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Jun 14, 2010, 4:05:33 AM6/14/10

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.

- World Cup sponsorship has risen from two billion dollars in 1984 to 16.6 billion dollars in 1996. Sponsors of the World Cup have little to lose, given that the tournament attracts 36 billion viewers on average from beginning to end of the tournament. These sponsors include Coca-Cola, McDonalds, and Adidas.

- The 1994 World Cup in the United States was hosted in a number of different cities. In Los Angeles, site of the final, there was a total economic profit of 623 million dollars that went directly into the metropolitan economy. To help one better understand this figure, in comparison of that same year the Super Bowl only accounted for 182 million dollars.

- The 2006 World Cup had an operating budget (for staging the event, not inclusive of capital infrastructure costs) of €430 million. The German Football Association announced a profit before tax of €135 million. After tax and repaying the FIFA contribution of €40.8 million - the net profit was €56.6 million which was distributed to the German Football Association (DFB) and the German Football League (DFL).

- Impact on South Africa: the projected total direct economic value for GDP is approximately $21.3 billion. Also, 159,000 new jobs are predicted, including full- and part- time jobs, both permanent and temporary. The government also plans to spend millions on upgrading stadiums and building a new international airport. The tournament will host 32 teams with an average of 50 people per team, 14,500 VIPs and dignitaries, 500 officials and 10,500 media. A projected number of half a million foreign visitors (located outside of Africa) are expected and staying an average of 15 days.