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Friday
Jun112010

While Soccer Fans Count World Cup Goals, Marketers And Financiers Are Counting $$$

June 11, 2010: The FIFA World Cup is not just about winning what is regarded as one of the most prestigious competitions in sports. It's also about the Benjamins, dinero, Euros or South African rands.

At stake here is not just bragging rights on the field, but a category in which the worldwide sale of soccer-related goods reached $10.9 billion in 2008, which was a non-World Cup year, and this year could exceed $11 billion, according to marketing consultant and research firm NPD Group, Port Washington, NY.

According to NPD, after the 2006 World Cup in Germany, the soccer footwear and apparel market grew 13% from 2005 in the European Big 5 countries: France, Germany, Great Britain, Italy, Spain. The total value in Euros was estimated at €1.7 billion, or about $2 billion U.S. Among the drivers, purchases of Germany’s national team shirt totaled almost €50 million, about $60.5 million U.S., by the end of 2006.

According to NPD's "Global Sports Market Estimate," the $10.9 billion worldwide total of soccer-related goods in 2008 includes the following breakdown (all in U.S. dollars):
    •    U.S soccer market is $900 million
    •    Brazil soccer market is $535 million
    •    Great Britain market is $1.4 billion
    •    German market is $800 million
    •    French market is $500 million

The NPD Group said it can estimate the market size for 90 countries in the world. For the top 15 countries, NPD measures or estimates market size broken down by sport. For each sport within those countries, NPD estimates footwear, apparel, equipment, sales intended for sport use and sales not intended for sport use separately.

Regarding the 2010 World Cup, there are fewer than two dozen companies worldwide that legally have the right to use in marketing such terms as "2010 FIFA World Cup," "World Cup 2010," "FIFA World Cup," "South Africa 2010," "Soccer World Cup," "Football World Cup" and a plethora of others.

FIFA has a short list of six top tier global marketing partners on its roster for the event being played in South Africa now through July 11: adidas, Coca-Cola, Emirates, Hyundai, Sony and Visa. Its second tier of global marketing sponsors is limited to eight companies: Anheuser-Busch (Budweiser), Castrol, Continental Tires, McDonald's, telecom company MTM, IT consulting firm Mahindra Satyam, food service supplier Seara and Yingli Solar. There also is a limited listed of third tier national supporters based in South Africa.

Homer Simpson and Ronaldo are among the stars in Nike's 'Write the Future' commercial.Of course, that has not stopped such companies as Nike from seeking to claim their share of the World Cup spotlight. Of the 32 nations that are playing, adidas will be the official uniform supplier of 12, including host South Africa. But rival Nike has deals with 10, including the U.S. National Team and via its Umbro division the national squad from England, giving Nike a uniform monopoly on the highly touted U.S.-England game on June 12 that is certain to garner ESPN strong viewing numbers. Nike also has covered ESPN's coverage with ads and other activation, led by its "Write the Future" TV spot, all but limiting adidas visuals to the official ball and uniforms worn by adidas nations and FIFA officials.

Not to be overlooked, the World Cup will have a major impact on the economy of the host nation. The International Marketing Council of South Africa estimates that the month-long event "will sustain an estimated 695 000 jobs and have a gross impact of R93 billion (in South African rands) on the nation's economy," about $12.1 billion in U.S. dollars. IMCSA projects that 373,000 tourists will visit South Africa during the World Cup, each spending an estimated R30,200 — about $4,000 — on average per trip.

Financial studies put South Africa's cost to stage the World Cup at a lofty $4 billion. But IMCSA stressed that "the indirect spin-offs from improved perceptions abroad could have an even greater, longer-lasting impact, not only on South Africa and its development but on the continent as a whole. A successful World Cup will help change the perceptions that a large number of foreign investors hold of Africa."

The 2010 FIFA World Cup Uniform Competition:

ADIDAS (12)
Argentina, Denmark, France, Germany, Greece, Japan, Mexico, Nigeria, Paraguay,  Slovakia, Spain, and host South Africa.

NIKE (10)
U.S., Australia, Brazil, New Zealand, Portugal, South Korea, The Netherlands, Slovenia, Serbia and England, which is being outfitted by Nike division Umbro.

PUMA (7)
Algeria, Cameroon, Cote D'Ivoire (Ivory Coast), Ghana,  Italy, Switzerland, Uruguay

BROOKS
Chile

JOMA
Honduras

PIRMA
Korea DPR

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