World Cup is FIFA's golden egg

Soccer News

World Cup is FIFA's golden egg

Berlin, July 3 (DPA) Amid the hubbub of tens of thousands of football fans who crowd into Berlin's public viewing area for every game of the World Cup, one place stands out as an ocean of calm. As customers crowd booths for souvenirs, sporting goods, food and beer, the massive stall set up by tournament sponsor MasterCard is devoid of customers.

'Yes it's quiet,' a sleepy attendant tells a journalist. 'No one really comes to the fan zone to look for financial services.'

But don't worry too much for MasterCard. It didn't get into the World Cup sponsorship business to sell credit cards to boozy fans.

Instead it sees its ties to the most popular sporting event on the planet as a way to boost its name before the biggest global audience of all. A cumulative 30 billion viewers are scheduled to tune in to watch the tournament - making it the most watched television event ever.

This is proving a windfall for football's governing body FIFA, which is expected to rack up almost $1.4 billion in profits from the World Cup. Altogether the governing body of world football is expected to earn some $2.4 billion from the sale of broadcast rights on television and the Internet, plus its 15 sponsorship deals, according to a report by sports research firm SportCal, which calculates that the competition cost about a billion dollars to stage.

Already the $770 million paid by the tournament's 15 'official partners' is reaping dividends, with each of them getting exposure worth at least $100 million, SportCal estimated.

With figures like that it is not surprising that rival companies are trying to muscle in on the action.

According to Bloomberg News, financial services company Visa recently closed a deal with FIFA to sponsor the next World Cup in 2010 in South Africa for $200 million. MasterCard has filed a lawsuit to retain the sponsorship rights that it has held since 1990.

By 2010, however, FIFA should raise an estimated $1.15 billion for the sponsorship rights, reflecting the tournament's stature as one of the few events capable of cutting through ethnic, cultural and generational differences to reach a global audience.

In addition FIFA has contracted with six global sponsors through 2014.

Apart from Visa, Adidas will pay $350 million, Sony $305 million, Air Emirates $195 million and Hyundai Motors an undisclosed sum. Coca-Cola has paid $500 million for the sponsorship rights through 2020. Its sale of 2010 broadcast rights is also expected to handily top the $1.7 billion figure of 2006.

'The Olympics and the World Cup are the only two properties that are global and that people really care about,' says Scott McCune, who oversees sports sponsorship at Coca-Cola.

But it's not only FIFA and its sponsors that are making a fortune off the World Cup. According to research firm SponsorClick sports marketing is now worth $43 billion a year - double the level of seven years ago.

World Cup hosts Germany is also experiencing a World Cup boom. Over a million extra visitors are expected in the country during the tournament, while positive coverage of Germany throughout the world is likely to lead to a long-term increase in tourism.

Economists predict that the tournament is likely to boost German economic growth by 0.5 percent this year, with retail up by some $2.5 billion and the hotel trade up by some $700 million. In total, the National Chambers of Commerce predict about a $5 billion boost to the economy.

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World Cup is FIFA's golden egg