(BFM Bourse) – For the first time in its history, the 2022 World Cup is taking up residence in a Middle Eastern state. One of the most popular sports competitions on the planet will be a form of apotheosis for an entire economy. Official partners, sponsors, broadcasters or sports equipment manufacturers… Which companies will benefit the most from the World Cup effect?
The 2022 edition of the World Cup is that of all superlatives. The first country in the Middle East to organize this planetary event on its soil, Qatar has not skimped on the means to offer the whole world an unforgettable competition to the supporters on site as well as to billions of television viewers. The Qatari government would thus have spent 220 billion dollars to build new infrastructures. A sum that greatly exceeds the 14 billion dollars put on the table by Russia to organize the 2018 World Cup, already considered the most expensive of all time.
As for the main players in this World Cup, namely the players, there too the records have literally exploded. The value of the 32 teams competing for this new edition is close to 13 billion euros, according to data from Transfertmarkt. It is therefore an expensive parterre of football stars who will thus compete for a month for the prestigious trophy on December 18th. And the financial carrot is also very enticing. FIFA plans for this Qatari edition, an overall envelope of 420 million euros for its endowment budget, against 344 million euros in 2018. The winning country will be awarded nearly 40 million euros in endowments when the dolphin wins 28.4 million euros, according to The Team. Note that if the Blues manage to retain their title of world champion, the amount of the bonus awarded to each player will be greater than 400,000 euros, according to the sports daily.
A sponsorship that has a cost
The competition also extends beyond the green field and the gates of Qatar’s eight stadiums. On the economic ground, some companies will also jostle to take full advantage of the financial fallout from this major event. “Advertising and marketing spend around the World Cup is expected to hit an all-time high this year and experts say the tournament period, in the run-up to Christmas and New Year, offers Qatar 2022 the opportunity to ‘offer a unique experience to companies’, reports Admiral Markets in its latest study dedicated to the queen competition of the football planet.
First and foremost, the official sponsors of the competition organized by FIFA will be prominently displayed in the stadiums as well as in all official World Cup publications. Companies like Coca-Cola, Visa or McDonalds will take advantage of this planetary event to strengthen their notoriety. A visibility which however has a significant price. To become FIFA partners or official sponsors, brands must put their hands in their pockets. According to data provided by Sporsora, Adidas and Visa must spend between 50 and 70 million euros per year over 4 years to obtain the title of official FIFA partner. Just like Coca-Cola, the official sponsor of the FIFA World Cup since 1978.
Source Sporsora
McDonalds must for its part spend between 10 and 35 million euros to be authorized to use the title of official sponsor. In addition to the various competitions punctuating a football season, companies also sponsor national teams. To be the official equipment supplier of the Blues, Nike spends 50 million euros per year while major partners like Crédit Agricole or Volkswagen pay 5 to 8 million euros each season.
Source Sporsora
Fnac-Darty and TF1 as leading attackers
Just like the giants McDonalds, Coca-Cola or Adidas, some French listed companies will not be able to polish the bench and will also benefit from the World Cup effect. Even if this World Cup 2022 takes place in a particular context with inflation that weighs on the purchasing power of households. For the past three weeks, Fnac-Darty has nevertheless seen a jump in its sales in stores. In anticipation of the World Cup, households have thus equipped themselves with a state-of-the-art television in order to make the most of the event.
“For three weeks we have been witnessing an explosion in sales. Growth is around 30% in value because consumers are buying very large models. The norm is becoming 65-inch models compared to 48 inches usually”, indicates Laurent Darrieutort, the consumer electronics director of Fnac Darty. Indeed, “on the French market, a World Cup generates additional sales estimated at around 300,000 TVs” he says. On the sidelines of the publication of its quarterly accounts last October, the specialized distributor then advanced to be confident in “the success of the key end-of-year events” including the Football World Cup. Fnac Darty is counting on this event to support its sales of electronic products, “provided that the evolution of the current social context in France does not significantly disrupt its activities”.
Being well equipped with a state-of-the-art television to follow this sporting mass is good, but it still needs to be broadcast on the small screen. And it is the TF1 group which is responsible for broadcasting all of the sporting exploits of Kylian Mbappé and his teammates during this World Cup… For their entry into the competition, the reigning world champions caused a sensation. Better still, TF1 achieved a record audience in 2022 – all programs and all channels combined – by broadcasting the first match of the Blues against Australia. For the first opposition of the French team in the competition, nearly 13 million viewers were in front of their screens and behind the Blues.
In 2018, TF1 had already benefited from this World Cup effect. The France-Croatia final alone recorded an audience of 19.3 million viewers on TF1, ie an audience share of 82.2% for the first channel! “The TF1 group is the home of the Blues!”, declared Gilles Pélisson, CEO of TF1, after obtaining the rights to broadcast the matches of the French team until 2028. Including the 25 free-to-air matches of the UEFA Euro 2028. The story between the Blues and TF1 will therefore continue even more…
Source Sporsora
Jackpot in sight for FDJ
The course of the Blues crystallizes the attentions of the supporters and will also be closely watched by bettors. The World Cup is an opportunity for sports betting companies to hit the jackpot. FDJ expects to benefit from the Football World Cup.
The lottery operator – which was not yet in the spotlight of the financial markets in previous competitions – recorded 32 million euros in bets during the final of the 2018 edition between France and Croatia. Unheard of, all competitions combined.
In total, 690 million euros have been bet on the French sports betting market, according to the results established by the gaming operator after the World Cup in Russia. French punters committed 309 million euros in stakes in the 27,000 FDJ “ParionsSport point of sale” sales outlets (press, bar, tobacco) and 381 million euros on the sites of the 12 operators active in sports betting approved by the Arjel. In comparison, the 2014 FIFA World Cup generated a total of €290 million in stakes and €297 million for UEFA Euro 2016.
For this World Cup in Qatar, the National Gaming Authority predicts that bets on the internet will reach at least 530 million euros, or 70% more than in 2018 during the previous World Cup in Russia.
The return to the locker room for Carrefour
Other companies, on the other hand, have decided to return to the locker room, like Carrefour in 2019. The distributor, which wanted to refocus on food, took the decision not to renew its partnership contract which linked it to the French team since 1998 and whose deadline was at the end of 2018. A logical decision when Carrefour launched a vast cost reduction plan in January 2018, resetting its sponsorship policy. If the amount of the contract was not communicated, Carrefour took advantage of the fervor for the national team to boost its sales for decades.
“In 2018, thanks to the course of the Blues, sales in supermarkets had increased by 2.1% thanks to the overconsumption during the period of beers, pizzas, chips and even champagne (victory obliges)” underlines Frédéric Bianchi journalist at BFM Business .
At this stage of the competition, no one yet knows who of the Blues, the Red Devils, the Seleção, or any other team will lift the coveted trophy. Unless you have a crystal ball… But one thing is certain, the World Cup is also a fiercely contested competition in economic terms.
Sabrina Sadgui – ©2022 BFM Bourse
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