By Dr. Eduardo Durazo Watanabe*
By the time the FIFA soccer cup ends, it is estimated that half of the world’s population will have seen it.
The soccer world cup is the biggest sporting event on the planet. By the time it’s over, it’s estimated that half the world’s population will have seen it. This edition has had particularities that are worth analyzing. Qatar is the first Arab country to host the event. With just 3 million people, it is the smallest hosting country to have hosted the World Cup.
Although this country is widely known for having the third largest natural gas reserves and being a large oil producer, it has followed the trend of neighboring countries in diversifying its economy towards other sources of income. One of the areas for which it has opted is for the sports sector. Prior to the World Cup event, he bought shares in various clubs, the best known being Paris Saint-Germain FC, who with his apparently unlimited budget, has the largest payroll totaling £351.3 million euros and that they have used to sign the biggest stars of the moment: Lionel Messi, Neymar and Kylian Mbappe.
According to the PWC consultancy, soccer, along with virtual sports, are the fastest growing sports area in the world. Middle East and that the FIFA World Cup has been organized in that areawill result in a growth of this sport that is also a highly profitable business for its investors.
Qatar is estimated to have invested $300 billion which resulted in unprecedented infrastructure development in such a short time. 7 new stadiums were built, a new metro was developed as part of public transport, a modern shipping port, the expansion of its main airport and the construction of a planned city, Lusail City, north of Doha that have transformed the country.
Although the profit for this country in the event, which lasts one month, is estimated at 17 billion dollars, the infrastructure will remain as a long-term investment, while exposure to the rest of the world as a tourist destination is part of the strategy to attract 6 million annual visitors by 2030, compared to 2 million in 2019.
Nevertheless, there is no doubt that the big winner of this event is FIFA. It is estimated that this organization will earn $7.5 billion from the more than 200 partner nations. Host country companies Qatar Energy, Qatar National Bank and telecommunications firm Ooredoo QSC are the main sponsors. This year FIFA has also included cryptocurrency firms such as crypto.com and Algorand among its sponsors.
To these sponsorships we must add the contracts for the broadcasting rights of the event signed with Fox in the United States and the broadcasting company Qatari BeIN Sports. However, not everything has been successful in the field of sponsorships. The strict Muslim laws on alcohol consumption dictated two days before the start of the event that there was no sale of alcohol in the stadiums; only allowing the sale of alcohol in places called fan zonein the VIP suites of the stadiums and in some 35 hotel bars and restaurants.
This hasty measure generated uncertainty due to other last-minute changes, so sponsor Budweiser, who paid an estimated £60 million for the exclusive rights, is very likely to touch on this issue with a view to renewing his contract heading into the World Cup 2026 in the United States, Mexico and Canada.
These numbers are large compared to the prizes for the winning selections. These add up to $440 million dollars, with the winner being the one who takes the highest prize, which is $44 million dollars. FIFA is giving at least the amount of 9 million dollars just for attending the tournament and participating in the Group Phase, so that will be the final amount that Mexico will receive for not having advanced to the second phase. Nevertheless, for specific countries the attention generated by the national teams is capitalized at the local levelTherefore, the impact on signatures, advertising, merchandise sales and television rights generates an economic benefit that is highly anticipated by the sports industry. That is why, despite the fact that the sports results are not as expected, the economic results continue to be very attractive for the companies involved and they all win.
*Eduardo Durazo He is a professor and researcher and member of the INNSIGNIA Institute of CETYS Universidad Campus Internacional Ensenada.
Editor’s Note: This text belongs to our Opinion section and reflects only the author’s vision, not necessarily the High Level point of view.
MORE NEWS:
Francisco Mucino Journalist. Public finance, energy, business, innovation and the stories they contain.