Monday, June 9, 2014

FIFA World Cup 2014 - Billion Dollars Business

FIFA World Cup Business Of Billion Dollars

FIFA World Cup 2014 is on fire and about to blast on 12 june in brasil. But can anyone imagine how big is this business for FIFA(International Association of Federation Football).

This FIFA World Cup 2014 Brasil is going to generate approx $4 billion total revenue in other words this year FIFA will generate 66% more than the previous World Cup in 2010 South Africa. The World Cup generates more revenue for its association than any other sports tournament, save the Olympics (based on revenue per-event-day, the NFL’s Super Bowl reigns supreme). FIFA’s profit for the Brazil World Cup: $2 billion. The revenue which FIFA generates comes from the television rights $1.7 billion and marketing rights $1.35 billion. Blue chip companies love to throw money at the World Cup because it is followed passionately throughout most of the world. Lets have a look on the chart below:

TV Rights Sale
$1.7 Billion
BBC, ITV, ESPN, CBC and many worldwide channels

Marketing Revenue
$1.4 billion
Adidas, Coca Cola, Visa, Sony, Emirates, Hyundai etc

Other Rights Sale 
$900 million
EA Sports Game, merchandise sale and other stuff

Total Revenue 
$4 billion 
FIFA will make 66% more revenue in 2014 WC than the last one

FIFA research, which took a year to produce after the FIFA World Cup 2010 in South Africa said More than 3.2 billion people watched live coverage of the 2010 tournament for a minimum of one minute and 909 million television viewers tuned in to at least one minute of the 2010 final at home. Some 619.7 million people also watched at least 20 consecutive minutes of Spain’s 1-0 extra-time win over the Netherlands in Johannesburg. The average official rating was 188.4 million for each match.

For the first time ever in the FIFA history most of the United States viewers were attracted by the 2010 Men’s World Cup. According to ESPN  broadcasts averaged a 2.1 rating (2.29 million households and 3.26 million viewers), a 31% increase over 2006. The final between the Netherlands and Spain was the most-watched men’s World Cup game with 15.6 million viewers. The value of the FIFA World Cup as a sport  is getting richer even in United States. Previous month Fox Sports won the US English-language rights for 2018 (Russia) and 2022 (Qatar), beating out bids from ESPN and NBC. ESPN bought the rights for the 2010 and 2014 rights for $100 million. While official figures for the new television deal have not been officially released, John Ourand of Sports Business  Journal was told Fox may have paid between $400 million to $500 million. That is quite plausible since Univision bought the U.S. Spanish rights for $425 million for the last two World Cups.

FIFA World Cup is the biggest competition on planet earth and will be making $4 billion in Revenue in this World Cup 2014 but this revenue will also be distributed. Here is small Chart of how it will be done.

Still, the business of the World Cup is not cheap to operate. For Brazil, FIFA will make total payments of $576 million to the participating member associations, the clubs of participating players and for the club protection program, 37% more than the World Cup in South Africa for years ago. The biggest lion’s share of the payments will go towards a record $70 million of prize money, 75% more than the 2010 competition. The 2014 World Cup winners will receive $35 million, while the 16 teams that are eliminated in the group stage will each collect $8 million. Taking into account the total number of teams, players and the duration of the World Cup, the per-player, per-day amount will be $2,800 in Brazil.

It is estimated that FIFA will be making around $1.4 billion in revenue for their official sponsorships of different brands.In terms of marketing FIFA world Cup 2014 is coming at just about the perfect time with players like Ronaldo, Messi, Neymar and Rooney etc at the peak of their powers which makes them some of the most marketable athletes in the world while all the big teams has made it to the world cup finals. Longest running FIFA official partner “Adidas” will be contributing a massive amount of money in sponsorship revenue for FIFA while other major brands like Hyundai, Emirates, Visa, Coca Cola and 100′s of big and small brands have associated themselves with world cup

Overall the financial success of the FIFA World Cup is great for the sport’s growth. FIFA’s budget for the years 2015-18 is $4.9 billion, of which $2.15 billion is slotted for the 2018 World Cup in Russia.  In aggregate, 78% ($3.8 billion) of the $4.9 billion will be directly invested in soccer.

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