Billion-dollar business of WC 2014
Tuesday, 17 June 2014
The World Cup kicked off in Brazil June 12.World Cup Brazil will generate $4 billion in total revenue for FIFA, or 66 per cent more than the previous tournament in South Africa in 2010, according to Forbes.
The vast majority of the money will come from the sale of television and marketing rights. The World Cup generates more revenue for its association than any other sports tournament. FIFA's profit for the Brazil World Cup would be $2 billion.
Almost all of the revenue FIFA generates comes from television rights ($1.7 billion) and marketing rights ($1.35 billion) from corporate partners like Adidas, Emirates, Sony , Visa V -0.23%, Hyundai and Coca-Cola . Blue chip companies love to throw money at the World Cup because it is followed passionately throughout most of the world.
FIFA research, which took a year to produce after the 2010 World Cup in South Africa, said 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. More than 3.2 billion people watched live coverage of the 2010 tournament for a minimum of one minute. The average official rating was 188.4 million for each match.
The 2010 Men's World Cup drew the most US viewers ever for the tournament. ESPN announced that broadcasts averaged a 2.1 rating (2.29 million households and 3.26 million viewers), a 31per cent increase over 2006. The final between the Netherlands and Spain was the most-watched men's World Cup game with 15.6 million viewers.
Even in the U.S., the value of the World Cup as sports content is getting richer. Last 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 and $500 million. That is quite plausible since Univision bought the U.S. Spanish rights for $425 million for the last two World Cups.
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 programme, 37per cent 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, 75per cent more than the 2010 competition.