With the World Cup nearing its grand finale this Sunday, it’s time to look at the tournament’s winners both on and off the pitch.
The World Cup is not just about 22 men ‘kicking it’ to the now familiar sound of the vuvuzela, but also about the companies that are making the event happen… and are profiting from it, of course.
We looked at which companies, from official sponsors to TV broadcasters to the construction firms that built the stadiums, have invested most heavily in South Africa 2010, and more importantly, what they get out of it.
What it cost them: Adidas signed a whopping $351 million deal with FIFA in 2005.
What they get: Nielsen found that Adidas' share of internet 'buzz' has risen, while arch rival Nike's has fallen. Adidas predicts sales of their World Cup-related merchandise to top $1.89 billion; they've already had record sales of $1.9 billion in their soccer category (a 15% increase from soccer-related sales in 2008 and a 26% increase from the 2006 World Cup) and they reported a 26 per cent increase in soccer product sales in the first quarter of 2010. For example, 6.5 million replica jerseys have been sold so far - double the number that sold in Germany.
Who: Anheuser-Busch, aka Budweiser
What it cost them: Between $10 - 25 million in annual fees for 2007 - 2010
What they get: Official World Cup beer and the only one sold at stadiums and official fan sites. Nielsen data showed Budweiser had a 25 per cent jump in online searches in the week ending June 19th, and this number has been increasing weekly. Nielsen also found four main World Cup sponsors, including Budweiser, generated a 55% higher 'net likeability' than commercials from other non-official World Cup advertisers, and they also scored 16% higher on brand recall.
Who: The television broadcasters
What they paid: ESPN paid $100 million for broadcast rights; Univision paid more than three times that amount - $325 million - for the same coverage. Broadcasting rights remain the main form of income for FIFA.
What they get: The advertising dollars that accompany an average of 125 million viewers worldwide per match, and the almost 1 billion people who will watch the final on July 11. 715 million people watched the 2006 championship game and in light of increased viewership this tournament, that number is supposed to be well-surpassed with forecasts that the match will 'draw the biggest audience of any sporting final in history.'
What it cost them: Between $10 - $25 million
What they get: McDonald's South African branch expects a revenue growth of 20%, thanks to the World cup publicity. Last month, McDonald's noted a 4.8% increase of sales worldwide. The media world cup buzz share around the fast food company jumped from 2.8% to 4.2%.
Source: Business Report
Who: MTN, a South African cell phone company.
What it cost them: $65 million
What they get: The first African FIFA sponsor, MTN receives the exclusive mobile content rights for Africa and the Middle East and other global marketing rights. 'MTN is ready to bring the 2010 FIFA World Cup to the mobile phones of millions of football fans in Africa and the Middle East,' said MTN CEO Phutuma Nhleko. This strategy gives the company a head start compared to its local competitors.
Who: Mahindra Satyam, a Indian IT Business consulting company
What it cost them: $100 million for two World Cups. Atul Kunwar, the company's business development head for Europe, Asia, Australia, Africa and the Middle-East, said it also gave FIFA a discount on their services.
What they get: As the official IT Technology provider for both the World Cup 2010 and the Brazilian World Cup in 2014, the company will coordinate the IT content management system for the events. It aims to double its revenues in South Africa this year and increase its revenue in the sports business section from $30 million to $100 million. Business in the country is already booming, with multimillion deals expected after the soccer tournament. The former chairman of the Indian firm, Ramalinga Raju, said: 'This sponsorship will serve to further increase Satyam's global expansion and accelerate its growth.'
Who: Seara, a Brazilian food supplier and a brand of Marfrig Group.
What it cost them: amount not disclosed.
What they get: The Seara brand is on display in every World Cup game. In the first quarter of 2010, the group showed an increase in net revenue of 43.2%, compared to the previous year. The company's CEO, Marcos Molina dos Santos, said: 'In terms of global exposure, sponsorship of the FIFA world cup is our most powerful tool to show our brands to millions of customers.'
Who: Yingli, a Chinese solar energy company.
What it cost them: The exact official amount is not disclosed, but Chinese media have reported the company invested at least $20 million into the soccer competition.
What they get: 'It's a fantastic platform to get our name out,' said Robert Petrina, the managing director of the Yingli Green Energy America division, to the New York Times. The company displayed its products in a special area in the Soccer City Stadium in Johannesburg.
Who: BP Africa
What it cost them: Between $4.5 - $7.5 million annually... And millions of gallons of oil.
What they get: BP Africa is the official fuel supplier and gets to supply diesel to all generators of the World Cup broadcasts. The official FIFA fleet and every team bus also runs on BP oil.
Source: BP Africa
Who: South Africa's First National Bank (FNB)
What it cost them: $30 million.
What they get: The bank receives exclusive advertisement, marketing and promotional rights in the financial service section.
Who: TELKOM, a South African telecommunications company.
What it cost them: Nothing, as the South African government pays $29.6 dollars instead of Telkom as part of its technology budget.
What they get: The company provides the FIFA tournament with the fixed-line network infrastructure. The agreement comes with special advertisement rights within South Africa.
Who: PRASA, South Africa's railway company.
What it cost them: $3.3 million in technical upgrades.
What they get: The company will profit of the increased demand in transportation due to over 400,000 international visitors and 1 million African travellers.
Who: The Republic of South Africa
What it cost them: Approximately $5 billion
What they get: It is estimated the World Cup will support about 695 000 jobs and have a USD $12.1 billion ( R93 billion) impact on the country's economy. About 373,000 tourists will visit South Africa for the event, each spending an estimated R30,200 -- about $4,000 -- on average. And, perhaps more importantly, 'the indirect spin-offs from improved perceptions abroad could have an even greater, longer-lasting impact, not only on South Africa and its development but on the continent as a whole. A successful World Cup will help change the perceptions that a large number of foreign investors hold of Africa.'
Who: The teams, especially the winner and runners-up...
What they get: The winners of the 2010 World Cup will pocket $30 million, and the runners-up get a check for $24 million. Every team who played in the World Cup finals will receive at least $9 million: $1 million as a contribution to preparation costs, and $8 million even if they're eliminated at the group stage. Total prize money amounts to $420 million - a 60 per cent increase from 2006's $261 million prize pool, and almost three times as much as the $154 million in 2002.
Source: The Standard
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