England's Success Has Big Commercial Implications - 19/11/2007

England's ability to secure a draw with Croatia on Wednesday and qualify for the European Championships has big commercial implications. The competition is ranked only behind the World Cup and the Olympics in terms of big sporting events generating economic value. England has not failed to qualify for a major tournament since 1994 and businesses have taken England's qualification for granted. With that comes a windfall every other year from the burst of patriotism that encourages people to spend on betting, drinking and replica shirts. Sports Direct and JJB Sports suffer a marked drop in revenue during non-tournament years when England shirt sales nosedive. As for pub groups, already feeling the effects of the economic slowdown and the smoking ban, they need another knock back like a leaking beer barrel. Judging by past tournaments, failure to qualify will cost pubs 25m pints or a loss of revenue up to £100m.

UPDATE: England lost. MacLaren was fired. Scottish fans still laughing. Your editor (not Prof Grant, I hasten to add) flirting with alcoholism as he tries to drown sorrows and personally make up for English pubs loss of income. What a bloody shower!

UPDATE 2 : We had a flurry of media calls last week about the commercial implications of England's failure to qualify for Euro 2008. However, although there will undoubtedly be impacts on particular sectors and firms, it is easy to exaggerate the macroeconomic impact. The money that would have gone on football related expenditure will not disappear, it will simply be spent in a different way. The biggest losers will be replica shirt makers and retailers with sales estimated to be £100m lower. The British Beer and Pub Association estimates lost beer sales of around £80 to £100m. However, some pub chains estimated that the impact would be much more limited for their food based pubs. A gastro pub is hardly likely to be hit at all. Bookmakers will lose some additional casual bets that could amount to anything between tens of millions and £250m. Eurostar, ferry operators and low cost airlines will lose some business from travelling fans. Television audiences for European football tournaments fall by an average of 30 per cent when home national teams are not taking part. In particular there is a loss of the young upmarket male viewers that are so attractive to advertisers. Some analysts estimate a £10m loss in projected advertising revenue at ITV. But although Sports Direct had to issue a profit warning and other retailers saw their share prices fall, no one is going to go out of business.