England’s qualification for the World Cup should provide a big boost to the economy. Estimates suggest a revenue boost of between £1.5bn to £2bn to various sectors of the economy. Events such as the international football tournaments are resistant to recessionary strains and create a micro-economy of their own. Simon Chadwick, professor of sports business strategy at the University of Coventry, commented in the Financial Times that one of the main psychological effects of a national side reaching a World Cup is ‘birging’ or basking in reflected glory.
England’s qualification for the World Cup should provide a big boost to the economy. Estimates suggest a revenue boost of between £1.5bn to £2bn to various sectors of the economy. Events such as the international football tournaments are resistant to recessionary strains and create a micro-economy of their own. Simon Chadwick, professor of sports business strategy at the University of Coventry, commented in the Financial Times that one of the main psychological effects of a national side reaching a World Cup is ‘birging’ or basking in reflected glory. The opposite effect when qualification is not achieved is ‘cofting’ or cutting off from collective failure. No estimates are available at this time of differential impacts on the English and Scottish economies.
One of the big gainers will be producers of sticker albums such as Panini which started making World Cup sticker albums in 1970 and today brings out about 6bn a year for all competitions. It is always a volatile market, but completed albums can change hands for sums approaching £1.000. They are unusual among printed media products as there is little scope to replicate their experience online, even though Panini teamed up with Microsoft two years ago to launch the first online sticker album for the 2008 European championships. Newspaper and magazine distributor Smith News hopes to obtain a £8m windfall from a surge in demand for football World Cup sticker albums. The group suffered £7m in lost sales when England failed to qualify for Euro 2008.
Other gainers from the boost to the economy include:
- Pubs – they could take £30m to £40m extra during each England game. In 2006 pubs took an extra £124m a week that England was in the tournament.
- Electrical companies – flat-screen televisions are expected to be in high demand.
- Supermarkets – fans will stock up on food, snacks and drinks to watch games at home.
- Advertising – spending around the 2006 World Cup was worth £300m but will soar if England reach the final.
- Sports kit manufacturers – replica England kits made by Umbro are expected to sell well.
- Travel agents – packages and flights to South Africa are already in high demand.
However, there are a few losers. There was a drop in interest in house buying in 2006. Some cinemas closed their doors because they could not compete.
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