Australia Set for Economic wins at 2010 FIFA World Cup

Irrespective of the Socceroos on field performance at the 2010 FIFA World Cup, business information analyst IBISWorld believes that there will be some major Australian winners off the pitch in the form of merchandisers, retailers, football organisations and bookmakers.

With nearly one in 17 Australians playing organised football; well ahead of rival football codes Australian Rules (one in 49), rugby league (one in 117) and rugby union (one in 170); IBISWorld believes that the fortunes of many Australian industries will be closely tied to the performance of the Socceroos in South Africa.

Everyone’s tuning in
The FIFA World Cup is the world’s largest sports event and a cumulative total of more than 40 billion viewers are expected to tune into this year’s tournament between 11th June and 11th July. Around 60% of Australians (13 million) watched the 2006 FIFA World Cup and IBISWorld General Manager (Australia), Robert Bryant, says that the 2010 FIFA World Cup audience will be greater on the back of the success of the A-League, grassroots soccer programs and Socceroos results in recent years.
 
Supporting = spending 
With more and more Australians playing and supporting football, this will translate into greater spending to cheer on the Socceroos at the FIFA 2010 World Cup, with IBISWorld forecasting that the average Australian will fork out $40.05 (a total of $884.2 million) – win, lose or draw.
 
Estimated 2010 FIFA World Cup spending by Australians (if the Socceroos exit at the Group Stage)
Product                           $ million    % of total spend
Team merchandise                  85         9.6
Other supporter retail             300        33.9
Electrical                               12.3        1.4
Pubs and clubs                     100        11.3
Food and alcohol                    52.3        5.9
Travel to South Africa            180         20.4
Advertising                             50          5.7
Gambling                              104.6      11.8
Total                                    884.2     100

If the Socceroos end up playing more than their three 2010 FIFA World Cup Group D matches – beyond the expectations of most pundits – then IBISWorld believes these figures could rise to a maximum of $369.51 per Australian (a total of $8.16 billion) in the event that they reach the final.
 
Estimated 2010 FIFA World Cup spending by Australians (in line with the success of the Socceroos)
Australia’s performance        $ million    % growth
Group Stage                          884.2        Not applicable
Round of 16                          1025.1        15.9
Quarter Final                        1395.5        36.1
Semi Final                            2668.2        91.2
Final                                    8158.5        205.8
 
And while Australia’s estimated spend sounds like a lot of money it will be relatively low compared to those of more established football-loving countries such as England, Germany and Spain, with IBISWorld estimating that a total of $265.6 billion will be splashed out worldwide.
 
Money in merchandise 
IBISWorld anticipates that one million Australians will buy a merchandise item – for example, a jersey, scarf or beanie – to show their support for the Socceroos at the 2010 FIFA World Cup. This activity is forecast to add $85 million to clothing spending, boosting the monthly Australian clothing retail spend for June/July by 8.5%. Socceroos merchandise is expected to account for most of the estimated clothing spending ($74 million), with the other $11 million going on gear of the other 31 teams.

Bryant explains that “football fever will be used to promote everything from breakfast cereals to deodorant,” adding that “non-clothing merchandise including Socceroos branding to generate sales is forecast to attract an additional $300 million in revenue, or 3% of Australia’s overall monthly retail spend.”
 
Big games – big televisions
While previous sports events have seen Australians spend big bucks on big televisions, IBISWorld believes that total dollar sales will be timid during the 2010 FIFA World Cup since most Australian households who can afford a flat-panel TV have one already – and a decent sized one at that.

“While Australian retailers are spruiking the World Cup as a reason to buy the latest 3D televisions, we expect demand will be subdued,” explains Bryant, “only a few manufacturers will have 3D televisions in Australian stores before the World Cup kicks off and the technology is limited by the need to wear expensive 3D glasses – something that is not really appropriate when watching an important World Cup match with a large group of mates.”

However, IBISWorld does tip DVD and hard-drive recorders and TiVo devices as likely winners out of the 2010 FIFA World Cup given that most of the 64 games will be broadcast late into Australia.

Overall, IBISWorld expects the 2010 FIFA World Cup will result in a 4% revenue boost for Australia’s TV and electrical goods sector, which equates to an additional $10 million in revenue.
 
Pubs and clubs – football hubs 
Australians love to watch sport with their family and friends so the 2010 FIFA World Cup will provide the perfect excuse for Socceroos fans to head to local pubs, sports clubs and designated viewing areas in major cities, including the Sydney International FIFA Fan Fest at Darling Harbour.

Unfortunately, early-morning kick-off times mean that venues are unlikely to enjoy a large spike in alcohol consumption and sales. However, the industry will certainly still enjoy a boost. How that translates in dollar terms will depend largely upon the performance of the Socceroos.

“Even a first-phase exit should add an extra $100 million to the industry’s coffers,” states Bryant.
 
Staying in, taking out 
Takeaway outlets, convenience stores and liquor retailers will benefit from those Australian football fans who choose to watch 2010 FIFA World Cup matches from the comfort of their own homes, with IBISWorld forecasting tournament-related total food and alcohol spending of $52.3 million between mid June and mid July, including $21.6 on takeaway food and $20.5 on alcohol.
 
Betting on the beautiful game
Sports betting is the fastest growing gambling segment in Australia and we will prove it during the 2010 FIFA World Cup, wagering an estimated $104.6 million despite the fact that the Socceroos are odds on (4-11) not to get past the Group Stage and long odds (66-1) to win the tournament.

Generally speaking, Australians do not need much encouragement to have a punt and the range of 2010 FIFA World Cup betting opportunities – it is possible to wager on everything from the winning team to Australia’s top goal scorer – will attract even more punters to part with their cash.

Bryant adds that “if the Socceroos negotiate a safe passage out of this World Cup’s ‘Group of Death’ then the Australian gambling spend will go through the roof thanks to patriotic punters.”
 
Cashing in on football fever 
When it comes to advertising, almost every product in Australian retail stores is likely to try to capitalise on the 2010 FIFA World Cup, with companies in the traditional major advertising markets such as car manufacturers, electronics retailers, fast-moving consumer goods and the food and beverage sector all investing significant sums in prominent campaigns to tie into the tournament.

Bryant adds “businesses need not be official FIFA sponsors to get involved and green and gold will be the colour for all sorts of goods this June and July, from Havaianas to M&Ms, while men’s products such as deodorants, shavers and the like will be particularly football flavoured.”

Also, IBISWorld believes that Australian success at the 2010 FIFA World Cup would provide a boon to A-League match attendances in the forthcoming 2010-2011 season, although they are likely to remain well below those of Australian Football League and National Rugby League games.

Bryant states that “despite the fact that two clubs are joining the A-League – Melbourne Heart in 2010 and Sydney Rovers in 2011 – football sponsorship remains below other major sports in Australia.

“The A-League and the Socceroos attract around $24 million in sponsorship dollars each year and Hyundai invested just $10 million for four years of naming rights. IBISWorld expects that Football Federation Australia will seek around $30 million for new naming rights next year as well as negotiating a

$300 million, five-year broadcast deal with Foxtel. And while that may sound like big bikkies, it is peanuts compared to the $1 billion deal that the Australian Football League is chasing.”
 
South Africa bound 
An estimated 18,000 Socceroos fans will join the ranks of 300,000 international supporters at the 2010 FIFA World Cup and, while the initial forecast of 700,000 visitors to South Africa has been slashed due to security risks and unstable economies, the current strength of the Australian economy compared to other nations will only boost the prominence of green-and-gold-clad fans in the stands.

Consequently, Australians will spend $180 million following the Socceroos at the 2010 FIFA World Cup, compared to the $68 million spent by 14,000 Australians at the Beijing 2008 Olympic Games.

3rd February 2009 - AUSTRALIA ENTERS RACE FOR FIFA WORLD CUP