England may not have lifted the trophy last night but they certainly gave the nation something worth cheering. The COVID pandemic has made it a torrid 16 months and whilst the country’s best footballers have spent the last 55 years trying to match the 1966 World Cup glory, even just getting into the final was something certainly worth raising a glass for.
But what does this mean for the economy and the companies who have skin in the game, too. Whether they’re sponsors, broadcasters or even just those involved in broader ways such as the sportswear and sporting goods industry, what happens from here? The easiest place to start is perhaps with a little history. In 2018, the Centre for Economic Research predicted that England’s run to the semi finals of the World Cup was worth around £1billion to the economy. The impact of this success can therefore be expected to run significantly deeper.
The hospitality industry will certainly welcome the shot in the arm this has brought after the run of restrictions they’ve been facing through the pandemic. Forecasts suggested 6.8 million pints would be drunk in pubs during the semi-final against Denmark, although this was set to be tempered by distancing restrictions, staffing shortages and the need for table service. Without these constraints it’s said that the number would have been around 20% or so higher.
Such surges in spending are sometimes maligned by economists. Often it’s said that spikes like this simply divert money from elsewhere, but with many consumers having been able to save handsomely during the pandemic, this time could be fundamentally different. It will take months for the true impact to be calculated here, whether it’s the purchase of a new TV to watch the matches on, replica kits, food to host a party at home or added spending in the pub. It all adds up to increased economic activity.
The correlations aren’t always that obvious, though. Having screened both the semi-final and the final, the assumption would be that ITV will be coining it in when it comes to ad revenues – yet many of the ad slots were sold last year, when few would have understood just how well England would do. ITVs results in a few weeks’ time should give us some more details here, although any last-minute inventory was presumably sold at a significant premium.
So what about the sponsors. What do they want to get out of the deal? JustEatTakeaway say it’s the biggest sponsorship deal they have ever been involved in. The broad appeal of the Euros – as opposed to club level football – and the fact people order takeaways when watching sport made this a good fit. As a digital first business, the company expects to get an even deeper insight into buying habits during the tournament.
TikTok is using the deal to place their brand at the heart of European culture – something which will presumably have the skin of many an art historian and classicist crawling! They’re doing it to show commitment to the region and have brought in fan engagement tools onto the app – things like virtual stadium tours or the ability to lift an AR version of the trophy.
This partnership is interesting because it’s far from a one-way deal. UEFA has also granted the company access to its content archive, and they see this as the precursor for more deals with the ‘beautiful game’. It also means that UEFA can expand its own reach with users of the content platform – they already have almost 5 million followers on their TikTok account, up from about 800,000 a month ago.
When Booking.com signed its sponsorship agreement for the Euros back in 2017, the company noted that four million travelling fans would be needing a home away from home as an integral part of their experience. That may not have quite worked out as planned given travel restrictions but on the basis that there’s pent up demand for people eager to take a holiday, the timing of the extra profile is still likely to be good.
Coca Cola found itself in the spotlight for its sponsorship of the Euros after a number of players moved strategically placed bottles of the soft drink out of shot during press conferences. The first such instance – by Ronaldo – was widely reported to have knocked billions off the company valuation. This was largely discredited, but the stock’s performance is lagging the wider market since the start of the tournament.
No one wanted to see England come second, but even at this level the team’s success in getting to a final will have provided a real economic boost. The abnormal circumstances we find ourselves in right now could amplify this impact even further but leaving all that aside, well done to Gareth Southgate and his team for your journey. The hard work for the World Cup starts here.
Economists calculated that when Leicester City won the Premier League in 2015, it boosted the local economy by £140m and supported over 2,500 jobs