The World Cup and finances
The World Cup starts in a few days and for many of us our productivity will plummet as a result.
The World Cup is a fantastic show, but behind the scenes there is a complex economic model that relies on strategic planning, broadcast rights and international participation.
There is intense competition for the chance to host the World Cup but aside from national pride, are there economic benefits to be gained from hosting the month long tournament? Many estimates suggest that large gains in employment and a boost to economic growth will be the result.
Economic prospects
Fifa expects this year's World Cup in South Africa to generate a net gain of $1 billion in income. In addition, as the host country, South Africa can expect an increase in GNP and employment.
The German economy was given a boost when it hosted the 2006 World Cup, with thousands of fans spending money on food and drink, hotels and transport. Around two million tourists visited Germany during the tournament and spent an estimated 600 million Euros.
The impact of the World Cup can be felt in the workplace and in shops, but also in consumer confidence and spending.
It may seem strange, but the outcome of the World Cup dictates the economic future of the participating teams and in turn, the world. As research suggests, the winners of the World Cup can expect to have a small boost in their finances as a result of the win.
Stock market
A recent study suggests that England's performance at the World Cup will likely be reflected on the London stock market.
Academics from the universities of Bangor, Leeds and Newcastle explored the relationship between England's results and the FTSE 100 index. The results showed that the index goes up if England wins and declines following a draw or a defeat.
The findings were based on returns from the FTSE 100 the day after 290 England games between 1984 and 2009.
It appears that stockbrokers and traders can fall into the depression associated with a poor England result.
The study indicates that if England leaves the tournament early, it may be a good time to look for deals on the stock market. However, an early exit would have negative business effects on industries such as media, alcohol and sportswear.
Prize money
The winner of the prestigious event nets $31m (£18.7m) and the runners-up receive $24m. Teams that reach the semi-finals get $20m and the quarter-finalists $18m each. Teams that make it to the round of 16 get $9m and those eliminated in the group stage receive $8m.
Clubs will also be compensated for the use of their players during the tournament. Each club who has a player at the World Cup will receive $1,600 per day, per player.
**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within this article/our website, but to conduct their own research and seek independent advice about the financial products they purchase.**
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