Why the 2010 FIFA World Cup matters so much

CAPE TOWN, South Africa - It will take some time for most of us to wrap our heads around this, but the 2010 FIFA World Cup -- which wrapped last night in Johannesburg with Spain's 1-0 championship win over the Netherlands -- is the most important modern-era global sports event the world has ever witnessed.

Never has a sports event meant as much, either to a host nation domestically, the hosting continent or to the world around it.

I'm not talking about sport business basics such as ticket sales, which saw more than three million spectators take in the 64 matches at 10 venues around South Africa. It's not about revenue generation, which saw FIFA sell a record $3.3 B US in sponsorships, television and other commercial rights on the strength of the tournament. And it's also not about television grandeur, despite the more than 700 million -- or the equivalent of between four and five Super Bowl audiences -- who would have watched Fernando Torres and Cesc Fabregas set up Andres Iniesta with the winning marker in extra time or the multiple billions in aggregate audiences the month-long event drew in 215 countries.

I'm talking about sheer economic, political and social significance to South Africa and the rest of the world.

Since winning the rights to host the 2010 FIFA World Cup in 2004, South Africa invested more than 39 billion rand or $5.3 billion in stadia and transportation infrastructure, including upgrades to highways, airports and transit systems. The stadium projects alone generated 66,000 jobs. What South Africa now has in terms of Planes, Trains and Automobiles -- or better still, planes, trains and buses -- is a far cry forward from what it had a half-decade ago.

And you simply cannot build an open country or modern economy without them.

The total direct spend on the World Cup hosting will come in at R55 B or almost $8 B. According to Grant Thornton Strategic Solutions, that will mean a contribution of close to R93 B or $13 B to South Africa's Gross Domestic Product. Most analysts believe the World Cup has accounted for almost half of the country's GDP this year and over the past couple of years as the ramp-up to the event gained steam.

With estimates of more than 400,000 tourists visiting South Africa for the World Cup alone -- and twice that overall -- the impact on tourism in South Africa in particular and Africa in general will be felt for years to come. That kind of public relations, in turn, will improve the media negativity the country has endured for decades.

And that is what makes the 2010 FIFA World Cup such a bellweather among global sports events. It is by no means an instant fix for South Africa nor an elixir for the country's complex economic, political and social problems. What it is, however, is a tremendous opportunity for the country -- and the continent -- to improve its lot on the world stage. It provides a marketing platform like never before to attract the kind of foreign investment -- from Europe and North America as well as existing partners in China and India -- that creates employment and stimulates development.

It will take a decade -- or perhaps a generation -- but that investment will lead to new jobs and those new jobs will lead to better lives for millions of South Africans.

It's that differential impact which makes the 2010 World Cup a more significant event than even the 2008 Beijing Olympic Games, which were a powerful global showcase for the People's Republic of China. The difference is that China's emergence was already happening and its economic growth was coming anyway.

I'm not so sure the same can be said for a South Africa that is only 16 years removed from apartheid. It is a country that "was not even part of the world less than two decades ago", as a South African here reminded me over the weekend. At so many levels -- public relations, tourism, investment and national, even continental, unity -- the World Cup has changed that forever.

As South Africa in particular and Africa in general gain traction with meaningful investment and development in the decades to come -- and the benefits of hosting the 2010 FIFA World Cup go beyond businesses in the major cities and trickle down from the small percentage of South Africans who saw immediate economic impact -- remember what opened the country and the continent to the world.

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South Africa 2010 and Vancouver 2010: Similar pre-event lead-ins, divergent post-event legacies

JOHANNESBURG, South Africa - Beginning with the familiar slogan used by some of the official corporate partners of the 2010 FIFA World Cup -- as in the welcome display used by First National Bank (FNB) at Tambo International Airport -- there are many common storylines between South Africa 2010 and Vancouver 2010, global sports events held four months apart after close to a decade of bidding and development.

At first glance, the South Africa World Cup and the Vancouver 2010 Olympic and Paralympic Winter Games are similarly-sized ventures, at least in terms of operating budgets. Vancouver 2010's operating budget stands at around $1.8 billion. When you add the South Africa local organizing committee's budget of $532 million to FIFA's tournament budget of $1.2 billion, you're pretty close at $1.7 B and change.

They're both huge ticketing machines of similar magnitude, at least when pro-rated. Vancouver 2010 sold about 1.5 million tickets over a two-week Olympic period of events and the month-long South Africa 2010 tournament has surpassed three million spectators at 10 soccer venues with an average capacity of 48,500.

Most important, they're both similarly associated with more than $5 billion in venues and infrastructure.
 
In the case of South Africa, hosting the 2010 FIFA World Cup involved construction or renovation of the 10 stadiums, about half of which were built from scratch. That generated 66,000 construction jobs according to the South African government. Also required were significant airport renewal and expansion (especially in Cape Town, Durban and here in Johannesburg) and massive transportation upgrades, including highways and rail.
 
Sound familiar? Vancouver 2010 saw the provincial and federal governments partner on about $600 M of Olympic venues; including the Richmond Oval, Hillcrest Curling Centre, UBC Thunderbird Arena, Whistler Sliding Centre and upgrades to the Pacific Coliseum and what is now Rogers Arena. In terms of infrastructure, Vancouver 2010 helped generate construction of the Canada Line, Sea-to-Sky Highway upgrades and the new Vancouver Convention Centre.   
 
The largely comparable storylines don't end with the economic costs themselves. In the lead-up to both events, critics and doomsayers dominated the news coverage and spin. Skeptics in both countries questioned why monies were being spent on sports toys instead of providing for the homeless, hungry and ill. There was considerable angst over venue construction in both countries, with shared concern over timelines, costs and overruns.
 
In both cases, the years of severe anxiety and negativity turned into palpable pride and positivity by the time both events were a week old.

Of course, we all know both Vancouver 2010's venues and South Africa 2010's stadiums cost much more than originally forecast and both required additional government support to get the jobs done (the full measure of which is still being tallied by the BC government, especially in what it spent off-line). 

Despite all of the similarities, there are differences and the biggest is in what the countries got for their money. While the spend was indeed similar, the return on investment is clearly higher in South Africa than it was in Vancouver.

South Africa 2010's $5 B in venues and infrastructure went a lot further than Vancouver 2010's $5 B. The stadium legacies alone are awe-inspiring and would make any fully-developed country in Europe, Asia and North America proud, including Canada. That, of course, has everything to do with access to and cost of labour in South Africa.
 
Arguably the most glaring difference between the World Cup and the Winter Olympics is the return on monies spent on security. The federal government of Canada rented close to $1 B worth of it at Vancouver 2010. South Africa, meanwhile, invested in the creation of 44,000 new police jobs. They'll stay in place permanently and, according to many South Africans, will serve as the most important legacy of the 2010 FIFA World Cup.
 
The ROI advantage to South Africa on venues, infrastructure and security will also likely be joined by a big differential in long-term tourism impact. The impact of Vancouver 2010 on tourism in Vancouver, British Columbia and Canada simply cannot be compared to the impact of the World Cup on tourism for South Africa.
 
In the case of Vancouver, it was already playing from a position of strength as a popular Pacific Gateway city which hosted the world's fair in Expo 86. In the case of South Africa, it was truly a coming out party and hence a much bigger deal in terms of what it means for the country over the next generation.
 
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World Cup tournament structure is the key to its marketing, television and media clout

DURBAN, South Africa - With the final weekend of the 2010 FIFA World Cup now set with three days of lead-in hype having begun moments after Spain's 1-0 semifinal win over Germany here last night, it speaks to how the very structure of the tournament is among its greatest strengths.

Giving pace and flow to a month-long event is not an easy thing to do but that's exactly what the scheduling formula installed for 32 teams in 1998 does.

The first-round or Group stage allows the 32 qualifying nations three matches to prove their place among the top 16 teams in the world. Luck of the draw is the wild card of course and round-robin play theoretically tends to promote the good teams but as this year's World Cup has shown, it can also work as a great equalizer (single knockout would of course be a non-starter after two years of qualifying).

What the Group stage does is give the national soccer federations of the 32 countries involved their two-week payoff of massive television and media exposure for soccer. It also sets the stage for the storylines to come in the final two weeks.

The third week -- actually typically nine days -- spans two weekends and gives us the Round of 16 and quarter-finals. In that tight span, the media and fan focus narrows from the 32 countries of the Group stage to 16 to eight to four.

The fourth and final week is where it all comes together, of course, making the quarter-final round the big cut off. What makes losing in the quarter-finals such a bitter pill to swallow is how big a difference there is there between winning and losing. Losers go home. Winners advance to the final four, are guaranteed two matches and bask in the global media attention of the climax of the quadrennial tournament.

There's nothing like being World Cup champion; the winner truly gets the spoils. But there's also a sense of tidiness that comes from the ranking of #1 through #4 at the top of the chart of 32 qualifying nations.

It's the perfect Saturday-Sunday one-two punch ending to the world's greatest single sport event and it's part of what helps make it the television, media and marketing juggernaut it is.

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Adidas understands the rule of leverage and activation in sport sponsorship

CAPE TOWN, South Africa - Adidas does tennis, golf, rugby, cricket, basketball and even European hockey. Its sister brand Reebok now gives it strong profile in North American football and hockey. But the German multinational has always been most defined by its roots in soccer.

It will bend to its competitors in other sports but in soccer, it is staunchly committed to never breaking against Nike, Nike-owned UMBRO and Puma.

That explains why Adidas will always do soccer "full out". It will never fall short when it comes to marketing soccer and its three stripes to the world. Adidas is not the world's largest soccer company -- and #2 shoe company across all sports -- by accident.

Its status as a multi-billion dollar brand has been finely-honed through a global marketing strategy featuring the full gamut of international, national and local deals across the full spectrum of advertising, television, internet, event and team sponsorships, personal endorsements, community investment and public relations.

There's no better example of that than Adidas' multilevel marketing around soccer at the 2010 FIFA World Cup in South Africa.

As a FIFA global partner, it has event exclusivity at the World Cup (and at the regional levels of UEFA, Conmebol, Concacaf, Africa and Asia). But it understands that event sponsorship typically delivers little more than signage and macro-level brand awareness. To make the most of its sponsorship investments, it gets that it needs to leverage its sponsorship with television and other advertising, engage customers through personal endorsements and activate by promoting and activating at the retail level.

The Star Wars-themed campaign, The Quest, is all about that: personally-leveraging its FIFA and World Cup sponsorships and activating sales on the strength of its personal endorsements. The Quest is about engaging fans through their personal connections with players such as Lionel Messi of Argentina, Kaka of Brazil, David Villa of Spain, Bastian Schweinsteiger of Germany and 18 other top internationals. Produced in association with George Lucas and Lucasfilm, its also about appealing to an audience outside of hard-core soccer, absolutely essential in building a brand and generating new sales.

What Adidas has invested in leveraging and activating its sponsorship rights in soccer will be considerably more than the sponsorships themselves. And by doing that, it is more likely to see a return on its massive World Cup investment and continue to grow on the world stage.

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Is Nike's "Write the Future" really this World Cup's Sports Illustrated cover jinx?

CAPE TOWN, South Africa - Nike would suggest its Write the Future video campaign has been everything it set out to be -- creating a buzz on the Internet and in social media circles from its launch in May -- but that hasn't stopped pundits from suggesting it is the Sports Illustrated cover jinx of this 2010 FIFA World Cup in South Africa.

The talk is easy because every one of the primary players featured in Write the Future is out of action at the World Cup as the final four nations line up for their semifinals in Cape Town tonight (overwhelming local favourite Holland, ranked fourth in the FIFA world rankings, against cinderella Uruguay, #16) and Durban Wednesday (#2 ranked Spain and #6 Germany).

With Didier Drogba of Cote d'Ivoire, Franck Ribery of France and Fabio Cannavaro of Italy (all in the Group Stage) and Tim Howard and Landon Donovan of the US, Wayne Rooney of England and Cristiano Ronaldo of Portugal (all in the Round of 16) on the sidelines after just 18 of 30 days of play, there's no doubt Nike's Write the Future could have benefitted from at least one or two of its heroes reaching the global media platform that is the final week of the World Cup, with at least two matches guaranteed for those four surviving teams.

Only Write the Future's Spanish stars -- Gerard Pique, Andres Iniesta and Cesc Fabregas -- are left standing in South Africa. Patrice Evra of France and Brazilian Thiago Silva had minor roles in the Internet campaign while Ronaldhino of Brazil and Theo Walcott of England did not even make the cut of their respective national teams (cursed before they even started?).

Upon further video review -- so to speak -- like any company marketing personal endorsements and guest spots, Nike was only playing the averages. Three of 14 Nike-sponsored athletes making the last week of the World Cup is 21.4%, actually not bad when one considers they had about 960 players to choose from going into South Africa and only 120 -- or 12.5% -- are still in contention for the big prize.

It's true the Spaniards giving Nike its one-fifth success rate to date were secondary to the starring roles played by the Drogbas, Rooneys and Ronaldos in Write the Future and it's also true that Spanish success means more to Adidas, which holds that country's national team shirt and gear rights.

Yet Adidas' own campaign, The Quest, has similar numbers, with four of its 22 players -- or 18.1% -- reaching the final four. It's just under 20% in success rate if you don't include the injured Michael Ballack of Germany, originally cast as one of Adidas' big three alongside Argentine superstar Lionel Messi and Kaka of Brazil.

Like Nike, Adidas saw many of its personal endorsements fall in the Group stage (including Yoann Gourcoff of France, Daniele de Rossi of Italy, Stanislav Sestak of Slovakia and Zlatko Dedic of Slovenia) and Round of 16 (Shunsuke Nakamura of Japan, Jozy Altidore of the US and Steven Gerrard of England).

Their big gun Messi -- understandably the front man among active players in The Quest campaign -- made it to the quarter-finals, leaving Adidas with strong vested interests in Germany and Spain in general and Bastian Schweinsteiger and David Villa in particular. Nike has more to gain with the Dutch advancing to the final, but Adidas will be pleased to see Surinamese-born Holland star Eljero Elia there as well, along with Adidas-endorsed Diego Forlan, who plays for Puma-sponsored Uruguay and has been an absolute stud in South Africa.

The bottom line is that any personal endorsement campaign carries performance risk. But Write the Future is no more a Sports Illustrated jinx than is The Quest. At least technically-speaking, in the 20% ballpark, they've actually both outperformed the law of averages that has only 12.5% of this World Cup's original rosters living to see the light of the final week.

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Brazil's quarter-final loss at the World Cup hurts both Nike and Adidas in the footwear wars

CAPE TOWN, South Africa - Some of the best sport business storylines at mega events such as the biggest of them all, the FIFA World Cup, revolve around the marketing wars being fought out among many of the planet's most powerful brands.

At the 2010 FIFA World Cup in South Africa, there is arguably no more expensive battle - with no stakes higher - than in the shoe and apparel category.

It's on that front where both Adidas (the FIFA Global Partner, official World Cup event sponsor and official supplier to 12 of the 32 national teams in South Africa) and Nike (the sponsor of world #1 Brazil and eight other countries) have invested hundreds of millions in sponsorships, endorsements, television advertising, internet campaigns and retail activation.

Adidas spent $200 M US on the FIFA World Cup sponsorship alone, another $100 M US on national team rights and what I'd estimate as another $300 M or more in advertising. Between the two footwear giants, they're spending in the range of $1 B US in total marketing around their event campaigns.

Throw in Nike-owned UMBRO and its England sponsorship, along with Puma and its sponsorship of seven national teams -- including four African entries -- and the shoe wars are big business well into 10 figures.

Nike -- which leads the overall shoe business market share sweepstakes with around 38% to Adidas' 34% -- struck first and hard with its Write the Future video campaign while Adidas countered a few weeks closer to the month-long tournament with its Star Wars-themed hero series entitled The Quest.

They've both had wins and losses along the way but it would appear Nike's advertising investment has run the shorter course with every one of the primary individual players featured in Write the Future out of action at the World Cup...with the event's biggest week still to come.

When Brazil fell 2-1 in Friday's quarter-final against the Netherlands, both Nike and Adidas shared the grief. That's because Nike supplies the Brazilian national team, while Adidas sponsors one if its biggest stars; Kaka, a headliner in its global campaign around the World Cup.

Nike loses more directly as its marquee team is out before the final week for the second consecutive World Cup. The only consolation for the U.S. company is that Brazil's loss came at the hands of The Netherlands, with the Oranje also wearing Nike and giving the Swoosh one team in the final four (alongside Germany and Spain of Adidas and Uruguay of Puma).

Yet on the Brazil loss, Adidas is not unscathed, partly because it gives Nike a stronger European foothold in the Oranje. Adidas is hurt with The Quest star Kaka out and because its official World Cup presence and television signage could very well be seen by less eyeballs worldwide. Brazil draws more than just Brazilians to the World Cup party and what hurts World Cup ratings hurts Adidas as an official FIFA partner.

It's an interesting case study around sponsoring giants. Brazil is the world's #1 soccer team and as such, has the cache - both collectively and through its individual players - to attract more than one global brand in any one category.

When such a giant falls, it falls hard...and in a case like this, the giant takes more than one sponsor with it.

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Stepping into the world of soccer

In what I remember to be only the third Canada Day which I haven't spent in either Montreal, Toronto or Vancouver, I've stepped off the North American continent and into the world of soccer.

En route to Cape Town, South Africa, for a special edition of The Sport Market on TEAM 1040 and teamradio.ca this Saturday, July 3rd, I don't have to be more than half my way there to already understand how big that world of soccer really is...and how front and centre soccer is pretty well everywhere but in the North America we share with the United States.

I saw it in my stopover at Schiphol Airport in Amsterdam, which like much of the Netherlands is painted orange during the month-long global party known as the 2010 FIFA World Cup. There are images of Dutch star Arjen Robben everywhere as the Dutch prepare to face Brazil in what should be an oustanding quarter-final match at Nelson Mandela Bay in Port Elizabeth tomorrow night. 

I saw it yesterday on Emirates flight #146, where in-flight entertainment options included Round of 16 matches featuring Paraguay-Japan and Spain-Portugal. Of course, the official airline of the World Cup was also promoting its sponsorship with FIFA logos on its in-flight magazine and in departure lounges.

Yet I saw it more than I expected when that Boeing 777 landed at 12:15 a.m. Dubai time for an early start to my Canada Day.

I'm more than familiar with how the United Arab Emirates is striving to define its place on the world stage by working to host big events in big venues with big ambitions, in both Dubai and Abu Dhabi. It's a big sport business story, slowed somewhat by the global economic recession and debt crunch of the past two years, but certainly far from stopped.

I get the emerging connection between this part of the world and soccer through Manchester City of the Barclays English Premier League, given ownership of that club by Sheikh Mansour bin Zayed of Abu Dhabi. I understand that's why a new annual scholarship program for four Emirati players to train at City is front page news in The National, the newspaper published by Abu Dhabi Media Company. It's no surprise that full page tabloid space is accorded the upcoming transfer of Spanish national David Silva from Valencia to none other than Sheikh Mansour's Manchester City.

I was surprised, however, to see the extent of attention today in Dubai on what was happening this historic month in South Africa.

It's one thing to see it loud and proud in Amsterdam, where the Dutch are not only among the 32 nations to qualify for the 2010 FIFA World Cup, they're living up to their contender status by reaching the fever pitch of the quarter-finals. The UAE nor any other Arab nation made it to South Africa. Despite that, it is everywhere here, from hotel bars and restaurants theming their menus around the teams du jour to video boards with result updates and airport signage promoting Dubai's own World Cup bid for 2022.

It's just a valuable reminder about the weight the global game carries. It has always played sports king in Europe, but it is also the prevailing national passion in South America, Africa and increasingly so in Asia. It is in the top three in Australia and Oceania alongside rugby and cricket.

It is only in North America where it does not hold that kind of podium status outside of those with strong connections to soccer through their heritage and roots elsewhere...and that's true in both the U.S. and Canada.

Nothing will challenge hockey as the sport which most defines us, at least for this generation and likely the next and the next after that. Same goes for the U.S. and the sport culture it has built around football, baseball and basketball.

What stands out to me on this Canada Day 2010, however, is that two things are clearly happening: Canada is becoming a bigger place through immigration and the status of cities such as Vancouver as Pacific Gateways and the world is becoming a smaller place through technology, internet and social media.

With those trends, the global game has made -- and is making -- inroads in both Canada and the U.S. and I believe it will continue to gain traction among future generations of Canadians and Americans. Without the club system inherent in Europe, it will be baby steps, but steps nonetheless to share in the global currency that is soccer.

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