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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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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