U.S., England Are Only World Cup Bids to Meet FIFA Sales Goals, Study Says
England and the U.S. are the only countries bidding to host the World Cup in 2018 and 2022 that can meet FIFA’s revenue targets, a study commissioned by soccer’s governing body said.
The “World Cup Host Candidate Report,” prepared by McKinsey & Co., was sent to FIFA’s Executive Committee to assist in their Dec. 2 vote on the venues. The confidential report, seen by Bloomberg News, didn’t detail FIFA’s projected revenue target.
The McKinsey study supports FIFA’s own technical analysis of the bids published Nov. 17, and may help sway committee members that England and the U.S. are the best choices as they go up against rivals including Russia, Qatar and Japan. The American bid team has said hosting the most-watched sports event would be worth about $5 billion to the U.S. economy.
“FIFA have just published an economics study and England comes out way ahead of its competitors in that economic study,” said Andy Anson, chief executive officer of England’s bid committee. “If you combine the technical evaluation with the economics study, we clearly have the strongest bid.”
England is bidding against Russia and joint proposals from Spain/Portugal and the Netherlands/Belgium for the 2018 edition. The U.S. faces challenges from Qatar, Australia, Japan and South Korea for the 2022 tournament.
Finances won’t be the only consideration when the executive committee votes in Zurich. FIFA’s evaluations addressed operational issues including stadiums, accommodation, transport and the ability of host broadcasters to deliver a quality signal for beaming matches around the world.
FIFA President Sepp Blatter said this month he wasn’t sure how much the executive body will rely on the technical analysis of the best bids. Marios Lefkaritis, a voter from Cyprus, said “football politics” would have a big impact.
Zurich-based FIFA declined to comment on the McKinsey report and Jurgen Mainka, a spokesman for the U.S. bid, wasn’t able to immediately comment. McKinsey spokesman John Cheetham said the company doesn’t comment on the work it does for its clients.
The 1994 edition in the U.S. had the highest average attendance per game at 69,000, while the total 3.6 million spectators remains a record even after the competition was expanded in 1998 to 32 teams from 24.
The McKinsey report subdivides FIFA’s revenue targets into five streams -- media, sponsorship, ticketing and licensing.
England, which won its only title as host in 1966, got 100 percent in all five categories, while the U.S. was awarded the top mark in four.
The bid from Spain and Portugal is forecast by McKinsey to generate 91 percent of FIFA’s revenue target, followed by the Netherlands and Belgium at 87 percent. Russia, considered the 4- 6 favorite by U.K. bookmaker William Hill to be the 2018 host, trails with a projection of 86 percent.
Andreas Herren, a spokesman for the Russian bid, said projections didn’t always reflect reality, citing the country’s performance at attracting sponsorship ahead of the 2014 Winter Olympics in Sochi. The Games domestic sponsorship income has topped $1 billion, $650 million more than projections, he said.
“You show me one report I’ll show you two others with different findings,” he said.
The U.S. is the only 2022 contender with a 100 percent rating from McKinsey, even though the bid is the third favorite to win behind Qatar and Australia, according to William Hill. Japan is next at 73 percent, followed by South Korea at 71 percent, Qatar at 70 percent and Australia at 68 percent.
Frank Lowy, the billionaire chairman of Australia’s bid, said development in Asia over the next decade would strengthen the financial prospects of an Australian World Cup.
“By the time the World Cup will happen Asia will be the economic powerhouse of the world,” he said in an interview yesterday. “More than two-third of the population is in our region so I think that poses an economic, moral and football rationale for football to recognize that.”
In FIFA’s technical reports England and Spain/Portugal were deemed to be the lowest risks of the 2018 contenders. Russia had more risk factors than the other bid contenders.
“FIFA has gone to Korea, to Japan, to Africa to take a risk but this leaves us a substantial human legacy, gives national pride to people, reconciles people” said Vitaly Mutko, chairman of the Russian soccer federation. “That’s more significant than just going through the ratings.”
Among the 2022 bidders, the U.S., South Korea and Australia had more “low risk” marks than Japan and Qatar in the 17 categories listed.
The U.S. bid team said yesterday that movie actor Morgan Freeman will join dignitaries including former President Bill Clinton and Los Angeles Galaxy forward Landon Donovan tomorrow in making the final presentation to FIFA’s voters.
A majority vote is required to decide the host. If that isn’t immediately attained, the lowest-scoring bids are eliminated in further voting rounds.
To contact the editor responsible for this story: Christopher Elser at firstname.lastname@example.org
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.