Euro 2008 Kicks Economies Up a Notch
As the U.S. gears up for the NBA Finals, other sports-crazy fans around the world will turn their attention to the three-week European soccer championship in Austria and Switzerland, the third-most-watched global sporting event after the Summer Olympic Games and soccer's World Cup Finals.
While the championship, known as Euro 2008, brings together Europe's top 16 national soccer teams, its widespread appeal makes the contest a truly global phenomenon. The Union of European Football Assns. (UEFA) expects TV audiences will top 8 billion worldwide for the matches held between June 7 and June 29. More than 100 million visitors are expected to visit the championship's official Web site, a fourfold increase over the last event held in Portugal in 2004.
Such exposure means big bucks for Europe's economy. According to Simon Chadwick, director of the Birkbeck Sport Business Centre at the University of London, Euro 2008's economic impact on UEFA's 52 members across Europe could top $2.15 billion. That includes extra tourism revenue for Austria and Switzerland, multimillion-dollar TV licensing agreements, and increased food and beverage sales as fans head to bars or host barbecues in support of their home teams.
"Euro 2008 will have a halo effect on the wider European economy," says Chadwick. "This impact will be felt in many countries, principally driven by sponsorship and commercial revenues."
The Bottom Line
While the business impact of this year's tournament is light-years ahead of the first UEFA championship in 1960, some elements have remained basically unchanged. Teams are still split into four groups to play each other in a round-robin format. The top two from each group then move into the knockout stages, until eventually a European soccer champion is crowned. Greece is the defending champion from 2004, but Germany, Italy, and Spain are the favorites this time.
No matter who wins, Austria and Switzerland will reap rewards from the hundreds of thousands of fans expected to descend on both countries during June. Consultants Rutter & Partner estimate Euro 2008 will bring $358 million into the Swiss economy, while consultants SportEconAustria figure Austria will gain $369 million.
Where will the money be spent? Kim Hollywood, a spokesperson for the Austrian tourism board, says the hotel and service industries will gain the most. In Austria alone, overnight bookings have already hit the 2 million mark—well above usual rates for June—while almost 11,000 temporary jobs have been created to cope with the influx of visitors. "Austria wants to show that it knows how to celebrate," she says.
Huge Wide-Screened TVs
For fans unable to attend one of the tournament's 31 matches, each of the eight host cities has invested millions of dollars in "fan zones," centrally located party areas where supporters can gather to watch the games. UEFA has forked over more than $13 million for the necessary infrastructure, including huge wide-screen TVs to show the action.
Sponsors, such as Coca-Cola (KO), McDonald's (MCD), and Adidas (ADSG) also have spent millions in product promotion (BusinessWeek.com, 6/6/08) to maximize their connection with Euro 2008. "Fan zones help people engage with our products in a meaningful way," says James Leipnik, chief of communications and corporate relations for Europe, the Middle East, and Africa at Canon (CAJ), one of the official sponsors.
Britain Bumped, Other Countries Buoyed
The tournament's economic bounce won't be limited to the host countries. Along with extra food and beverage sales, gambling across the Continent is expected to rise as Europeans stake money on teams winning Euro 2008. British betting firm Ladbrokes (LADL) expects more than $700 million to be wagered on matches during the three-week event, in part thanks to the explosion in Internet gambling.
The economic windfall will benefit some European countries more than others, though. Because the English national team failed to qualify for Euro 2008 (Britain's other home nations—Scotland, Wales, and Northern Ireland—also missed out), Britain likely will lose hundreds of millions of dollars in potential revenue. More than 40% of the English express a "strong interest" in soccer, so Birkbeck's Chadwick reckons the team's absence could depress the economic impact of Euro 2008 in Britain. When England reached the quarterfinals of the 2006 soccer World Cup, for example, an estimated $3.1 billion was spent in the local economy.
Too bad for Britain this time around, but other countries in the final 16 could get a nice pick-me-up. From Portugal to Russia, the European soccer championship will undoubtedly be a kick for the economy.