The World Cup's $3 Billion GoalRick Horrow and Karla Swatek
1. One Month Countdown to World Cup
Nothing is small about the FIFA World Cup, and it never has been, ever since the tournament was launched in Uruguay in 1930. The 19th edition of international soccer's crown jewel, featuring 32 of the world's top national squads, begins June 11 in Johannesburg, South Africa, and it will be the first time a major sporting event has taken place on the African continent. FIFA expects to generate a $1 billion net gain from the World Cup, while South Africa's soccer association could pocket $80 million to $100 million. All told, the monthlong tournament could generate more than $3.3 billion in income from all commercial arrangements.
Take that, Olympic Games.
For South Africa, which has pursued the event since 1994, Nelson Mandela's first year as president and South Africa's first year of returning to competition after ending apartheid, the World Cup is playing a vital role in reuniting and reenergizing the country. Government officials today are hoping that the worldwide exposure will increase tourism in the region from 11 million visitors a year to 15 million by 2014 and that the 415,000 infrastructure jobs created when South Africa was awarded the event will serve as the foundation for a large-scale economic turnaround.
Approximately 373,000 foreign visitors plan to travel to the World Cup, according to SportsTravel Magazine, down from 480,000 in earlier projections but sizable nonetheless. About 119,000 match tickets have been sold so far to U.S. buyers, testament to how much the sport has grown in this country and how increasingly important U.S. participation is to soccer globally. Led by Los Angeles Galaxy star Landon Donovan, the U.S. squad will have a rough go of it in its first round pool against England, Algeria, and Slovenia, while Mexico—and that team's close to 30 million fans in the U.S.—will face France, Uruguay, and host South Africa in the first round. Italy comes in as defending champion, while 2009 European champion Spain enters as the World Cup team to beat, closely followed by five-time winner Brazil.
An estimated 26 million people in more than 24 countries are expected to watch at least part of the four-week event. In the U.S., all 64 matches will be broadcast live on the ABC/ESPN network of channels, as well as their online and wireless counterparts, ensuring soccer fans they won't miss a minute of the action, no matter the 9-hour to 12-hour time difference, depending on where you live.
In a week in which MLS and its players officially ratified their new five-year collective bargaining agreement, with 84 percent of players voting to approve the CBA (which ensures guaranteed contracts for all players 24 years old and older with three years of MLS experience) and in which MLS formally announced that the Montreal Impact will join the league in 2012 as its 19th expansion franchise, it's a good time to be a soccer fan in America.
2. Tough Going in Minnesota for Viking's Stadium?
It's not fourth and long with mere ticks left on the clock and no time outs for the Minnesota Vikings stadium funding proposal. But it's definitely deep into the fourth quarter.
As the May 17 Minnesota legislature adjournment date looms, the stadium financing issue was dealt a major setback when one House of Representatives committee voted down the proposal just hours after another committee had approved it after stripping the proposal of tax increases that would help pay for the $791 million project. Minnesota Governor Tim Pawlenty refused to support any proposal with higher taxes—the proposed new levies on hotels, rental cars, and licensed pro sports merchandise would have raised a projected $527 million over 40 years toward stadium funding.
The proposal now will "all but require that a new stadium be built at the site of the Metrodome" in downtown Minneapolis, according to the Star Tribune. Since that land is already owned by the Metropolitan Sports Facilities Commission, the Vikings won't incur the $90 million-odd in infrastructure costs that were spent on Target Field, and stadium architectural firm HKS has created a design that will utilize as much of the current Metrodome as possible. Local leaders are also hopeful that Target Field's enthusiastic reception by fans and the media will carry over to a new stadium for the Vikings.
Other financing options still on the table include the Vikings servicing stadium debt through 2020, when the Minneapolis Convention Center would be completely paid off and the downtown entertainment taxes now supporting it could be redirected to the stadium. A so-called racino measure that would add 2,500 slot machines to the state's Canterbury park racetrack and add about $40 million annually to the stadium fund has been met with lukewarm interest by lawmakers. Selling personal seat licenses to Viking fans for an average of $8,000 to $20,000 for the permanent right to each seat has also been discussed.
Bills in the Minnesota House and Senate face continued committee hearings this week. Will the Vikings' stadium funding proposal pass before May 17? The bigger question—will Brett Favre return? And the biggest question of all—if Favre announces his return before May 17, will it help the measure pass?
3. Sports Advertising vs. Stock Price
Anheuser-Busch InBev's (BUD) Bud Light brand will replace Coors Light as the NFL's official sponsor in the beer category beginning with the 2011 season. Sources say the Bud Light contract is for $1.2 billion over six years, making it one of the most lucrative sponsorships in sports history. Does exorbitant sports ad spending, however, equate to a boost in stock price? Here are the five biggest sports TV advertisers in 2009 and their stock performance over the course of a year:
*Acquired by InBev in June
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